Limbaugh shortchanged international relief and aid to Third World countries


Nationally syndicated radio host Rush Limbaugh denied international efforts to alleviate Third World debt and claimed that the United States is "practically" alone in acting to relieve crushing debt burdens in developing countries. In fact, the Bush administration has sought to dilute recent efforts, led by Britain, to initiate a bold new round of debt relief.

On the April 4 edition of the Rush Limbaugh Show, Limbaugh stated: "Who in the world is forgiving Third World debt? Us [the United States]! That's because we're practically the only one loaning any money. Then we're granting money all over the place. Fifteen billion dollars to fight AIDS in Africa."

But the U.S. has resisted a British proposal for wealthy nations to service World Bank debt on behalf of poorer countries, and President Bush is not on pace to fulfill his 2003 pledge of $15 billion in development aid to Africa. Further, while the U.S. is the largest contributor in international development aid in total dollars, it devotes the lowest percentage of gross national income in foreign aid of the 22 rich countries that make up the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD

The United States has opposed a plan by British Chancellor of the Exchequer Gordon Brown in which wealthy nations would pay off the debt that poor nations owe to the World Bank. The United States favors a less generous proposal in which the World Bank would simply write off Third World debts, rather than having rich countries take them over. In return, poor countries would accept lower aid levels in the future. The Wall Street Journal detailed the two proposals in a February 2 article:

The World Bank borrows on global markets at very low interest rates and lends to developing nations at slightly higher rates. If it wrote off big loans, the bank's credit rating might suffer and the bank might find itself having to pay more to borrow and having to charge more to lend.

Britain is proposing that rich nations use their own money to repay World Bank loans on behalf of the borrowers. That would keep money flowing back into the World Bank and allow it to maintain new-lending levels.

The Bush administration, facing record budget deficits, wants the World Bank to forgive existing debts and reduce the amount it lends in the future. The U.S., represented by Treasury Secretary John Snow, also wants the bank to increase the amount of aid it provides in the form of grants, instead of loans, so countries don't slip back into unmanageable arrears. The U.S. position troubles debt-relief activists, who fear that it would drain World Bank resources.

The Washington Post similarly described the U.S. proposal as "flimsier" than Brown's plan: "Brown's plan would involve billions of dollars in firm commitments by wealthy nations to ensure that the World Bank has the funds to keep providing aid. The commitments envisioned in the U.S. plan are much flimsier, and Washington's proposal also includes the idea of replacing many World Bank loans with grants, which some critics fear would weaken the bank."

A New York Times editorial on February 13 further described the difference between the British proposal and the American plan put forth by Treasury Undersecretary John Taylor:

If the World Bank just forgave those debts out of its own pocket, its funds would eventually be depleted, since the World Bank depends on those loan payments to finance other projects -- and more loans -- to these same poor countries. To counter that, Mr. Taylor would have the World Bank subtract the debt forgiven from whatever project or additional loan it planned to give a country that year. So, let's say Tanzania gets $100 million a year from the World Bank, and makes a loan payment every year of $20 million. Under Mr. Brown's plan, Tanzania gets $100 million in World Bank money, and Group of 7 [major industrial countries] members pick up the $20 million debt payment. That's foreign aid. Under Mr. Taylor's plan, Tanzania gets $80 million, and the World Bank picks up the $20 million debt payment. That's an accounting gimmick.

Limbaugh's claim that the U.S. has "grant[ed] ... [f]ifteen billion dollars to fight AIDS in Africa" is a reference to Bush's pledge in the 2003 State of the Union address "to commit $15 billion over the next five years" to combat HIV and AIDS in Africa. But so far, Bush and the Republican-led Congress are not on pace to meet that target. The Associated Press reported on December 3, 2004, that Bush and Congress have failed to enact actual appropriations to match his ambitious pledge:

"In the face of preventable death and suffering, we have a moral duty to act, and we are acting," Bush said in May 2003, when he signed a five-year, $15 billion bill aimed mainly at HIV and AIDS sufferers in sub-Saharan Africa. Congress passed the legislation just four months after Bush proposed it in his State of the Union address.

But in Washington, approving or authorizing a program does not necessarily mean the money will be there when Congress passes its annual budgets. So far, Congress has not come up with the $3 billion a year average, appropriating $2.4 billion in the 2004 budget year and $2.9 billion for 2005.

U.S. development aid to poor nations is very high in gross terms, but very low on a per capita basis. According to the OECD's report on "DAC Members' net Official Development Assistance in 2003," the United States "has consolidated its position as the world's largest aid donor in volume terms, providing 24 percent of total DAC ODA [official development assistance]," but has provided only 0.15 percent of gross national income, which is the lowest figure for any of the 22 member states. The report notes that Denmark, Luxembourg, the Netherlands, Norway and Sweden have met the United Nations' development target -- established at a meeting in Monterrey, Mexico -- of 0.7 percent of gross national income, while Ireland, Belgium, Finland, France, Spain, and Britain aim to reach that target between 2007 and 2013.

But the United States has no firm plans to reach the targeted level of development aid. The Washington Post reported on January 15: "U.S. officials now say that the president never promised to fulfill the goal set in Monterrey anytime soon -- or ever. ... Reaching the goal of the Monterrey Consensus is unlikely because the United States lacks the political will and gives priority to domestic demands."

A more comprehensive survey of international generosity -- which measures official government aid as well as other policies that affect poor countries (which involves using some arguably subjective criteria to quantify the pro-development merits of various policies), including trade, immigration, investment, and security -- places the United States 7th among the world's 21 richest nations.

Posted In
National Security & Foreign Policy, International Aid
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