This is an archived USAID document retained on this web site as a matter of public record.
Administrator J. Brian Atwood
Business Alliance for International Economic Development
Press Conference on report Global Markets and Foreign Assistance: Is the United States Losing Ground?
Washington, D.C., July 22, 1997
U.S. Agency for International Development
-- I am grateful to George Burrill and the Business Alliance for
their informed concern about this important issue. At a
time when many Americans have all but lost interest in
international affairs, the Alliance provides valuable insights
about the importance of developing nations to the American
economy.
-- This report documents the fact that foreign assistance is an
investment in America's future just as much as it is an
investment in the future of the people in developing nations.
Countries like South Korea, Taiwan and Thailand were once
in no better shape than some of the poorest countries in the
world today. Our annual exports to these countries now far
exceed all of the U.S. foreign aid these countries received
over many years.
-- This same pattern is being repeated in many other Asian,
Latin American and African economies where U.S.
development aid laid the groundwork for growth. The
fastest growing markets for U.S. exports today are in the
developing world. Whether today's least developed
countries become tomorrow's emerging markets will depend
in great measure on whether we make the right development
investments now.
-- The report makes additional excellent points, including the
fact that USAID's budget accounts for only a little over half-a-penny of every federal budget dollar. We are getting a lot
for very little money. The Alliance concludes that foreign
assistance neither strains our economy nor squanders our
resources and recommends that funds for foreign assistance
should be increased to three-quarters of a penny.
-- Perhaps the most important aspect of the report is its
understanding of American leadership. The real influence of
the United States does not begin with our formidable arsenal
of weapons, or the size of our economy.
-- America's most important power is the power of the ideas
on which this nation was founded -- democracy, freedom
and opportunity for all. It was these ideas, ultimately, that
brought down the Berlin Wall and eventually the Soviet
Empire. These ideals fueled the hopes and dreams of
people who have created new democracies around the world
in the past decade.
-- This report asks whether the United States is "losing
ground?" To answer that, I think we must first ask
ourselves what ground we wish to hold.
-- The report recognizes that "For fifty years the United States
has been the foremost proponent of democracy and economic
development through foreign assistance." This commitment
-- quote -- "has defined both our national identity and our
international stature. If we are to lead in the coming
century, we must remain steadfast in our commitment to our
ideals. We must champion these ideals -- not with rhetoric,
but with appropriate, well-executed assistance programs."
-- It is in America's national interest to build on the gains of
the past decade, not let them slip away in the disappointed
hopes and dying dreams of millions of people who want to
follow our lead.
-- Despite the dramatic gains of the past 30 years, 800 million
people still do not have enough to eat, and more than 1.3
billion must survive on less than $1 U.S. per day. Apart
from our concern for their suffering, if we turn our backs on
their grinding poverty, we are losing 1.3 billion potential
customers who could be boosting future demand for
American products and increasing American jobs.
-- USAID helps to establish institutions, laws and policies that
foster increased productivity, trade and investment.
Strengthening democracy and free market economies also
helps ease some of the pressures that explode into conflict.
-- Let me use Africa as an example. This is a time of hope
and special opportunity in Africa. There is new leadership
and commitment to reforms in many African countries. Last
year 30 African countries experienced positive growth.
-- Already, the United States conducts more trade with
southern African nations than with the newly independent
states of Central and Eastern Europe. We trade more with
South Africa than we do with Russia.
-- President Clinton's African Trade Initiative will bring
together all the federal agencies and departments with a role
in trade and development. Each will target activities aimed
at fostering private investment that will support the efforts of
countries making democratic and economic reforms.
-- Private investment in the developing world last year totalled
$234 billion -- more than four times the $55.1 billion total
of development aid from governments. The increase alone
in private investment amounted to $80 billion, nearly one-and-a-half times the total aid from governments.
-- So why don't we just let private investment finance
economic growth in the developing world? The Alliance
report answers that critical question. The vast majority of
private investment has gone to a handful of dynamic
economies -- much of it to China.
-- Many of the poorest countries, which need the most help,
cannot transform themselves with private investment.
Before investment will come, they need help with legal,
democratic and economic reform and developing basic health
systems, transportation and telecommunications and market
infrastructures.
-- USAID is providing this help to match the needs of
developing countries to U.S. businesses that can meet those
needs. Our Office of Business Development has done that in
South Asia, resulting in more than $30 million in contracts.
-- We expanded the office's operations in December 1995 to
ten Latin American countries. In May of this year, we
added Africa and new areas, such as agribusiness, health and
information technology.
-- The Alliance report makes a key point -- quote: "Fifty years
after the Marshall Plan, we know how to help emerging
economies grow. We know how to invest in people all
around the world so that they can rise to the challenge of
bettering themselves and invigorating their economies. We
know how to combat many of the threats that arise in the
developing nations before their toll is too great....If the
United States is not working to help build the resulting
markets we will not be invited to participate in them later."
-- "The question Americans must ask themselves is not how we
can justify maintaining a foreign assistant budget now that
the Cold War is over, but how can we justify keeping it so
low?" the report asks.
-- As the Alliance Report concludes:
"The truth about foreign assistance is that sometimes a
penny saved is an opportunity lost. "
This is an archived USAID document retained on this web site as a matter of public record.
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Last Updated on: July 18, 2001
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