America - Andrew Stephen tracks America's overseas aid

The US thinks it is fantastically generous with overseas aid. But even after Bush's big increase, it

A friend once suggested that I write a book called What Americans Don't Know About Themselves. There would be plenty to write, I told him, but there was one problem: Americans don't give a damn about what other people think of them, and such a book would be doomed to obscurity in the US. But I still sometimes write the book in my mind, and one chapter is already devoted to a favourite American canard: that, such is American kindness and generosity, US dollars are splattered about the world in monumentally huge amounts. In fact, of the 24 nations of the developed world that contribute overseas aid, last in the list of aid as a proportion of gross national product is: America.

But in the wake of 11 September, some interesting contradictions are emerging. If there is one assertion that still enrages Americans, it is that poverty was a root cause of the atrocities. Yet this conflicts with another American instinct, which is that a problem can always be solved by flinging money at it. The two converged at the UN development summit in Monterrey in March, when the Bush administration announced that it had the new, ambitious goal of eliminating poverty throughout the world. In addition to contributing an extra $10bn over the next three years, President Bush himself announced that US overseas aid would increase by 50 per cent by the fiscal year 2006.

"It certainly turns around the trend," says Judith Randel of the UK-based Development Initiatives. "But in terms of burden-sharing, [the increased US aid] is still tiny in comparison, particularly with the Scandinavian countries." By my calculations, even with its increase, the US is still likely to finish last in the league table of the big 24 - although it may possibly just overtake Italy, the second-most niggardly. The US will still give well under half the average donated by the 24, falling well short of the goal of 0.7 per cent of GNP set by the UN in 1970. The only countries currently exceeding this threshold are Denmark (which gives away almost ten times as much as the US), Norway, the Netherlands, Luxembourg and Sweden.

What appeases American consciences, naturally, is that in sheer dollar amounts the US still leads, with around $10.88bn last year - followed by Japan at $9.68bn, Germany ($4.88bn), the UK ($4.66bn) and France ($4.29bn). But as a percentage of GNP, Japan comes third from last, with the UK, Germany and France roughly in the middle. Britain suggested officially last November that each country aim to double its contribution. But the Bush administration is having none of that: its increased aid programme comes with strings attached, and is one-tenth of the increase Bush proposes in his military budget.

"We're trailing. We're trailing very badly in the United States," says Mary McClymont, president and chief executive of InterAction, an umbrella group of US aid organisations. "We give half of what we gave in the 1980s for official development assistance. We're dead last in terms of the developed world in what we give. So [the Bush initiative] was long overdue and very significant." But it remains a drop in the bucket. Currently, the rich countries spend just $57bn a year in aid. Yet the World Bank estimates that a further $60bn is needed each year, merely to halve the numbers in extreme poverty - as a result of which 110 million children do not go to school and seven million people die each year.

The US has, nonetheless, given the nod to the notion that moving towards the goal of eradicating world poverty - however slowly and inadequately - is also somehow an essential step in the war against terrorism.

The turnaround is fascinating in that it contradicts everything the US has said and done otherwise since 11 September, as not a single member of the Bush administration would concede that poverty may have played any role in the atrocities. Yet the US has always seen aid as a weapon in wars - go back to the height of the cold war in the 1960s, and US overseas aid to countries it saw as menaced by communism was five times what it is today.

If Americans spend a buck, they want at least a buck back for it in some form. Paul O'Neill, the businessman who is now Bush's less-than-impressive treasury secretary, summed up the US attitude when he said he has seen precious little evidence of that supposed US largesse doing any good in the developing world; and he wants to see more productivity come out of it.

But the winds of change are blowing. Representative Jim Kolbe, an Arizona Republican who chairs the House appropriations subcommittee on foreign aid, believes the US should spend much more on overseas assistance. He makes no bones about stating that pragmatism rather than altruism should govern this: "We need to start thinking of the foreign assistance budget as part of the national security budget," he says. Perhaps I'll start writing What American Don't Know About Themselves after all.