Budget Priorities to
Address Global Human Needs

What can and should be done?

Human security flourishes where there is a culture of peace, a strong economic life, democratic participation, an educated population, personal safety, healthy families, and a healthy environment. Yet, in too many places around the world today, we find instead poverty, oppression, lack of educational opportunity, prejudice, greed, fear, hatred, environmental degradation and depletion, and war. Combined, these provide the abused, neglected, damaged soil from which those who would preach hatred and promote violence cultivate their following and reap their grim harvest. Such conditions can easily be found both at home and abroad.

The global challenge

The UN Development Programme's Human Development Report 2001 provides a snapshot of the global population.

* More than 854 million adults are illiterate, including 543 million women.

* Over 960 million people lack access to improved water resources.

* Three hundred twenty-five million children do not attend school, including 183 million girls.

* Eleven million children under five die each year from preventable diseases.

* 1.2 billion people live on less than one dollar a day, and 2.8 billion live on less than two dollars a day.

* Malnutrition affects one-half of all children in South Asia and one-third in Africa.

In Arab countries, employment and economic growth over the past ten years have lagged in comparison to all but the poorest countries in sub-Saharan Africa. In Egypt, the most populous Arab country, 60% of all people live at or below the poverty line.

Worldwide, 40 million people are infected with HIV. Of these, 25 million live in Africa. In some African countries, 20% of adults are infected. Ninety-five percent of those infected do not have access to life-prolonging treatments. Millions of children have been orphaned.

At the UN Millennium Summit in 2000, world leaders agreed to work together to halve global poverty, reduce child mortality by two-thirds, and achieve universal primary education by 2015. The UN has also called for a sustained, multi-billion dollar global health initiative to combat the spread of HIV, tuberculosis, and malaria. Unless the HIV/AIDS pandemic in the developing world is brought under control, little progress toward the important Millennium Summit goals will be possible.

Debate has focused on how to advance the agenda of the Millennium Summit. The U.S. government has insisted that increasing trade and investment is the best way. Others governments, primarily those of developing countries which attract few investors, disagree. These governments maintain that the first step must be more development assistance and debt forgiveness. Such measures would allow these governments to invest more in health care, education, and economic development.

Private foreign investment and trade are certainly important in advancing development. In the 1990s, nations with developing economies received about four times as much money from private foreign investors as from donor governments and multilateral institutions, creating much-needed employment.

However, private capital tends to go where conditions are best, not worst. About 80% of private investment went to only fifteen developing countries in the late 1990s, according to Oxfam. Poorer countries that are less attractive to investors need more aid in the near term to develop their economies and create a climate that will encourage investment.

Leading the effort for more aid, Gordon Brown, UK Chancellor of the Exchequer, has called for a new "Marshall Plan" for the developing world. He has challenged donor countries to increase their current aid levels to $100 billion per year from the current $60 billion per year.

Oxfam, however, estimates that, in order to accomplish the UN goals by 2015, donor countries would have to triple their current level of giving. They would have to increase their contributions by $114 billion, not the $40 billion proposed by Gordon Brown. As large as this increase sounds, it would amount to only about 0.7% of the donor countries' combined Gross National Products (GNP). Currently, the average level of giving for donor countries is about 0.22% of their GNP. The U.S. gives less than 0.11% of its GNP.

The US. has the means but lacks the will

Despite the dramatic growth of the U.S. economy over the past forty years, U.S. foreign aid has not grown at the same rate. According to the Center on Budget and Policy Priorities, U.S. aid as a percentage: of the GNP has declined steadily, dropping from 0.58% in 1962 to less than 0.11% in 2003. Although the U.S. ranks first in the absolute level of non-military foreign aid, it ranks last among developed countries in the percentage of its GNP given in aid. On average, governments in the European Union contribute three times as much of their GNP (0.33%) in non-military foreign aid.

Polls suggest that the majority of people in the U.S. greatly overestimate the level of U.S. foreign aid. Most persons polled place foreign aid spending at 15% of the federal budget. In fact, less than 1% of all federal outlays go to foreign aid. The Center on Budget and Policy Priorities has calculated that outlays for all foreign assistance programs in FY 2003 (including economic aid to Israel, Egypt, former Soviet Republics, Colombia, and anti-drug programs) will comprise only 0.55% of all federal outlays.

Pres. Bush's FY03 budget would do little to change this. The President would increase humanitarian and development assistance by only $0.7 billion, while he proposes to increase military spending by $46.0 billion. The combined spending proposed for child disease and survival programs, food aid, refugee assistance, Peace Corps, multilateral development banks, voluntary contributions to international organizations, debt relief, USAID operations, and other development and humanitarian aid does not match the spending on the ballistic missile shield ($7.6 billion vs. $7.8 billion).

Perhaps a small step in the right direction

On March 14, Pres. Bush announced a new initiative to increase U.S. foreign aid by a total of $10 billion over current levels. The new funds would be distributed to developing countries whose governments demonstrate a commitment to good governance, respecting human rights, advancing health care and education, opening markets to trade, and fiscal discipline. We will be interested to see whether the President's speech marked a real shift in the Administration's policy with respect to aid.

If the President and Congress follow through with this proposal, it would be a step in the right direction. However, conditions placed on the aid may exclude some of the poorest countries from eligibility. Moreover, the aid increases are not slated to occur until 2004-2006.

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