by Austin Bay
It's a deceptive estimate, but nevertheless an estimate with too
many zeros to ignore.
Since 1950, America and its allies have spent a cool trillion in
U.S. dollars on anti-poverty and economic programs in poor and developing
nations. Even though it's over a five decade span, that's a stack of tax
dollars -- from plumbers, school teachers, you, me -- dedicated to improving
the economic and social conditions of this planet's impoverished, ill and
Let's first deal with the deceptive component of the cash pile.
World War II didn't quite end. Instead of fading, the front lines froze in
Central Europe, producing the Cold War -- a military, economic and political
siege engaging Soviet East and Allied West.
The Truman and Eisenhower administrations saw "foreign aid" as a
strategic weapon. Aid dollars -- for food, for basic infrastructure, for
industrial development -- could fortify weak nations vulnerable to Soviet
intrigue. Propping up the economy of a nation targeted by a Soviet-backed
"liberation front" made strategic sense, politically and, yes, militarily.
Money could also buy other forms of "strategic influence," like
the support of Third World elites. Who dared call it bribery, if the check
came from the U.S. Treasury?
But when dealing with local autocrats, the potentates and
presidents-for-life in the hard corners of post-colonial Africa, South and
Central America, and Asia, Washington and the West didn't stress financial
accountability. If money thwarted Soviet subversion, or bought a U.N. vote,
Gobs of developmental aid, gurgling through corrupt Third World
autocracies, became personal deposits in Swiss bank accounts. Of course, aid
wasn't the only source of cash for the various Mobutus, Suhartos, and
Mugabes -- endemic corruption stunted business development and sapped
non-governmental aid. Imagine Enron and Global Crossing as being the
national government (with regulatory and police power), as well as secretive
business enterprises. The term "banana republic" provides a fruit logo for
the condition. "Kleptocracy" -- rule by systemic thieves -- is the gut
So that's part of the cool trillion's trail. Scads of it was
wasted or purloined. What did the remainder buy, or not buy? Let's pick on
Africa for a moment, because the stats there are so chilling. Expected life
spans in Africa are no longer now than they were in 1960. Yes, AIDs is one
terrible reason, but African incomes have also failed to increase.
With such dismal failures in the foreground, the U.N.-sponsored
International Conference on Financing for Development, held this week in
Monterrey, Mexico, seeks to reach what U.N. Secretary General Kofi Annan has
called "a new global deal" for aid and trade in the post-Cold War era. It's
a U.N. conference where jargon actually connects to real-world issues. On
the table are economic incentives for addressing social issues (such as
teen-age pregnancy) that hinder economic empowerment. Poor nations are
discussing market-oriented reforms and promising to confront the paralysis
of corruption. The "debt burden" is on the table, with the poor asking for
debt reductions from the wealthy. Yes, debt from past abuses beggars the
future. Expect "targeted" debt reduction (e.g., debt "exchanged" for
eliminating corrupt practices) to occur.
However, recalculating "macro-economic" and political policies
is only part of the new approach. In so many hard corners, hydroelectric
dams and bad debt aren't the most pivotal development issues -- it's human
Enter the hottest buzz in developmental aid -- micro-finance and
micro-development. "Micro-development" is a less grandiose, though
demonstrably effective means for helping build the "local human
infrastructure" necessary to support positive, long-term economic growth.
Mexican President Vicente Fox supports "micro-development" in a
major way, but the most effective "micro" proponents aren't governments but
religious and secular organizations.
"Micros" focus on direct aid that circumvents corrupt systems.
The Grameen Bank is an exemplary "micro" advocate. Grameen provides
economically creative individuals and communities with low-cost loans and
advice. Grameen addresses the literally down and dirty issues that hinder
development. Loan recipients learn to site and dig outhouses so water isn't
polluted. Grameen also emphasizes individual accountability and integrity.
Five Talents, a U.S.-based group associated with the Episcopal Church, is
another "micro" advocate working in Africa and Asia.
Changes wrought by "micros" may be small, but they are victories
of verifiable substance and build a human base for "macro-development"
success. Micro mounts up. Grameen estimates its projects have added 1
percent to Bangladesh's GDP. They accomplished this with small loans and the
sweat of local people motivated by genuine opportunity.
While the frittered trillion isn't chump change, these
new, creative approaches offer something more precious: hope.