SOURCE: HC 60 .C37 AUTHOR: Carnegie Commission on Science, Technology, and Government DOCTITLE: Partnerships for Global Development: The Clearing Horizon SECTITLE: Partnerships for Global Development: The Clearing Horizon DATE: 1992 SUBJECT: economic development science social aspects international cooperation developing countries technology United States technical assistance economic assistance foreign economic relations PUBLISHER: Carnegie Commission on Science, Technology, and Government DOCTYPE: Book TITLEID: CC4047 ISBN_ISSN: 1881054047 Text: PARTNERSHIPS FOR GLOBAL DEVELOPMENT THE CLEARING HORIZON December 1992 CONTENTS FOREWORD PREFACE 1.0 INTRODUCTION David A. Hamburg 2.0 THE CASE AND THE RECOMMENDATIONS IN BRIEF 2.1 Time for Renewal in a World of Change 2.2 The Case 2.3 The Recommendations 2.4 Creative Commitment Now 3.0 WHY: THE REASONS FOR COOPERATION FOR DEVELOPMENT 3.1 Roots of Current Cooperation 3.2 Dimensions of Change 3.3 Enduring Continuities 3.4 Why the United States? 3.5 Why Now? 3.6 Unique Assets of the United States 3.7 Rededication 4.0 WHAT: THE CONTENT OF COOPERATION FOR DEVELOPMENT 4.1 Levers on Development 4.2 Principles of Balanced Institutional Development 4.3 Critical Roles of Science and Technology 4.4 Criteria for Programs 4.5 Partnerships of Interests, Expertise, and Management 4.6 Determinants of Current Government Program Content 4.7 New Approach 4.8 Conclusion 5.0 HOW: ORGANIZATION, DECISION MAKING, AND RESOURCES 5.1 Harnessing the Full Power of Pluralism 5.2 U.S. Government 5.3 The World Bank and the UN System 5.4 Resources for Development Assistance 6.0 CODA 6.1 Surprises 6.2 Seizing the Moment 7.0 APPENDIXES 7.1 Appendix A: Individuals Assisting the Task Force 7.2 Appendix B: Biographies of Task Force Members and Principal Advisors and Consultants 8.0 NOTES AND REFERENCES 9.0 BIBLIOGRAPHY 10.0 MEMBERS OF THE CARNEGIE COMMISSION ON SCIENCE, TECHNOLOGY, AND GOVERNMENT 11.0 MEMBERS OF THE ADVISORY COUNCIL, CARNEGIE COMMISSION ON SCIENCE, TECHNOLOGY, AND GOVERNMENT 12.0 INTERNATIONAL STEERING GROUP OF THE CARNEGIE COMMISSION ON SCIENCE, TECHNOLOGY, AND GOVERNMENT 13.0 TASK FORCE ON DEVELOPMENT ORGANIZATIONS FOREWORD The familiar division of our planet into Western and Eastern Blocs and First, Second, and Third Worlds has vanished suddenly. But as the curtains that divided us and distorted our social, economic, and military relations have been pulled back, the scope of human needs has become much more visible. This report, prepared by the Task Force on Development Organizations, presents the compelling logic for renewed global partnerships in development. The report emphasizes that science and technology are among the most powerful tools for development, especially allied with democratic values, market-friendly economics, and human rights. The Task Force argues that the United States, the world leader in science and technology, should rededicate itself to global development. Such rededication involves not only a logic for action, but also an agenda and means. This report lays out the principles and criteria for the agenda and provides examples. It then identifies barriers that need to be removed and explains how organization and decision making should be changed to make genuine partnerships for development even more effective. We are grateful to former President Carter for his leadership of this effort, visionary yet pragmatic. And we are deeply impressed that the members of the Task Force, representing extraordinarily diverse views and experiences, could find so much common ground. The members of the Task Force are: President Jimmy Carter (Chair) Rodney W. Nichols (Vice Chair) Anne L. Armstrong[*] Harvey Brooks John R. Evans Robert W. Kates John P. Lewis Lydia P. Makhubu M. Peter McPherson Rutherford M. Poats Francisco R. Sagasti George P. Shultz (senior advisor) The report offers a remarkable basis for the government and people of the United States to move ahead, in the words of the report, "to make the world economy work for everyone and to help provide for those for whom the economy currently does not." William T. Golden, Co-Chair Joshua Lederberg, Co-Chair Endnote [*] Participated as a member of the Task Force from 1990 through July 1992 and endorses the general conclusions and recommendations. PREFACE The Carnegie Commission on Science, Technology, and Government established the Task Force on Development Organizations to examine the changing circumstances facing cooperation for international development over the next decades and to assess the policy and organizational implications of these changes for the United States. The Task Force was chartered to address three questions: Why should there be cooperation for development? What should it consist of? How should it be organized? The report sets forth the argument for action and offers specific recommendations for the substance of programs and for ways of carrying them out. The Commission was aware in establishing the Task Force that there are many reports on cooperation for development, and partly for this reason an extensive bibliography is included. There have been many calls to action. And there have been many pleas for programs to address particular facets of development, including agriculture, population, manufacturing industries, environment, health, basic human needs, gender issues, and children. The Commission established the Task Force in the belief that a balanced report on the issues would be valuable, including criteria for the selection of programs and the often-neglected dimensions of organization and decision making, which are the Commission's special concern in all its work. In fact, the Commission felt that it could hardly consider its work complete unless it took account of the portions of humanity who are most in need of the benefits of science and technology. The Commission is carrying out several activities aimed at strengthening the institutions and decision-making processes by which the use of science and technology is connected to world affairs. These activities are overseen by an International Steering Group chaired by Rodney W. Nichols. The Commission has issued a report on Science and Technology in U.S. International Affairs (January 1992), which examines how the U.S. Government, particularly the State Department, can be better prepared to mesh science and diplomacy. It has also issued International Environmental Research and Assessment (July 1992), which seeks to renew a positive, long- range vision of the international institutional science and technology infrastructure as it relates to environment and development. In addition, it has sponsored a consultant report by Alexander Keynan on "The United States as a Partner in International Scientific and Technological Cooperation: Some Perspectives from Across the Atlantic" (June 1991). The Task Force on Development Organizations was created in early 1990, following a preparatory workshop sponsored jointly by the Commission and the Council on Foreign Relations and held at the Carter Center in Atlanta in October of 1989. Rodney Nichols, Vice Chair of the Task Force, and Jesse Ausubel, the Commission's Director of Studies, organized the workshop and guided the research and analyses that underlie the report. The Task Force met four times and also convened a session with the leaders of major private voluntary organizations involved in development. Members of the Task Force benefited from numerous other consultations and extensive correspondence with knowledgeable individuals, including leaders of industry and of governmental and intergovernmental foreign assistance programs, workers in the field, and scholars in development. Appendix A provides a list of those with whom we have worked. Susan Raymond was the principal consultant to the study, and she and Charles Weiss prepared a series of particularly valuable background papers, which are available from the Commission and are listed in the Bibliography. William Foege, Executive Director of the Carter Center, and Victor Rabinowitch and Walter Rosenblith, members of the Commission's International Steering Group, participated extensively in the deliberations of the Task Force. Kenneth Keller, John Temple Swing, and Peter Tarnoff worked with the Task Force on behalf of the Council on Foreign Relations, and John Blackton provided liaison with the U.S. Agency for International Development. Maryann Roper, assistant to President Carter, provided professional and administrative liaison with the Carter Center. James Brasher, Michael Heisler, and Nancy Konigsmark helped greatly at the Carter Center. David Kirsch, Margret Holland, Doris Manville, and Georganne Brown made many practical contributions to the success of the project, and the Commission's executive director, David Z. Robinson, offered valuable suggestions and consistent encouragement throughout the effort. The report was edited by Jeannette Lindsay Aspden. The report is endorsed by the Task Force and was approved by the Commission at its June 1992 meeting. 1.0 INTRODUCTION It is a privilege to introduce this rare and special report. It addresses a badly neglected and critically important topic. If these problems cannot be solved in the next few decades, there will be immense worldwide dangers. When I set out to establish the Carnegie Commission on Science, Technology, and Government, with the superb cooperation of the Carnegie Corporation board, one of our deepest aspirations was to make this enterprise a truly international one, taking account of the extraordinary circumstances of world transformation. At that time, we were just beginning to envision the end of the Cold War and a vast array of new opportunities that might well emerge. A vital turning point in the development of the Carnegie Commission on Science, Technology, and Government occurred when I was able to enlist the distinguished leadership of Joshua Lederberg and William Golden as co- chairs, and then to enlist the active participation of President Jimmy Carter in all the activities of the Commission. In light of President Carter's profound commitment to developing countries, including the uses of science and technology for development, the commitment to human rights and the building of democratic institutions, it was our privilege to ask him to chair the Task Force on Development Organizations. His agreement to do so, and his vigorous intellectual leadership of the enterprise, assured its success. We were doubly blessed by being able to link President Carter with an established leader of the scientific community who has had extensive experience in international cooperative efforts, Rodney Nichols. Their combined leadership has stimulated extraordinary cooperation from a diverse, broadly informed task force that is deeply international, interdisciplinary, and rich in relevant experience. Their approach has been open-minded, inquiring, and innovative. The result is a major statement -- in my view, one of the most significant ever made on this subject, especially in view of its timing, context, and leadership. Its key points surely deserve emphasis at the outset. The Cold War is over. With its grotesque distortions removed, new opportunities emerge throughout the world. So it is a time for basic reassessment, similar to the period right after World War II. For a variety of reasons, many nations in the Southern Hemisphere have been late in getting access to the remarkable opportunities now available for economic and social development. They are seeking ways to modernize in keeping with their own cultural traditions and distinctive settings. How can they adapt useful tools for their own development? - The immense power of science and technology can be brought to bear on development throughout the world. - The best context for bringing this about is the creation of democratic societies that strongly protect human rights. - Market-oriented economies are vital in the modernization process. - The application of these modernizing trends must be carried out in the framework of humane, compassionate values, and a concern for social justice. - Such efforts will be pursued most effectively with a strong cooperative outlook and a mutual aid ethic as well as institutions to match -- that is, cooperative global development. - The United States can make a major contribution in fulfilling the promise of this approach, working in concert with many others -- not dominating but stimulating and cooperating in international efforts. - All this can best be achieved with a strong commitment to pluralism both within nations and among them. Pluralistic activity in public, private, and independent sectors can lead to vitality and creativity, with protections provided by the balance of such pluralism. - Altogether, the essential ingredients for development center around knowledge, skill, and freedom. Knowledge is mainly generated by research and development; skills are mainly generated by education and training; freedom is mainly generated by democratic institutions. - The orientation of cooperative international development is deliberately inclusive. The international community can find ways to work cooperatively for the benefit of most, if not all, nations. - The United States needs to create a national roundtable for international development; it also needs new legislation to establish much stronger aid institutions, policies, and practices -- using many sectors to do so. - There is a great opportunity to strengthen multilateral organizations so that they can be more effective in using science and technology for development. - Both bilateral and multilateral activities must now facilitate productive civilian economies and civil societies; they must diminish the overwhelming commitment to the military sector that characterized the years of the Cold War. Such a sketch cannot do justice to an intellectually rich and morally uplifting report. The main themes of this report are likely to reverberate throughout the world for decades to come. If they are taken seriously by leaders and incorporated into the work of relevant institutions, the world will become a much better place than it is now. David A. Hamburg President Carnegie Corporation of New York 2.0 THE CASE AND THE RECOMMENDATIONS IN BRIEF 2.1 Time For Renewal In A World Of Change It is long past time to renew the content and form of the relations between the United States and the diverse countries loosely called "the developing world." Many of these countries, late to develop modern economies, are home to hundreds of millions of people still painfully burdened with illness and poverty. Many others have made great progress over the past generation. Moreover, there is a conjuncture today of welcome geopolitical change with a worldwide move toward market economies. Although the situation is fluid, and hazards and reversals are all too obvious, these changes offer enormous opportunities. The world could move from merely preserving an armed truce, with bitter ideological tension, toward achieving peace, democracy, sustainable economic growth, and improvement in the quality of life. Yet in the United States existing laws and apparatus for "assistance" -- or better, for cooperation for development -- are outdated. Even the will to support programs abroad may sometimes seem lacking. So the United States must define a new strategy, with firmer criteria, to govern the choice of its programs and its investments for international development. In renewing both the national commitment and the governmental organizations to pursue that strategy, the theme should be "Partnerships for Global Development." Some say that the failures of the United States to ensure equality of opportunity and a decent standard of living for everyone calls into question America's right to prescribe societal changes elsewhere. And some argue that scarce resources should be applied to resolution of domestic problems, rather than devoted to "foreign aid" -- charity, after all, begins at home. Yet improving economic (and, indeed, political) conditions throughout the world is not only correct, but necessary -- it is ethical self-interest grounded in the principles of political and economic liberty endorsed by the United Nations and by free peoples everywhere. What is advocated here is not outmoded "foreign aid" but modern partnerships for global development. As peace and prosperity spread throughout the parts of the world now crippled by unrest and poverty, economic opportunities for America will increase, and the reduction in international tension will mean that every nation can turn to its own pressing domestic needs. The United States has a chance not only to do good but to do well, to foster independence everywhere and to reestablish leadership for durable interdependence. Still, any report on the controversial subject of "foreign assistance" must confront the three classical questions: Why? -- is the rationale sound? What? -- do the programs make the best sense? How? -- is the implementation effective? The report's findings and conclusions answer these questions. This summary gives the case in brief, along with recommendations for action. 2.2 The Case In the National Interest The United States has compelling interests -- a mix of humanitarian, economic, and security reasons -- to promote cooperation for development. American goals in health, environment, jobs, exports, and conflict resolution are all interdependent with the actions of others around the world. Moreover, as the world's most powerful nation -- with a tradition of generosity as well as leadership in science and technology -- the United States brings unique assets to a partnership for development. A basic principle of American cooperation will remain: to foster everywhere the balanced development of the private, public, and independent sectors. The resulting pluralism nurtures diversity and encourages constructive competition that will test and improve even the best ideas. Cooperation of this kind can be achieved only by broader and better-balanced participation of the different sectors in the United States and in all donor countries. The overall U.S. aim in successful partnerships with every country is the establishment of sound public administration, a culture of lively enterprises, a healthy not-for-profit independent sector, and a shared commitment to political freedom, social opportunity, and unfettered worldwide trade. Science and Technology: A Key to the Future For the 1990s on into the 21st century, science and technology will continue to be a linchpin in the efforts to achieve most of the world's social and economic goals. They undergird the research that creates needed knowledge. They help build the education and training systems that advance skills. And they thrive with the freedoms of inquiry, communication, and association that ensure, and are ensured by, democracy and liberty. Program Criteria and Illustrations What programs shall the partnerships select? Along with intrinsic merit, there are four criteria for the selection, design, and conduct of programs in any country. One criterion is the policy environment, especially economic trends. A second is the prospect for ecological and social sustainability. A third criterion is the potential to build human and institutional capability to solve future problems. Fourth, partnerships need sturdy lines of communication to promote the social understanding that enables the establishment of mutual objectives and shared responsibilities. As these criteria are applied, initiatives of immediate importance to the alleviation of desperate human suffering must be pursued, employing what we already know. At the same time, a longer-term outlook must challenge the vast potential of science and technology to discover better means for accelerating social advance by applying new ideas. Many goals demand urgent application of the potential of science and technology: halving world hunger, reducing the incidence and the toll of tuberculosis, protecting and restoring the earth's forests where they are at risk, building the capacity for economic policymaking in the nations of the so-called Third World, and relating the U.S. educational enterprise to the needs and aims of development. Programs are needed in all these areas, and more; and programs already established -- some many years ago -- must be updated to make best use of science and technology for development. U.S. Action How shall the United States proceed? Renewed U.S. cooperation in global development will require a significant strengthening of national and governmental capacity and willingness to work with the full spectrum of developing countries, from the poorest to the newly industrialized. Moreover, the United States must enhance its efforts to help solve problems that cut across national borders, notably in health and the environment. Programs must be driven by needs in the field. They must be freed from outdated objectives as well as from the obsolete political, economic, and geographic constraints that in the past determined eligibility for action and funding. Cooperative development must establish a more effective balance between growth and equity, management and participation, large- scale and small-scale endeavors, global campaigns and local needs, and the establishment of rules and norms and investment in bricks and mortar. Technological savvy -- an awareness of what might work, and an analysis of why and how -- will be essential for almost every program. An imperative for implementing the next generation's partnerships in global development is that the United States must harness much more fully the power of its own pluralism. Government at the federal, state, and city level -- along with the private for-profit sector -- must reach out to the independent sector, including private voluntary organizations, universities, and foundations. All must improve their ability to work together across institutional lines, forming coalitions to press ahead on the actions needed internationally. 2.3 The Recommendations The recommendations touch upon every area of activity of the United States and illuminate the many new ways in which action must be taken in international partnerships. National Action - To foster creative cooperation among all U.S. institutions, a National Action Roundtable for International Development should be created, with balanced representation from the private, governmental, and independent sectors (see Chapter 5.0). The purpose of the Action Roundtable would be to review the evidence on trends and then catalyze the formation of specific task forces to address urgent problems. Some task forces would focus on a particular nation or region, others on a technological opportunity, and still others on a longer-range process such as educational institution building -- every group proceeding on a specific plan and timetable. Each action would be clearly in the international interest, and each would need to be justified in a convincing way to the American public. Multilateral Action - The United States should encourage and take a leading role in an analysis of multilateral organizations to identify opportunities to improve their performance, frequently by using science and technology more perceptively (see Chapter 5.0). As critical as change in the national strategy is, a change in outlook on the world is also crucial. In short, multilateral action is often the best way to solve global problems. - Greatly enhanced means must be devised for coordinating the ongoing efforts of the major donors (see Chapter 5.0). Such coordination would be aimed at achieving better results, given the changing circumstances in the field. Special attention should be given to the international capacity for studies and research on the most difficult and longest-range problems in science and on technology pertinent to development: new institutions may be needed. The increased emphasis on multilateral work and enhancing donor coordination will by no means eliminate the vital roles for bilateral programs. White House and Congressional Action The most important recommendations for the federal government are directed at the highest levels of the Executive and Legislative branches. - The White House must take the lead (see Chapter 5.0). Entrenched interests, institutional inertia, and organizational complexity -- developed over more than forty years -- require the President to articulate anew the principles and long-range priorities for cooperation with the entire range of developing countries. A bipartisan outlook will be essential. Presidential guidance should draw upon an intensive review by all relevant federal agencies of their current and desired activities with and in developing countries. To be completed during 1993, this complex review must be started now. - Concurrent with new presidential leadership, the Congress should initiate broad consultations, studies, and hearings that will lead to major reform of "foreign assistance" legislation and oversight (see Chapter 5.0). Given the public's skepticism about "foreign aid," and the many domestic urgencies, the political problems in Congress are exceedingly difficult. Yet in recent years, sweeping and constructive changes have been outlined by congressional and executive leaders of both parties. These new paths must be taken. At a minimum, the reforms include setting only a few broad goals, imposing much less detailed constraints on programs and funds, and relating global development strategy to foreign policy aims while keeping U.S. economic and social goals in sharp focus. Independent Sector - Leading organizations in the independent sector concerned with partnerships for development using science and technology should explore new mechanisms for regular exchange of information and extension of voluntary networks to address common concerns (see Chapter 5.0). The mechanisms should be sharply problem-oriented so that participants see their shared mission and fulfill action- plans. Although universities, foundations, and many nonprofit centers have extraordinary competence, their effort has been fragmented, and it has not been shored up with long-range research. Private Sector -- Business, Labor, and Industry - Major private-sector organizations should form study groups and action-oriented panels on the key issues in international development (see Chapter 5.0). The point is to link high-level U.S. business executives for exchanges of ideas about economic policy, both domestic and international, concerned with long- range global development. U.S. private enterprise and labor must recognize and act to realize the benefits of trade with developing countries and the rewards of the accelerated global economic growth that will accompany cooperation for development. The proposed National Action Roundtable should facilitate communications with the independent sector and with government so that the private sector can become more broadly engaged. Executive Agencies - The means for interagency program development must be strengthened (see Chapter 5.0). Many federal departments and agencies with science and technology capabilities participate in foreign projects, but there is much too little coordination for development across agencies. - To fulfill its mandate, the Agency for International Development (AID) must increase its access to American expertise in science and technology, enhance staff skills, decentralize authority, improve long-range planning, and match its organization to evolving international conditions (see Chapter 5.0). AID is the U.S. Government organization with the most significant explicit financial and policy responsibility for "foreign assistance." Although presidential leadership and legislative reform will have to precede AID renewal, recent appraisals of AID have made abundantly clear what must be done -- and the task, while difficult, is feasible. Resources - The United States can afford to -- and should -- rededicate itself to a fair share of the effort on urgent development in Africa, Latin America, Asia, and the Middle East and, at the same time, reach out to the extraordinary opportunities in Eastern Europe and the former Soviet Union (see Chapter 5.0). Even with constrained national budgets in the United States (and in other donor nations), surely there should be plans for a shift in "aid" budgets from military to development purposes. In parallel, the developing countries should shift their expenditures from military to civil accounts. Furthermore, these shifts of public resources must be integrated into the vastly larger context of the flows of private savings and investments throughout the world. Overall, new strategies must place public funds within a framework that enhances private incentives for economic growth. 2.4 Creative Commitment Now It is time to break away from the obsolete images of the world of the 1960s, the 1970s, and the 1980s. That world no longer exists. Now is a rare moment, a clearing horizon of historic opportunity, for all nations to promote peace, liberty, and global prosperity through partnerships. It is a unique time for creativity, comparable to the era immediately after World War II. Concepts, laws, and institutions must change. The stakes are high. So are the chances for success. It is time for the United States to use its human and financial resources to make the world economy work for everyone -- and to help provide for those for whom the world economy currently does not. For many reasons -- humanitarian, economic, and security -- this is, indeed, profoundly in the national interest. 3.0 WHY: THE REASONS FOR COOPERATION FOR DEVELOPMENT The central goal of development is the realization of the full potential of all individuals in their societies. Without compromising options for future generations, this realization of potential should enlarge the range of people's choices and make development more democratic and participatory. Choices should include access to income and employment, education, health, and a clean and safe environment. This chapter reviews the roots of cooperation for development, explores dimensions of change as well as enduring continuities, and discusses the particular interests and assets of the United States in development, showing why now is the time for action. GRAPHICS: Immunization against diphtheria, whooping cough, and tetanus, Adana, Turkey. (Photography by Chrisopher Warren.) 3.1 Roots Of Current Cooperation So much about today's world has changed so rapidly that it often seems that even the foundations of international relations have shifted. Much the same can be said about the relations between the United States and those countries late to develop modern economies and home to many hundreds of millions of people still painfully burdened with ill health and poverty. To understand where these relations now stand, and where they will and must go tomorrow, a brief historical sketch is instructive. The efforts of the United States to provide assistance to other nations are rooted in economics and politics as well as in the humanitarian spirit that American culture manifests. Economics From the outset, a powerful motivation for foreign assistance has been economic. As can be seen in Box 1, even before the end of World War II, enlightened Allied statesmen recognized that their self-interest lay in rapid and widespread economic recovery. The appreciation that flourishing economies are mutually reinforcing led directly to the programs for rebuilding Europe and Japan. It generated the effort to stabilize currencies and to ease and expand trade through the creation of the International Monetary Fund and the General Agreement on Tariffs and Trade (GATT). It brought forth the World Bank to provide guarantees and investments for reconstruction and development. And the United States led these multilateral efforts while at the same time beginning new bilateral programs. BOX 1: Chronology of Organization for Development[a] 1944 Bretton Woods Conference to plan for postwar Europe and to organize recovery assistance 1945 Creation of the International Bank for Reconstruction and Development (the World Bank) for long-term capital lending 1946 Creation of the International Monetary Fund to correct short- term financial imbalances 1947 General Agreement on Tariffs and Trade (GATT) developed as Executive Agreement within proposal for an International Trade Organization (ITO) 1947 U.S. bilateral European Recovery Program (Marshall Plan) authorized 1948 Creation of the Economic Cooperation Agency (ECA) to administer the Marshall Plan; ECA later renamed the Mutual Security Agency (MSA) 1949 Point Four Program announced to expand bilateral aid to developing countries 1950 Creation of the Technical Cooperation Administration (TCA) to implement the Point Four program 1953 Foreign Operations Administration (FOA) formed to combine MSA and TCA 1954 Mutual Security Act passed to recodify all foreign assistance 1954 PL 480 program of food assistance created 1958 Development Loan Fund formed for U.S. capital assistance 1960 Export-Import Bank established as independent federal agency to ease export financing of U.S. goods and services 1961 Peace Corps established as independent federal agency for unsalaried American volunteers to work in villages in developing countries 1961 Foreign Assistance Act separated military from economic assistance, unified all economic assistance under a new Agency for International Development (AID), and emphasized long-term planning and programming 1964 Gardner Report reviewed AID technical capabilities 1965 GATT Part IV on Trade and Development adopted 1969 Hannah Report reviewed AID from the perspective of the universities 1970 Peterson Report reviewed AID against increasing public criticism arising from the Vietnam War 1971 Overseas Private Investment Corporation separated from AID; provides insurance against political risks for U.S. private direct investments in developing countries 1973 "New Directions" amendments to 1961 Foreign Assistance Act targeted bilateral assistance on basic human needs in order to restore public support for aid 1973 Title XII added to the 1961 Foreign Assistance Act to strengthen U.S. university role in food and nutrition 1975 Funds for politically/militarily important countries separated from general development funds; creation of two "accounts" within AID, Economic Support Fund (ESF) and Development Assistance (DA) 1977 Babb Report reviewed AID and proposed field-focused organizational changes to implement the New Directions legislation 1978 Creation of the International Development Cooperation Agency to link all U.S. Government organizations engaged in development 1978 Proposal for creation of the Institute for Scientific and Technical Cooperation (ISTC) for research and technical assistance 1979 Gordon Report reviewed AID from within the bureaucracy as a reaction to implementation of the Babb Report; emphasized role of research 1980 Trade and Development Program established to increase U.S. exports to developing countries by financing project feasibility studies 1981 Formation in AID of S&T Bureau and Private Enterprise Bureau to act together in applying S&T to assistance programs 1983 Carlucci Report reviewed AID in context of declining support for foreign assistance yet rising threat from the Soviet Union; recommended integrating military and economic assistance 1983 National Endowment for Democracy created to encourage autonomous economic, political, social, and cultural institutions throughout the world as foundations of democracy and guarantors of individual rights and freedoms 1989 Hamilton Report (U.S. House of Representatives) recommending new foreign assistance legislation and an overhaul of the administrative organization 1989 Woods Report from AID reviewed the economic and social condition of the developing world and raised questions about the appropriate organizational response 1992 Ferris Report -- the report of the President's Commission on the Management of AID Programs -- offers Congress a plan for reforming AID Endnote [a] The eight reports in italics are analyzed by Charles Weiss in "Lessons from Eight 'Reform Commissions' on the Organization of Science and Technology in U.S. Bilateral Assistance," a background paper prepared for the Task Force on Science, Technology, and Government. * * * * * Geopolitics and the Birth of The Third World Almost simultaneously, a second concern, geopolitics, also spurred foreign assistance. Expanding Soviet influence evoked the policy of "containment" and an East-West axis of political and military confrontation. The leading institutions of this confrontation were military organizations, especially the North Atlantic Treaty Organization (NATO) and the Warsaw Pact. They sought to protect territory and deter war through a balance of fear that would eventually stretch from Europe to Southeast Asia, Africa, and Latin America. Through these organizations a global drama was played out on a stark and forbidding stage furnished with rapidly expanding arsenals of nuclear weapons. Members of each alliance fostered the economic growth of their own side through the Organization for Economic Cooperation and Development (OECD) in the West and the Council for Mutual Economic Assistance (COMECON) in the East. Sometimes each alliance sought to hinder the economic progress of the other. In this simmering Cold War, competition for allies was keen, especially within the "Third World," as it was first called by Alfred Sauvy in 1952. [1] As developing countries achieved independence, they were avidly courted by the opposing camps. "Development assistance" became the main currency in the struggle for loyalties along the emerging North-South axis of the international economy. It brought both badly needed finance and widely desired military might. Both East and West promised the poor nations of the South that theirs was the fast, reliable, and politically correct track to industrialization and wealth. The Desire To Alleviate Suffering A third stream of motivation flowed between the North and the South in this period. The interest in development in the North was nourished by a genuine desire to support new nations seeking to grow from colonialism to self- reliance. Recognition of these newly independent nations' aspirations for progress and betterment, as well as the deep poverty in which those aspirations were mired, elicited the humanitarianism that underlies public support for development assistance. A desire to alleviate suffering has always been a foundation of assistance to developing countries and will remain so in the future. Institutional Consequences of Ambivalence From this period, then, an ambivalence about cooperation for development grew within the public and its government. Political, economic, and military motivations were often pitted against humanitarian concerns. Even when not diametrically opposed, they remained, at best, uncomfortable companions. The mix of objectives was reflected in the series of institutions and programs created by the United States Government to conduct cooperation for development (see Box 1). After World War II, several institutions for economic and technical cooperation and mutual security were created to administer what became known as the Marshall Plan. As emphasis shifted from Europe to the Third World, the mandate of "foreign assistance" was broadened through the "Point Four" program to the newly independent nations and other nonindustrialized countries. The Peace Corps, created in 1961, captured the interest of many people, who volunteered to work in these countries. In the same year, several diverse ongoing programs were pulled together by the Foreign Assistance Act to form the Agency for International Development (AID), the government's primary agency for foreign assistance. Much money continued to be spent on improvement of large physical infrastructures. In the early 1970s, a major revision of the content of development cooperation emphasized the "basic human needs" of the world's poorest. During the 1960s and 1970s, the Export-Import Bank and the Overseas Private Investment Corporation were created to encourage private trade and investment in developing countries. Over the years, the U.S. Government's institutions for global development expanded and contracted with presidential and congressional commitment. Rhetoric and programs shifted in response to new development theories and approaches. Both substance and organization were studied and restudied as the roles and limits of bilateral, governmental action came to be better understood. Nonprofit voluntary organizations multiplied and came to shoulder a larger share of cooperation, especially with the poorest regions of the world. The multilateral World Bank expanded, and other multilateral institutions, both global and regional, were created and, indeed, now dispense more development resources than any bilateral agency. The U.S. share of net disbursements of loans and grants made on concessional financial terms declined. More countries, including China, joined the international system. Arms negotiations reduced the threat of world war. Old Structures, New World Despite the many fluctuations in style and slogans, the overall institutional and legal framework of the United States Government's cooperation for development has changed little since the early 1960s. But the world of the 1960s, the 1970s, and even the 1980s no longer exists. 3.2 Dimensions Of Change As in any analysis of human events, separating the multiple and intertwined strands of change is difficult. For the sake of order, however, we address first those that are primarily political, then those relating to human development and economics, and finally those relating to science and technology and to environment and natural resources. Politics In a torrent of events, the ice of post-World War II politics has broken and been carried away. The nations of Central and Eastern Europe and the Baltic region are newly free. The Warsaw Pact, the antagonist that evoked the free world's political and military defense of Europe, has dissolved. The Soviet Union is gone, and the future of the commonwealth and member states that have succeeded it is unclear. Amidst these changes, not all results have been beneficial. The rise of nationalism and ethnic rivalries bodes ill for a smooth transition from Communism to liberty, justice, and prosperity. Yet the world senses an unprecedented chance for a deeper international peace and a wider horizon for development. Changes, however, emanate not simply from the demise of the Soviet Communist bloc. Simultaneous, related events have altered the political face of many parts of the world. Many changes have been fundamental and more rapid than could have been predicted even five years ago. Reforms in southern Africa are under way. Namibia is an independent nation, and South Africa has begun to dismantle the prison of apartheid. Elsewhere in Africa democracy is advancing. A remarkable number of countries throughout the world have conducted or scheduled free elections since 1989. In South and Central America and the Caribbean, most governments are now freely elected. Across Africa, free elections are taking place. In the newly democratic nations of Eastern and Central Europe and the former Soviet Union, freedom of political and economic choice is replacing tyranny. Even in the Middle East, decades of confrontation have given way, however tentatively, to new perspectives and a still fragile dialogue about the region's future. The positive momentum of political changes will not eliminate surprises and setbacks. Nor will an improved international climate solve all national problems. Political, ethnic, and religious fragmentation and crisis continue to plague the Yugoslav region and could intensify in India. China's future remains uncertain, and its policies, cohesion, and economic well-being will seriously affect world events. Several scenarios in Southeast Asia are possible. The future of the planet is fluid, and, while the opportunities for positive change are many, the speed of events carries the risk that the expectations of newly free peoples will rise far too fast for governments and economies to satisfy them, setting the stage yet again for disillusionment and conflict. Human Development and Economics Under the turbulent surface of political change are incontrovertible facts of sustained material growth and improved welfare. The social, economic, and technological evolution of the past 40 years has been more consistent than the course of political evolution. It suggests a universal potential often forgotten amidst the dramas of revolutions, plagues, and floods that occupy the front pages each day. Health, Education, and Well-Being There have been real and significant improvements in many measures of health, education, and well-being around the world. Much of this improvement has been spurred by modern science and technology. In many cases and for many people, development has succeeded. For example, Third World infant mortality rates have declined rapidly (Figure 1). Progress that took England and France a century to achieve has been achieved in just decades in Latin America and Asia, and even in parts of Africa. [2] FIGURE 1: Changing infant mortality (deaths per 1,000 births) in three regions of developing countries and the OECD, 1960-1987. (Source of data: World Bank World Data Tables.) Life expectancy is increasing (Figure 2). Between 1960 and 1988, life expectancies increased by 38 percent in the Near East/North Africa, 24 percent in sub-Saharan Africa, 23 percent in Asia, and 20 percent in Latin America. [3] Smallpox has been eradicated, [4] and rising rates of immunization are beginning to loosen the death grip of infectious diseases on many of the world's children. FIGURE 2: Changing life expectancy at birth in five world regions, 1960-1989. (Source of data: World Bank World Data Tables.) Educational levels are also rising, and basic education is more widespread. [5] Even in low-income countries, the percentage of children enrolled in primary school has more than doubled (Figure 3). FIGURE 3: Percentage of school-age children enrolled in school in low- and middle-income developing countries. Total may exceed 100% because of older students enrolling in lower grade levels. (Source of data: World Bank, World Development Report, 1979-1991.) There have also been improvements in nutrition. Only in sub-Saharan Africa does average per capita daily caloric intake generally fall short of the standard suggested by the United Nations. [6] Indeed, with the application of scientific advances and the Green Revolution, several former recipients of food aid now export food. Agricultural development has powered economic success in most countries. A billion people still go hungry, but this tragedy could be greatly lessened; reducing the number of hungry people in the world by half within the next decade is possible (see Box 3, Chapter 4.0). [7] The most critical area of need remains sub-Saharan Africa, where agricultural self-sufficiency continues to be elusive and where averages mask the enormous grief in pockets of famine and malnutrition. Economic Progress Assessed in terms of economic output and income, the well-being of countries has also improved. On average, real per capita income in the developing world has grown over 2 percent per year since 1950. [8] In nearly all countries, the past four decades have witnessed economic progress, [9] although its benefits have often been uneven within societies. In some countries, progress has been remarkable. In East Asia, real annual per capita income growth of the "Four Tigers" (South Korea, Taiwan, Hong Kong, and Singapore) in the past decade has averaged 4.8 percent. [10] Improved well-being in the region is not limited to these economic engines. In the same period, Indonesia and Thailand were not far behind, with annual real growth rates approaching 3.5 percent [11] a rate that doubles income in 20 years. However, even when economic growth is achieved with relative equity, recent history teaches again the bitter lesson that political and social stability are not guaranteed. Two of the historically better performers on the dimension of income equality, Yugoslavia and Sri Lanka, have become tragically entangled in destructive webs of ethnic strife. Growth has been accompanied by and spurred by fundamental changes in economic structure. Developing countries are no longer simply sites where natural resources are mined. As agriculture becomes more productive and efficient, manufacturing and service sectors are growing and now provide more than 80 percent of the gross domestic product (GDP) of the South. [12] Among low-income countries, agriculture today accounts for only a third of gross domestic product, while in middle-income countries the share is down to 12 percent. [13] Over half of developing country exports are manufactured goods, up from 26 percent in 1965. [14] This increasingly diverse economic base means that more countries have greater prospects for stable, balanced growth. To capitalize on these opportunities in the future, much more widespread application of science and technology will be needed in the manufacturing and service sectors as well as in the creation of an educated, skilled workforce. National economies now interact in a different world. The global economic anomaly created by World War II has passed. For two decades after the war, the world's economy was dominated by the United States. Almost 40 percent of gross world product originated in the United States, and its share of world exports soared. [15] The opportunity for leadership was often used well by the United States, as evidenced by its role in advancing trading institutions to create more open opportunities for commerce. This imbalance, however, also meant that U.S. institutions, both public and private, were unaccustomed to partnership. By the mid-1960s, the U.S. share of global economic activity was returning to prewar levels as Europe and Japan rebuilt. The economic dominance of the United States receded, but U.S. agencies and businesses were often slow to recognize the rebirth of competition and to accept partnership roles. The development institutions of the United States and of the North in general retained their tendency to dictate development objectives and agendas. FIGURE 4: Value of total world exports, 1950-1988, in millions of constant dollars. (Source of data: Handbook of International Trade and Development Statistics, UN Conference on Trade and Development, 1990; Direction of Trade Statistics Yearbook, International Monetary Fund, 1991.) Today, the balancing of the international economy has gone further. More nations participate, and participate more actively, in the international marketplace, and the weights of most of the players are more evenly matched. A greater share of all economic transactions is transnational. The globalization of finance has promoted rapid capital flows and wider access to the world's savings pool. Manufacturing crosses and recrosses national borders until the origin of a product is obscure; the making of parts and their assembly in stages take place in a variety of countries. Nations are increasingly interdependent, and no nation alone is in full control of its economic destiny. Trade has expanded rapidly, entwining nations more closely. Since 1950, the value of trade has risen dramatically (see Figure 4). [16] The export of manufactured goods from developing countries more than tripled in value between 1970 and 1980, and has more than doubled again in the past decade. [17] This growth in trade has created a world that is more economically integrated than at any time in history. Although exceptions exist and pressures for protectionism remain, another effect of this expansion has been a gradually broadening acceptance of the global benefits of free trade and the goal of further liberalization of trade regimes. The fate of the economy of the former Soviet Union is a chastening reminder of the withering long-run effects of isolation from the global market in information, goods, and services. Science and Technology Underlying the advances in well-being are progress in science and technology and the wide diffusion of innovations. Major improvements in plant breeding and irrigation during the last 40 years have enhanced the ability of many developing nations to feed themselves. Satellites used for weather prediction have helped mitigate the effects of natural disasters. Both low- and high-technology contraceptives have helped ensure that children that are born are wanted, and techniques such as oral rehydration have increased child survival. Information technologies have enabled new techniques for management and rapid data transfer in manufacturing and among financial institutions, shaping productive investments around the world. Electrification has brought light to villages, towns, and remote farmsteads alike. Modern communications and transportation link much of the developing world to the global economic and information network. Compared to 30 years ago, there are few national "islands" of isolation remaining among developing countries. The adaptation of cultures to this ensemble of changes and the tides of internationalism, however, is fraught with uncertainty. In many places, longstanding institutions struggle to retain their traditional social roles. When their functions, such as care of the young and old, are not fulfilled, the human price is painfully obvious in the streets of any city in the developing world, and in the industrialized world as well. In this context, certain movements have emerged to confront and confound the pace and direction of economic, political, and social change, and the progress of science itself. Environment and Natural Resources Just as the political and social landscape has been altered, so has the physical landscape. In no other respect has the effect of enormous economic and population growth been so obvious or so serious. Tropical forests dwindle. Deserts encroach. Wetlands diminish. Species disappear. Lakes die. The ozone layer thins, and concentrations of greenhouse gases rise. Like modern-day Flying Dutchmen, vessels with hazardous wastes wander the seas in search of a port. The state of the world's environment is being comprehensively documented, and concern for the future is widespread. One hundred and twenty heads of state gathered at the Earth Summit in June 1992 in Rio de Janeiro to promote improvement in environmental protection and conservation. [18] The evidence presses home to the public and governments alike that much more attention must be given to promoting and implementing policies and programs that support economic and social progress, while imposing a much lower price on the environment. The contributions of science and technology to reducing environmental threats today -- and to developing less polluting technologies for tomorrow -- have been and will be among the most significant factors in the Earth's environmental future. The poor suffer most from a degraded environment. Research on environment and health risks shows that richer is safer and poverty is the worst toxin. The challenge thus remains to accelerate development, but in a way that damages less land, consumes less energy and materials, and delivers services more efficiently. Technologies are within reach that can make a large difference. But it is not yet certain whether they can be deployed fast enough to offset the environmental impacts of the economic growth needed to improve the lot of those who are poor now. The imperative to ensure that economic and social developments are ecologically sustainable is newly appreciated in both industrialized and developing countries. In what might be called a "pollution equation," the high consumption of the North and the population growth of the South are weighted about equally. "Sustainability" is sure to prove to be one of the guiding principles of development and may provide the new glue for deeper, broader, and more productive global partnerships. 3.3 Enduring Continuities Even in the face of a powerful economic evolution and sudden political revolution, many development themes continue. Some of these continuities provide the foundation for future cooperation. Others are stubborn challenges. Need The first continuity is suffering, human need, and untapped human potential. Although there have been many achievements, the vastness of what remains to be done is apparent in every region of the world, including the cities of the North. The hungry, uneducated, ill-clothed, and poorly housed outnumber the affluent in far too many places. A billion people throughout the world remain impoverished, fishing out a bare existence at the margins of the vast global resource flows. Aggregate figures hide large regional populations with persistently short life expectancies and high mortality rates. For example, although India's overall infant mortality rates have improved considerably over the last several decades, infant mortality levels among landless families in rural Punjab are 36 percent higher than those for landowning families. [19] And in Bombay, crude death rates in slum areas are as much as three times higher than in the city's suburbs. [20] Generally, there is evidence that the century's progress began to flatten out in recent years, especially in Africa and Latin America. [21] The 1980s can be called the "Lost Decade" of development in large areas. Commitment and Resources Continuing, but perhaps weakening, is the commitment to humanitarian programs that respond to the basic needs of the world's most disadvantaged. The strength of the national and international conscience undergirds cooperation for development. The total of private, voluntary contributions to overseas development by Americans -- about $6 billion -- is comparable to the U.S. federal budget for such assistance (and larger if expenditures by religious groups are included). [22] The $6 billion is an earnest expression of individual, human generosity and commitment that is frequently forgotten. Governments also maintain a financial commitment to cooperation for development in both bilateral and multilateral forms. Measured in absolute terms, amounts are significant. Worldwide Official Development Assistance (ODA) totaled nearly $50 billion in 1990. [23] This is equivalent to the annual profits of the 50 largest industrial corporations in America. [24] In relative terms the amount is less impressive. It equals about $12 per person for a year for the population of all recipient countries. Since 1980 about $3.50 out of each $1,000 of GNP in the OECD countries has gone for official development assistance, half the target of $7 endorsed by the United Nations and supported in principle by most donor countries. Nevertheless, the traditional donor nations remain committed to cooperation. Furthermore, the nations whose incomes have significantly increased in recent years, whether by virtue of natural resource endowments (e.g., Saudi Arabia) or industrialization (e.g., Finland), have joined the ranks of development donors. The public ethic that lies at the root of cooperation appears to have withstood the test of time. It was reaffirmed and extended at the 1992 Earth Summit. Whether out of self-interest or moral concern, the nations that succeed reach out to those still struggling on the path to success. Not only is there a larger number of potential partners in the North, but their economies have become more open. In fact, there is continuing growth of key groups of private institutions as partners within both developed and developing countries. Many nongovernmental organizations and networks have expanded their global efforts in fields such as environment, health, and human rights. The number of U.S. private voluntary organizations with programs in the developing world tripled between 1973 and 1989, and U.S. Government funds allocated for their support increased seventeenfold. [25] Such institutions and their counterparts in the developing world will be increasingly able to design and conduct programs for economic progress and social welfare. The rise in this kind of public-private entrepreneurship offers an enormous resource now and an even greater potential for the future. The North also has new and potentially more accessible technical capabilities. Universities and other research institutions have grown in size and number and have become more diverse. In the United States alone, well over a hundred universities now embrace substantial research programs, and university research expenditures increased by 75 percent between 1980 and 1990. [26] Universities have also become more international in character. Over half a million students from developing countries are enrolled in higher education in the United States, France, Germany, the United Kingdom, and other industrialized nations. [27] A growing resource is the leadership within the developing world. In both the government and private sectors, a new generation of leaders is beginning to steer tomorrow's course. Many have themselves benefited from the advances of the last 30 years, and have the education and experience that encourages an openness to change. Barriers Because of, or perhaps in spite of, the speed and scope of change, other fundamental continuities exist. These are the barriers to world progress. Over the next decade, such barriers as poverty cycles, debt burdens, human rights abuses, military spending, unnecessary economic slumps, and underdeveloped science must all be overcome. Population Growth and Distribution One of the highest barriers is still the chain of poverty and population growth. In many regions rapid population growth continually adds to the burden of poverty. Current growth rates mean that every month more than 7 million people, the population of Bolivia (or the state of Georgia), are added to the world, and 90 percent of the growth is in developing countries. [28] As populations and expectations rise, so do other needs multiply, particularly for food, energy, and jobs. Perhaps the most visible effect of economic, political, and environmental change has been the growth of cities in developing countries. By the year 2000, two-thirds of the world's urban dwellers will live in cities in the developing world. [29] In Latin America, it is estimated that some 40 percent of the population will be living in slums and squatter areas. [30] The rates of urban growth in the developing world have exceeded even rates of population growth. Mexico City, for example, quintupled its population between 1950 and 1980. The population of some African cities is expected to quadruple between 1980 and 2000. [31] The relationship between population size and economic progress is neither simple nor straightforward. Historical evidence and cases can be mustered to demonstrate both the positive and negative effects of large populations. [32] Still, rapid growth of population has clear implications for the adequacy of national and natural resources and for the health of individuals, particularly women of childbearing age. Reducing rapid population growth is a dual task. On the one hand, improved access to family planning techniques and services is essential to ensure the health of mothers and reduce infant death rates, as well as to expand the economic and social choices of families. On the other hand, much recent research has emphasized the importance of economic vitality itself as a motivation in the limitation of family size. [33] Employment, education, and social mobility all affect the choices families make about childbearing, whatever the techniques available. The Debt Crisis A second critical barrier facing development is the persistent debt crisis. The total debt of developing countries has reached some $1.2 trillion, $520 billion of which is owed to commercial lenders and the remainder to governments and international organizations. [34] The resource drain from developing to industrialized countries now totals some $60 billion annually, [35] a sum larger than the annual ODA transfer from donors to the developing world and a complete reversal from the 1970s. Although some countries have negotiated debt relief, the burden for many others remains crushing. In Mozambique, Somalia, and Sudan the value of annual export earnings is not enough to meet scheduled debt service payments. [36] The cumulative legitimate and illegitimate flight of private capital from developing countries to safer havens in the industrialized nations may equal total debt. As countries seek to reduce their debt, future private capital requirements must be kept in mind: adjustments will have to be made on a case-by-case basis so that economic conditions will improve reliably. GRAPHICS: Security concerns, Yemen. (Photography by Chrisopher Warren.) Human Rights Abuses Human rights abuses continue throughout the world, even where political changes have begun. Censorship and other forms of human rights abuse are often closely associated with failures in development. Those who starve often starve in silence. [37] For countries with a free press and democracy, the risk of famine is reduced. By the same token, without freedom of inquiry and expression, knowledge, discovery, and innovation are imprisoned. Cooperation for development through science and technology cannot be effective in the long run unless it is also committed to the human rights of everyone. War and Unrest Violent ethnic or tribal conflicts and civil wars not only block development but destroy its achievements. New means of mediation and conflict resolution will be essential for clearing the barriers to development. Table 1 shows that there have been more than 100 violent conflicts between 1950 and 1990, and at least a score of comparable situations could be counted today. Indeed, centuries-old ethnic discrimination and conflict often intensify while democracy establishes its foundations. TABLE 1: Violent Ethnic and Tribal Civil Conflicts, Civil Wars, and Cross- Border Conflicts, 1950-1990 (by location) Region Number Latin America 13 Europe 5 Middle East 17 South Asia 10 Africa 30 Southeast Asia 37 Source: Ruth Leger-Sivar, World Military and Social Expenditures, 1991, World Priorities, Washington, DC, 1991, pp. 22-25. Boom-and-Bust Cycle Also impeding progress are the fluctuations of the global economic system. Economic slumps affect the willingness of donor countries to increase development outlays, of private enterprises to invest more, and of developed countries to import manufactured goods from developing nations. Simultaneously, they make the need for such increases greater by worsening the condition of developing countries. Periods of economic boom draw developing nations into the world system, only to be followed by busts in which they are bitterly marginalized again. Many of the economic problems sketched above could be avoided with more prudent economic policies. Governments must implement market-oriented reforms and, as outlined later in this report, must foster pluralistic analysis of the options in policymaking. Doubt and Skepticism Within the technical fields of development itself, there continues to be a poor understanding of what works best in assistance and how to apply donor money most reliably and efficiently to leverage development progress. Indeed, there is debate, sometimes healthy but often debilitating, on what development "progress" really is. Given this poor understanding, development professionals face continuing conflicts over the objectives and policies when they recommend programs, sectors, and industries for support. Coordination among donors, and by performers of development projects, remains elusive; time and money may be wasted when coordination is poor. Recognizing the uncertainties about both the effects of assistance and the goals of development, the public maintains considerable skepticism about public foreign assistance even as it gives generously to private charity. In the United States, this skepticism is expressed in three related criticisms: assistance is simply not effective; where it is effective, it takes jobs from U.S. workers; and the United States, with its own economic problems, cannot afford assistance. Whatever the merits of these views in specific cases, they are widely and strongly held; and their criticisms have been politically effective, especially when domestic needs appear to be in competition. That the American public translates its compassion into continued support for private philanthropy, but not for governmental foreign assistance, is attributable not only to a healthy concern for the public purse but also to a failure on the part of government to demonstrate the national interest associated with cooperation for development. The Burden of the Past and the Challenge of Change Of the greatest import, institutions remain locked into past conflicts and competitions. Military budgets drain huge resources not only from donor countries, but also from developing nations. In 1990, $880 billion was spent on armaments and training for war throughout the world, a total fifteen times the annual expenditure on official development assistance. [38] Although troop levels of industrialized countries have remained stable over the last three decades, military budgets have doubled. [39] In developing countries, troop totals have doubled and military spending has quintupled. [40] As a result, poor countries spend two or three times as much on the military as they receive in aid from donor nations. [41] In some countries, despite the persistence of disease, high mortality, poverty, and illiteracy, military budgets are many times larger than those for social needs (Table 2). TABLE 2: Military Spending as a Percentage of Health and Education Spending (1986) Country Percentage Iraq 711 Syria 445 Iran 333 Pakistan 279 Peru 217 Saudi Arabia 155 South Korea 153 Jordan 150 China 146 Thailand 95 India 81 Cuba 79 Nigeria 63 Chile 59 Philippines 55 Guatemala 52 United Kingdom 45 United States 37 Source: The World Paper, February 1992, calculated from the Human Development Report 1991. Meanwhile, bilateral aid agencies have often failed to recognize and respond to changing world opportunities and events. Innovations in technology and new scientific insights are poorly or belatedly linked to program priorities or planning. Too frequently, assistance clings to the pattern of past alliances, demands immediate and visible results to retain public support, and fails to plan for long-term needs or support vital underpinnings of research. Ultimately, the charge is made that too much is transformed into support for large governmental bureaucracies of both donors and recipients rather than for the individuals in the cities and villages for whom the programs were conceived. Program balance has also been difficult to achieve in the midst of change. This has been obvious, for example, in the tension between the ongoing needs for agriculture and rural poverty compared with the soaring demands of cities, where the majority of people now live, though urban housing and other services lag badly behind population increase. Reconciling the ongoing needs with rapid change in development programs requires both more aggressive application of what we already know and greater attention to opportunities that might be realized through research. Multilateral agencies have also had difficulty adapting to new needs and approaches. If they remain oriented toward large, centralized, public infrastructure investments in areas such as water and energy supply, multilateral agencies may be less suited to the new waves of development that emphasize markets, private property, incentives for individual enterprise, and the globalization of the marketplace. Multilateral agencies need to encourage recipient governments to promote open markets, political and economic decentralization, and individual and business initiative. Governments remain responsible for operating public infrastructure, and international financial institutions will retain their role in assisting governments with that task. In the future, skills and approaches will be needed within multilateral institutions to balance support for the roles of private commerce and public infrastructure in cooperation for development. Underutilization of Science and Technology Another problem -- not really a barrier, and perhaps more properly seen as an opportunity -- is that too little of the great power of modern science and technology has been directed at development. Mobilization of developed- country scientists to deal with problems found mainly in developing countries has not been very successful. The scientists and their employing institutions often lack the first-hand knowledge of conditions in developing countries that is required in order to formulate appropriate research agendas. Conversely, the cost of creating the infrastructure for developed-country scientists to do research within developing countries is often prohibitive, and long learning periods are required before such research is productive. The set of International Agricultural Research Centers is evidence that such an approach can be effective, given patience and commitment. The distributed network of scientists working in the Tropical Disease Research Program of the World Health Organization provides another successful, contrasting model. The major Northern institutions concerned with development, science, and technology have a large unfinished agenda. They are not connecting enough with changing needs, people, and institutions elsewhere in the world. They urgently need help in recognizing this fact and in developing entirely new distribution systems to reach partners. Meanwhile, as shown in Table 3, only about 4 percent of the world expenditure on research and development and about 14 percent of the world's supply of scientists and engineers are in developing countries, which contain about 80 percent of the world population. [42] There are enough successes in fields such as health and agriculture to suggest that much more could be profitably invested. For example, estimates of the economic returns on investments in international agricultural research indicate that these are much larger than for nearly every other type of investment. [43] There is a need to create understanding among leaders in developing countries of the benefits from such innovations. Better access to knowledge and information about available technological options is a requisite for the broader realization of the potential of science and technology serving long-term development. TABLE 3: R&D Scientists and Engineers and R&D Expenditure, 1990, by Region R&D Scientists and Engineers R&D Expenditure Estimated Estimated Percent Number Amount in Percent Percent Estimated of per Million Millions of of Number Total Population of U.S. Total GNP WORLD TOTAL 5,223,615 1,000 452,590 2.55 Industrialized Countries 4,463,800 85.5 3,695 434,265 96 2.92 Developing Countries 759,815 14.5 190 18,325 4 0.64 North America 930,720 3,360 193,720 3.16 Europe 1,091,000 2,210 104,960 2.21 USSR 1,694,430 5,890 55,710 5.66 Africa (excluding Arab states) 34,960 75 750 0.29 Asia (excluding Arab states) 1,190,360 400 88,530 2.08 Arab states 77,260 360 3,080 0.76 Latin America 162,930 365 2,360 0.40 Source: Table derived from the 1991 UNESCO Statistical Yearbook (UNESCO, Paris). Global Cooperative Development The changes now under way allow the world to move away from merely preserving an armed truce, with its chronic, and sometimes acute, ideological tensions, toward achieving the universal aspirations for peace, democracy, economic growth, and improvement in the quality of life. The changed conditions allow us to think and act as one extended global family. "Partnerships for global development" is the appropriate theme. Only when social and economic progress is widespread and durable will new democracies become deeply rooted and stable. And only then will newly free peoples be confident that the risks they have taken in turning toward the future will buy them the rewards of lasting liberty and prosperity. 3.4 Why The United States? In all of this change and opportunity, what are the interests of the United States in cooperation for development? A compelling answer to this question is essential for mobilizing sustained public support for the allocation of scarce public and private money for cooperation. Why should the United States not revert to isolationism? Moral Interests The readiness of Americans to respond to the needy and to meet adversity with an outpouring of generosity is an abiding strength of American culture. It has always been and it remains the foundation of public support for U.S. foreign assistance programs. Generosity and humanitarian concerns are a hallmark of American values with which people around the world identify. At the same time, many deep and serious "development" problems confront American society itself. Applying the moral values that support development beyond U.S. borders provides an opportunity to reaffirm them within America itself. Global partnerships will lead to learning and action at home and abroad. Economic Interests Global prosperity is crucial to continued prosperity in the United States. In 1950, U.S. exports and imports accounted for under 5 percent of GNP; in 1990 they comprised 28 percent of GNP. [44] Indeed, between 1986 and 1990, U.S. merchandise exports accounted for 41 percent of the increase in GDP, and in 1990 alone they accounted for 88 percent of GDP growth. [45] The U.S. Department of Commerce estimates that U.S. merchandise exports supported 7.2 million American jobs in 1990, an increase of 42 percent over 1986. [46] This level of job creation accounts for 25 percent of the growth in civilian jobs in the U.S. between 1986 and 1990. [47] Another reflection of the growing interdependence of the world economy is that approximately $2 trillion of assets in the United States are already foreign-owned (with the United Kingdom being the leading investor) and support 3.7 million American jobs. [48] U.S. exports to developing countries exceeded $127 billion in 1990, much of it by small and medium-sized businesses. [49] It is estimated that a 5 percent decline in U.S. exports would cut real GNP growth in America by a fifth. [50] America's jobs depend on the health of its trade. The markets that will buy and use what the United States can and would like to produce in the future -- aerospace products, pharmaceuticals, software, for example -- are markets of societies that are far more developed and wealthier than those in which most of the world's people participate today. Growth in the economies of America's trading partners and enhancement of the education and well-being of their peoples are critical to growth in U.S. exports and the possibility for balanced U.S. trade. Foreign investment by U.S. firms already matters greatly to the U.S. economy and to American corporations. U.S. companies increased their foreign investments sixfold in the last three decades, from $56 billion in 1967 to $373 billion in 1989, of which $90 billion is in developing countries. Such investments benefit American companies not only in repatriated profits, but also with sources of goods and services that keep American companies competitive in the U.S. market. Fully 15 percent of all U.S. imports come from foreign affiliates of U.S. corporations. [51] The capacity of developing countries to become partners in such investment, through sound policies, financial strength, human resources, and infrastructure, will be of growing importance to the American private sector. Just as each nation's economy has become more thoroughly entwined with the global whole, so U.S. economic interests hinge on policies that promote the viability of the world marketplace. Reinforcing the role of GATT [52] and facilitating the participation of developing countries in GATT are central to a stable trading environment from which U.S. exports can benefit. The globalization of markets means that the United States must formulate its policies toward all nations collectively rather than in isolated segments. Ultimately, poverty elsewhere in the world hurts U.S. economic interests by breeding political and economic turbulence. This, in turn, disrupts financial and export markets upon which the United States depends. With the globalization of transportation, markets, and information, the industrialized countries are vulnerable to instability caused by social tensions, epidemics, extreme economic disparities, and large population movements virtually anywhere in the world. It is also important to note that social upheaval in the developing world slows the shrinking of military expenditures by the United States that might otherwise fuel U.S. economic growth. Nevertheless, promoting liberal trade policies is not easy. Although the net aggregate gains of open trade far exceed the net losses, openness does create losers as well as winners. Ways must be developed to assist those (at home and abroad) who are temporarily disadvantaged by open trade to adjust to the structural changes so they can compete more effectively, continue to grow economically, and shift jobs from declining to growing industries. Security Interests Development is essential if four core U.S. security interests are to be realized Security here is defined broadly. Confidence in the Future America's hopes for the worldwide advance of democracy depend on economic and social progress. The perception of such progress underlies the confidence of peoples that, however difficult the current change, they are now the masters of their own future. By contributing to that progress, cooperation for development helps maintain the momentum of the positive political and economic changes now taking place around the globe. Peaceful Conflict Resolution Continuation of the momentum of democracy is essential to the reduction of conflicts within and between nations. Democracies seldom declare war on one another. Although violence will no doubt continue to occur within and among nations, peaceful conflict resolution has become ever more essential in an era of weapons proliferation. Modern weapons mean that potential gains from violence can be offset in a few moments by the destruction and suffering that are the by-products of the violence. Development can contribute to peacekeeping by expanding prosperity and thus raising the penalties associated with extreme or prolonged violence. After all, those who have nothing have nothing to lose. New roles may emerge for the United Nations, and for regional groups, to resolve intranational conflicts. GRAPHICS: Mexico City, Mexico (Photograph by Christopher Warren.) Prosperity Large disparities in living standards among the world's people are not only economically destabilizing, they are also increasingly dangerous, both socially and politically. Tensions resulting from such disparities spread throughout nations and around the globe. They increase the pressure along fault lines of conflict, such as ethnic identification. The wealthy countries are unable to insulate themselves from the troubles of the poor, not even from their diseases. The spread of AIDS and the recent re- emergence of tuberculosis and cholera may be harbingers of future epidemics spread in all directions by the deadly mix of poverty and mobility. To reduce global risks, wider prosperity is essential, along with better- designed national and international policies and regulations in fields such as health and environment. Global Environmental Quality The winds and waters of the world flow freely across borders. The people of the United States cannot be assured environmental security unless the rich and poor of the world cooperatively address issues of population growth, industrial practice, and land and energy use. Scientific Interests Cooperation is needed not only for economic and social development, but for the progress of science itself. Scientific benefits of cooperation always flow in both directions. Many developing countries have brilliant scientists and engineers. In the past, almost all U.S. research was carried out using solely domestic resources. Today and tomorrow, growing numbers of problems, ranging from computer development and climate change to AIDS and cancer, require research partnerships and data sharing among countries. The United States is advantageously positioned to contribute to such partnerships and to strengthen the institutions in the developing world that can become effective partners in scientific research that, in turn, will be of importance to the American people. 3.5 Why Now? Now is a rare moment of historic opportunity to promote peace, liberty, and global prosperity through cooperation. It is a time for creativity comparable to the period immediately after World War II, and the chances of success are even greater. This is also the time to mobilize science and technology to speed change toward these goals. The deed is not yet fully done. The foundations of openness and freedom that have been laid in recent years in many corners of the world must be reinforced if they are to withstand the setbacks, disagreements, and reversals that surely lie ahead. Cooperation for international development must rise to this challenge. Cooperation need no longer be about buying allies. The opportunity now is to transform development cooperation into investing in the world's prosperity. Tangible, visible, firm commitments to cooperation for development are essential if we are to ride the tide of individual, economic, and political freedom now rising worldwide. The time for commitment is now. To wait is to risk the gains so recently won. 3.6 Unique Assets Of The United States All nations of the world can and should step forward to accept the new challenge. To the opportunities and problems ahead, each nation brings special strengths. For its part, the United States has two preeminent assets as a development partner. Leadership Around the world, America is a symbol of freedom and progress. The Statue of Liberty rising over Tienanmen Square in 1989 exemplified the hope that America represents to those seeking freedom and democracy. The commitment of American leadership to cooperation for development sends the strongest possible signal to all nations that the United States stands shoulder-to- shoulder with those who accept the risks of economic and political change. It reminds everyone of the urgent need to take seriously a responsibility toward the world's poorest peoples. When the United States moves ahead to lead a coalition, the world gains. And when the United States hesitates, the potential for cooperation drains away. America is also an example, if still imperfect, of a free and open market and the many benefits that it can bring. The U.S. private sector is the largest, most diverse, dynamic, and independent in the world. It offers models of all kinds of enterprises and innumerable partners. But the American private sector must become more committed to bringing its experience and insights to worldwide development, more dedicated to open and fair markets. Beyond political symbols and entrepreneurial drive, America has 200 years of experience in building and, with the tragic exception of the Civil War, peacefully adapting policies and institutions within a decentralized democracy. The mistakes as well as the successes can be offered to developing-country partners to ensure that hard lessons need not be painfully learned twice, and that "what works" can be observed and applied. U.S. institutions are uniquely transparent to outsiders. By law and custom, most of the information, regulations, and processes of public departments and agencies are open to public study, scrutiny, and inspection. America's institutions of higher learning are also uniquely varied and accessible. Finally, American resources available for development partnerships are far greater than shown by the measures of public budgets or private trade. The American tradition of voluntarism has meant that many individuals and organizations share knowledge and services for cooperation in development. No other nation has a cadre of comparable size and skills to participate in technical cooperation. Strength in Science and Technology The only way to solve the problems of societies and meet their multiplying needs is with enhanced contributions of science and technology to development and by extended cooperation between the "science-rich" and the "science-poor." The depth and breadth of U.S. expertise in science and technology is unrivaled. U.S. experience with application of technologies ranges from automation of financial systems to vaccination of inner-city children. 3.7 Rededication In sum, three realities define the case for reformed and reinvigorated partnerships for international development. First, the Cold War has ended, and with it the distortion of international relations and economic cooperation that it brought. The 1990s offers the opportunity to shift assistance from the cause of political and military alliances toward the goals of global development. Second, a massive restructuring of the world economy is under way. People and their leaders everywhere wish to build market-friendly models of economic development in place of state-led models. In literally scores of countries in Asia, Africa, and Latin America as well as Eastern and Central Europe, this change creates enormous opportunities to raise economic efficiency, enlarge participation in development, and strengthen freedom. It ensures that foreign technical and financial assistance will be more effective in the future. More importantly, private trade, investment, and technical cooperation by Americans with developing countries will have greater scope and impact. But the restructuring of the world economy is not just a matter of what is happening in developing countries or the former Soviet Union. The economy of the United States is undergoing major changes, as well as adjusting to new forces in the world market that have abruptly made large portions of the economies of many nations obsolete. The third reality is that terrible gaps in human progress persist, both within and among countries. Desperate needs in health, food, education, and other areas must be met. Understanding these three realities is the path to resolving the puzzle of "why cooperate?" For the people of the United States must answer the inescapably consequential question of their future engagement with global development. The answer to this question is that the realities demand a firm rededication to the historic principles of U.S. cooperation. The Task Force recognizes that rededication will be meaningful only if it transcends rhetoric. The first step toward making rhetoric an operational plan is determining the content of cooperation. Then there can be an agenda of actions, the "what to do" of highest priority for the next decade. That is the subject of the next chapter. Vigorous rededication also requires institutional reform -- the "how to proceed." Major organizational and legislative changes will be needed throughout the United States if partnerships for international development are to respond to the changing circumstances and the emerging opportunities. Those changes are the subject of the fifth chapter. Chapter 6.0 offers some final thoughts on what the past has meant and what the future might bring. 4.0 WHAT: THE CONTENT OF COOPERATION FOR DEVELOPMENT As the reasons for cooperation for development -- the "why" -- have evolved, so must the substance, the "what." The problems faced in development have altered and diversified. The trajectories of development involving industrialization, urbanization, and demographic and other changes, as well as the different rates at which countries travel along them, are better understood. Furthermore, countries recognize more clearly that they travel on trajectories that bring collective risks, such as global warming and loss of biological diversity. These must be faced by all nations together as part of the development process. To remain relevant, therefore, the agenda of cooperation for development must adapt. The United States, as the largest donor and the partner with the most deeply established practices, has the most difficult adjustments to make to respond to the new needs and opportunities. Its success will be correspondingly significant. Here the Task Force first summarizes the larger patterns within which development takes place. The main focus of the chapter is on the principles and criteria that should govern the choice of programs for development for the next decades. A more flexible system for cooperation is mandatory in this period of transition and increasing diversity of needs. Unfortunately, the present state of affairs is unsatisfactory. The final section of this chapter offers a new approach, using several concrete examples to illustrate how the recommended principles and criteria should be applied. 4.1 Levers On Development There are many potential levers on development, some public and many private. For the U.S. Government, these begin with programs to ensure security and peace that set the framework within which development can occur. The U.S. Government also has many other "international" policies and programs that have consequences for international development. These relate to trade, environment, energy, drugs, migration, foreign students, and intellectual property rights, to mention but a few. At least as important are "domestic" policies and programs that affect American savings, investment, and economic growth, and inevitably the world economy. Of course, macroeconomic performance in the industrialized countries affects development of the rest of the world. The Task Force fully recognizes that overarching macroeconomic forces determine how smoothly development proceeds, how resources become available for it, and how effective U.S. bilateral efforts can be. This report focuses on U.S. and multilateral programs and organizations whose primary and direct purpose is international development. Nevertheless, the effects of many other "levers" on development are so great that they must be factored into the national and governmental processes of decision making for development. 4.2 Principles Of Balanced Institutional Development Even if much greater financial resources and political attention were devoted to development, programs would not function wisely and well in the absence of sound principles on which to base the substance of partnerships. Experience with cooperation in development, whatever the subject of programs, teaches that long-term benefits emerge most strongly when the choice and design of programs are guided by well-understood principles. The most fundamental principle of cooperation for development is to foster the balanced development of the public, private, and independent sectors, pluralism within these sectors, and creative interaction among the different ways of thinking that underlie the sectors and the institutions in them. Cooperation of this kind can be achieved only by balanced participation of the different sectors in the donor countries as well. Cooperation must conjointly build sound public administration, an enterprise culture, and a lively, critical independent sector. Private Sector Governments alone cannot generate economic and social progress. The engine for development is the enterprise culture, which is concerned above all with results. This culture protects the autonomy and freedom of the individual, promotes innovation, and ensures that private investment generating social benefit is rewarded. It facilitates the formation of flexible networks to accomplish tasks on all scales as efficiently as markets allow. The private sector is the source of most wealth for investment, whether indigenous or foreign. The "bottom line" is the principle that creates a vigorous private sector (see Box 2). BOX 2: The Enterprise Funds In seeking to encourage the emergence of an entrepreneurial culture, free markets, and private competition in the newly democratic nations of Eastern and Central Europe, the United States, through the Agency for International Development, has created four "Enterprise Funds" in the region, one each for Hungary, Poland, the Czech and Slovak Republics, and Bulgaria. The objective of the Enterprise Funds is to promote policies and practices conducive to the development of the private sector through the provision of loans or equity investments in small and medium-sized businesses. Although initially capitalized with U.S. Government funds, they function as private investment entities, completely privately managed according to standard business practices and governed by Boards of Directors made up largely of private-sector executives and bankers from the United States and partner countries. They are also empowered to function as financial wholesalers, soliciting monies from other investors and thereby creating a larger pool of capital. Profits generated by Enterprise Fund investments or loans are retained and reinvested in new projects. Among the Enterprise Fund investments have been projects in housing, agribusiness, and business technology. * * * * * Propulsion for the enterprise culture comes from science and especially technology. They are important enabling tools in a responsive marketplace. Technological innovation enhances and speeds the flow of information, which lowers the costs and guides the energy of entrepreneurs. Scientific research and technological development underpin innovation, facilitating the creation of new services and products in response to individual choice and increased freedom. In turn, the entrepreneurial culture serves science and technology by speeding the dissemination of innovation through the global marketplace. Public Sector The public sector must provide and strengthen the organizational and administrative means to build and maintain democracy, honest political and economic processes, representative government, and the rule of law. The public sector also has special responsibility for fairness in markets, sound regulation to balance privilege and obligation, prudent use and protection of the resource base and the environment, and patronage of basic research and other public goods. Stable public or quasi-public entities are needed to address and administer numerous large and complex social functions. Sophisticated government policies and competent governance are required for military and social security, environmental protection, health care, transport, communications, and other infrastructures. Some of these functions, for example family planning, can be promoted through private initiative, involving both nonprofit and for-profit groups. Governments must have the ability to gather and analyze data, frame options, evaluate results, and articulate choices to the electorate as regards national priorities. Sound public administration relies on carefully codified and universally respected processes. A modern public sector cannot operate without massive applications of science and technology -- for example, in handling the flows of information needed for overseeing banking, health, and environmental goals. Independent Sector It is vital to maintain social organizations that check inequalities of wealth, status, power, and knowledge, that protect human rights, that promote voluntary cooperation among the individuals and groups, and that provide for the tailoring of new ideas and products to particular cultural contexts. Local groups and initiatives are the sources of creativity and persistence in pushing for humane innovation and responsible government. Universities, churches, many nongovernmental organizations, and the "independent sector" more generally flourish in a society that embraces critical debate as an ingredient for growth that is both sustainable and equitable. This sector promotes political pluralism, freedom of religion and the press, the rights of minorities, and direct expression and consent of the governed. It is also the independent sector that is most active in meeting the needs of those marginal members of society who will never be absorbed by either the enterprise engines or routine administrative practices. It is often most effective at delivering services to the most needy. Science and technology are indispensable to a healthy independent sector: they provide the expertise to balance that retained by otherwise more powerful interests, and they foster a culture that does not take received wisdom for granted. A Balanced Approach A stable democratic society arises from the healthy interaction of diverse ways of thinking in a humane context. For much of its history, development assistance has involved an emphasis on only one sector or approach, with predictable shortcomings in the results. Cooperation for development must encourage balanced evolution in societies of the knowledge, organizations, and decision-making processes utilized in each of these sectors. In some societies, partnerships for development must explicitly take on the task of building an enterprise culture, or an independent sector, or sound public administration -- and, in all these areas, science and technology play essential roles. 4.3 Critical Roles Of Science And Technology Science and technology are critical to a new approach to cooperation for development. Ultimately, the key components for building prosperity are knowledge, skills, and liberty. Science and technology - Undergird the research that creates needed knowledge - Help build the education and training systems that advance skills - Thrive with the freedoms of inquiry, communication, and association that ensure, and are ensured by, democracy and liberty All major developmental goals -- rapid economic growth and industrialization, environmental protection, modern telecommunications, improved health, better farming, responsible population management, new techniques for housing and biotechnology -- depend to a large degree on the ability of countries to absorb and use science and technology. Box 3 illustrates how, through science and technology, the known and the new can be harnessed to address urgent development issues, in this case the goal of halving hunger by the year 2000. BOX 3: Halving World Hunger by the Year 2000 A major initiative is under way to end half the world's hunger before the year 2000 by combining the products of recent scientific research with new technologies of implementation, consensual approaches, and pluralistic institutions. Simultaneously, longer-term S&T innovation is essential to sustain and extend the accomplishments that are possible in the near term. Although numbers are imprecise, some one billion people live in households too poor to obtain the food they need in order to work; a half a billion in households too poor to obtain the food they need in order to move around. One child in six is born underweight, and one in three is underweight by age five. Hundreds of millions of people suffer anemia, goiter, and impaired sight from diets with too little iron, iodine, or vitamin A. Yet there is a consensus that, by linking what we now know with what expanded S&T research can tell us, we can reduce by half the toll of hunger within a decade. This is the conclusion of groups and agencies concerned with hunger, including the World Food Council, the Task Force on Child Survival, heads of state at the World Summit for Children, and the authors of the major nongovernmental initiative developed at Bellagio, Italy, in November 1989. Specifically, the Bellagio Declaration proposed four achievable goals for the 1990s: (1) to eliminate deaths from famine; (2) to end hunger in half of the poorest households; (3) to cut malnutrition in half for mothers and small children; and (4) to eliminate iodine and vitamin A deficiencies. In the three years since the Declaration, there is much progress to report. Famine. Leading the agenda is the potential for virtual elimination of deaths due to famine among the 15-35 million people annually at risk, through implementing existing early warning and famine prevention systems and, most important, through continuing efforts to provide safe passage of food in zones of armed conflict. Nutrition. Equally capable of eradication are two of the three major nutritional diseases. By iodizing salt or injecting iodized oil, most of the 190 million cases of goiter could be eliminated by the end of the century. A capsule given twice a year to the 280 million children at risk of vitamin A deficiency could virtually eliminate the disease in the crucial ages between 1 and 4 years, not only preventing blindness but dramatically increasing child survival. A coordinated international effort is under way to eliminate vitamin A and iodine deficiencies and reduce iron deficiency. It will combine the hitherto competing approaches of supplementation (pills and injections), fortification (additives to food), and dietary change (use of mineral and vitamin-rich foods) to address the "hidden hunger" of micronutrient deficiencies. It is also possible to halve malnutrition among women and children. Rapid progress has been made in immunizing infants and providing simple, home- based treatment of diarrhea. Breastfeeding of infants is continuing or even increasing in many developing countries. Innovative programs in Africa and Asia combine the monitoring of growth by weighing the child with supplemental feeding as needed. These activities can be combined with efforts to ease the burden on already overworked mothers and to reduce the nutritional anemia found in half of all women of reproductive age. Poverty. Most hunger is rooted in poverty, but the hunger of at least half of the poorest households can be ended. Extensive experience with food subsidies, coupons, ration shops, and feeding programs demonstrates that careful targeting and effective application of such measures could reduce much urban food poverty at relatively low cost. In rural areas, providing wage and food income in return for labor to construct needed agricultural and environmental improvements reduces food poverty immediately while simultaneously increasing long-term agricultural productivity and income. Other programs provide self-sustaining sources of credit, especially to women, to start small businesses or to produce local products and services. Subsistence Farming. Food-poor households that raise their own food have to cope with the deterioration of their natural resources, the loss of crucial access to common resources, and restriction to all but the most ecologically marginal land. There are important opportunities for redistribution to smallholders of land that is little used, and a variety of low-cost techniques have demonstrated ability to sustain productivity, provide fuelwood, limit soil erosion, and increase food and income. Costs. A systematic assault on the hunger problem will inevitably require coordinated action in new partnerships, as well as new resources and food aid, linking the rich to the hungry and poor. One estimate of the cost of a realistic program to combat hunger in the 1990s is about $8 billion a year, half in new resources (with some from the United States and most from a pool of donors including Japan, the EC, and international institutions). This is the equivalent of about $7.25 for each citizen of the afluent world. Even more important than new resources is the need for renewed social support and political will and the creative employment of local institutions and underutilized resources in order to encourage incentives for independent economic growth. A careful plan would have to be developed on both the substance of action and the mobilization of resources, spanning investments in food aid as well as in research on such topics as fast- growing trees and other crops, production on arid lands, and biotechnology for agriculture in the 21st century. Private Volunteer Organizations. Private voluntary organizations are particularly important in reaching the hungry and poor, and the best of them are hungry people acting in their own behalf. The most promising approaches empower people to assess their own condition and to act to improve it, provide short-term hunger relief while addressing deeply rooted causes, and demonstrate sustainability over the long term. The last decade has also witnessed a slow emergence of new public voices for the hungry and impoverished. What Can Be Done Now. There is now in place new scientific knowledge to provide early warning of famines, to break the nexus between hunger and disease in children, and to increase food production in sustainable ways. There are also new technologies of implementation: ways to target assistance or provide credit to the very poor, ways to immunize a whole generation, and ways to provide mothers with the tools to monitor their children's growth and health. There are new approaches that combine markets with safety nets and link the grassroots with the summit by new networks of institutions. In the Long Term. While near-term options are many, as population grows, long-term food sustainability will require expanded investment in research on agricultural systems and technologies. This is especially important if expanded production and growing populations are not to result in a further deterioration in fragile ecologies. Similarly, long-term investments must be made in instituting the types of stable incentives for farmers that will encourage production and discourage environmentally dangerous practices. * * * * * The countries now succeeding in a world that is increasingly science-based are those that have long invested in scientific education and technology training and learned how to use the results. Cooperation can assist less- developed countries to make the investments in science and technology that will provide them with the human and technical resources to fuel sustainable development. 4.4 Criteria For Programs Traditionally, cooperation for development has been approached by specific "sectors," with agriculture, energy, and transportation in the lead. Fresh approaches must emphasize fundamental social conditions and the forward- looking policies that are conducive to sustained prosperity and that in turn can be enhanced by it. In any given case, a candidate program for a partnership in development must be examined in terms of the urgency of the problem and the intrinsic merit of the ideas for its solution. More broadly, there are four criteria for selection, design, and conduct of programs: the policy environment in the recipient country in which the opportunities exist; ecological and social sustainability; building the capacity in a country to solve its future problems; and cultural sensitivity and mutual respect between the partners, creating common objectives and shared responsibilities. Fulfilling these criteria significantly raises the chance that the partnership will contribute to sustained development. Cooperation, in turn, should be designed whenever possible to promote the objectives that these criteria embody. Each of the criteria requires explanation. Favorable Policy Environment The policy environment spans all sectors of society. Among the policies most important for development initiatives are fiscal and monetary policies that in combination promote noninflationary, sustained economic growth; trade policies that favor competitive excellence in domestic industry; policies for efficient use of resources; and policies that protect property rights. Stable macro-economic policy environments must be in place to create the micro-economic conditions that encourage individual entrepreneurs. Entrepreneurship is sufficiently risky by itself -- it should not be burdened with the added risk of unpredictable and rapidly changing macroeconomic policies and unnecessary regulatory intervention. Box 4 describes ways in which development assistance has worked to create strong economic policy capability in developing countries. BOX 4: Economic Policy: Building Capability and Institutions Development assistance through bilateral and multilateral channels during the 1950s, 1960s, and 1970s focused primarily on investment projects in infrastructure, agriculture, industry and, to a lesser extent, the social sectors. By the 1980s it became clear that many of the projects had failed to yield the anticipated rates of return. One reason was that investments were made in a highly distorted policy environment. Investments to improve agriculture through irrigation, credit, infrastructure, and technical assistance often failed when government policies favored urban consumers at the expense of rural producers, primarily by keeping prices for food artificially low. Similarly, a distorted structure of prices for consumer goods and intermediate inputs, mostly a result of inadequate trade and credit policy interventions, reduced the necessary incentives for efficient private investors and subsidized inefficient investments. A few developing countries, notably South Korea, Singapore, and Taiwan, introduced policy reforms early to correct harmful distortions. By the end of the 1980s most developing countries, prodded in many cases by multilateral institutions, accepted the need to introduce policy reforms to seek a better balance between market forces and state intervention. This began to produce trade and financial liberalization, privatization, and improvements in regulatory practices. Much more remains to be done. These developments highlighted the importance of the government's capacity to formulate and execute policy reforms, of academic and independent institutions conducting policy-oriented research, and of private sector capabilities to assess the impact of policy reforms on the performance of manufacturing and service firms. Fellowship programs, short-term training, research grants and contracts, institutional support, and small grants for events, publications, and travel have been the main mechanisms for building capacity for economic policy. Fellowships. The Colombo Plan in South and Southeast Asia and the Ford Foundation in Latin America had major fellowship programs during the 1950s, 1960s, and 1970s that supported graduate students in the social sciences, primarily in U.S. and European universities. The Ford Foundation is credited with helping to train the first generation of professional economic policymakers in several Latin American countries. Similarly, the Fulbright program administered by the U.S. Government has enabled students from all over the world to do their graduate work in the United States in a variety of fields, with a good proportion choosing the social sciences. More recently, the Japanese government has provided resources to the World Bank and the Inter-American Development Bank for a graduate fellowship program in economics, international relations, and related disciplines; this program supports hundreds of students from developing countries every year, as they pursue their studies in the United States, Japan, and elsewhere. As a result, a large number of the economic policymaking elite in many developing countries have been trained at leading universities in the United States and Europe. Short-Term Training Programs. These programs have been and are offered by a variety of private, bilateral, and multilateral institutions. One example is the highly regarded 8-week training course for staff members of central banks offered jointly by the U.S. Treasury Department and the World Bank every year. The IMF and the World Bank also offer short courses in a variety of topics, ranging from stabilization policies to project design, privatization, tax reform, and economic policy management. In addition, several private institutions offer training programs to developing country nationals, mostly under contract with bilateral agencies such as AID. Research grants and contracts. One of the most important factors in improving economic policymaking capabilities in developing countries, and particularly in Latin America, during the last two decades, has been the creation of university-based and independent policy-oriented research centers. In some cases with government and private sector support, and mostly with external funding from bilateral agencies, multilateral institutions, and private foundations, these centers have conducted empirical studies, developed policy options, organized debates and seminars, and published books, reports, magazines and journals. U.S. foundations, especially MacArthur, Carnegie, Ford, Rockefeller, and Pew, have been particularly active in this area, mainly in sector-specific economic policy research in agriculture and health. The Canadian International Development Research Center (IDRC), the Swedish Agency for Research Cooperation with Developing Countries (SAREC), the Netherlands University Foundation (NUFFIC), and the Sasakawa Peace Foundation are also among the many private and public financing institutions that provide research grants in the social sciences. In addition, multilateral institutions, including the World Bank, the Inter-American Development Bank, and the European Community, and bilateral agencies such as AID, the Canadian International Development Agency (CIDA), and the British Overseas Development Institute (ODI), give contracts and in some cases grants to economic policy research centers in developing countries. A recent and particularly effective way of supporting policy-oriented research has been the network of economic policy research centers, established by the Inter- American Development Bank, which transforms the results of research projects into policy options and proposals for implementation. Latin America is the developing region where independent research centers have flourished and wield considerable influence. CIEPLAN and CLEPI in Chile, FUNDESARROLLO in Colombia, Fundaci›n Mediterr neo and the Instituto di Tella in Argentina, GRADE and the Instituto Libertad y Democracia in Peru, and IESA in Venezuela are examples of strong policy-oriented institutions. In contrast, in many countries of East Asia, government policy study centers, which have enjoyed considerable autonomy, have been extremely active in conducting studies and exploring policy options. For example, the Korean Development Institute has been for many years a center of excellence in trade, finance, and technology policy research. In many other regions, the establishment of independent policy research institutions is a relatively new phenomenon. Institutional Support. The provision of external support to educational, research, and training institutions in developing countries to cover general expenditures, as well as program costs, was common in the 1960s. In some cases this took the form of a donation to establish an endowment, which subsequently generated resources to cover recurrent expenditures. During the 1970s most foundations and development assistance agencies switched to providing support for specific projects and programs. From the perspective of the donors, this allowed better monitoring and review, but the mechanism left recipient institutions without support for general expenditures. In turn, this required recipients to prepare and negotiate many small project proposals continuously, which often diverted their efforts from research and studies. As the number of academic, government, and independent centers increased during the 1970s and 1980s, institutional support became rare and competition for external support intensified, particularly in Latin America and some East Asian countries, with the consequent fragmentation of funding and a reduction in the average size of grants. Some funding agencies have begun to reexamine this situation in the 1990s, and there is renewed interest in exploring ways of providing institutional support, particularly in view of the new emphasis on dissemination and the utilization of research results. These generally involve mass media activities, seminars, and workshops that are considered "overhead." Efforts to reduce administrative costs in funding agencies, often by increasing the average size of grants, have also contributed to this reexamination of the importance of institutional support. The African Economics Consortium, sponsored by the Rockefeller Foundation and the IDRC, is an example of the return to institution building, in this case reinforced by expanded networking within Africa itself. Small Grants. Another form of support for capacity building for economic policy has been the provision of small grants to finance the incremental costs of publications, seminars, workshops, and other events. This has been the preferred approach of institutions such as the Friedrich Ebert, Friedrich Naumann, and Konrad Adenauer Foundations in Germany, as well as of small international foundations and of private corporations in developing countries. This has allowed research centers to obtain resources for specific dissemination activities, although the need to secure these funds can lead to the dispersion of efforts and generate inefficiencies. In general, building the institutions required to examine the evidence for alternative economic policies objectively will be crucial to the success of market-friendly economic reform. * * * * * Open markets and trading are essential. This is as important in the policy corridors of industrialized development partners as in those of developing countries. Yet, unfortunately, by the end of 1990, GATT members had in place over 250 arrangements to impede the flow of developing-country products into their markets. The United States has encouraged a more open approach to its markets than many of its industrialized counterparts. As can be seen in Table 4, America absorbs the greatest share of developing- country exports. The United States can make a major contribution to development by encouraging other industrialized nations to join in truly global approaches to open markets and trade, with particular attention to the goods of the developing world. Protectionism is, quite simply, everywhere an enemy of long-range development. But the "policy environment" goes beyond economics: peace, political freedom, and pluralism are preeminent considerations. Without these, development is unlikely to contribute to sustainable economic or social progress for individuals. Indeed, as many countries achieve economic progress, their peoples demand greater freedom and liberty. Without such freedom, the progress itself may be threatened. Among the most important policies are those for prote