In New York Times on December 7, a story appeared about
AIDS in Africa the budget fight over U.S. President George Bush’s Millennium Challenge Fund. The rub against the five-year, $4.8 billion plan is that it moves at a snail’s pace to spend its money and pull poor countries out of poverty. Presently, only $115 million of the funds have been allocated.
In the eyes of the U.S. Congress, that’s not how the organization is supposed to work. During budget proceedings, the story says, the House of Representatives slashed the administration’s $3 billion budget request to $1.8 billion. The Senate proposed $1.2 billion, and claimed no more up-front money be spent for future five-year projects. Instead, everything must be fully funded at the beginning of the project. Government leaders of country’s eligible to receive the money will just have to believe that the U.S. government will come up with its share of the funds in the future.
In a rare inquiry regarding the outcomes of federal programs, Senator Patrick Leahy, D-Vermont, asked about effects of the U.S. foreign aid budget. “Do we cut maternal health?” he asked. “AIDS? Malaria? Do we cut refugees? The only thing that’s got a blank check is the war in Iraq.”
Beating to a different drum
Of course, MCC was always supposed to be different, and being set apart makes it an easy Congressional target – especially during a possible economic downtown.
When it was first announced by George Bush in a March 2002 speech, MCC would be different in two ways: First, it would coordinate a large amount of money specifically earmarked for building a country’s infrastructure, instead of funding a series of smaller projects through piecemeal funds; secondly, and most importantly, MCC would only work with poor governments exhibiting sound economic and political policies. To become eligible, countries must obtain passing scores in three major criteria: Ruling justly; investing in people, which tallies how much governments invest in health care, primary education, etc.; and finally, economic freedom, including regular World Bank stuff like how easy it is to open a business, the quality of regulatory bodies, fiscal policy, etc.
Governments who pass this threshold are then supposed to come up with a plan of how they’ll spend the money. They’re encouraged to think big and address a fundamental problem facing their people. For example, Burkina Faso submitted the first country plan, a $12.9 million project to focus on improving girls’ education across the country.
So what went wrong?
Ever since Bush’s March 2002 speech, the program has hit a series of bumps and roadblocks – some of its own making, some of the government’s making and some the fault of other countries. First, it took nearly a year to draft the legislation and send it to Congress and another year after that for both houses to pass the legislation and send the bill back for the president’s signature. That puts us at February 2004. Three months later, the Senate confirmed Paul Applegarth, MCC’s first director. That month, the staff reaches 20.
It takes another full year before MCC signs its first compact – with Madagascar. Not long after that, President Bush meets with a few African leaders who complain the process is too-time consuming and shrouded in too much bureaucracy. It wasn’t too long after that when Applegarth tendered his resignation.
(When MCC staffers traveled to Burkina Faso after Applegarth’s resignation, they made sure everyone in Ouagadougou knew their former boss was to blame for some of the agency’s problems: This known control freak sat in on every interview, right down to the office secretaries. By design, the program is only supposed to employ 200 people, for better or for worse, to keep it from becoming an overfed bureaucratic monster. However, it didn’t reach 105 employees until April 2005.)
During the second half of 2005 European countries were also energetically discussing aid policies and strategies. Preparing for a G8 summit at Gleneagles in Scotland, proposals were on the table to double aid budgets and tie it to .7 percent of each country’s GDP. The U.S. is famously parsimonious when it comes to development aid to foreign countries. Americans claim that their smaller percentage of GDP makes up a bigger amount than most individual European countries.
Another difference between the two continents’ aid strategies is that European governments often gather money from many different resources, pooling it together to tackle a specific problem, like malaria.
As Robert Guest, author of the Shackled Continent: Power, Corruption and African Lives, pointed out on NPR interview in June 2005, this is exactly the opposite of what the U.S. does, which ties aid money very closely to the continuing governmental performance of each country. He points out the possible risks that exist between the two philosophies are that Europeans spend money too quickly to be effective and Americans spend it too slowly to be effective.
One reason it took so long for accepted countries to receive MCC funds is the number of bureaucratic hurdles set up set up by the organization. For example, MCC forms are not only complicated, Guest says, but couched in “very American ways of talking.” He wasn’t being a jerk. I’ve seen early forms from the Clinton Foundation’s HIV/AIDS Initiative full of idiomatic phrases that are very difficult to understand for better than average English speakers. If the MCC forms were anything like the Clinton Foundation, it’s a point well taken.
One of the issues here is that developing countries don’t have a lot of capacity to quickly fulfill all the requirements demanded by MCC. Well educated government officials are a commodity, and many governments can’t free up people from other work. Keeping the whole process transparent forces governments to create new structures – a difficult proposition for any administration.
What’s most telling to me is that two documents critiquing MCC from mid-2005 – the Guest interview and a report from the Brookings Institution – rehash the same complaints people are still leveling against the organization in this month’s New York Times story. For example, Representative Nita Lowey, D-New York, recently traveled to Ghana to find the country’s $547 million to develop a modern agriculture economy is still not very far along.
The problem here isn’t whether the philosophy behind MCC is good or not. Most people will agree it’s a worthy cause: After Americans have thrown away untold billions propping up dictators over the years, rewarding well run countries should feel good. Tying aid to government performance is also a fine idea. Same goes for demanding that governments becoming stakeholders in this process by prioritizing their needs and then following through on projects.
The question on most people’s minds is whether MCC can overcome its setbacks or whether these problems represent the cost of doing business in a different way.
Spare a dime, brother?
Someone better find an answer quickly. If the Senate and House cannot work out an agreement to stave off MCC funding cuts, Burkina Faso, which toiled for two years to draft its plan, will receive no money.
Burkina Faso’s Prime Minister, Tetrius Zongo, spent five years in the U.S. as his country’s ambassador. He understands the bull and bluster of U.S. politics. So far, he sounds pretty scared. That’s not a good sign.
From the New York Times story:
Burkina Faso has gone to great lengths to meet the agency’s good governance standards. The agency gave it a $13 million grant to improve girls’ education, which the country used to build, among other things, schools with day care centers so school-age girls do not have to stay home to look after their younger siblings.
Identified by the International Finance Corporation as one of the most difficult places in the world to do business, Burkina Faso has also halved the number of days it takes to start a business, and reduced by a third the cost of registering property.
In small, poor countries like Burkina Faso, every burp and hiccup of an aid agency like the Millennium Challenge Corporation is news — and often front page news. David Weld, the agency’s country director for Burkina Faso, said he did not know how he could face people there if Congress did not come through with enough money to help them.
“What type of message does that send to Burkina Faso, a country that has spent a huge amount of political capital and money on this process?” he asked. “What does that tell the Togos, the Nigers that want to become eligible? It tells them: Do everything like Burkina Faso, make all these reforms, spend millions of your own money, and then maybe at the end we might be able to sign a compact with you — or maybe not.”
A final note: The photos accompanying the newspaper story were awesome (a very proper word to describe photographs). More of the photographer’s work can be found here.