Council Proposes Foreign Aid Shift

JOHN SEWELL says the Bush administration can have its cake and eat it in the field of international affairs. Mr. Sewell, president of the Overseas Development Council (ODC) calculates that President Bush could impose a "new world order" in the areas of military and economic aid abroad, debt relief, the World Bank, International Monetary Fund and other multilateral institutions, refugees, and the United States Information Agency and still save $6 billion over the next five years. Mr. Bush has requested $34 billion for this portion of the fiscal 1992 budget, called "promoting national security and advancing Amer i

ca's interests abroad."

"There is some money to be saved there if we want to make some choices," said the head of the Washington think tank. "But we can't meet new needs and keep the old programs."

For example, Sewell would like to see funds saved by cuts in "obsolete" cold-war-type spending on military aid and foreign bases used for expanded debt-relief and refugee programs.

'Alternative budget'

Together with Peter Storm, an ODC senior fellow, Sewell has

drafted an "alternative budget" intended to "expand the terms of the debate" in Washington. Their report says: "The massive political, social, and economic changes in the world over the last two years present an unprecedented opportunity to rethink and reorganize US government budget priorities in the field of international affairs."

The two also look at the broader "peace dividend the money that should be freed for civilian government expenditures as a result of the anticipated decline in overall defense spending. The cumulative dividend in the five fiscal years starting in 1991 could range from $322 billion to $429 billion, they say. "You have a lot of savings to deal with domestic problems," Sewell says.

One general aim of the alternative budget is to renew growth in the developing nations. Because these nations would then be better able to import goods from abroad, it would tend to reduce the US international payments deficit. Specific recommendations of the report include:

*-Expand funding for official debt-relief from $600 million over three years, as proposed by the administration, to $6 billion over five years. Developing countries owe about $60 billion to the US government or its entities. The extra money would eliminate all arrearages owed the US by developing countries from past loans for food aid, development assistance, military sales, loans from the Export-Import Bank, and Commodity Credit Corporation loans. It would also eliminate 70 percent of the official debt

owed by more than two dozen, severely indebted countries.

Rebuild war-torn areas

*-Establish a Multilateral Reconstruction Fund to help rebuild economic infrastructure in areas emerging from long-standing regional conflicts, such as those in the Middle East, Central America, southern Africa, Afghanistan, and Cambodia. The initial US contribution would be $100 million in fiscal year 1992. Participation by other countries could boost the fund's capital to $4 billion by fiscal year 1996.

*-Increase funding for overseas refugee-assistance programs from $500 million a year, as requested by President Bush, to $700 million a year.

*-Expand funding over the president's request for the World Bank and regional development banks by $300 million a year in fiscal years 1994 and 1995.

*-On the grounds that the US Agency for International Development (AID) has lost its effectiveness, introduce competition into the activity of carrying out development programs. Establish a Sustainable Development Fund that would dispense foreign-aid funds to private voluntary organizations or international organizations, but would not conduct development programs itself. AID would have its funding drastically cut, but it could compete for funds from the new agency.

*-Discontinue security and military assistance in return for "base rights" in such countries as Spain, Portugal, and Greece, since the Soviet military threat that necessitated the bases no longer exists. If any bases are continued, the "rent" paid to the host country should be paid by other protected countries as well as the US.

*-Move military-aid programs to the defense budget, where they can be measured against other claims for expenditures within the overall defense program.