Select Committee on International Development Minutes of Evidence

Letter to the Clerk of the Committee from William S Farish, US Ambassador

  Thank you for your letter requesting information about United States development policy. As you know, at the Monterrey Summit President Bush outlined a major new vision for development based on the common interests of developed and developing nations in peace, security, and prosperity. The President's "Compact for Development" proposes a historic, shared effort to stop the cycle of poverty in the developing world. It defines a new partnership between the United States and those governments in developing countries that have made and are demonstrating a commitment to domestic reforms that are necessary for sustained growth.

  The Compact creates a separate development assistance account called the Millennium Challenge Account. The Account is designed to increase to $5 billion a year starting in FY 06 over and above the approximately $10 billion in existing U.S. development assistance (ODA). To gain access to the Millennium Challenge Account, developing countries will need to show they are implementing sound policies that promote growth and development, including the need to fight poverty. We would like very much to hear your views on the President's stringent results-oriented approach for the Millennium Challenge Account.

  The new initiative is designed to support countries as they move towards the Millennium Development Goals, and reflects my government's emphasis on the effectiveness, rather than the sheer amount, of aid. We believe that an emphasis on a target, such as 0.7 per cent of GNI, draws attention away from the important issue of how that money can have the most impact to help the poor. The issues are much too involved to discuss in a short letter, so I have attached a brief outline of the Administration's current thinking on fighting poverty.

  In response to your question about the extent to which charitable contributions supplement ODA, I have also attached the relevant chapter from a study performed by the Centre for Civil Society in conjunction with Johns Hopkins University, which gives some details about United States cross-border philanthropy. As you know, it can sometimes be difficult to get current and pertinent figures for international giving, and you will note that the data is, unfortunately, from 1994. More recently, Leslie Bains from HSBC stated in her October 2001 speech to the Philanthropy Forum that total U.S. charitable giving (domestic and international) totaled USD 203 billion in 2000.

  Again, thank you for your interest in the Millennium Challenge Account and U.S. overseas development assistance. I hope that in the coming year there will be a lively and sustained discussion of development topics between your Committee and Embassy staff.

William S Farish

US Ambassador

12 June 2002

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