Luncheon with Pauline Baker
Batelle Human Affairs Research Centers
Washington, DO 20036 Home: 7300 Broxburn Court
tel (202) 785-8400 Bethesda, MD 20034
Major point of the lunch:
US assistance to Zimbabwe is flowing more quickly than other assistance
because it is program, not project aid. This mean that US$ go in
grant form to the government of iimbabwe which in turn uses them to pur-
chase goods from the US. The majority of these goods are iz~akta in
the form of capital eguiptment which is ordered by the private-or semi-
public sector. The government then sells these goodlto the private sector
for Zimbabwe $. The first effect of the aid is to subsidize Zimbabwe's
foreign exchange position.
the Zimbabwe $ which are generated by the dAntsale of US goods domestically
y are then put into ax- trust account or a development fund. This fund is
spenb locally in Zimbabwe on development projects which have the approval
of th both the United states government and the government of Zimbawbwe.
This form of aid is defendable in the US because ig is a direct support
for US industry and it is a major advantage for Zimbabwe which is currently
experiencing a severe foreign exchange crisis. It also maintains a
great deal of flexibility for the recepitnt country.
The net effect is that ticaid is spenl twice, onee in the
United States and once in the recgpiant country.
Aid of this fort does not need to wait for te formulation of complex
development projects which canj and indeed is, delaying the arrival of
foreign aid f/im donor agencies.