|
|
|
|
Foreign Affairs
A Better Way to Fight Global Poverty: Broadening the Millennium Challenge Account
By Gene Sperling and Tom Hart
Gene Sperling is Senior Fellow and Director of the Center for Universal Education at the Council on Foreign Relations. Tom Hart is Director of Government Relations for the Episcopal Church.
Last March, at the un-sponsored International Conference on Financing for Development in Monterrey, Mexico, President George W. Bush pledged to significantly increase U.S. development assistance to poor nations through the creation of a new Millennium Challenge Account (MCA). The fund would set strict standards of accountability and performance for recipients and would reward a select set of poor countries with as much as $5 billion in new aid by 2006. This initiative has the potential to be a step forward in the evolution of U.S. development policy. But, in its current form, the MCA could also be a step backward in the ongoing U.S. effort to reach out to the majority of poor countries in a coordinated and effective way.
The proposed MCA is a step forward because it builds on an emerging consensus that development works best when poor countries have strong policies on governance and economic reform and take responsibility for reducing poverty and spurring economic growth. This philosophy has helped shape a number of major development initiatives in recent years, including the Heavily Indebted Poor Country (HIPC) debt relief program (which reduces debt for countries that develop independent national poverty-reduction strategies); the Global Fund to Fight aids, Tuberculosis, and Malaria (usually referred to simply as “the Global Fund,” it awards money to countries with the most comprehensive strategies to combat infectious diseases); and the Education for All (EFA) initiative (which makes funding contingent on countries’ producing credible national plans for achieving universal education).
In addition, the MCA is a step forward because it underscores a growing bipartisan commitment to development assistance. Although some notable Republicans joined the Clinton administration and a coalition of religious groups in pushing for debt relief, during most of the 1990s the Republican Congress sought to limit funding for development assistance. Given that history, President Bush’s call for such a substantial increase in effective development assistance has strengthened the emerging consensus that the United States must do more to help the world’s poorest countries.
But the MCA also poses a great risk: by dealing with recipient countries only on a bilateral basis, the fund could undo significant recent progress in improving donor coordination. Backsliding in this area could condemn poor countries to the unhappy position of having to court myriad donors and wade through competing and conflicting regulations. And by going it alone, the United States would forgo a powerful opportunity to increase the impact of its funding by bringing other donors’ resources to bear as part of multilateral initiatives. Moreover, although governments increasingly agree that progress in certain fundamental areas, such as stopping the spread of AIDS and providing basic education, is of paramount importance in all poor countries, a large but narrowly focused MCA might end up crowding out resources for global efforts to address these challenges. Finally, although the narrow focus may generate funds and encourage reform for a select group of top performers, the MCA’s formula would fail to do the same for the large majority of low-income countries. A redesigned MCA . . .