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World's Riches are unevenly distributed: One fifth ofthe population has 4/5 of the wealth.

Global Aid Wars Sci Am. Nov 94

Poverty, it seems, is not foremost among the criteria by which wealthy nations choose to disburse their aid The Human Development Report 1994 published by the United Nations Development Program, notes that two thirds of the world's poor get less than ome third of the to tal development aid. And donor nations routinely tie assis tance to military spending. In 1992 countries that spent more than 4 percent of their GDP on their military received $83 per capita in aid, whereas nations that spent less than 2 percent got $32. A large part of this imbalance is brought about by bilat eral donors, who offer not just military but economic aid to strategic allies. For instance, Israel and Egypt will receive more than $2 billion of the $7.4 billion of bilateral assis tance the U.S. plans to give in 1994. (The two nations re ceive an additionai $3.i bil lion in military assistance from the U.S. every year) The U.S., Russia, China, France and the U.K.-the five per manent members of the U.N. Security Council-continue to supply the most weapons to developing countries. Although multilateral institutions are more evenhand ed-the World Bank gives about half its aid to two thirds of the world's poor they do not redress the imbalance. As a result, a Brazil ian woman living below the poverty line receives $3 in such support a year, whereas her Egyptian counterpart re ceives $280. These days far more foreign capital flows to developing countries in the form of private investment instead of aid In 1992 more than $100 billion was invested as op posed to the $60 billion donated. Unfortunately for the poorest of the poor, this form of cash flow misses them too. In the late 1980s sub-Saharan Africa received only 6 percent of foreign direct investment. Trade, another means by which developing countries earn foreign capital, also benefits the more developed and illustrates the ambivalence of wealthy states toward the world's poor. Although poverty wins a measure of sympathy, the cheap work force of poor nations makes them an economic threat. By one estimate, if developed countries lifted ail trade bar riers to Third World goods, the latter would gain in ex ports twice what they now receive in aid. Another constraint on the development of the Third World-foreign debt-keeps growing. In 1970 total debt was $100 billion; in 1992 it stood at $1.5 trillion, including service charges. During the decade preceding 1 992, net financial transfers related to loans amounted to $125 billion-from the developing to the developed world.-Madhusree Mukerjee