No subject

------------------
http://www.nytimes.com/2001/07/18/international/18PREX.html?pagewanted=print
JUL 18, 2001

Bush Urges Shift to Direct Grants for Poor Nations

By FRANK BRUNI with DAVID E. SANGER

WASHINGTON, July 17 — President Bush called today for
a major change in the way rich nations help poorer
countries, proposing that up to 50 percent of aid to
those countries from the World Bank and similar
institutions be given as direct grants rather than
loans for needs like education and health.

Mr. Bush, calling these grants a way to help alleviate
the debt that burdens developing economies, said they
should be used increasingly as substitutes for heavily
discounted loans that the World Bank provides now. He
promoted the approach in a speech at the World Bank
headquarters here to state his commitment to fighting
world poverty.

"This is compassionate conservatism at an
international level, and it's the responsibility that
comes with freedom and prosperity," Mr. Bush said in
remarks intended to set the stage for a European trip
later this week.

"The needs are many and undeniable," Mr. Bush said.
"And they are a challenge to our conscience and to
complacency. A world where some live in comfort and
plenty, while half of the human race lives on less
than $2 a day, is neither just, nor stable."

During Mr. Bush's last trip to Europe he confronted
and in many ways stoked the apprehensions of European
leaders who felt that he was putting the United
States' interests above its international obligations.
With his
speech today, he seemed to be trying to dispel that
perception abroad while also showing a more moderate
side to voters at home. 

But Mr. Bush's remarks today did not take into account
nor delineate how expensive such a change in the way
the World Bank operates would be. Nor did the
president say how — or whether — the United States and
other wealthy nations that give the bank its primary
financial support would pay for the added cost.

Currently, the United States contributes $803 million
annually to the World Bank. This money, with
contributions from other nations, allows the World
Bank to make loans totaling $15 billion each year — $6
billion of that to poor countries as heavily
discounted loans. The World Bank has estimated that in
the next
decade the United States would need to double its
contribution just to maintain the current level of
aid.

The president's vision for the World Bank carried a
different emphasis than the one that the
organization's
president, James Wolfensohn, struck in comments he
made on Monday. Mr. Wolfensohn said the most important
step that rich countries could take was not giving
loans and grants but opening their markets more fully
to exports from poorer countries.

"We must recognize that it is simply hypocritical to
give debt relief with one hand and then deny poor
countries the ability to export their way out of
poverty with the other," Mr. Wolfensohn said. 

These issues are likely to be discussed this weekend
at a summit meeting in Genoa, Italy, where the
president
will meet with the leaders of the other largest
industrial economies during a time of economic
slowdown in Europe and the United States and recession
in Japan.

But the focus of much of the Genoa discussions will be
on restoring growth in the economies of the world's
wealthiest nations, it is unclear how much attention
or support Mr. Bush's ideas for the World Bank will
receive.

But it was his remarks about the World Bank today that
drew the most attention, and critics focused on the
financial implications for the organization. They
noted that because the World Bank depends on
repayments of
existing loans to have money for new loans or for the
grants, it would encounter a shortfall and have less
money to use under Mr. Bush's proposal.

Condoleezza Rice, Mr. Bush's national security
adviser, said that would not be a factor in the short
term. "It will be 10 years before this makes a
difference," she said. "But we understand that this
will require some greater commitments."

She also noted that, like Mr. Wolfensohn, "The
president said it's important to open markets." But
she
acknowledged a longstanding tension, which the
administration had yet to resolve, between that goal
and its belief that "it's also important to protect
American farmers."

Mr. Bush's speech comes as the administration is
rethinking how the United States should deal with the
World Bank, which fights poverty, and the
International Monetary Fund, its sister organization,
which deals with financial crises.

Last month, Treasury Secretary Paul O'Neill called for
an overhaul of the World Bank. His concept was to
focus the bank's programs on increasing a country's
productivity and aiding its development of a self-
sufficient economy.

Mr. Bush echoed that theme today, saying that the bank
and similar organizations "should focus on raising
productivity in developing nations, especially through
investments in education."

World Bank officials, with some exasperation in their
voices, say they have been doing exactly that for the
past few years. As Mr. Wolfensohn has moved the
institution away from grand projects like building
hydroelectric dams and toward education programs and
credit assistance to people starting small businesses.

But the bank's programs often go awry because of local
corruption or the conflict between the bank's plans
and
those of local and national leaders. It is unclear
how, according to Mr. Bush's vision, that problem
would be
surmounted.

Mr. Bush's remarks today dwelled more on his broad
vision for the United States' role in helping
developing countries than on specific prescriptions.
They were delivered with an eye toward where he would
be traveling, whom he would be seeing and how he
wanted them to see him.

"We have, today, the opportunity to include all the
world's poor in an expanding circle of development,
throughout all of the Americas, all of Asia and all of
Africa," Mr. Bush said. "This is a great moral
challenge, what Pope John Paul II called placing the
freedom of the market in the service of human freedom
in its totality."

During his trip, Mr. Bush will meet the pope, a visit
closely watched by many Catholics. Bush administration
officials have been assiduously courting Catholic
voters and know that Mr. Bush risks angering some of
them if he decides, in coming weeks, to permit federal
support for embryonic stem cell research.

As on his last trip to Europe, Mr. Bush is expected to
encounter protests, many by groups opposed to
globalization. But Mr. Bush said today that less
restricted trade was one of the best ways to help
developing countries.

"Those who protest free trade are no friends of the
poor," he said. "Those who protest free trade seek to
deny them their best hope for escaping poverty."


=====
Brian Farenell
Returned Peace Corps Volunteer -- Guinea (Beindou) '95-97
My website: http://www.angelfire.com/ak/SaaBrian
Mon site web: http://www.angelfire.com/ak/SaaBrian/indexfrn.html 
Friends of Guinea: http://maxwell.ucsc.edu/~stephanie
North American Green Parties: http://www.greens.org/na.html

__________________________________________________
Do You Yahoo!?
Get personalized email addresses from Yahoo! Mail
http://personal.mail.yahoo.com/