Foreign Aid: How Much Will Really Go to the Victims?

With nearly $4 billion pledged in tsunami relief so far, the governments of the world's wealthiest countries have sought to lay to rest doubts about the largeness of their largesse. But the sobering backdrop to that rush of official sympathy is a sorry history of half-finished aid efforts. The Iranian city of Bam, for example, where an earthquake killed some 30,000 people in December 2003, has so far seen only $17 million of the $1.1 billion in aid pledged by foreign governments at the time of the disaster, Iran's leaders say. To do better this time, rich countries will have to match to the size of their promises the strength of their commitment.

Why is that so difficult? Good intentions are partly to blame. Donor countries do not want their aid to overwhelm a country's bureaucracy or feed corruption, so in the name of accountability, they give very carefully. The pledges of aid made by governments are just that--pledges to help, not outlays of cash. Rather than write the U.N. a $4 billion check, governments pick and choose which relief and reconstruction efforts they want to fund. "It makes no sense just to give money," says German Chancellor Gerhard Schr??der. "Our people don't want that." At the donors conference in Jakarta last week, the U.N. launched an appeal for $977 million in short-term help over the next six months. Now it must go through the painstaking process of matching donors to dozens of projects in five countries as well as to overall regional aid. That means persuading donors to fund not just the high-profile, big-ticket projects like clearing debris in Aceh and monitoring disease outbreaks in Sri Lanka but the small-scale tasks as well. Somali fishermen need $1.9 million to repair their boats; $750,000 would measure damage to coral reefs in the Maldives. Some countries will give the U.N. unrestricted aid, but for the most part, each project needs confirmed funding to begin.

The U.S. has given few clues as to which projects it will support. So far, it has spent $66 million on immediate relief, like bags of rice and medical supplies, as well as $50 million in military aid, covering helicopters, cargo planes and help from troops on the ground. (Most of the Department of Defense's costs won't count against the $350 million pledge, according to State Department officials.) In Jakarta last week, Secretary of State Colin Powell said that "we will continue responding to legitimate demands until $350 [million] is reached." The $350 million offered by the White House will be drawn against existing funds for the U.S. Agency for International Development, and Congress sets that agency's budget. Any further increases in tsunami relief will need approval from Congress, where budget leaders have suggested that up to $1 billion in added funding could be approved.

But given the strains on the federal budget, it comes as little surprise that President Bush has called on citizens to donate privately and has appointed former Presidents George H.W. Bush and Bill Clinton to lead an effort to drum up private-sector support. "The greatest source of America's generosity is not our government," he said. "It's the good heart of the American people." To sweeten the deal, Congress is allowing taxpayers to claim tsunami-relief donations on their 2004 returns if the contributions are made by the end of this month.

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