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E.U., U.S. pledge to increase development assistance. (Environmental Intelligence).

Reversing a decade-long downward trend, the European Union recently announced an increase in foreign development spending of $4 billion to $29 billion annually, while the United States pledged to boost aid by $5 billion to $15 billion annually by 2006. E.U. countries will now be spending an average of 0.39 percent of GNP on development aid, and the United States 0.13 percent. The U.N. target is 0.7 percent, a benchmark exceeded only by Denmark, Luxembourg, Sweden, the Netherlands, and Norway. Overall aid spending has declined in the past decade from $73 billion in 1992 to $54 billion in 2000 (in 2000 dollars).

Announced just prior to the U.N. Conference on Financing for Development in Monterrey, Mexico, in March 2002, the U.S. pledge represented a significant policy change. President George W. Bush reversed his earlier opposition to increased development assistance, expanded his anti-terrorism stance to include the connection between violence and poverty, and argued that "we fight against poverty because hope is the answer to terror." He also said that a higher percentage of money should be given to developing nations as grants, rather than as loans that beneficiaries may have difficulty repaying. However, civil society groups are concerned that allocations of aid may be significantly biased by the U.S. anti-terrorist political agenda.

The Monterrey conference brought together over 250 heads of state and government ministers and hundreds of non-governmental and private sector leaders. Besides donor nations' pledge of increased aid, the Monterrey Consensus adopted at the conference includes a promise by receiving nations to curb government corruption and to implement a range of reforms aimed at opening their economies and spurring economic growth.
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Title Annotation:European Union/ United States economic aid
Author:Bast, Elizabeth
Publication:World Watch
Article Type:Brief Article
Geographic Code:1USA
Date:Jul 1, 2002
Words:281
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