Unlikely Note Is Struck on World Finance Stage

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2.3.02 - LA Times

Bill Gates and Bono challenge the Treasury chief and the U.S. to boost foreign aid.

By William Orme, Times Staff Writer

NEW YORK -- At one end of the dais was Uncle Sam's chief financial representative, a man seen by some at this year's World Economic Forum as Uncle Scrooge: Paul H. O'Neill, an unapologetic opponent of increased aid from the world's wealthiest nation to the world's poorest nations.

On the other side, taking on the Treasury secretary and his tightfisted policies, was the new odd couple of the aid advocacy world: the wealthiest nation's wealthiest man, Bill Gates, in his trademark mail-order glasses and open-collar shirt, and Bono, the Irish rock star, in his trademark wraparound shades and much more open collar.

Looking squarely at O'Neill, his fellow panelist at a session during the annual forum's third day here, Gates chastised the U.S. government Saturday as "the laggard" among world aid donors.

"If we took the world and reordered it so that you and me were close to a random neighborhood from some other part of the world, you would see the living conditions, the medical problems, the infant mortality, and of course the human spirit would respond to that," Gates said.

Bono, who has emerged at the forum as the unlikely chief spokesman for developing nations and international aid programs, was clearly pleased to have his new billionaire friend taking the lead Saturday.

Noting that he once enlisted Pope John Paul II in his campaign for debt relief for poor nations--"an unusual juxtaposition" that he said was calculated to attract media attention--the U2 front man smiled broadly as he and Gates reiterated pleas for aid later at a joint news conference.

"Now I am here with the pope of software, making another unusual juxtaposition," Bono said.

After announcing Saturday that he is personally giving an additional $50 million to combat the worldwide spread of AIDS, Gates challenged O'Neill and the Bush administration to increase U.S. government funding for health-care programs in sub-Saharan Africa and other poor regions. More money for vaccinations alone could save 2 million lives a year, Gates said, "and if the U.S. doesn't do it, it is not going to happen."

O'Neill, however, politely but pointedly dismissed the criticism from the software tycoon and the rock star, making clear that he remains opposed to appeals for a major increase in aid from wealthy nations. Poor countries have received "trillions of dollars in aid over the years with precious little to show for it," he said, a calculation that appeared from his later remarks to include the costs of the many internationally backed bailouts of indebted nations from Asia to Latin America in recent decades.

"The question is, how do we create a situation so that people become engines of economic progress, and not just objects of our pity?" O'Neill said.

Bono retorted that without outside help for basic health care, many poor countries will find economic progress impossible.

"Dead people don't make a great work force," he said.

Britain, France and other European nations have been pushing plans to boost aid from the world's wealthiest nations to poor countries and regions, but the Bush administration has blocked the proposals. In November, O'Neill in effect vetoed a proposed call by the finance ministers of the wealthy Group of 7 nations that they all aim to devote 0.7% of their gross domestic product to international aid programs. Few now are close to that goal; the furthest away, figures show, is the United States, where an estimated 0.1% of the GDP goes to foreign aid. The United Nations has long sought commitments from rich countries to boost aid to 1% of GDP.

More recently, the U.S. Treasury torpedoed proposals to have wealthy nations pledge an eventual doubling in their foreign aid commitment, an idea backed most prominently by Gordon Brown, Britain's chancellor of the exchequer. Proponents had hoped to have the pledge adopted at a U.N. conference on foreign aid in Monterrey, Mexico, next month. But the administration told conference planners that President Bush would cancel a planned appearance there if specific aid commitments were adopted, diplomats at the United Nations said.

Mexico, counting on Bush's presence to give greater prominence to the conference, urged the Europeans to back away from their insistence on fixed aid goals, the diplomats said. Last week, the White House announced that Bush would attend.

O'Neill, asked here whether he agreed with the goals endorsed by Brown and others, said he is "not charmed by proposals" to set specific targets for aid increases.

"Why is it that the spread between those of us who are privileged and those of us who are not is so incomprehensibly large?" O'Neill said. "My answer to that question is: Up until now, we've lacked imagination."

But Ernesto Zedillo, Mexico's former president, who also appeared on the panel with O'Neill, suggested mildly that what is lacking isn't imagination, but cash.

"Even if we update institutions, the bottom line is, we still need money," Zedillo said.

Sen. Patrick J. Leahy (D-Vt.), speaking from the audience, also challenged O'Neill. Less than 1% of the U.S. federal budget is spent on foreign aid, he said, with the bulk of that going to Israel and Egypt and what Leahy characterized as disguised export promotion programs and funds for "the failed war" on drugs.

"We are left with a tiny, tiny portion for very poor countries," Leahy said. "It's ridiculous."

The new focus on health and on environmental problems in poor countries by Gates and other wealthy philanthropists--Ted Turner and the Hewlett and Packard families, among others--has been cited by some U.S. opponents of government assistance as a more efficient and focused form of foreign aid. But Gates argued vigorously here for greatly increased aid from the United States and other official donors.

"Certainly private philanthropy is no substitute for governmental action here," Gates told reporters later. "The scale of the problem, and the need to engage it government-to-government, is just way too great for this to be done, even with the increases you will be seeing in private philanthropy."

More official funding of health and development programs in poor nations also will attract more money from private charities, Gates said.

"We have said to governments that 'if you step up and increase, we will be stepping up and increasing as well,' " said Gates, whose personal foundation reports that it has given out $2.8 billion in grants and pledged $2.1 billion more since its creation two years ago. More than half the grants have gone to global health projects, it says.

In their joint appeal for aid to poor nations, Gates let Bono do most of the talking.

Though the rock star had described himself to a forum concert audience as "the poor man's James Joyce or the thinking man's Perry Como," he came across Saturday as a secretly studious policy wonk in hipster's clothing. With Gates attentively nodding, he spoke offhandedly about the Group of 8 summit in Canada later this year, his recent drug pricing discussions with executives from major drug companies, and the debate over "conditionality" in World Bank debt restructuring programs.

Bono was carefully diplomatic about O'Neill, giving him credit for honesty--"the secretary's position accurately reflects a certain distrust in the U.S. about foreign aid," he said--and disclosing plans to accompany O'Neill on a visit to Africa in a month and a half. The Treasury Department later confirmed plans for the trip.

"The great thing about hanging out with Republicans is that it is very unhip for both of us," Bono said. "There is a parity of pain there."

Outside, unseen by Gates or Bono or any other forum participants, about 7,000 demonstrators converged for the largest protests yet against the five-day gathering of political and business leaders. The protesters represented a variety of causes, from animal rights and environmentalism to Palestinian nationalism and anti-globalization campaigns.

Holding brightly colored signs, the marchers were watched by thousands of police officers who walked alongside, behind and in front of them as they made their way toward the Waldorf-Astoria Hotel, the site of the forum. Officials said 36 people were arrested for misdemeanor offenses.

"It's all about greed, man," said college student Joel Silverman, who had come to protest international bankers' "blatant manipulation" of poor economies.

As she donned a rubber Statue of Liberty crown, Michelle Arti of France called the forum "a force for evil."

Most New Yorkers paid little heed, but some watching the protests were openly antagonistic.

"Go home!" yelled a man in front of a Gap store near 59th Street, a target of protests earlier in the week. "We've had enough craziness in this town--we don't need any more."

* * *

Times staff writer Josh Getlin contributed to this report.

Copyright © 2002 Los Angeles Times. All rights reserved.

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This page contains a single entry by Jonathan published on February 3, 2002 4:10 PM.

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