22 March 2002

Bush Spells Out Goals of Development Aid to Poorer Nations

President says aid should be in form of grants, rather than loans

President Bush speaks at the U.N. International Conference on Financing for Development in Monterrey, Mexico March 22. (AP/WWP)

President Bush says the goal of aid to developing nations should be to help them "grow and prosper beyond the need for any aid," and that the focus should be on providing "real benefits to the poor instead of debating arbitrary levels of inputs from the rich."

In March 22 remarks to the United Nations International Conference on Financing for Development in Monterrey, Mexico, Bush said that when nations adopt reforms, each dollar of aid attracts two dollars of private investment.

"When aid is linked to good policy," the president added, "four times as many people are lifted out of poverty compared to old aid practices."

The president said that aid must be tied to political, legal and economic reforms and that by insisting on reform, "we do the work of compassion."

On that point, he said, the United States will lead by example. Bush said that he has proposed a 50-percent increase in U.S. core development assistance over the next three years, which eventually will mean a $5 billion ($5,000 million) annual increase over current levels. These new funds will go into what he called a new Millennium Challenge Account devoted to projects in nations "that govern justly, invest in their people, and encourage economic freedom."

The president declared that "we will promote development from the bottom up, helping citizens find the tools and training and technologies to seize the opportunities of the global economy."

Bush said that more of the developed world's aid should be in the form of grants, rather than loans "that can never be repaid." The president said that the aid should go for improving health care, such as expanding "our efforts to fight AIDS, which threatens to undermine whole societies."

The work of development, the president said, is much broader than development aid. The vast majority of financing for development comes not from aid but from trade and domestic capital and foreign investment, Bush asserted. He noted that developing countries receive about $50 billion ($50,000 million) every year in aid. This compares to foreign investment of almost $200 billion ($200,000 million) and annual earnings from exports of $2.4 trillion.

"So to be serious about fighting poverty, we must be serious about expanding trade," Bush said. The president pointed out that trade has helped nations as diverse as South Korea, Chile and China to replace "despair with opportunity for millions of their citizens."

On the issue of terrorism, Bush said that "history has called us to a titanic struggle whose stakes could not be higher, because we're fighting for freedom itself." The United States, he said, is leading the way in pursuit of "great and worthy goals to make the world safer, and as we do, to make it better."

Following is a transcript of the president's remarks:

[Note: In the transcript, "billion" equals "thousand million" and "trillion" equals "million million."]

The White House
Office of the Press Secretary
(Monterrey, Mexico)

March 22, 2002

Remarks By President Bush
At United Nations Financing For Development Conference
Cintermex Convention Center
Monterrey, Mexico

9:35 A.M. (Local)

President Bush Good morning. We meet at a moment of new hope and age-old struggle, the battle against world poverty. I'm honored to be with so many distinguished leaders who are committed to this cause. I'm here today to reaffirm the commitment of the United States to bring hope and opportunity to the world's poorest people, and to call for a new compact for development defined by greater accountability for rich and poor nations alike.

I want to thank Vicente Fox, el Presidente de Mexico, and the people of Monterrey for such grand hospitality. I want to thank Kofi Annan for his steadfast leadership. And I want to thank the distinguished leaders who are here for your hospitality, as well.

Many here today have devoted their lives to the fight against global poverty, and you know the stakes. We fight against poverty because hope is an answer to terror. We fight against poverty because opportunity is a fundamental right to human dignity. We fight against poverty because faith requires it and conscience demands it. And we fight against poverty with a growing conviction that major progress is within our reach.

Yet this progress will require change. For decades, the success of development aid was measured only in the resources spent, not the results achieved. Yet pouring money into a failed status quo does little to help the poor, and can actually delay the progress of reform. We must accept a higher, more difficult, more promising call. Developed nations have a duty not only to share our wealth, but also to encourage sources that produce wealth: economic freedom, political liberty, the rule of law and human rights.

The lesson of our time is clear: When nations close their markets and opportunity is hoarded by a privileged few, no amount -- no amount -- of development aid is ever enough. When nations respect their people, open markets, invest in better health and education, every dollar of aid, every dollar of trade revenue and domestic capital is used more effectively.

We must tie greater aid to political and legal and economic reforms. And by insisting on reform, we do the work of compassion. The United States will lead by example. I have proposed a 50-percent increase in our core development assistance over the next three budget years. Eventually, this will mean a $5-billion annual increase over current levels.

These new funds will go into a new Millennium Challenge Account, devoted to projects in nations that govern justly, invest in their people and encourage economic freedom. We will promote development from the bottom up, helping citizens find the tools and training and technologies to seize the opportunities of the global economy.

I've asked Secretary of State Powell, Secretary of Treasury O'Neill to reach out to the world community to develop clear and concrete objective criteria for the Millennium Challenge Account. We'll apply these criteria fairly and rigorously.

And to jump-start this initiative, I'll work with the United States Congress to make resources available over the 12 months for qualifying countries. Many developing nations are already working hard on the road -- and they're on the road of reform and bringing benefits to their people. The new Compact for Development will reward these nations and encourage others to follow their example.

The goal of our development aid will be for nations to grow and prosper beyond the need for any aid. When nations adopt reforms, each dollar of aid attracts two dollars of private investments. When aid is linked to good policy, four times as many people are lifted out of poverty compared to old aid practices.

All of us here must focus on real benefits to the poor, instead of debating arbitrary levels of inputs from the rich. We should invest in better health and build on our efforts to fight AIDS, which threatens to undermine whole societies. We should give more of our aid in the form of grants, rather than loans that can never be repaid.

The work of development is much broader than development aid. The vast majority of financing for development comes not from aid, but from trade and domestic capital and foreign investment. Developing countries receive approximately $50 billion every year in aid. That is compared to foreign investment of almost $200 billion in annual earnings from exports of $2.4 trillion. So, to be serious about fighting poverty, we must be serious about expanding trade.

Trade helped nations as diverse as South Korea and Chile and China to replace despair with opportunity for millions of their citizens. Trade brings new technology, new ideas and new habits, and trade brings expectations of freedom. And greater access to the markets of wealthy countries has a direct and immediate impact on the economies of developing nations.

As one example, in a single year, the African Growth and Opportunity Act has increased African exports to the United States by more than 1,000 percent, generated nearly $1 billion in investment, and created thousands of jobs.

Yet we have much more to do. Developing nations need greater access to markets of wealthy nations. And we must bring down the high trade barriers between developing nations, themselves. The global trade negotiations launched in Doha confront these challenges.

The success of these negotiations will bring greater prosperity to rich and middle-income and poor nations alike. By one estimate, a new global trade pact could lift 300 million lives out of poverty. When trade advances, there's no question but the fact that poverty retreats.

The task of development is urgent and difficult, yet the way is clear. As we plan and act, we must remember the true source of economic progress is the creativity of human beings. Nations' most vital natural resources are found in the minds and skills and enterprise of their citizens. The greatness of a society is achieved by unleashing the greatness of its people. The poor of the world need resources to meet their needs, and like all people, they deserve institutions that encourage their dreams.

All people deserve governments instituted by their own consent; legal systems that spread opportunity, instead of protecting the narrow interests of a few; and the economic systems that respect their ambition and reward efforts of the people. Liberty and law and opportunity are the conditions for development, and they are the common hopes of mankind.

The spirit of enterprise is not limited by geography or religion or history. Men and women were made for freedom, and prosperity comes as freedom triumphs. And that is why the United States of America is leading the fight for freedom from terror.

We thank our friends and neighbors throughout the world for helping in this great cause. History has called us to a titanic struggle, whose stakes could not be higher because we're fighting for freedom itself. We're pursuing great and worthy goals to make the world safer, and as we do, to make it better. We will challenge the poverty and hopelessness and lack of education and failed governments that too often allow conditions that terrorists can seize and try to turn to their advantage.

Our new approach for development places responsibility on developing nations and on all nations. We must build the institutions of freedom, not subsidize the failures of the past. We must do more than just feel good about what we are doing; we must do good. By taking the side of liberty and good government, we will liberate millions from poverty's prison. We'll help defeat despair and resentment. We'll draw whole nations into an expanding circle of opportunity and enterprise. We'll gain true partners in development and add a hopeful new chapter to the history of our times.

May God bless you all. (Applause.)

End -- 9:48 A.M. (Local)

end transcript