Letter to the Chairman of the Committee
Thank you for your letter of 24 April 2002 regarding
the preparatory process and outcomes of the UN Conference on Financing
for Development. I hope you were as pleased as we were with the
renewed commitment to partnership by both developed and developing
countries in Monterrey, Mexico, to achieve concrete development
Administrator Natsios requested that I respond
on his behalf to the three questions posed in your letter.
1. 0.7 per cent ODA/GNP target: The US has
never endorsed the UN target of providing 0.7 per cent of our
GNP in the form of Official Development Assistance (ODA). This
target was developed in the late 1960s, an era in which ODA was
the primary source of capital flows to developing countries and
capital flows were perceived to be the driving force of development.
In today's world, neither of these conditions remains true.
In the 1960s, over 70 per cent of all financial
flows from the US to developing countries were in the form of
ODA. Today, 80 per cent of US financial flows to developing countries
are private flows, including investment, philanthropy (eg corporate,
NGOs, foundations) and remittances. In terms of volume, ODA is
no longer the dominant force it once was.
Experience and our current development theory
tell us that development largely depends not on the volume of
capital flows, but on the efficiency with which they are used.
Efficient resource use is accomplished through improvements in
policy and institutional environments, investments in people,
and the adoption of new technology. The most appropriate role
for ODA today is to effect these changes.
2. MDGs: The US has not officially endorsed
the Millennium Development Goals (MDGs) as outlined in the UN
document "Road map towards the implementation of the United
Nations Millennium Declaration". It should be noted that
the MDGs have not yet been brought before any international forum
for formal endorsement of the International Development Goals
(IDGs), the subsequent endorsement of the IDGs at the 1998 G-8
Summit, and the signing of the Millennium Declaration in September
2000. Though substantively similar, the MDGs do not correspond
exactly to the range of goals agreed in these other forums.
The US does believe that indicators for measuring
progress toward development goals should be distinguished from
an official endorsement of principles by the international community.
While potentially useful from an analytical perspective, the proposed
indicators for measuring progress toward the MDGs should be separated
from any future official endorsement of the MDGs themselves.
3. Data on private charitable/philanthropic
contributions: The US provides data to the OECD/DAC on private
charitable and philanthropic donations from the US to developing
countries on an annual basis. In 2000, grants by US private voluntary
agencies totalled $4,069 million. The second largest donor of
these types of funds was Germany, contributing $846 million in
2000. For the US, the 1999, 1998 and 1997 reported figures stood
at $3,981 million, $2,906 million , and $2,518 million, respectively,
demonstrating a growing interest on the part of US private voluntary
organisations in developing issues.
We do, however, have reason to believe that
such figures greatly underestimate actual contributions from private
charitable and philanthropic organisations to developing countries.
Due to our country's private laws, submission of such data by
these organisations to government agencies is strictly voluntary.
I hope you find these to be helpful answers
to your questions. Please feel free to contact us again if we
can be of further assistance.
Patrick M Cronin
Bureau for Policy and Program Co-ordination, USAID