Reagan's Imprint on FOREIGN AID. Under Reagan, US foreign aid is tied more tightly to national security

This year the United States is spending a whopping $16 billion -- more than ever before -- on aid to foreign countries. But ask the average American about the value of US foreign aid, pollsters say, and you'll probably get this assessment: It's OK to help starving people in Africa, but foreign aid is mostly a multibillion-dollar boondoggle, wasting the American taxpayers' money. After spending billions on foreign aid since World War II, we have little to show for our efforts. The simple truth is, you can't buy friends.

US officials disagree, saying foreign aid is indispensible to the achievement of US policy objectives around the world -- even though the programs often work slowly and inconspicuously.

Foreign aid meets the test of hard-headed self-interest, they say. By supporting friends, US foreign aid strengthens key allies and alliances. By fostering economic growth, it makes recipient countries better trading partners and more attractive candidates for US investment. By strengthening democracy and free-market systems, it helps produce a world more compatible with US interests.

Many in Congress say US aid should be focused on long-term economic development designed to alleviate poverty and to bring poorer nations into the economic mainstream. This was the thrust of US aid policies during much of the 1970s.

While administration spokesmen agree traditional development aid is desirable, they say it does not directly promote US security interests. To meet growing security threats, they say, more US aid should be spent on military assistance.

Accordingly, the Reagan administration has begun to transform US aid policy:

Economic aid vs. military aid. The Reagan administration has quietly shifted priorities away from traditional development aid. If Congress goes along with the President's 1986 budget request, such aid -- including development assistance, Food for Peace, and US contributions to international banks and agencies -- will have risen since 1981 by only 22 percent, from $4.9 billion to $6 billion. During the same period, security assistance -- which currently includes some $1.4 billion in development aid -- will have risen by over 100 percent.

Allocation to countries. Fewer countries are receiving a larger percentage of US aid. Seven countries -- Israel, Egypt, Turkey, Spain, Greece, Pakistan, and South Korea -- receive 80 percent of all US military aid. By next year, Israel and Egypt could get nearly 40 percent of total US foreign aid.

Bilateral aid vs. multilateral aid. Under Reagan, the US is sending a larger share of money directly to recipient nations.

At the same time, it is decreasing contributions to international organizations like the World Bank and the United Nations.

In the past, most US development aid was pooled with contributions from other countries, then channeled through an international donor. Now there is more direct aid -- grants and loans that fund development projects and help recipient governments pay back their foreign debts. Bilateral aid gives the US more control over the way the money is spent, the administration says.

But administration critics charge that the ``militarization'' of US foreign aid is a mistake. They say US development aid can better help prevent economic failure and social disruption, which are often underlying causes of political instability in regions of strategic importance to the US.

Administration spokesmen say the shift represents a pragmatic turn in US foreign-aid policy. Because the major source of political instability in the world today is Soviet influence, it is necessary to harness US foreign aid to specific foreign-policy objectives abroad, they say. Hence, the emphasis is on making key countries, like Turkey, bulwarks against the advance of Soviet power.

Administration officials also defend cuts in support to multilateral institutions, saying the World Bank does not necessarily promote US interests.

Partly because of these diverging views, there's now something in the aid program for everyone, accounting for huge increases in spending. During the Reagan administration, foreign-aid spending is up from $10.6 billion to $16 billion -- at a time when other parts of the federal budget are being cut.