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November 22, 2004

President Bush’s Second Term and Development: Five Issues Worth Watching

Posted by Administrator in Rethinking U.S. Foreign Assistance Tags: ,

What will George W. Bush’s second term mean for the U.S. role in development? Nancy Birdsall, president of the Center for Global Development, sees two related challenges facing U.S. development initiatives. First is updating and reforming U.S. aid institutions to better meet today’s foreign policy needs. Second is delivering on promises to increase U.S. assistance at a time of rising deficits. Addressing these twin challenges will be especially difficult because of the tension between the administration’s preference for unilateral action and the multilateral cooperation required for effective development assistance.

“President Bush launched several initiatives during his first term that suggest he intends for the U.S. to continue to play a dominant role in development and in the direction of multilateral development institutions such as the World Bank,” says Ms. Birdsall. “Doing this will require both continued reform of U.S. aid institutions and follow through on public pledges to provide additional resources for development,” she said.

In the early 1950s, the U.S. provided around 90% of total aid. As the number of donors increased, the U.S. share of total aid fell, to about 15% today. U.S. aid also declined relative to national income, by about two-thirds, to 0.13 percent of GNP, the lowest level of any major donor.

“Although the U.S. provides only a fraction of total aid, it still gives more than any other single country. If Washington follows through on promises to increase and reform U.S. development assistance, and mends its relations with other donors, there would be a solid basis for continued U.S. leadership,” she says. “Otherwise, U.S. leadership in development will become increasingly difficult.”

These challenges are common to many of the development issues that will confront the U.S. during President Bush’s second term. Five issues on which CGD has done significant research and helped to shape the policy debate are briefly summarized below. Each summary includes the views of a CGD expert on the topic and links to related CGD research. The issues: weak states, trade, debt relief, the Millennium Challenge Account, and HIV/AIDS.

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March 5, 2004

A Better Bush Legacy: How the president can change history without breaking the bank

Posted by Administrator in Aid Effectiveness, Rethinking U.S. Foreign Assistance Tags: , , ,

By Michael Clemens

President Bush literally shoots for the stars in his 2004 budget with a 5.6 percent increase to NASA’s budget. He doesn’t just want to win this fall; he wants a legacy. I wonder if he knows that Cadillac legacies are available at Pontiac prices.

The idea of sending a person to Mars is to elevate humanity as whole and reinforce America’s status as the world’s economic and intellectual powerhouse, as well as leave a monumental legacy for the president who proposed it. Eradicating or at least turning the tide against HIV world-wide would accomplish all these goals, and as I calculate, at a small fraction of the cost. This comparison is about more than sniping, “we should be spending the money at home not in the stars”, it’s about accomplishing a grand vision that elevates America’s stature in the world community. Surely being remembered as the President who had the vision to end HIV would be a proud legacy for President Bush.

The preposterous truth is that this pharaonic legacy would be cheap; in relatively terms, very cheap. First of all, how much will the Mars/Moon initiative cost? The Center on Budget and Policy Priorities, a respected, independent, non-partisan think tank in Washington, DC, ran the numbers and put the total cost in the “many hundreds of billions of dollars, possibly as much as $1 trillion” in a January 9th press release. While new allocations to NASA will be initially modest, recurring lifetime expenditures like maintaining a lunar base will quickly add up to this literally astronomical figure.

Next to that, the cost of stopping the greatest epidemic of infectious disease ever recorded costs a pittance. Addressing a summit meeting in Nigeria on April 26, 2001, Kofi Annan put the cost of a credible global fight against HIV/AIDS at “an additional seven-to-ten billion dollars a year … in the world as a whole, over an extended period of time.”

The math is easy. Take the cost of the AIDS fight at $8.5 billion, in the middle of Annan’s range. Any banker will tell you that a perpetual stream of $8.5 billion payments is roughly financially equivalent to a lump-sum, one-time payment of somewhere between $85 and $170 billion, depending on the interest rate. Remember, that’s a one-time payment, never to be repeated, and it would cover the entire global fight — even in the absurd case in which other donors and afflicted nations contributed nothing at all — so it’s surely an overestimate of the true cost to the US. And the stream of payments would not be literally perpetual, further lowering the true one-time equivalent cost. No matter what, that’s a small fraction of the cost of the hundreds of billions, potentially approaching $1 trillion, for the Mars/Moon plan. The bottom line: A Bush legacy of crushing history’s greatest epidemic would cost one fifth to one tenth as much as his lunar legacy.

Some say throwing money at AIDS isn’t enough, or that we need to take care of our own before we solve ‘foreign’ problems. Does money for global public health go to waste in strange corners of the world with funny names? Smallpox afflicted Abraham Lincoln right after the Gettysburg address; we eradicated smallpox in 1977 after decades of expensive effort. Polio crippled Franklin Delano Roosevelt; today the World Health Organization proclaims that polio has been “beaten back to only a few remaining reservoirs” and we are at the doorstep of forever eliminating it from the earth. We have saved our own and we have saved others through our contribution to these noble, epochal efforts.

These are the great monuments of our age so far, but the biggest target remains: Over 10,000 people die in Africa every day from HIV in Africa. That’s like a packed 747 jet crashing every four hours without end. It’s like September 11th every day of every week, all year long. We have the power to stop that, and stop it for all time. No other legacy that great could be this cheap.

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