Kaiser Daily HIV/AIDS Report - Fri, 27 Jul 2001
-----------------------------------------------
* Senate Appropriations Committee Shifts South American Drug War
Money Toward Fighting Disease, Wall Street Journal Reports
* World Bank Should Shift to Grants, Economists Say
--
Senate Appropriations Committee Shifts South American Drug War Money
Toward Fighting Disease, Wall Street Journal Reports
The Senate Appropriations Committee yesterday approved a revised for-
eign-aid budget that transfers funds from antidrug efforts in South
America to international efforts to fight disease, the Wall Street
Journal reports. To provide a total of $625 million to fight AIDS in
Africa and other infectious diseases, the committee cut President
Bush's funding request for the Andean drug war by 22%. The $15.6 bil-
lion Senate bill earmarks about $450 million to fight AIDS -- 37%
more than Bush requested-- and $175 million to combat other diseases
such as malaria and tuberculosis. The "competition for money under-
scores how the importance of antidisease and antidrug programs have
grown in the post-Cold War world," the Journal says (Rogers, Wall
Street Journal, 7/27). On Tuesday, the House voted 240-188 to reject
an amendment by Rep. Barbara Lee (D-Calif.) to the $15.2 billion FY
2002 foreign-aid appropriations bill that would have shifted $60 mil-
lion from the South American antidrug initiative and military-aid
programs into the U.N. Global AIDS and Health Fund. The House also
voted 249-179 to reject an amendment proposed by Rep. James McGovern
(D-Mass.) that would have reduced military aid to Colombia by $100
million and evenly divided that funding between programs aimed at
fighting tuberculosis and "child-survival" programs. The House ver-
sion of the bill does allocate $474 million for AIDS initiatives, in-
cluding $100 million of the $200 million President Bush pledged to
the U.N. AIDS fund (Kaiser Daily HIV/AIDS Report, 7/25).
--
World Bank Should Shift to Grants, Economists Say
Although the World Bank has "orchestrated" opposition to President
Bush's proposal that a larger proportion of aid to developing nations
be given in the form of grants instead of loans, the bank's previous
record on financial assistance "call[s] for a major change in the way
aid is delivered and administered," Adam Lerrick and Allan Meltzer
write in a Wall Street Journal op-ed. Lerrick and Meltzer serve as
director and chair, respectively, of the Gailliot Center for Public
Policy at Carnegie Mellon University and are both advisers to the
Joint Economic Committee of Congress. They write that the bank's
lending practices have led to 42 "needy countries" having $175 bil-
lion in debt, with "nothing to show for it but a 25% decline in their
standard of living since 1980" (Lerrick/Meltzer, Wall Street Journal,
7/26). Last week, Bush proposed that the World Bank provide up to 50%
of its assistance to developing countries through grants, thus allow-
ing the countries to "alleviate the debt that burdens" their econo-
mies (Kaiser Daily HIV/AIDS Report, 7/18). A number of lawmakers,
AIDS groups and African groups have called on international lending
institutions such as the World Bank and the International Monetary
Fund to forgive the debts of developing nations, stating that debt
reduction would help the countries allocate more funding toward
HIV/AIDS and other health initiatives (Kaiser Daily HIV/AIDS Report,
4/26). The World Bank has said that providing assistance through
grants will "deplete its resources, together with its ability to help
the poor, unless the grants are accompanied by an immense infusion of
new funding." However, Lerrick and Meltzer state that this argument
is "faulty" because grants "can provide the same amount of aid, make
every dollar more effective, provide a permanent exit from debt for
the poorest countries, protect donor contributions from risk of loss
-- all without diminishing the funding pool or asking for more money
from the taxpayers of the industrialized world." They add, "Unlike
the current trend toward lending sums for indeterminable government
plans, grants would be project-linked, monitored for results and paid
only for performance. ... No results, no funds expended." They write
that as the World Bank's International Development Agency shifts from
loans to grants, "the volume of development programs and the flow of
financial resources to poor countries would match what would have
been delivered by loans. Failures to repay old loans would reduce re-
sources, but not more so than under lending." Lerrick and Meltzer
conclude, "Finance ministers and legislators should insist on the use
of grants when making new contributions. The increased effectiveness
of aid might then encourage them to give more, and with good con-
science" (Lerrick/Meltzer, Wall Street Journal, 7/26).
--
The Kaiser Daily HIV/AIDS Report is published for kaisernetwork.org,
a free service of The Henry J. Kaiser Family Foundation, by National
Journal Group Inc. � 2001 by National Journal Group Inc. and Kaiser
Family Foundation. All rights reserved.
--
Send mail for the `AFRO-NETS' conference to `<afro-nets@usa.healthnet.org>'.
Mail administrative requests to `<majordomo@usa.healthnet.org>'.
For additional assistance, send mail to: `<owner-afro-nets@usa.healthnet.org>'.