STATEMENT BY USAID ADMINISTRATOR ANDREW S. NATSIOS

THIRD LEAST DEVELOPED COUNTRIES CONFERENCE

MAY 14, 2001, BRUSSELS BELGIUM

Let me start by warmly saluting all parties who prepared for this important Third United Nations Conference on Least Developed Countries. I was confirmed to be the Administrator of the United States Agency for International Development (USAID) two weeks ago. This is my first international conference, the first of many over the next few years.

This gathering is very important to the United States and, we are certain, to all other participating entities, be they nations, NGOs, or private corporations. The United States has been and continues to be deeply supportive of the development of LDCs, which we regard as a pressing issue.

In absolute numbers, poverty is increasingly pervasive. Today, more than 2.8 billion people live on less than $2 a day; of those, about another 1.6 billion live on less than $1 a day; HIV/AIDS and other infectious diseases are spreading at a massive rate; millions of children, especially girls, are denied basic education. Most important, conflict, with its devastating effect on communities and nations, is destroying the building blocks of future development. In addition to the enormous human suffering, it has severe economic, political, and social consequences. According to the Carnegie Commission for Preventing Deadly Conflict, total NATO peacekeeping and humanitarian aid efforts cost $53 billion in Bosnia alone.

This is a situation that the world can neither tolerate nor afford; it is unethical on humanitarian grounds; irresponsible on fiscal grounds; and reckless from an overall security perspective.

In May 1996, the International Community pledged to implement the International Development Targets. These are worthy goals to which we have subscribed and which we have been working very hard to achieve. They are, however, incomplete for what might have taken many generations to build, can be destroyed in an instant as a result of internal conflicts, as we have seen happen repeatedly in countries such as the Congo, the Sudan, Angola, Indonesia, Afghanistan, Bosnia, and Kosovo. A quick glance at the list of LDCs reveals that over 25 percent are in a present or potential conflict situation. The list also reveals that more often than not, poverty is the result rather than the cause of long-lasting conflicts. For this reason, the USG will make conflict prevention and resolution one of the four pillars of its foreign assistance program. USAID will integrate into its existing portfolio of democracy and governance programs new approaches to anticipating crisis, conflict analysis, comprehensive vulnerability assessments, and a series of new methodologies for dealing with conflict before they begin. As with poverty, the ultimate responsibility lies with the countries themselves, but we are there to assist and support.

As important as conflict prevention and resolution are, they are but the first step toward poverty reduction. USAID programs will be centered on three other pillars essential to poverty reduction: economic growth and agriculture, global health, and support for global development alliances.

We must recognize that the reason so many families are poor is that they little or no household income. Ultimately, the only way to lift these families out of poverty is to increase their income. Social service programs alone will not do it. Health and education programs are essential, but not a sufficient approach to eliminating poverty.

Three-quarters of the world’s poor live in rural areas, thus we must have a strategy which addresses the livelihoods of the rural poor. In order to do this, we must focus on the agricultural sector in LDCs, particularly for the small farmer. For too long agriculture has been neglected in development circles, including by my own agency and other donor governments. No industrialized country has reached this stage of development without first developing its agricultural sector. One of the greatest successes of international aid programs is the Green Revolution of the 1960s in Asia. We now need a Green Revolution for the LDCs.

With the advent of globalization, greatly facilitated by the conclusion of the Cold War, the world economic order has changed dramatically. We are working with the World Trade Organization to establish fair and open markets as a common economic goal. The U.S. will respond to this changing world economy with adjustments to its programs. This will be accomplished through the pursuit of the mutually reinforcing goals of promoting economic growth to reduce poverty and increased agricultural production to reduce hunger. USAID is also increasing its education budget by 20 percent. Job creation will be most important, especially through the promotion of micro-enterprises and agro-enterprises, and through trade-capacity building.

USAID’s leadership in global health will continue. The HIV/AIDS pandemic is devastating the Least Developed Countries. The U.S. Government is spending $340 million to address this pandemic. Last week, President Bush announced an additional $200 million contribution towards and international trust fund. Total USG spending on HIV/AIDS exceeds that of all other donors and developing countries combined. Our programs will focus on the most effective methods of combating the spread of HIV/AIDS, based on over a decade of experience.

Last week, Secretary Colin Powell announced the Global Development Alliance (GDA), a new USAID business model for the 21^st century that is applicable to all our development programs. The GDA is based on recognition of significant changes in the environment of economic development assistance. Governments and multilateral organizations are no longer the only or even the principal development assistance actors; nor is official development assistance (ODA) the most important source of funding. Increasingly, a substantial number of organizations including NGOs, private voluntary organizations (PVOs), private foundations, corporations, colleges and universities, and even individuals have joined the donor core. For example, in 1999 net total resource flows from the United States alone to developing countries and multilateral organizations amounted to over $50 billion. Of this, over $36 billion came from private capital flows and private grants by NGOs.

The Global Development Alliance mechanism will allow us to leverage our official development resources by creating alliances with private corporations, foundations, universities and colleges, and other private organizations interested in working in the developing world. These alliances will be based on USAID’s field presence, technical expertise, and institutional infrastructure and our partners’ financial resources and commitment to humanitarian and development goals. Through this mechanism we hope to improve the quality and extent of partnerships with a wide range of non-governmental entities, increase non-governmental financing for development assistance, and enhance policy reform through advocacy.

In conclusion, I would like to reiterate our unambiguous commitment to poverty reduction through economic growth and agriculture, conflict prevention and resolution, and global health. The United States believes that there is an unprecedented opportunity to improve the lives of billions of people through these programs, coupled with the advances that have already been made on debt relief through the HIPC initiatives, and on market access through a wide range of trade preference schemes, and with a commitment from the LDCs to do their part with respect to economic policy and governance.

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