Proposes Plan to Help Developing Nations
Inter-American Development Bank
March 14, 2002
1:21 P.M. EST
Thank you all. Asientese. Gracias, Enrique. It's about time you invited a President
here. (Laughter.) It's about time one accepted. (Applause.)
Thank you for the energy and leadership you bring to the challenge of global
development. I'm honored to be at the Inter-American Development Bank, which
has done a lot of good in our hemisphere over the last 40 years. I appreciate
your work and I'm proud of your accomplishments.
Along with many of you, I'll be in Monterrey, Mexico, next week as leaders from
around the world focus on the important work of reducing global poverty.
I'm here today to announce a major new commitment by the United States to bring
hope and opportunity to the world's poorest people. Along with significant new
resources to fight world poverty, we will insist on the reforms necessary to
make this a fight we can win. (Applause.)
As you can see, I'm traveling in some pretty good company today: Bono. (Laughter
and applause.) We just had a great visit in the Oval Office. Here's what I know
about him: first, he's a good musician; secondly, he is willing to use his position
in a responsible way. He is willing to lead to achieve what his heart tells
him, and that is nobody -- nobody -- should be living in poverty and hopelessness
in the world.
Bono, I appreciate your heart and to tell you what an influence you've had,
Dick Cheney walked in the Oval Office, he said, "Jesse Helms wants us to
listen to Bono's ideas." (Laughter and applause.)
I appreciate Paul O'Neill, Secretary of Treasury. I appreciate his work, I appreciate
his advice. He's a fine member of my Cabinet. Cardinal McCarrick, thank you
for coming, sir; I'm honored to have you here. Jim Wolfensohn, thank you for
your leadership of the World Bank. I appreciate Jose Fourquet. Thank you, Jose,
for taking on the responsibility you've done. It's good to see Andrew Natsios
here of AID. Thank you, Andrew, for coming. You've done a fine job, by the way,
in helping prevent starvation in Afghanistan. I appreciate your work and I appreciate
I want to thank John Negroponte, Embajador, of the United Nations. I want to
thank all the other ambassadors who are here. I look around, I can see many
familiar faces. Thank you all for coming today.
I appreciate the members of the United States Congress who are here. I see Frist
and DeWine from the United States Senate. I appreciate both senators for coming.
I appreciate the Congressman from Puerto Rico; thank you for coming, se?or.
I see the Congress lady from Miami, Florida. I see Spencer Bachus, from Alabama.
I think that's it; I better -- well, anyway, if anybody else is here -- (laughter)
-- Chris Cannon, I think, from Utah is here. Hey, Chris, thank you for coming.
And thank you all for taking an interest in this subject; it's an important
As you all know and we all know, America is engaged in a global struggle, a
mighty struggle against the forces of terror. Yet, even as we fight to defeat
terror, we must also fight for the values that make life worth living: for education,
and health, and economic opportunity. This is both the history of our country
and it is the calling of our times.
In World War II we fought to make the world safer, then worked to rebuild it.
As we wage war today to keep the world safe from terror, we must also work to
make the world a better place for all its citizens. (Applause.)
The advances of free markets and trade and democracy and rule of law have brought
prosperity to an ever-widening circle of people in this world. During our lifetime,
per capita income in the poorest countries has nearly doubled. Illiteracy has
been cut by one-third, giving more children a chance to learn. Infant mortality
has been almost halved, giving more children a chance to live. Nations from
India to Chile have changed old ways and, therefore, found new wealth. Nations
from Turkey to Mali have combined Islam with progress.
Yet in many nations, in many regions, poverty is broad and seemingly inescapable,
leaving a dark shadow -- a dark shadow -- across a world that is increasingly
illuminated by opportunity. Half the world's people still live on less than
$2 a day. For billions, especially in Africa and the Islamic world, poverty
is spreading, and per capita income is falling.
In Malawi, thousands of teachers die each year from AIDS, and life expectancy
has fallen to only 38 years. In Sierra Leone, nearly one-third of all babies
born today will not reach the age of five. And in Sudan, only half the children
This growing divide between wealth and poverty, between opportunity and misery,
is both a challenge to our compassion and a source of instability. We must confront
it. We must include every African, every Asian, every Latin American, every
Muslim, in an expanding circle of development.
The advance of development is a central commitment of American foreign policy.
As a nation founded on the dignity and value of every life, America's heart
breaks because of the suffering and senseless death we see in our world. We
work for prosperity and opportunity because they're right. It's the right thing
to do. We also work for prosperity and opportunity because they help defeat
Poverty doesn't cause terrorism. Being poor doesn't make you a murderer. Most
of the plotters of September 11th were raised in comfort. Yet persistent poverty
and oppression can lead to hopelessness and despair. And when governments fail
to meet the most basic needs of their people, these failed states can become
havens for terror.
In Afghanistan, persistent poverty and war and chaos created conditions that
allowed a terrorist regime to seize power. And in many other states around the
world, poverty prevents governments from controlling their borders, policing
their territory, and enforcing their laws. Development provides the resources
to build hope and prosperity, and security.
Development is not always easy, but the conditions required for sound development
are clear. The foundation of development is security, because there can be no
development in an atmosphere of chaos and violence. Today, the United States
is leading a broad and vast coalition defending global security by defeating
global terror. Meeting this commitment is expensive, but securing peace and
freedom is never too expensive. (Applause.)
Development also depends upon financing. Contrary to the popular belief, most
funds for development do not come from international aid -- they come from domestic
capital, from foreign investment, and especially from trade. America buys and
imports over $450 billion in products from the developing world every year --
$450 billion of purchases every single year. That is more than eight times the
amount developing countries receive in aid from all sources. Trade is the engine
of development. And by promoting it, we will help meet the needs of the world's
Successful development also requires citizens who are literate, who are healthy,
and prepared and able to work. Development assistance can help poor nations
meet these education and health care needs. That's why the United States provides
more than $10 billion a year for development assistance for food and for humanitarian
aid. That is also why my administration has committed $500 million to the global
fund to fight aids and other infectious diseases.
And we will work with Congress to increase this commitment, to show our love
and compassion by increasing our commitment as the fund gets organized, develops
a strategy, and shows success. We're spending billions more on AIDS research
and other programs, to fight the disease around the world.
Yet many of the old models of economic development assistance are outdated.
Money that is not accompanied by legal and economic reform are oftentimes wasted.
In many poor nations, corruption runs deep. Private property is unprotected.
Markets are closed. Monetary and fiscal policies are unsustainable. Private
contracts are unenforceable.
When nations refuse to enact sound policies, progress against poverty is nearly
impossible. In these situations, more aid money can actually be counterproductive,
because it subsidizes bad policies, delays reform, and crowds out private investment.
The needs of the developing world demand a new approach. In Monterrey, we have
a tremendous opportunity to begin acting on a new vision of development. This
new vision unleashes the potential of those who are poor, instead of locking
them into a cycle of dependence. This new vision looks beyond arbitrary inputs
from the rich, and demands tangible outcomes for the poor.
America supports the international development goals in the U.N. Millennium
Declaration, and believes that these goals are a shared responsibility of developed
and developing countries. To make progress, we must encourage nations and leaders
to walk the hard road of political, legal and economic reform, so all their
people can benefit.
Today, I call for a new compact for global development, defined by new accountability
for both rich and poor nations alike. Greater contributions from developed nations
must be linked to greater responsibility from developing nations. The United
States will lead by example. We will increase our development assistance by
$5 billion over the three -- over the next three budget cycles. This new money
above and beyond existing aid requests -- is above and beyond existing aid requests
in the current budget I submitted to the Congress.
These funds will go into a new Millennium Challenge Account. Under this account,
among other efforts, we will expand our fight against AIDS; we will bring computer
instruction to young professionals in developing nations; we will assist African
businesses and their people to sell goods abroad; we will provide textbooks
and training to students in Islamic and African countries; we will apply the
power of science and technology to increase harvests where hunger is greatest.
These are some of the examples of what we intend to do. The goal is to provide
people in developing nations the tools they need to seize the opportunities
of the global economy. In return -- in return for this additional commitment,
we expect nations to adopt the reforms and policies that make development effective
The world's help must encourage developing countries to make the right choices
for their own people, and these choices are plain. Good government is an essential
condition of development. So the Millennium Challenge Account will reward nations
that root out corruption, respect human rights, and adhere to the rule of law.
Healthy and educated citizens are the agents of development, so we will reward
nations that invest in better health care, better schools and broader immunization.
Sound economic policies unleash the enterprise and creativity necessary for
development. So we will reward nations that have more open markets and sustainable
budget policies, nations where people can start and operate a small business
without running the gauntlets of bureaucracy and bribery.
I've directed Secretary Powell and Secretary O'Neill to reach out to the world
community, to develop a set of clear and concrete and objective criteria for
measuring progress. And under the Millennium Challenge Account, we will apply
these criteria rigorously and fairly.
Countries that live by these three broad standards -- ruling justly, investing
in their people, and encouraging economic freedom -- will receive more aid from
America. And, more importantly, over time, they will really no longer need it,
because nations with sound laws and policies will attract more foreign investment.
They will earn more trade revenues. And they will find that all these sources
of capital will be invested more effectively and productively to create more
jobs for their people.
The evidence shows that where nations adopt sound policies, a dollar of foreign
aid attracts $2 of private investment. And when development aid rewards reform
and responsibility, it lifts almost four times as many people out of poverty,
compared to the old approach of writing checks without regard to results.
Marrying good policies to greater aid led Mozambique to a 10 percent growth
rate in 2001. This approach help Uganda open its schools to more children, and
increased teacher pay by 2,700 percent. Bangladesh, a nation that was once a
symbol of famine, has transformed its agricultural economy; rice production
is almost up by 70 percent since the mid-'70s.
The new compact I propose would multiply this progress. I challenge other nations,
and the development banks, to adopt this approach as well. America's support
for the World Bank will increase by almost 20 percent over the next three years.
We expect the World Bank to insist on reform and results, measured in improvements
in people's lives. All the development banks should adopt a growth agenda, increasing
their support for private sector enterprises and focusing more on education,
as the Inter-American Development Bank has done.
And I challenge the development banks to provide up to half of the funds devoted
to poor nations in the form of grants, rather than loans. (Applause.) Grants
instead of loans that may never be repaid. Many have rallied to the idea of
dropping the debt. I say let's rally to the idea of stopping the debt.
This new compact for development can produce dramatic gains against poverty
and suffering in the world. I have an ambitious goal for the developed world,
that we ought to double the size of the world's poorest economies within a decade.
(Applause.) I know some may say that's too high a hurdle to cross -- I don't
believe so, not with the right reforms and the right policy. This will require
tripling of current growth rates, but that's not unprecedented. After all, look
at the dramatic growth that occurred in Asia in the 1990s.
With the world's help and the right policies, I know -- I know -- that the developing
world can reform their own countries. I know it can happen. And, therefore,
better their own lives. They can live in a world where their children's dreams
are ignited by liberty and learning, not undermined by poverty and disease.
(Applause.) They can live under governments that deliver basic service and protect
basic rights. The demands of human dignity know no borders and know no boundaries.
They are universal. And so are the gifts of creativity and enterprise that lead
When governments repress and punish those gifts, no amount -- no amount of aid
is sufficient to lift people from poverty. When governments honor these gifts,
every nation can know the blessings of prosperity.
People across the world are working to relieve poverty and suffering, and I'm
proud of their efforts. I appreciate Bono. I appreciate groups like the Sisters
of Charity. Some were motivated by simple decency, some serve a God who is impatient
with injustice. And all have made this commitment. We cannot leave behind half
of humanity as we seek a better future for ourselves. (Applause.) We cannot
accept permanent poverty in a world of progress. There are no second-class citizens
in the human race. (Applause.)
I carry this commitment in my soul. And I'll carry it with me to Monterrey next
week. As the civilized world mobilizes against the forces of terror, we must
also embrace the forces of good. By offering hope where there is none, by relieving
suffering and hunger where there is too much, we will make the world not only
safer, but better.