Top official defends US aid policy

The looming and intensely ideological battle over the US foreign aid budget has heated up further, with the Clinton administration's top-ranking aid official accusing Republicans of "playing with fire" in their plans to make further deep cuts in a ssistance to poorer countries In a speech on Wednesday evening - 24 hours before Mr Clinton himself went on national television in an attempt to rescue his sinking presidency - Brian Atwood said that such cuts only invited "international disorder" which would damage America's econom i c and political security. .

The retort by Mr Atwood, head of the Agency for International Development, which runs US foreign aid programmes, was a response to proposals by the incoming Republican majority on Capitol Hill to cut most aid programmes by 20 per cent and to ever louder complaints from conservatives that most money is wasted.

A draft bill presented by Senator Mitch McConnell of Kentucky, who will chair the key Senate sub-committee on foreign aid, calls for big cuts in assistance to Africa. Mr McConnell wants to demote AID by putting it under the State Department. Only the Mi d dle East and eastern Europe would escape his axe, which would fall particularly heavily on population control projects.

These proposals, however, mask a deeper debate, between an establishment view which sees aid as a reward for democracy and the fashionable conservative wisdom that aid should only go to countries with the capitalist instincts to use it. Unless aid spurs growth and free market reforms, says a new study by the conservative think-tank, the Heritage Foundation, "US development aid will only prop up failing economies, doing more harm than good."

The fact is US foreign aid is of diminishing importance. It amounts to barely 0.2 per cent of GDP, the smallest of any leading industrial nation. The $1.2bn budget cut urged by Mr McConnell compares with $50bn or so of tax cuts Mr Clinton was expected tooutline last night. So passionate are the exchanges,outsiders might conclude US aid single-handedly supported afeckless Third World. In fact the US share of total aid in 1992 was under 20 per cent, while of the 1994-95 aid budget of $13.7bn, about half goes to three countries: Israel, Egypt and the former Soviet Union.

But aid is one of the most visible barometers of US isolationism and its budget a popular target for cuts in federal spending. To deflect criticism, Mr Atwood has already acted to "streamline" the workings of AID, notably by closing 23 of his agency's overseas offices in the next three years.

By Republican standards, Mr McConnell is a moderate - a veritable dove alongside Jesse Helms, incoming Senate Foreign Relations Committee chairman, who wants a virtual end to a process he has likened to "pouring money down a rathole".

But Mr Atwood argued aid was a crisis prevention measure and warned of the risks of increased drug trafficking, enviromental pollution and the eventual loss of markets.