Posted on 03/24/2002 6:39:23 PM PST by Sandy
Remarks by the President at United Nations Financing for Development Conference
Cintermex Convention Center
Monterrey, Mexico
Good morning. We meet at a moment of new hope and age-old struggle, the battle against world poverty. I'm honored to be with so many distinguished leaders who are committed to this cause. I'm here today to reaffirm the commitment of the United States to bring hope and opportunity to the world's poorest people, and to call for a new compact for development defined by greater accountability for rich and poor nations, alike.
I want to thank Vicente Fox, el Presidente de Mexico, and the people of Monterrey for such grand hospitality. I want to thank Kofi Annan for his steadfast leadership. And I want to thank the distinguished leaders who are here for your hospitality, as well.
Many here today have devoted their lives to the fight against global poverty, and you know the stakes. We fight against poverty because hope is an answer to terror. We fight against poverty because opportunity is a fundamental right to human dignity. We fight against poverty because faith requires it and conscience demands it. And we fight against poverty with a growing conviction that major progress is within our reach.
Yet, this progress will require change. For decades, the success of development aid was measured only in the resources spent, not the results achieved. Yet, pouring money into a failed status quo does little to help the poor, and can actually delay the progress of reform. We must accept a higher, more difficult, more promising call. Developed nations have a duty not only to share our wealth, but also to encourage sources that produce wealth: economic freedom, political liberty, the rule of law and human rights.
The lesson of our time is clear: When nations close their markets and opportunity is horded by a privileged few, no amount -- no amount -- of development aid is ever enough. When nations respect their people, open markets, invest in better health and education, every dollar of aid, every dollar of trade revenue and domestic capital is used more effectively.
We must tie greater aid to political and legal and economic reforms. And by insisting on reform, we do the work of compassion. The United States will lead by example. I have proposed a 50-percent increase in our core development assistance over the next three budget years. Eventually, this will mean a $5-billion annual increase over current levels.
These new funds will go into a new Millennium Challenge Account, devoted to projects in nations that govern justly, invest in their people and encourage economic freedom. We will promote development from the bottom up, helping citizens find the tools and training and technologies to seize the opportunities of the global economy.
I've asked Secretary of State Powell, Secretary of Treasury O'Neill to reach out to the world community to develop clear and concrete objective criterion for the Millennium Challenge Account. We'll apply these criterion fairly and rigorously.
And to jump-start this initiative, I'll work with the United States Congress to make resources available over the 12 months for qualifying countries. Many developing nations are already working hard on the road -- and they're on the road of reform and bringing benefits to their people. The new Compact for Development will reward these nations and encourage others to follow their example.
The goal of our development aid will be for nations to grow and prosper beyond the need for any aid. When nations adopt reforms, each dollar of aid attracts two dollars of private investments. When aid is linked to good policy, four times as many people are lifted out of poverty compared to old aid practices.
All of us here must focus on real benefits to the poor, instead of debating arbitrary levels of inputs from the rich. We should invest in better health and build on our efforts to fight AIDS, which threatens to undermine whole societies. We should give more of our aid in the form of grants, rather than loans that can never be repaid.
The work of development is much broader than development aid. The vast majority of financing for development comes not from aid, but from trade and domestic capital and foreign investment. Developing countries receive approximately $50 billion every year in aid. That is compared to foreign investment of almost $200 billion in annual earnings from exports of $2.4 trillion. So, to be serious about fighting poverty, we must be serious about expanding trade.
Trade helped nations as diverse as South Korea and Chile and China to replace despair with opportunity for millions of their citizens. Trade brings new technology, new ideas and new habits, and trade brings expectations of freedom. And greater access to the markets of wealthy countries has a direct and immediate impact on the economies of developing nations.
As one example, in a single year, the African Growth and Opportunity Act has increased African exports to the United States by more than 1,000 percent, generated nearly $1 billion in investment, and created thousands of jobs.
Yet we have much more to do. Developing nations need greater access to markets of wealthy nations. And we must bring down the high trade barriers between developing nations, themselves. The global trade negotiations launched in Doha confront these challenges.
The success of these negotiations will bring greater prosperity to rich and middle-income and poor nations alike. By one estimate, a new global trade pact could lift 300 million lives out of poverty. When trade advances, there's no question but the fact that poverty retreats.
The task of development is urgent and difficult, yet the way is clear. As we plan and act, we must remember the true source of economic progress is the creativity of human beings. Nations' most vital natural resources are found in the minds and skills and enterprise of their citizens. The greatness of a society is achieved by unleashing the greatness of its people. The poor of the world need resources to meet their needs, and like all people, they deserve institutions that encourage their dreams.
All people deserve governments instituted by their own consent; legal systems that spread opportunity, instead of protecting the narrow interests of a few; and the economic systems that respect their ambition and reward efforts of the people. Liberty and law and opportunity are the conditions for development, and they are the common hopes of mankind.
The spirit of enterprise is not limited by geography or religion or history. Men and women were made for freedom, and prosperity comes as freedom triumphs. And that is why the United States of America is leading the fight for freedom from terror.
We thank our friends and neighbors throughout the world for helping in this great cause. History has called us to a titanic struggle, whose stakes could not be higher because we're fighting for freedom, itself. We're pursuing great and worthy goals to make the world safer, and as we do, to make it better. We will challenge the poverty and hopelessness and lack of education and failed governments that too often allow conditions that terrorists can seize and try to turn to their advantage.
Our new approach for development places responsibility on developing nations and on all nations. We must build the institutions of freedom, not subsidize the failures of the past. We must do more than just feel good about what we are doing, we must do good. By taking the side of liberty and good government, we will liberate millions from poverty's prison. We'll help defeat despair and resentment. We'll draw whole nations into an expanding circle of opportunity and enterprise. We'll gain true partners in development and add a hopeful new chapter to the history of our times.
May God bless you all. (Applause.)
Policy in Focus: Aid to Developing Nations
Helping Developing Nations
President George W. Bush has said that combating poverty is a moral imperative and has made it a U.S. foreign policy priority. To meet this challenge, the President has proposed a “new compact for development” that increases accountability for rich and poor nations alike, linking greater contributions by developed nations to greater responsibility by developing nations.
Increased Development Assistance
The President announced in a speech at the Inter-American Development Bank on March 14, that the United States will increase its core development assistance by 50% over the next 3 years, resulting in a $5 billion annual increase over current levels. These additional funds will go to a new Millennium Challenge Account that will fund initiatives to help developing nations improve their economies and standards of living.
Aid Linked to Sound Policies
The new compact recognizes that economic development assistance can be successful only if it is linked to sound policies in developing countries. In sound policy environments, aid attracts private investment by two to one – that is, every dollar of aid attracts two dollars of private capital. In countries where poor public policy dominates, aid can actually harm the very citizens it was meant to help.
The funds into the Millennium Challenge Account will be distributed to developing countries that demonstrate a strong commitment toward:
- Good governance. Rooting out corruption, upholding human rights, and adherence to the rule of law are essential conditions for successful development.
- The health and education of their people. Investment in schools, health care, and immunization provide for healthy and educated citizens who become agents of development.
- Sound economic policies that foster enterprise and entrepreneurship. More open markets, sustainable budget policies, and strong support for development will unleash the enterprise and creativity for lasting growth and prosperity.
The President has instructed the Secretary of State and the Secretary of the Treasury to reach out to the world community to develop a set of clear, concrete and objective criteria for measuring progress in the above areas.
Why is the President Proposing This New Initiative?
In two generations, per capita income in developing countries has nearly doubled. Illiteracy has been cut by a third - giving more children a chance to learn and prepare for a brighter future. Infant mortality in the poorest countries has been almost halved - giving more children a chance to live. Nations from India to Chile have changed old ways and found new wealth. Yet in this world of growing opportunity, there are entire regions untouched by progress. The statistics are alarming:
- One half of the world’s population today lives on less than $2 a day.
- For billions of people, especially in Africa and the Islamic world, poverty is spreading, and per capita income is falling.
- In Malawi, thousands of teachers die each year from AIDS, and life expectancy has fallen to 38 years.
- In Sierra Leone, one third of all babies born today will not reach the age of 5.
President Bush wants to close the growing divide between nations that are making progress and those that are falling deeper into need and despair. This growing divide is a major source of sorrow and instability in the world, and the President wants to include every African, Asian, Latin American and Muslim in an ever-expanding circle of development.
Success Stories in the Developing World
Marrying good policies to aid has put many countries on a path toward a stronger, more prosperous future. For example:
- Mozambique's economy grew 10 percent in 2001. In fact, over the 1990s, Mozambique averaged roughly 6 percent annual growth.
- Sound policies allowed Uganda to open its schools to more children and increase teacher pay by 2700 percent. Over the last decade, Uganda has averaged annual growth rates of roughly 7 percent.
- Bangladesh, a nation that was once a symbol of famine, has transformed its agricultural sector. Rice production, for example, is up nearly 70 percent since the mid-1970s.
The Administration's Commitment to the Developing World
The United States is consistently the world's largest bilateral donor to the developing world. While many donors provide economic assistance, the United States provides resources both to strengthen security and foster economic growth. Congress appropriated in FY 2002 $17.1 billion to support these activities.
Key Facts
- The United States is the world leader in humanitarian assistance and food aid, providing over $3 billion combined in 2000.
- The United States is spending $1 billion per month for the war on terrorism. In addition, the United States contributed $976 million to international peacekeeping in 2001.
- The United States is the top importer of goods from developing countries, importing $450 billion in 2000, eight times greater than all Official Development Assistance (ODA) to developing countries from all donors.
- The United States is the top source of private capital to developing countries, averaging $36 billion annually between 1997 and 2000.
- The United States leads the world in charitable donations to developing countries -- $4 billion in 2000.
- The U.S. is one of the top two providers of Official Development Assistance (ODA). In 2000, the United States provided $10 billion in ODA. This ODA is expected to increase substantially from 2001 to 2003 in key sectors:
- HIV/AIDS - 54%
- Basic Education - 50%
- Trade and Investment - 38%
- Agriculture - 38%
- USAID's core "Development Assistance" account is expected to increase 22 percent overall from 2001 to 2003, with significant increases in key regions:
- Africa - 30%
- Asia and the Near East - 39%
- Latin America and the Caribbean - 29%
Growth Agenda for the World Bank & Other Development Banks
Beyond its direct bilateral efforts, the United States recognizes the importance of the Multilateral Development Banks (MDBs) in promoting economic growth and poverty reduction in the poorest countries. That is why the President has proposed a vigorous growth agenda to make these institutions more effective in raising standards.
Grants. Last June President Bush called on the World Bank and other development banks to provide up to 50 percent of their assistance to the poorest countries in the form of grants. This proposal recognizes that it is time to "stop the debt" for the poorest countries, especially for such urgent priorities as basic education, health care, and clean water that do not generate the revenues necessary to service loans. Many poor countries and development experts have recognized the importance of this proposal:
- Over 20 African nations -- from Benin to Tanzania -- have indicated their support for increased grants.
- Groups as diverse as the AFL-CIO, Catholic Relief Services, Friends of the Earth, the Heritage Foundation, and Oxfam have also voiced support.
Performance-Based Replenishment. The United States has also proposed a performance-based financing framework for its contribution to the International Development Association (IDA) -- the component of the World Bank that provides assistance to the poorest countries. In addition to the funds announced today:
- To demonstrate his commitment to these proposals and to these institutions, the President's budget requests an 18 percent increase for IDA over the next three years -- equivalent to a pledge of $2.85 billion -- if the World Bank demonstrates it can use the funds to achieve measurable results.
- The President's budget also includes an 18 percent increase to the African Development Bank's fund to assist the poorest -- by far, the largest increase among the major donors.
The Administration's Commitment to Fighting HIV/AIDS
The President recognizes that HIV/AIDS is ravaging many poor countries, especially in Africa. The Administration is strongly committed to fighting this disease:
- In FY 2003, the President proposed $1.1 billion to help fight HIV/AIDS in the developing world -- a 13 percent increase over FY 2002.
- Last year the President pledged U.S. support for a Global Fund to fight HIV/AIDS and other infectious diseases -- to date the Administration has committed $500 million to this Fund and will work with Congress to increase this commitment as the Fund proves successful.
- In total, the Administration proposes spending over $16 billion in FY 2003 to combat HIV/AIDS around the globe.
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