THE 16 pre-conditions or performance criteria for additional aid to the poor countries from the US as set by President George Bush under his new Millennium Challenge Account (MCA) seem pretty tough.
For all that elaborate or well calibrated prescription to qualify for supplementary US aid, in addition to the normal US assistance, the ultimate increase in such aid will only be $5 billion in three years ending 2006.
The fact is that under the UN goal the rich industrial states are expected to provide 0.7 per cent of their gross domestic product to the developing countries, but the US contribution has been a low 0.1 per cent of its GDP despite the enormous wealth it gained in the 1990s through a decade of soaring prosperity.
Small countries like Norway and Denmark provide around one per cent of their GDP as aid to developing countries and other countries like Sweden and the Netherlands are not far behind. But the richest country in the world is far behind them despite being the lone super-power and its eagerness to impose its political will around the world using its military supremacy.
Hence there has been pressure on the US to increase its aid. And Britain’s Chancellor of Exchequer, Gordon Brown, has been among the Western leaders very vocal about it.
Responding to such appeals President Bush used strong rhetoric at the Inter-American Development Bank meeting on March 14 this year and called for “a new compact for global development defined by new accountability both for rich and poor countries alike. Greater contribution from the developed nations must be linked to greater responsibility from developing nations.”
The new US funds which will eventually mean five billion dollars over the current level of US assistance will go into a new MCA devoted to projects in nations that “govern justly, invest in their people and encourage economic freedom.”
The 16 performance indicators as they are called are grouped together in three major categories. And the fund is to be administered by a board of directors headed by the secretary state.And its members, directors will be cabinet level officials.
None of the 16 performance indicators is against the interest or welfare of the assistance receiving countries. Under the clause “governing justly comes civil liberties in the countries, political rights, voice of the people and accountability, the government’s effectiveness, rule of law and control of corruption.
Under investing in people come public primary education and health through spending a percentage of the GDP on both.
And under promotion of economic freedoms come country credit-rating, inflation, three-year budget deficits, trade policy, regulatory quality and time taken to start a new business.
To qualify as a better performer a country has to score above the median in half the indicators in each of the three policy areas, except inflation which must be under 20 per cent annually.
For the US budget years of 2004 and 2005 the countries with per capita incomes below $435 will be considered and in the third year countries with per capita income up to $2,975 annually. If that income is based not on the cash income of the people and not the far higher purchasing power parity of their currency in relation to the US dollar Pakistan may not qualify for the new MCA aid as its per capita income on the basis of purchasing power parity is said to be $2,000 a year and not the official $425 per capita per year.
And that means that until the last of the three years the new assistance will go to the ‘Highly-indebted Poor Countries,’ like the deft relief to them earlier.
What that means is too much fuss is being made by the US to help a small number of extremely poor countries in the world and it will not come to the assistance of the developing countries like Pakistan with large populations who need to fight poverty as well as invest greatly on social sector development, particularly education and public health. Without such assistance good governance and rule of law may not be possible or sustainable.
What is happening is that in name of globalization the rich countries are becoming richer while the poor are becoming poorer, and a country like Pakistan has one-third of its people living below the poverty line, saying their per capita income is 2000 dollars a year on the basis of PPP does not make them any less poor or help them live a better life.
While each of the 16 pre-conditions is acceptable to the aid-receiving states making a success of all of them together or even a half of them, as the new stipulation demands, can be very tough for some of the states with serious economic problems which need more assistance.
What should a state do when it has difficult neighbours as Pakistan has and one of the neighbours is too large and spends too much on defence, acquires the most sophisticated weapons in large numbers and assumes a threatening pose from time to time?
How can a state accept most of the new obligations when it has a large population like Pakistan and does not have the means to provide schools and hospitals to them?
And how can a state like Pakistan fulfil the 16 conditions or even half of them when its feudal and tribal hangover is strong and the feudal lords and tribal chiefs resist change fearsomely, and a return to democracy often means a throw-back to feudal dominance and tribal supremacy?
Take for example the states of sub-Saharan Africa with its tribal wars and inter-state conflicts on one side and excessive poverty and the ravaging AIDS on the other side to add to the old epidemics? What can even the best reformers achieve in such conditions?
Hence if the Western states want peace, less poverty and social progress in the world, particularly in the developing countries, they have to double their aid and raise the total to at least $50 billion. And they have to raise the ratio of their aid to the UN goal of 0.7 per cent of their GDP and finally to one per cent for a period of ten years.
If they will not do that and prefer to spending far more on their armed forces and intelligence activities, as the US prefers to do, it cannot achieve success in its goals and peace will be a distant goal in this world. Instead the grovelling poverty will increase the number of crimes, which will ultimately lead to terrorism.
The issue is not how good or desirable are the 16 pre-conditions for stepping up US aid but how practicable they are for some of the countries beset with too many problems in difficult regions. Hence instead of relying on their arms and devising more powerful new weapons, Western states, like the US should be stepping up their aid and try to eliminate abject poverty from the world rather than fixing 2015 as the target date for reducing half the poverty in the world, which is a case of wanting too little too far from now.
