"The current ratio of rich to poor is about 65:1. That is, for every dollar earned in the developing world, 65 dollars are earned in the industrial world. At the turn of this century the ratio was 9:1. There are now 1.3 billion people living in extreme poverty," Atwood said in his last speech.

Atwood, who leaves his position on July 9, said, "The dangers created by this poverty gap are not only the products of disillusionment-war, terrorism and the like-they also include losing the battle against climate change and disease." He harshly criticised the Clinton administration and the US Congress for an undeclared policy of "backdoor isolationism" that, he said, would undermine the global economy that the United States is trying to create. The US was making a grievous mistake by continuing to cut itsforeign assistance spending, despite converting a chronic budget deficit into a surplus, he added.

"Recently, we learnt that the budget surplus has grown once again. It will be $1 trillion over the next 15 years. That is more than the combined GNPs of South Asia and sub-Saharan Africa. Yet, we continue to run our government under budget caps set when we had a deficit," he noted. "What will it take to wake up our political leaders? More failed states? More wars? More South-to-North migration? More transmissions of infectious diseases? More terrorism?" he asked.

Atwood, however, made it clear that the speech was an expression of his personal views, not those of the administration. He praised President Bill Clinton and First Lady Hillary Clinton for advocating using foreign assistance to combat those threats. He said the US rationalised its low contribution to the developing world by assuming that nations wanted "trade, not aid." "As time went on, and despite many well-publicised trade missions, we sawvirtually no increase of trade with the poorest nations. These nations could not engage in trade because they could not afford to buy anything," he added.

"For a while we pointed to the huge private capital flows to the developing world," he said, adding, "a closer examination showed this investment going into the richer emerging markets rather than the poorer countries and that this investment was short-term, not equity capital." "In 1996, we achieved a peak high in loans from the developed to the developing world," Atwood said.

"We thought that would compensate for the drop-off in development assistance. The net plus in 1996 was $86 billion in loans, including repayment outflows. In 1998, the net loan portfolio fell to a negative $65 billion as repayments easily overtook the dwindling number of new loans as the financial crisis took hold."

Meanwhile, Official Development Assistance (ODA) fell from $60 billion in 1994 to $47 billion in 1997. It rose again, slightly, to $50 billion in 1998. Yet, of the$50 billion, 4.5 per cent was for disaster relief, an increase of 250 per cent in a ten-year period. "We are sending very mixed messages to our developing world partners. We say on the one hand we want them to embrace democratic, market economies and to enjoy the benefits of globalisation and, on the other hand, we withhold the assistance they need to help themselves prepare for this new world of opportunity," Atwood remarked.

IANS