[Congressional Record Volume 141, Number 173 (Friday, November 3, 1995)]
[Senate]
[Page S16681]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      AID FOR THE WORLD'S POOREST

 Mr. SIMON. Mr. President, one of the most shortsighted things 
we can do is to cut back on our foreign assistance, which is already 
far behind what other Western nations do in terms of the percentage of 
our budget and in terms of the precentage of our national income.
  The New York Times had an excellent editorial titled, ``Aid for the 
World's Poorest.''
  I ask unanimous consent that the editorial be printed in the Record.
  The editorial follows:

                      Aid for the World's Poorest

       The new Republican majority in Congress wants to eliminate 
     government services that private markets could also provide. 
     Yet it has aimed its budget knife at a valuable program--
     economic aid to the world's poorest countries--that could not 
     possibly survive without Federal funds. Drastic cuts approved 
     by the House and Senate threaten to grind dreadfully poor 
     people into deeper poverty.
       Under President Bush's leadership, the United States 
     committed itself to contributing about $1.3 billion next year 
     to the International Development Association, an affiliate of 
     the World Bank that provides very-low-interest loans to poor 
     countries. As part of its deficit reduction program, the 
     House and Senate want to renege on that commitment and reduce 
     the contribution to between $577 million, the House figure, 
     and $775 million, the Senate's figure.
       Neither figure makes fiscal or ethical sense. The I.D.A. 
     loan program is cost-effective. Every dollar in American 
     contributions leads to $4 or $5 more in contributions from 
     other industrialized countries. To save a few hundred million 
     out of a $10 billion-plus foreign aid budget, Congress would 
     trigger a $3 billion reduction in I.D.A. loans.
       The loan program is also politically effective. By inviting 
     poor countries to open their economies to trade and adopt 
     market reforms, I.D.A. loans are a cheap way for Congress to 
     spread capitalism. The program's multilateral nature 
     insulates recipient countries from pressures to warp their 
     economic programs to suit the narrow export interests of 
     individual donors. I.D.A. programs worked well in Korea, 
     Thailand, Turkey and Indonesia. They are working well in 
     Ghana and Bolivia.
       Critics of the I.D.A. say that third-world countries would 
     become more prosperous more rapidly if they relief more on 
     private capital and far less on World Bank handouts. This 
     criticism applied, at least until recently, to World Bank 
     loans for dams and other infrastructure projects. As the new 
     president of the World Bank concedes, private capital markets 
     are willing and able to extend such loans. But private 
     investors will not bail out sub-Saharan Africa and other 
     economic disasters. Over 70 percent of private lending to 
     developing nations goes to fewer than a dozen countries. Sub-
     Saharan Africa claims only 2 percent.
       The I.D.A., not private capital, fights the spread of AIDS. 
     The I.D.A. helps pay for schools. The I.D.A. finances women's 
     health and childhood nutrition programs. The World Bank has 
     shifted its priorities from investing in concrete to 
     investing in people. No one else can take on this role. Do 
     American taxpayers really prefer to save themselves about $2 
     a year rather than leading the world to help those eking out 
     an existence on less than $2 a day?

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