Forward FYI Pollyanna Meets Cassandra June 1, 2002 By BILL KELLER Now that we've all had a good laugh at the spectacle of our fastidious treasury secretary touring African misery with a middle-aged rock star, now that we've snorted at Paul O'Neill and Bono in matching Ghanaian robes and tortured all the obvious U2 lyrics, it's time to ask whether anything is going on here besides soliciting MTV votes for the Republican Party. Before I try to answer that, a caveat. Whenever I set out to write something hopeful about the current administration, I hear a cynical voice whispering "Sucker!" in my ear. And on the subject of compassion, President Bush has more than the usual burden of proof. You don't need Ralph Nader to tell you this is an administration that has methodically exalted corporate power and fortified the obscene gap between America's rich and poor. So my credulity alarm tingles at the idea that the administration cares about the far more remote and powerless poor of Africa. And yet, something interesting seems to be happening. Something we've seen before. In the early 90's an improbable consensus came together on the issue of America's own poorest citizens. After a period of fatalism that hit bottom with Charles Murray's classic indictment of welfare, "Losing Ground," some conservatives shook off the deep pessimism that had become an excuse for doing nothing and began asking what would work. Some liberals, in turn, took off their blinders about the failings of welfare. Bill Clinton brought forth a tough-minded law pushing welfare recipients into jobs. Whatever you think of those welfare-to-work reforms, and most experts agree they did far more good than harm, that hard compromise changed the politics of poverty. As Jason DeParle, who covered all this for The Times, points out, the compromise created a belief that progress was possible, and thus took much of the poison out of the poverty debate. Suddenly there were serious, competing visions of how to help the poor - and a shared assumption that this was actually a worthwhile thing to do. Is something similar happening to our attitude toward the rest of the world's poor? Can we do for Congo what we did for Milwaukee? On one side you have (to oversimplify a bit) the conservative Cassandras, defeatists, moral scolds and free-market zealots who believe that until poor countries get a grip on their own bootstraps, any amount of foreign aid will be money wasted. This idea flowered in the Reagan/Thatcher years, and led the major development lenders to a policy of "structural adjustment": If you want loans, shrink your government, cut your deficits and tighten your belts. And as for those people dying of AIDS and malaria - not our problem. This approach was not only heartless but mindless; countries being eaten alive by disease, hunger and regional warfare were bad candidates for tough love. Their failures, of course, simply confirmed the pointlessness of aid. American donations shriveled, and not just under Republicans. During the Clinton years, our meager contribution to the world's poor dropped by nearly half. Nowadays your annual share of our aid to the 40 most pitiful countries is about the price of a fancy coffee and a pastry at Starbucks. If there is a Charles Murray of this debate it is William Easterly, an apostate World Bank economist who wrote an authoritative book last year outlining the failure of foreign aid to generate economic growth. His skepticism has helped stimulate some conservatives to look for new ways up from despair. On the other side you have (again, to oversimplify) the liberal Pollyannas, populists and romantics who regard aid as a simple humanitarian obligation, even a guilty debt we owe for our exploitation. Putting conditions on aid is a form of colonialism - except for conditions that suit a liberal agenda, such as empowering women or protecting the environment. Development strategies that feature trade and global business play into the hands of multinational capitalists. If you just pump in the money, countries will get better. What we are seeing now is an awareness among the Cassandras that foreign misery and chaos breed real dangers to our national interest; and among the Pollyannas, a recognition that more discriminating aid works better and does not necessarily amount to big-business imperialism. You have the Bush administration advocating debt relief and offering a little more money for the most desperate countries; you have Oxfam talking about the importance of lowering trade barriers as part of the war on misery. It's too early to celebrate a consensus, but it is possible to see some points that might be part of a compromise leading to more help for countries in lethal distress. One new common theme is a large-scale forgiveness of old debts - in effect, allowing the poorest countries to declare bankruptcy. This is not the magic bullet the Bono-ites make it out to be, and in a sense it unfairly rewards countries that squandered their loans on corruption and patronage. But the loans are not going to be repaid anyway. The Bush administration and many liberals embrace this idea, along with an important corollary: Stop making these make-believe loans in the first place. Give grants instead, which don't carry burdensome interest, and save loans for countries that will actually repay them. A second possible point of agreement is that we should no longer give money to governments we know will steal or misspend it. The late economist Peter Bauer famously described foreign aid as the phenomenon of taxing poor people in rich countries to support the lifestyles of rich people in poor countries. Even liberal aid economists, like Jeffrey Sachs of Harvard, say that as a general rule, aid should go to foreign governments that are democratic (or at the very least, responsive), that live by the law and that have more or less free markets. These are the countries with a hope of turning aid into economic growth, which may ultimately get them off life support. The tricky part is judging which countries qualify and, over time, measuring whether they are making good use of their aid. Mr. O'Neill talks about "productivity growth" as the litmus test of whether aid is effective, which sounds sensible in theory but a little simplistic. James Wolfensohn, president of the World Bank, notes that Mr. O'Neill seems to be setting a standard of effectiveness we don't even apply to our own government. At the same time, there is enormous good that can be done in failing countries without sending money through their bad governments. As Mr. Sachs points out, relief agencies can immunize children even in war zones. A third area of agreement is that aid should be more nimble and less bureaucratic. Mr. Easterly counts at least 10 annual reports that every World Bank country officer has to file on every project - impact on the environment, on indigenous peoples, on waterways, etc. Now the World Bank and its meaner sister, the International Monetary Fund, are everybody's favorite scapegoats - to the left, handmaidens of rapacious multinationals; to the right, an empire of waste. In fact, the bank does what the big donors, mainly Washington, tell it to do, and it has already begun some serious internal reforms. But it could use more competition. Mr. Bush has announced a $5 billion "Millennium Challenge Account," new grants to poor countries with good governments. We'll see if the U.S. can teach the World Bank some new tricks. A fourth principle should be to separate aid from geopolitical expediency. We used to give money to corrupt thugs - Mobutu Sese Seko in Zaire and Daniel arap Moi in Kenya come to mind - just because they were anti-Communist. Now we will inevitably give money to some unsavory autocrats for their cooperation against terror. But let's at least not do it out of the aid account. Let's put it in the homeland security budget, or somewhere else. One other important component of a new middle ground is a recognition that trade is at least as important as aid. Mr. O'Neill was rightly chewed out at every stop on his Africa tour because the latest American farm bill, signed by Mr. Bush, lavishly subsidizes American-grown food that competes with farm products from the poorest countries. On that point you'll find Bono and Oxfam singing perfect harmony with the Wall Street Journal editorial writers. Rich countries spend $350 billion a year on farm subsidies - six times what they spend on foreign aid. Will Mr. Bush veto the next farm bill for the sake of free-market principles and a few million African lives? Not until Ugandans vote in Florida. So here's an easier compassion test: Once we've got American aid focused on things that work, let's double it. Then double it again. That would finally catch us up to France in terms of national generosity (Qué Bono!) and leave a lot of cynics speechless. Copyright 2002 The New York Times Company ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html To contact the List Management, please send an e-mail to: [log in to unmask] ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~