Bush Outlines Terms for Foreign Aid Recipients

With missionary zeal, President Bush on Friday sought to redefine the terms of foreign aid, as he called on scores of world leaders to join him in a new U.S. funding initiative that requires developing nations to commit to free trade, political liberty and human rights.

In an address here at the United Nations Conference on Financing for Development, the president denounced “a failed status quo” that provides aid without measuring results. “Developed nations have a duty to not only share our wealth,” Bush said. “We must tie greater aid to political and legal and economics reforms.”

Bush said he will work with Congress to jump-start the initiative rather than wait until the 2004 budget year--as he had announced last week in unveiling what is being called the Millennium Challenge Account.

At the aid conference Friday, the president laid out the principles and the rationale for the new initiative, which by 2006 would increase U.S. foreign aid from $10 billion annually to $15 billion--with strings attached.

After Bush’s initial announcement last week, many in Washington hailed his intention to ask Congress for the added funding. But some, including House Minority Leader Richard A. Gephardt (D-Mo.), called on Bush to act more quickly to secure and then deliver the new aid.

Bush’s initiative is, in part, an answer to criticism in the international community that the United States gives too little in foreign aid. The U.S. spends far less on such aid as a percentage of its economy--0.1% of its gross domestic product--than many other wealthy nations.

But Bush made clear Friday that he believes it is wrong to measure merely the amount given.

“For decades, the success of development aid was measured only in the resources spent, not the results achieved,” Bush said. “Yet pouring money into a failed status quo does little to help the poor and can actually delay the progress of reform. We must do more than just feel good about what we are doing. We must do good.”

When a developing nation embraces sound policies, every dollar it receives in foreign aid can attract $2 in private investment, the president said.

“We must build the institutions of freedom, not subsidize the failures of the past,” Bush told other leaders here during a morning session.

Poverty Battle Can Help End Terrorism, Bush Says

The president also linked his initiative to the global fight against terrorism, which he described as a “titanic struggle” that would make the world safer. By fighting poverty and hopelessness, Bush said, the developed world can eradicate conditions that allow terrorists to thrive.

The president has ordered Secretary of State Colin L. Powell and Treasury Secretary Paul H. O’Neill to develop “a set of clear and concrete and objective criteria” that he said will be applied “fairly and rigorously” to developing nations seeking U.S. aid.

The requirements for developing nations under the Millennium Challenge Account include investments in education and public health and sustainable budget policies.

On Friday evening, Bush met with Mexican President Vicente Fox to discuss a panoply of regional and bilateral issues, including a joint program dubbed Partnership for Prosperity, which the two leaders unveiled in February 2001. It is designed to encourage business investments in Mexico.

Because of Bush’s focus on the war on terrorism, little progress has been made on the program, or on ambitious immigration reforms that both men want to implement.

But Bush said Friday that he won’t allow U.S.-Mexican issues to be sidetracked.

“The United States has no more important relationship in the world than the one we have with Mexico,” he said.

Mexico, however, was expecting some specific and short-term concessions from Bush on border infrastructure, water rights and immigration--and it was disappointed. One bright spot: a U.S. commitment to speed vehicle, trade and pedestrian traffic with computerized “smart” border technology to cut wait times.

The Partnership for Prosperity program sets ambitious goals for U.S. help in the areas of housing, remittances and small-business loans without specifying dollars or timelines.

Fox’s goal of obtaining legal status for about 3 million Mexican migrants in the United States seems no closer than it was Sept. 7, when the two chiefs of state ended a summit with Bush saying he was willing to consider such a move.

U.S. Is ‘Moving in the Right Direction’

Among leaders at the conference Friday, reaction to Bush’s proposals on foreign aid was generally positive.

Romano Prodi, president of the European Commission, said the United States is “moving in the right direction. . . . This is a strong engagement, a definite change.”

Spanish Prime Minister Jose Maria Aznar said Bush’s plan contains many “positive elements, including the push for more education, more democracy, more investment.”

Aznar credited the prospect of the Monterrey summit and its theme of helping impoverished nations with having prompted leaders of the United States and Europe to dig into their pockets and come up with concrete aid commitments.

Leaders at the conference Friday ratified the so-called Monterrey Consensus, a statement that commits wealthy nations to increase aid while poor nations promise to institute legal and democratic reforms.

But many economists, including those at the United Nations who track Latin America, say massive increases in trade and foreign investment in the region over the last decade have failed to raise income or produce job growth.

Critics of the “trade first” approach to development say billions of dollars in investment have led to growth in skilled jobs but not blue-collar employment.

Also, foreign investors who have bought or started companies in Latin America often import many of the components they use to manufacture goods, depriving the local economy of the ripple effect often associated with such investment.

Amid the discussions of international assistance, this rather staid summit was abuzz over the Cuban government’s charge that Mexican officials, at the behest of the Bush administration, had pressured President Fidel Castro to leave town before Thursday’s dinner.

At a news conference here Friday night, Bush and Fox denied that anyone had pressured Castro to leave early.

“There was no pressure placed on anybody,” Bush said to persistent questions from reporters. “Fidel Castro can do what he wants to do.”

Bush also repeated his desire to see Iraqi President Saddam Hussein ousted--despite an outpouring of opposition from Arab nations, whose leaders did not hesitate to make their views known to Vice President Dick Cheney during his recent tour of the Middle East.

“We have no imminent plans to use military operations,” Bush said. “But we will deal with Saddam Hussein.”

Bush leaves this morning for the Peruvian capital, Lima, where he is to meet with President Alejandro Toledo. Then the two will meet with the leaders of Bolivia, Colombia and Ecuador.

Before heading home Sunday, Bush is scheduled to stop in San Salvador, where he will meet with Salvadoran President Francisco Flores and then have lunch with him and the leaders of Belize, Guatemala, Nicaragua, Costa Rica, Honduras and Panama.