A deep US-European split in the war on poverty emerged last night on the eve of a United Nations development summit of 50 leaders in Monterrey, Mexico.
|
|
Masked and hooded protesters march against the UN summit on financing development in Monterrey Photo: Reuters
|
The differences in approach called into the question the durability of the Monterrey Consensus, a 16-page document that leaders are to endorse here.
Europeans stressed their leading role in providing official development assistance, government aid that traditionally has been earmarked for critical infrastructure projects.
But US Treasury Secretary Mr Paul O'Neill, whose country trails the league of official aid donors, disputed the notion that aid - which he described as welfare - could lift the world out of poverty.
"Most of the real economic development is going to come from capital coming into countries to create private enterprise that creates jobs, that create higher levels of living," Mr O'Neill said. "We are not going to do it with welfare".
But UN officials question whether private investment can overhaul infrastructure and expand public services, particularly in areas unattractive to investors.
They say that aid in 1998 accounted for 84 per cent of all resource flows to the world's 48 poorest countries. In the same year, those countries secured just 4 per cent of long-term private capital flows to the developing world.
European Commissioner for Development and Humanitarian Aid Mr Poul Nielsen said that official aid allowed the poorest countries to plan development while counting on rich countries to provide dependable finance.
AFP