MONTERREY,
Mexico -- US Treasury Secretary Paul O'Neill
has told the UN's first international conference
on
Financing for Development that Washington's new
$5 billion aid boost for poorer countries will
be based on accountability, efficacy and good
governance. He also said Washington "detests" the
social crisis in Argentina, and that in bilateral
talks he had held in Monterrey so far, he had discussed
a range of issues, such as the terrorism financing
problem, "which the whole civilized world
is working on together."
Explaining
President George W. Bush's new aid budget in detail
for the first time, he said the world had entered
a new era in terms of assistance to reduce poverty.
And he was quick to state at a news conference the
conditions under which the financing would be disbursed.
The monies would only go to nations which encourage
private enterprise through market-oriented mechanisms;
fight corruption and uphold the rule of law and competent
public administration; open their economies to trade
and investment; invest in human capital such as education
and health care; and observe and adopt the best practices
in business and government from around the world.
"For too long," he said, "we
have bragged about our efforts without measuring
our accomplishments. Now, at last, we will
hold accountable rich and poor governments
alike to make a difference-not just a donation."
One of the sharpest business minds in America,
O'Neill joined the treasury in January 2001
after retiring as chairman and CEO of Alcoa.
His experience with Alcoa, a global firm with
140,000 employees, has been chronicled in a
study by the Harvard Business School. His mastery
of federal budget details stems from his tenure
earlier at the US Office of Management and
Budget. Born in St. Louis, Missouri in 1935,
he has four children and 12 grandchildren.
The Monterrey conference, which Bush will
address on Friday, aims to go some way toward
achieving the ambitious goals of the UN's Millennium
Declaration of September 2000-reducing global
poverty by half and creating universal primary
education by the year 2015. It also calls on
donor nations to commit themselves to a target
of raising development assistance to 0.7 percent
of national income.
O'Neill, who
expressed confidence that Congress would
back the Bush plan to step up developing
aid, said, however, that America would not
go along with the 0.7 percent goal. "We
want to provide a substantial increase in our
aid. We are looking to raise the current level
of $10 billion annually to $15 billion annually
from the year 2006," he said. He said
he expected Congress to approve plans to lift
the aid budget gradually by $1.66 billion in
2004, $3.33 billion in 2005, and then by $5
billion from 2006 and beyond.
The plan has drawn criticism from some African
diplomats in Monterrey, who said that it was
too little for a nation with a $48 billion
defense budget.
But O'Neill
argued that wealthy nations had a responsibility
to see that their contributions
produced real improvements in the daily lives
of people in the poorest countries. "Over
the last 50 years, bilateral and multilateral
aid has delivered relief and disappointment.
Relief, as we provide food or vaccines where
there are none. But also disappointment, because
so many poor countries stay that way, and we
too rarely ask why."
After citing Washington's conditions for disbursing
the money to developing nations, he said donor
countries should expand grants instead of loans;
donor investments should boost productivity
in borrowers' economies; donors should play
a larger role in promoting investment reform;
donors should step up efforts to promote good
governance and assist poor countries in monitoring
their public expenditures.
On Argentina,
a major recipient of US assistance, he said
in response to a reporter's question
that Washington was not helping enough. "Believe
me," he said, "we are prepared to
provide any kind of technical assistance or
advice from other people, or suggestions, or
anything that we can do to help them remedy
the situation," he said. O'Neill said
he was scheduled to meet a senior Argentinean
official in Monterrey on Thursday. "We
detest the social dislocation in Argentina," O'Neill
said. "We've been working everyday behind
the scenes to try to be of help to President
Eduardo Duhalde and his cabinet ministers and
struggle with the difficult issues that ultimately
only they can deal with in order to create
the social stability conditions in Argentina
as a basis for economic growth." The US
Treasury chief cited the past history of IMF
lending to Argentina that still permitted the
country to fall into economic chaos, and said
it raised the question "how much is enough" before
loans were stopped.
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