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Panel recommends changes in how US doles out foreign aid

A bipartisan commission has concluded that United States overseas aid is currently inadequate to meet American foreign-policy needs. The 42-member commission also concludes that coordination of American aid programs be enhanced by placing these disparate programs in a single organization under a single administrator. The new organization would be called the Mutual Development and Security Administration (MDSA).

Commission staff members said that the panel was formed by Secretary of State George P. Shultz last February largely because of the increasing difficulty of achieving a consensus on foreign aid and getting aid bills through Congress. In only one year out of the past five has an administration succeeded in getting an aid bill both authorized and appropriated. The commission's aim is to foster a new consensus.

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Few senators and congressmen are likely to be satisfied with every aspect of the 88-page report produced by the commission. But it does contain elements that ought to appeal to both liberals and conservatives. A number of liberals are likely to be pleased with the call that the panel makes for increased aid and for a special emphasis on the needs of Africa, which is now confronted with a food crisis. Conservatives are likely to be pleased with the commission's support for private-sector initiative and for easier credit terms for military aid to third-world countries.

Nine senators and congressmen of widely differing political tendencies have served as full members of the commission. In addition, there are 18 senators and congressmen who are ex officio members, chosen because of their key positions on relevant congressional committees and subcommittees.

Called the Commission on Security and Economic Assistance and headed by Frank C. Carlucci, former deputy secretary of defense, the panel was to present its report Monday to Secretary of State Shultz. A commission staff member said that Shultz has already read a summary of the report and that his preliminary reaction was positive.

According to an article in the current issue of the Foreign Service Journal written by John K. Wilhelm, executive director of the commission, the panel's report ''goes far beyond any recent attempt to reform US foreign assistance programs. . . .''

Among its main recommendations, the commission calls for:

* Greater flexibility in the administration of economic development assistance programs.

* Increased training in the United States of both civilian and military personnel from foreign nations.

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* Increased effort in science and technology along the lines of the effort that produced the so-called Green Revolution in agriculture.

* Integrated policy and program development, including a comprehensive evaluations system that looks at the long-term and secondary effects of aid programs. The report argues that previous evaluations have almost always been of a technical nature, failing to assess political impact or make judgments on the effectiveness of programs in supporting US interests.

The report proposes that the World Bank take the lead in coordinating more effectively the aid efforts of the US and other countries as well as those of the multilateral financial and economic institutions. It says that recipient countries should give ''evidence of a political will to carry out needed reforms.''

The commission says that US aid levels have fallen ''substantially'' in real terms in recent years. Its judgment that the US foreign cooperation program is inadequately funded is based upon what it calls a need for resources to maintain a US leadership role in the world.

''For the next decade, the economic and security outlook for most of the less-developed world is not encouraging,'' the report says.

''Given the nature of the problem the United States will face in the less-developed world during the coming decade, either lesser objectives or more resources will be called for,'' says the report.

The report says that since the early 1970s, a relatively small number of nations have received a large part of American foreign aid: Israel, Egypt, and five nations in which the US has military base rights (the Philippines, Greece, Spain, Turkey, and Portugal). It says that this allocation - 75 percent of the military aid went to these nations in 1980-82 - ''reflects a broad consensus on US foreign policy priorities. But in the process, it has reduced our capacity to meet existing commitments to multilateral banks and to deal with the needs of 30 to 40 other countries in which we have important strategic and political interests.''

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