France beats US in Third World aid

Paris - France may have overtaken the United States as the world's second- largest donor of aid to developing countries, Brian Atwood, administrator for the US Agency for International Development (Usaid), said yesterday. Japan is the leading First World donor.

"France may be number two, in gross terms, when the [1995] figures are finalised," Mr Atwood told a news briefing in Paris to discuss a new results- oriented aid strategy to be adopted by donor countries belonging to the Organisation for Economic Co-operation and Development (OECD).

"They've fallen back" in terms of aid, Mr Atwood said of the French, "but we've fallen back further." He said the US aid budget had shrunk by more than 40 per cent since 1985, reflecting pressure to reduce government spending, and had been cut to around $6.2bn (pounds 4.1bn) from $7bn for 1996.

He praised the results- oriented strategy and said it was likely to increase not only the efficiency of development assistance but also raise incentives for donors to contribute.

Among the targets set in the plan are a 50 per cent reduction in the number of people living in extreme poverty, defined as those having an annual income of $370 or less, and universal access to primary education for children by the year 2015.

Mr Atwood said the strategy "for the first time sets targets for what we want to achieve in the the next 20 years. It moves away from talking about the input side of the equation to talk about output targets".

"The purpose of this is to create a political dynamic wherein the [aid] numbers will go up," he said. "If we don't do more to expand markets, industrial nations know the tensions among them will increase because we'll be going for a static part of the pie."

Mr Atwood said the strategy would encourage donors to work more closely together to meet the jointly agreed targets, which would be tracked by the OECD's Development Assistance Committee.