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Soros warns of flaws in new US aid policy

Billionaire philanthropist George Soros warned on Monday that President George W Bush's new foreign aid policy might resurrect old Cold War habits of helping geopolitical allies, regardless of whether it reduces poverty.

Speaking at a major UN aid conference, Soros said he was generally supportive of Bush's new emphasis on funneling aid to poor countries that respect human rights, root out corruption and pursue free market policies.

But he said Washington should not act alone in deciding which countries were worthy of additional support and which were not.

"I am concerned that if the United States acts unilaterally, we may return to the Cold War activity of giving aid to our geopolitical allies," Soros said, adding it was that type of policy that first gave foreign aid a bad name.

Bush announced a new $5 billion aid package to poor nations last week, saying his government was determined to fight poverty but would focus its help on those nations where governments pursue democratic and free market policies.

The strategy is aimed at making aid spending more effective and rewarding good government rather than throwing money at poor nations and hoping it is used well.

Soros said he agreed with the policy shift and that it was one his own private foundation followed, but he said that Bush was not putting enough money into the plan.

"I am concerned there is not enough in the pot to make a difference," he said on the opening day of the UN Conference on Financing for Development in Mexico's northern city of Monterrey.

"The proposal is nicely packaged but there is too little in the package," Soros said.

The new Bush plan sets aside $5 billion over three years but will not kick in until fiscal year 2004.

The money will come on top of the some $10 billion a year the United States currently gives in foreign aid -- the lowest aid budget of developed countries as a percentage of economic output.

Soros said the Bush administration should speed up the program and ask other developed nations to contribute to the package, with all of them then deciding what criteria to set in determining which nations would benefit.

He said the September 11 attacks on New York and the Pentagon had demonstrated the importance of tackling poverty and supporting good governments around the world.

"Most of the poverty and misery in the world today is due to bad government -- repressive or corrupt or simply incompetent regimes and failed states," he said.

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