Obama seeks accountability on foreign aid

President Obama unveiled to world leaders Wednesday a new plan for distributing U.S. aid to struggling nations, promising to “change the way we do business” by putting a new focus on self-reliance and market forces to create a path out of poverty.

The United States’ aim is not to simply dole out aid but to create “the conditions where assistance is no longer needed,” Obama said in comments at the United Nations. The program will reward countries willing to cooperate in their own improvement, he said.

At the same time, Obama insisted that the United States would not abandon the helpless and would remain a leading world donor. Countries such as Haiti and Afghanistan would continue to receive special assistance, even if their governments’ records are questionable, aides said.

“We will seek partners who want to build their own capacity to provide for their people,” Obama said. “We will seek development that is sustainable.... The days when your development was dictated in foreign capitals must come to an end.”

Obama spoke during a week in which world leaders have been focused on the U.N.’s chief anti-poverty program, the Millennium Development Goals, a 15-year plan launched in 2000. With five years left to meet targets of poverty reduction and healthcare improvements, and amid a world economic crisis, doubts have spread about whether the goals can be met.

The new U.S. program, set up after a lengthy review, builds on the Bush administration’s Millennium Challenge Corp. concept, which aimed to give special rewards to countries that seek to improve their own development and governance in specified ways.

Aides to Obama acknowledged that the new approach would mean shifting aid from some countries to others, but they were vague on specific cutbacks.

The president named a few names. He singled out Tanzania as a country that the U.S. would reach out to, and mentioned the Ivory Coast as one nation that may not meet the new American criteria for assistance.

Obama said the new program would put a strong emphasis on broad economic growth, of the kinds he said had turned South Korea “from a recipient of aid to a donor of aid.”

A consensus has developed among major donor nations that money must be spent on more than food, health and education — it should help build economies and public institutions.

Economic growth is “the force that has raised living standards from Brazil to India,” he said. “And it’s the force that has allowed emerging African countries like Ethiopia, Malawi and Mozambique to defy the odds and make real progress toward achieving the Millennium Development Goals, even as some of their neighbors — like [Ivory Coast]— have lagged behind.”

In regions where problems are less acute, such as Eastern Europe and Latin America, Obama aides said, help would probably be reduced, while the poorest stretches of Africa and Asia could get more aid.

Aides said the United States in the past has often seemed to just throw money at problems. Obama has promised to double foreign aid to $50 billion a year by 2012, but he wants to make programs more effective.

The president’s tough-love message echoed those of other leaders in New York gathered for the annual meeting of the United Nations General Assembly. German Chancellor Angela Merkel has called on developing nations to take greater responsibility for their progress, and Canadian Prime Minister Stephen Harper urged greater accountability from countries that receive aid.

The remarks reflect the concerns of donor nations about the stewardship of their contributions at a time of global economic troubles and a drive for austerity.

Yet hard times weigh on the recipient nations too. Leaders from African nations are seeking a greater commitment to help their continent climb out of poverty.

Private aid groups have heard American leaders talk about focusing their aid before, but some experts say Obama’s strategy could prove sweeping in its goals.

The president appears to be proposing a more comprehensive approach, said Mark Quarterman, director and senior advisor of the Post-Conflict Reconstruction Project at the Center for Strategic and International Studies. The actual effect depends on how Obama’s ideas are carried out, he said.

“We can only have a sense of how the practice of development would change with more details,” Quarterman said. “The idea sounds very interesting, and U.S. foreign assistance needs an overhaul, but the devil really is in the details.”

cparsons@latimes.com

paul.richter@latimes.com