[Congressional Record Volume 140, Number 35 (Thursday, March 24, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
            THE TRIUMPH OF ECONOMIC POLICY OVER ECONOMIC AID

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                             HON. TOBY ROTH

                              of wisconsin

                    in the house of representatives

                        Thursday, March 24, 1994

  Mr. ROTH. Mr. Speaker, our foreign aid system and the vast 
bureaucracy that administers it are in a shambles. For years, billions 
of hard-earned taxpayer dollars have been given to help developing 
nations grow economically with little result. In fact, in many cases 
these nations are worse off now than they were decades ago.
  As we reassess our foreign aid programs this year, it is worth 
remembering that the most successful developing countries have created 
their own economic success by fostering economic investment, 
productivity, and entrepreneurship wherever possible. In other words, 
economic policies--not aid--make the difference for countries seeking 
economic growth.
  On this subject, I commend to my colleagues' attention an article 
written by a constituent of mine, Dr. Ismail Shariff, the current chair 
of the department of economics at the University of Wisconsin-Green 
Bay.

            [From the Green Bay Press-Gazette, May 8, 1993]

        Economic Policies Are More Effective Than Extensive Aid

                        (By Dr. Ismail Shariff)

       Over the past four decades, the U.S. has provided the so-
     called developing world with some $500 billion in aid.
       Yet throughout this period, the American people have heard 
     from various pulpits only that poverty persists in these 
     lands and they must send more money.
       Before sending in their checks, they logically might ask: 
     What happened to the previous $500 million?
       Two recent reports, one by the Agency for International 
     Development and one by a congressional task force, offer an 
     explanation for what's wrong with development aid.
       Administrators say that no country receiving U.S. aid in 
     the past 20 years has ``graduated'' from developing to a 
     developed status. With remarkable candor, the AID reports 
     that all too often U.S. aid promises dependence on yet more 
     aid, not development, and calls for a radical reshaping of 
     foreign aid programs.
       The AID study follows a bipartisan task force report by the 
     House Foreign Affairs Committee. It said aid programs are so 
     encrusted with red tape they no longer either advance U.S. 
     interests abroad or promote economic development. The task 
     force skewered both Congress and the Bush administration for 
     piling 33 different, often conflicting, foreign aid 
     objectives one on top of another.
       The panel co-chaired by Democratic Rep. Lee Hamilton and 
     Republican Benjamin A. Gilman recommends repealing the 1961 
     foreign aid law abolishing AID authorizing a new agency and 
     ending congressional micro-management of aid programs. It 
     noted that the current programs are caught in a maze of 75 
     different statutory priorities and 288 separate 
     congressionally mandated reports. Changes in any of 700 
     programs must be reported to Congress.
       The AID report provides evidence that sound economic 
     policies, not foreign aid, have reduced poverty abroad.
       Growth-centered South Korea has cut its infant mortality 
     rate by more than 60 percent since 1976 and enrolls more than 
     90 percent of its children in high school. China's 
     agricultural liberalization has doubled rural income since 
     1979 and the nation now can feed itself. It is noteworthy to 
     realize that policies of economic growth are a constant among 
     success cases, regardless of aid they have received.
       In the light of the above conclusions, as Congress begins 
     to debate President Clinton's budget outlays for 1994 fiscal 
     year, specific attention should be paid to the proposed $16 
     billion foreign aid package. Also, in light of growing budget 
     deficit at home, the question of continuing the foreign aid 
     package without any realistic consideration is no longer 
     acceptable.
       About six months ago, Sen. Bob Dole, the Senate minority 
     leader, raised for the first time on the Senate floor the 
     issue about the logic of continuing foreign aid. He went on 
     to suggest that we should let our foremost aid recipients, 
     Israel and Egypt (they received about half of the total U.S. 
     aid in 1992), know that the United States can no longer 
     continue to dole out aid as in previous years due to its 
     growing deficit at home and mounting demand for scarce tax 
     dollars.
       In other words, the U.S. has to realize that it cannot 
     afford to year after year billion of dollars in foreign aid, 
     and that all indications point out to that U.S. foreign aid 
     to date has failed to accomplish its intended objective of 
     making the recipient countries graduate from less developed 
     to developed status.
       Therefore, the only sensible thing left for the U.S. is to 
     export policies that were responsible to create its own 
     wealth to the less fortunate countries. Thus, exporting 
     economic policies that produce real results would be the most 
     generous aid program for all.

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