Bush says poverty can help breed terror

MONTERREY, Mexico -- President Bush urged world leaders to demand political reform from poor countries in exchange for increased aid and warned Friday that unchecked poverty can foster terrorism.

"We fight poverty because hope is an answer to terror," Bush said in a speech before representatives from 171 nations taking part in the U.N. International Conference on Financing for Development.

The president outlined his proposal to link U.S. foreign aid dollars to a country's ability to rid itself of corruption and walk a straight, narrow path to economic reform. He said he will ask Congress to put an extra $10 billion into core U.S. development assistance by 2006, and make money available to qualifying countries over the next year.

French President Jacques Chirac likened the campaign against poverty to the war against terrorism. "What can be done against terrorism can surely be done against poverty, in the name of a more human, manageable globalization," he said.

But, he said, poor nations are coming to understand that they can no longer expect development money without strings.

Bush directed his secretaries of State and Treasury to develop eligibility criteria, and promised those criteria would be applied "fairly and rigorously." He called for dispensing more aid in the form of grants rather than loans, arguing that a colossal debt burden keeps poor countries from healing their sick and educating their children.

Bush also advocated opening markets and lowering trade barriers, and expressed hope that a new global free-trade agreement would be reached as a means of alleviating poverty.

He noted that since the African Growth and Opportunity Act became law in May 2000, exports from African countries to the United States increased by 1,000 percent, generated thousands of jobs and leveraged nearly $1 billion in investment.