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Monterrey Summit to Focus on Foreign Aid

Dozens of world leaders will meet later this week in Monterrey, Mexico, to discuss ways to increase the effectiveness of foreign assistance to the world's poorest countries. There is a new interest in establishing benchmarks to make aid programs more successful.

The World Bank is suggesting that global aid be doubled to $100 billion a year, a goal almost certain not to be met. While there is a willingness to consider increasing aid, there is a new emphasis on assuring that the money is well spent. Statistics show that while $1 trillion has been spent on aid in the last 50 years, half of the world's population still lives on less than two dollars a day. Aid programs seldom popular in donor countries are judged to have been largely ineffective.

Mark Malloch Brown, the head of the United Nations Development Program, says certain countries are making good use of aid and more money is needed for these strong reformers.

"If we are to sustain the incentive system to maintain the momentum of reform we have to do much better in terms of the levels of development assistance," says Mr. Brown. "Trade, investment and debt relief won't do it alone. If you take countries like Uganda and Mozambique, which have been model reformers, the level of international foreign investment in their economies still remain disappointing. And is likely to pick up only after some years more of sustaining public investment."

President Bush, who will be attending the Monterrey conference, announced last week that he will seek a 15 percent or $5 billion increase in U.S. aid over the next three years.

Sonal Shah is a researcher at the Center for Global Development in Washington who applauds the U.S. move towards bigger but more targeted aid programs.

"You want to be able to highlight countries that are doing well. And you want to be able to give them more money because they are doing well," explains Ms. Shah. "Right now, what you have is the same pot of money given to everybody across the board."

Ms. Shah believes Mr. Bush is setting the U.S. aid program in a new, more positive direction.

Alan Larsen, the U.S. undersecretary of state for economic affairs, says President Bush wants to make aid programs more results oriented.

"His focus in going to Monterrey will be to see if other leaders share our sense of commitment, share our view of what the effective strategy is, and share our desire to have a very accountable approach to make sure that we really start to achieve the outcomes we all want," he explains.

The Bush administration wants the World Bank to shift its loans to the poorest countries into outright grants, a move opposed by most European countries. It is also demanding that future funding for aid be tied to results.

Britain and the United Nations have strongly endorsed the World Bank's call for a doubling of aid. Aid budgets peaked in 1992 with allocations of $61 billion. Aid levels have been decreasing ever since while the income gap between rich and poor countries has been steadily widening.