The United States is on course for a clash at a meeting this week of the wealthy Group of Seven (G-7) nations over its refusal to back efforts for an ambitious aid boost for the world's poorest countries.
"Undignified squabbling" among some of the world's most senior power-brokers is set to be replayed when U.S. Treasury Secretary Paul O'Neill meets his counterparts February 8-9 at the G-7 meeting in Ottawa, Canada, during which development aid will be a key issue on the agenda.
In Ottawa, O'Neill is expected to underline the stance taken at last November's meetings of the World Bank and International Monetary Fund, where he said, "The world has spent an enormous amount in the name of development without much success."
Washington insists that development assistance be focused on measurable results as a pre-condition for stepping up aid to meet a United Nations target of 0.7 percent of Gross National Product (GNP). It says the target, set in 1969, is outdated.
Despite the U.S. stance, a UN committee charged with negotiating the principles for a conference on Financing and Development, in Monterrey, Mexico, next month, reached an informal agreement January 28 on a draft text calling for a "substantial increase" in foreign aid.
While the 'Monterrey Consensus' will be debated by all UN member nations at the conference, March 18-22, the U.S. is expected to stick to the line that poor countries can best improve their economic performance through freer markets.
However, its partners in the G-7--with the notable exception of Japan--accept the urgent need for increased aid, despite an economic slowdown that is putting pressure on domestic budgets.
Britain's Chancellor of the Exchequer Gordon Brown has already called for developed nations to boost annual foreign aid by US$50 billion--double the amount of Overseas Development Aid from donor countries--to developing countries.
German development minister Heidemarie Wieczocek-Zeul says Germany intends to increase its aid budget, with Africa high on the priority list. And Canada, the G-7's host this week, boosted aid in its December budget by US$620 billion for the next three years. It committed US$310 million to promoting "sustainable development in Africa".
The differences between the U.S. and its partners were described in a recent editorial by London's Financial Times as, "Undignified squabbling over policy and penny-pinching over aid [which] do not augur well for the prospect of building a new compact with the developing world."
The rift over aid policy comes after a study by senior World Bank economist Branko Milanovic, published 18 January in the Economic Journal, which says the world's richest 50 million people earn as much as the poorest three billion.
The rich may soon be forced to live in heavily-guarded communities, Milanovic says, "to escape the resentment of the billions living below the poverty line."
K.Y. Amoaka, executive secretary of the UN Economic Commission for Africa, has warned that the continent is failing to meet any of the development targets set at the UN Millennium Summit in September 2000.
Amoaka says, "even incurable optimists have been cured when they looked at Africa's dismal economic progress."
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