Los Angeles Times
21 March 2002

The World; U.S., Europe to Tout Pledges of Development Aid at Summit;
Mexico: Bush and other leaders say they want to boost grants to poor nations by $12 billion a year by 2006.


MONTERREY, Mexico - Carrying a sackful of aid promises, President Bush arrives here today for a global development conference that, in sharp contrast to many past meetings with lofty goals, may actually accomplish something.

The United States and European nations will use the U.N. Conference on Financing for Development to tout pledges to raise annual aid to poor nations by a combined $12 billion by 2006.

Bush will also unveil a new program to promote private investment and jobs in rural Mexico as a way to discourage illegal immigration, U.S. and Mexican officials said Wednesday.

The proposed U.S. and European Union aid increases are a response to globalization foes who say the benefits of free trade haven't filtered down to the poor. The increases would constitute a reversal after a generation of shrinking U.S. aid budgets. Bush wants to gradually boost aid to poor nations from $10 billion a year now to $15 billion yearly by 2006; Congress must approve any increase. The EU announced its commitment to add $7 billion to its annual aid program at a summit in Barcelona, Spain, last weekend.

The timing of the proposed aid increases--before a conference whose theme is how to lift developing nations out of poverty--is no coincidence, Mexican Foreign Minister Jorge Castaneda said.

"They are directly linked to the celebration of the summit in Monterrey," he said.

Nearly 60 world leaders are expected at the meeting. Castaneda attributed the high turnout to nations' eagerness to ratify what is being called the "Monterrey Consensus," that wealthy countries must do more to help the poor.

Cuban President Fidel Castro will also attend the conference, but he and Bush will not meet, the White House said. Castro will arrive this morning and leave tonight. Bush arrives this afternoon and will stay through Saturday morning, when he leaves for Lima, the Peruvian capital.

The U.S.-Mexico rural assistance program, dubbed Partnership for Prosperity, unites the public and private sectors in developing projects to help regions of Mexico that haven't benefited from the North American Free Trade Agreement, officials said.

Asked about the program, National Security Advisor Condoleezza Rice said it is aimed at smoothing out NAFTA's "uneven" economic benefits.

"NAFTA created a tremendous economic boom . . . mostly along the border states," she said. "And one of [Mexican] President [Vicente] Fox's concerns has been to take that prosperity and transfer it to the center of the country and to the south."

At a news conference here Wednesday, U.S. Treasury Secretary Paul H. O'Neill cautioned that the Bush administration wants to attach some strings to its proposed boost in aid to poor nations.

To keep the aid spigot open, the United States wants to be shown concrete results in terms of higher living standards and incomes, O'Neill said.

In typically blunt fashion, O'Neill expressed some reservations that government grants are the best way to help the world's poor.

"The real economic development will come from [investment] capital," he said. "We're not going to do it with welfare."

O'Neill and Secretary of State Colin L. Powell are heading an effort to devise benchmarks to prove the effectiveness of poverty aid.

Bush and Fox will hold talks Friday that Mexico hopes will result in U.S. aid for border infrastructure and other programs. Officials of both countries were reticent Wednesday about what specific help Mexico might receive.

Asked at a White House briefing Wednesday about criticism that Washington isn't providing enough foreign aid, Rice argued that in addition to grants, U.S. assistance comes in the form of military and security guarantees.

"I say to people that the United States provides for the world a lot that others do not, including security," she said. "What we're doing to increase stability and security around the world right now is really quite remarkable."

At a news briefing here Wednesday, Harvard economics professor Jeffrey Sachs made the case that improving health care in poor countries plagued by AIDS, tuberculosis and malaria is the first step to fostering economic development.

Sachs discussed a recent study that he directed showing that AIDS, tuberculosis and malaria are blocking chances of economic growth in many developing countries.

Rich countries should contribute one penny for each $10 of economic output, an investment that he said would save 8 million lives a year and generate a 600% return in terms of productivity.

"Monterrey can be a turning point in this division between rich and poor," he said. "There is nothing more important in economic development than helping the poor stay alive to become members of productive society."

One fund set up last April to deliver health care is the Fund to Fight AIDS, Tuberculosis and Malaria, which commissioned Sachs' study. Directed by officials at the United Nations' World Health Organization, the fund has raised nearly $2 billion in less than a year--including $100 million from the Bill & Melinda Gates Foundation.

The WHO's Andrew Cassels said the fund has gone from "a standing start to disbursing $700 million" in aid to as many as 50 countries. Its goal is to disburse 10 times that much in five years.

"We hope people come out of Monterrey thinking that health care isn't just important in its own right," he said, "but that it's a key strategy in building a sound economy."

By Chris Kraul, Edwin Chen, Times staff writers, Asia Pulse