[Public Papers of the Presidents of the United States: George W. Bush (2002, Book I)]
[March 14, 2002]
[Pages 408-412]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks at the Inter-American Development Bank
March 14, 2002

    Thank you all. Sientese. Gracias, Enrique. It's about time you invited a President here. [Laughter] 
It's about time one accepted.
    Thank you for the energy and leadership you bring to the challenge 
of global development. I'm honored to be at the Inter-American 
Development Bank, which has done a lot of good in our hemisphere over 
the last 40 years. I appreciate your work, and I'm proud of your 
accomplishments.
    Along with many of you, I'll be in Monterrey, Mexico, next week as 
leaders from around the world focus on the important work of reducing 
global poverty.
    I'm here today to announce a major new commitment by the United 
States to bring hope and opportunity to the world's poorest people. 
Along with significant new resources to fight world poverty, we will 
insist on the reforms necessary to make this a fight we can win.
    As you can see, I'm traveling in some pretty good company today: 
Bono. [Laughter] We just had a great visit in the Oval 
Office. Here's what I know about him: First, he's a good musician; 
secondly, he is willing to use his position in a responsible way. He is 
willing to lead, to achieve what his heart tells him, and that is 
nobody--nobody--should be living in poverty and hopelessness in the 
world. Bono, I appreciate your heart. And to tell you what an influence 
you've had, Dick Cheney walked in the Oval 
Office; he said, ``Jesse Helms wants us to 
listen to Bono's ideas.'' [Laughter]
    I appreciate Paul O'Neill, Secretary of 
Treasury. I appreciate his work; I appreciate his advice. He's a fine 
member of my Cabinet. Cardinal McCarrick, thank you for coming, sir; I'm honored to have you 
here. Jim Wolfensohn, thank you for your 
leadership of the World Bank. I appreciate Jose Fourquet. Thank you, Jose, for taking on the responsibility you've 
done. It's good to see Andrew Natsios here 
of AID. Thank you, Andrew, for coming. You've done a fine job, by the 
way, in helping prevent starvation in Afghanistan. I appreciate your

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work, and I appreciate your focus. I want to thank John 
Negroponte, Embajador de la United 
Nations. I want to thank all the other Ambassadors who are here. I look 
around, I can see many familiar faces. Thank you all for coming today.
    I appreciate the Members of the United States Congress who are here. 
I see Frist and DeWine 
from the United States Senate. I appreciate both Senators for coming. I 
appreciate the Congressman from Puerto Rico; thank you for coming, senor. I see the Congress 
lady from Miami, Florida. I see Spencer 
Bachus from Alabama. I think that's it; I 
better--well, anyway, if anybody else is here--[laughter]--Chris 
Cannon, I think, from Utah is here. Hey, Chris, 
thank you for coming, and thank you all for taking an interest in this 
subject. It's an important subject.
    As you all know and we all know, America is engaged in a global 
struggle, a mighty struggle against the forces of terror. Yet, even as 
we fight to defeat terror, we must also fight for the values that make 
life worth living, for education and health and economic opportunity. 
This is both the history of our country, and it is the calling of our 
times.
    In World War II, we fought to make the world safer, then worked to 
rebuild it. As we wage war today to keep the world safe from terror, we 
must also work to make the world a better place for all its citizens.
    The advances of free markets and trade and democracy and rule of law 
have brought prosperity to an ever-widening circle of people in this 
world. During our lifetime, per capita income in the poorest countries 
has nearly doubled. Illiteracy has been cut by one-third, giving more 
children a chance to learn. Infant mortality has been almost halved, 
giving more children a chance to live. Nations from India to Chile have 
changed old ways and, therefore, found new wealth. Nations from Turkey 
to Mali have combined Islam with progress.
    Yet in many nations, in many regions, poverty is broad and seemingly 
inescapable, leaving a dark shadow--a dark shadow--across a world that 
is increasingly illuminated by opportunity. Half the world's people 
still live on less than $2 a day. For billions, 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 only 38 years. In Sierra Leone, nearly 
one-third of all babies born today will not reach the age of 5, and in 
Sudan, only half the children attend school.
    This growing divide between wealth and poverty, between opportunity 
and misery, is both a challenge to our compassion and a source of 
instability. We must confront it. We must include every African, every 
Asian, every Latin American, every Muslim, in an expanding circle of 
development.
    The advance of development is a central commitment of American 
foreign policy. As a nation founded on the dignity and value of every 
life, America's heart breaks because of the suffering and senseless 
death we see in our world. We work for prosperity and opportunity 
because they're right. It's the right thing to do. We also work for 
prosperity and opportunity because they help defeat terror.
    Poverty doesn't cause terrorism. Being poor doesn't make you a 
murderer. Most of the plotters of September the 11th were raised in 
comfort. Yet persistent poverty and oppression can lead to hopelessness 
and despair. And when governments fail to meet the most basic needs of 
their people, these failed states can become havens for terror.
    In Afghanistan, persistent poverty and war and chaos created 
conditions that allowed a terrorist regime to seize power. And in many 
other states around the world, poverty prevents governments from 
controlling their borders, policing their territory, and enforcing their 
laws.

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    Development provides the resources to build hope and prosperity and 
security. Development is not always easy, but the conditions required 
for sound development are clear. The foundation of development is 
security, because there can be no development in an atmosphere of chaos 
and violence. Today, the United States is leading a broad and vast 
coalition defending global security by defeating global terror. Meeting 
this commitment is expensive, but securing peace and freedom is never 
too expensive.
    Development also depends upon financing. Contrary to the popular 
belief, most funds for development do not come from international aid; 
they come from domestic capital, from foreign investment, and especially 
from trade. America buys and imports over 500--$450 billion in products 
from the developing world every year--$450 billion of purchases every 
single year. That is more than 8 times the amount developing countries 
receive in aid from all sources. Trade is the engine of development, and 
by promoting it, we will help meet the needs of the world's poor.
    Successful development also requires citizens who are literate, who 
are healthy and prepared and able to work. Development assistance can 
help poor nations meet these education and health care needs. That's why 
the United States provides more than $10 billion a year for development 
assistance for food and for humanitarian aid. That is also why my 
administration has committed $500 million to the global fund to fight 
AIDS and other infectious diseases.
    And we will work with Congress to increase this commitment, to show 
our love and compassion by increasing our commitment as the fund gets 
organized, develops a strategy, and shows success. We're spending 
billions more on AIDS research and other programs to fight the disease 
around the world.
    Yet many of the old models of economic development assistance are 
outdated. Money that is not accompanied by legal and economic reform are 
oftentimes wasted. In many poor nations, corruption runs deep; private 
property is unprotected; markets are closed; monetary and fiscal 
policies are unsustainable; private contracts are unenforceable.
    When nations refuse to enact sound policies, progress against 
poverty is nearly impossible. In these situations, more aid money can 
actually be counterproductive because it subsidizes bad policies, delays 
reform, and crowds out private investment.
    The needs of the developing world demand a new approach. In 
Monterrey, we have a tremendous opportunity to begin acting on a new 
vision of development. This new vision unleashes the potential of those 
who are poor, instead of locking them into a cycle of dependence. This 
new vision looks beyond arbitrary inputs from the rich and demands 
tangible outcomes for the poor.
    America supports the international development goals in the U.N. 
Millennium Declaration and believes that these goals are a shared 
responsibility of developed and developing countries. To make progress, 
we must encourage nations and leaders to walk the hard road of 
political, legal, and economic reform so all their people can benefit.
    Today I call for a new compact for global development, defined by 
new accountability for both rich and poor nations alike. Greater 
contributions from developed nations must be linked to greater 
responsibility from developing nations. The United States will lead by 
example. We will increase our development assistance by $5 billion over 
the three--over the next three budget cycles. This new money, above and 
beyond existing aid requests--is above and beyond existing aid requests 
in the current budget I submitted to the Congress.
    These funds will go into a new Millennium Challenge Account. Under 
this account, among other efforts, we will expand our fight against 
AIDS. We will bring computer instruction to young professionals in 
developing nations. We will assist African

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businesses and their people to sell goods abroad. We will provide 
textbooks and training to students in Islamic and African countries. We 
will apply the power of science and technology to increase harvests 
where hunger is greatest.
    These are some of the examples of what we intend to do. The goal is 
to provide people in developing nations the tools they need to seize the 
opportunities of the global economy. In return for this additional 
commitment, we expect nations to adopt the reforms and policies that 
make development effective and lasting.
    The world's help must encourage developing countries to make the 
right choices for their own people, and these choices are plain. Good 
government is an essential condition of development, so the Millennium 
Challenge Account will reward nations that root out corruption, respect 
human rights, and adhere to the rule of law. Healthy and educated 
citizens are the agents of development, so we will reward nations that 
invest in better health care, better schools, and broader immunization. 
Sound economic policies unleash the enterprise and creativity necessary 
for development, so we will reward nations that have more open markets 
and sustainable budget policies, nations where people can start and 
operate a small business without running the gauntlets of bureaucracy 
and bribery.
    I've directed Secretary Powell and 
Secretary O'Neill to reach out to the world 
community, to develop a set of clear and concrete and objective criteria 
for measuring progress. And under the Millennium Challenge Account, we 
will apply these criteria rigorously and fairly.
    Countries that live by these three broad standards--ruling justly, 
investing in their people, and encouraging economic freedom--will 
receive more aid from America. And more importantly, over time, they 
will really no longer need it, because nations with sound laws and 
policies will attract more foreign investment. They will earn more trade 
revenues, and they will find that all these sources of capital will be 
invested more effectively and productively to create more jobs for their 
people.
    The evidence shows that where nations adopt sound policies, a dollar 
of foreign aid attracts $2 of private investment. And when development 
aid rewards reform and responsibility, it lifts almost 4 times as many 
people out of poverty, compared to the old approach of writing checks 
without regard to results.
    Marrying good policies to greater aid led Mozambique to a 10-percent 
growth rate in 2001. This approach help Uganda open its schools to more 
children and increase teacher pay by 2,700 percent. Bangladesh, a nation 
that was once a symbol of famine, has transformed its agricultural 
economy; rice production is almost up by 70 percent since the mid-
seventies.
    The new compact I propose would multiply this progress. I challenge 
other nations and the development banks to adopt this approach as well. 
America's support for the World Bank will increase by almost 20 percent 
over the next 3 years. We expect the World Bank to insist on reform and 
results, measured in improvements in people's lives. All the development 
banks should adopt a growth agenda, increasing their support for private 
sector enterprises and focusing more on education, as the Inter-American 
Development Bank has done.
    And I challenge the development banks to provide up to half of the 
funds devoted to poor nations in the form of grants, rather than loans--
grants instead of loans that may never be repaid. Many have rallied to 
the idea of dropping the debt. I say let's rally to the idea of stopping 
the debt.
    This new compact for development can produce dramatic gains against 
poverty and suffering in the world. I have an ambitious goal for the 
developed world, that we ought to double the size of the world's poorest 
economies within a decade. I know some may say that's too high a hurdle 
to cross. I don't believe so, not with the right reforms and the right 
policy. This will require

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tripling of current growth rates, but that's not unprecedented. After 
all, look at the dramatic growth that occurred in Asia in the 1990s.
    With the world's help and the right policies, I know--I know--that 
the developing world can reform their own countries--I know it can 
happen--and, therefore, better their own lives. They can live in a world 
where their children's dreams are ignited by liberty and learning, not 
undermined by poverty and disease. They can live under governments that 
deliver basic service and protect basic rights. The demands of human 
dignity know no borders and know no boundaries. They are universal. And 
so are the gifts of creativity and enterprise that lead to prosperity. 
When governments repress and punish those gifts, no amount--no amount--
of aid is sufficient to lift people from poverty. When governments honor 
these gifts, every nation can know the blessings of prosperity.
    People across the world are working to relieve poverty and 
suffering, and I'm proud of their efforts. I appreciate 
Bono. I appreciate groups like the Sisters of Charity. 
Some were motivated by simple decency; some serve a God who is impatient 
with injustice; and all have made this commitment. We cannot leave 
behind half of humanity as we seek a better future for ourselves. We 
cannot accept permanent poverty in a world of progress. There are no 
second-class citizens in the human race.
    I carry this commitment in my soul, and I'll carry it with me to 
Monterrey next week. As the civilized world mobilizes against the forces 
of terror, we must also embrace the forces of good. By offering hope 
where there is none, by relieving suffering and hunger where there is 
too much, we will make the world not only safer but better.
    Thank you very much.

Note: The President spoke at 1:21 p.m. in the atrium. In his remarks, he 
referred to Enrique V. Iglesias, President, and Jose A. Fourquet, U.S. 
Executive Director, Inter-American Development Bank; Theodore Cardinal 
McCarrick, archbishop of Washington; and Resident Commissioner Anibal 
Acevedo-Vila of Puerto Rico.