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Calling aid by its right name

Not far from Timbuktu, in the West African nation of Mali, the United States is running an ambitious foreign aid project designed to ''famine-proof'' Mali by the end of the century. The program embodies the popular ideal of American economic aid: small-scale projects in agriculture, nutrition, population planning,and disease eradication - all operating in a nation with the sixth lowest per capita income on earth.

When American news articles focus on US economic aid, it is to such development programs they usually point. References are made to ''impoverished, third-world nations'' and accompanying photos provide glimpses of US-funded experimental farms and health clinics. Americans' self-image as a compassionate people, reinforced by such articles, tends to be shaped by the size of their annual economic aid budget.

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But the term ''economic aid'' is also used by Congress to describe quite another objective, one not as well reported: the transfer of cash, sometimes in the hundreds of millions of dollars, to the treasuries of US military allies.

The recipient of such aid is often able to utilize the funds as it chooses. With money being by nature fungible, and no meaningful restrictions placed on US assistance, there is little preventing aid labeled ''economic'' from becoming an indirect military subsidy.

The device that permits this irony is a section of the annual foreign aid bill known as the Economic Support Fund (ESF), and before 1978 called Security Supporting Assistance. For the most part, the ESF is aid dispatched to nations of strategic importance with large military expenses, primarily in the Middle East.

In recent years, Congress has endowed the ESF with the largest single authorization in the foreign aid bill: $2,065,000,000 in fiscal 1981. More than one-third of it (a grant of $785 million) is being mailed this year via quarterly checks to Israel. Another $200 million in cash (two-thirds as a grant, one-third loan) has been sent to Turkey. Portugal is receiving $20 million in ESF funding, basically as rent payments for American military bases.

Some ESF recipients such as Egypt (whose 1981 ESF grant equals half the development budget allocated by Congress for all the nations of Africa, Asia, and Latin America combined) find their aid earmarked for specific urban and rural development projects. But the billion dollars of ESF funding to Israel, Turkey, and Portugal is being dispatched with no real means of tracing what the funds are buying. Once this ''economic aid'' is locked in the recipient's treasury, there is little way for the US to know whether its tax dollars have gone to build irrigation systems or tanks.

At a time when Congress is cutting developmental aid funneled through such third-party lending institutions as the World Bank, it becomes increasingly important to examine how our direct, nation-to-nation aid programs function.

For too long we have been content to let a benign catch phrase called economic aid stand, in contrast to US military aid, as a synonym for our humanitarian concern.

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The term ''economic aid'' should be abandoned. Programs designed to meet basic human needs should be clearly separated - both in the congressional budget and news coverage - from, as one State Department official recently characterized them, ''check-writing exercises.''

Distinguishing between the two - calling, for example, the former aid ''development'' and the latter ''financial subsidies'' - will not solve all our misconceptions surrounding foreign aid. But it will isolate for the first time, both in news reporting and in the public mind, that fraction of the US foreign aid budget designated for countering hunger, illiteracy, and disease in such nations as Mali.

If, as opinion polls indicate, there is some disillusionment with what US aid has been able to reap abroad in developing nations, it may be due, at least in part, to an exaggerated notion of how much aid Americans have sown.ct in Peru and last year traveled through the West African Sahel.

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