Development assistance—some call it foreign aid—is at the center of our nation’s effort to help other countries reduce poverty and address human needs, either directly through governments or indirectly through NGOs.* Providing such aid is meaningful for millions – a matter of our stewardship of the great wealth we have been given, in service to a world where billions of people live in poverty.

Conservatives in the United States have tended to be the most critical of development assistance, which helps to explain the fact that the U.S. gives less than 0.1% of our GNP, far less than the international goal of 0.7%.

Conservatives have not been alone. Critics of aid over the years have rightly questioned how effective it has been for the world’s poorest countries. While mistakes in providing and receiving assistance have been frequently cited to ‘prove’ we shouldn’t bother, those of us committed to a vision of meaningful assistance to help people live with dignity and hope have also seen in those mistakes a challenge about process, priorities, and participation.

Development assistance continues to address such issues as health and the HIV/AIDS pandemic, education (especially for girls), food security, micro-enterprise lending, child survival, and conflict resolution and peacekeeping. Reducing poverty is the ultimate focus, and there is little doubt that aid has helped to improve social indicators in Africa over the last 30 years.

Given this history, and given present economic realities in the United States, it has been fascinating to watch the Bush Administration seek a way forward, with its proposal to add $5 billion to the U.S. core development assistance budget, the condition being that it be provided only to those countries most likely to use it effectively.

The President pledged, back in March 2002, that the proposed Millennium Challenge Account (MCA) would provide new funds —meaning that the pledge would not be honored by taking the money from some other category in the federal budget—and would be added to the upcoming 2004 fiscal year budget, leading to a $5 billion annual increase by 2006.

This commitment of an additional $5 billion marks a remarkable shift. At the outset the faith communities looked warily at the proposal. Its announcement had been timed to defuse criticism of the U.S. before the Monterrey conference on financing to confront global poverty. There was another such announcement in August 2002—just before the World Summit on Sustainable Development in Johannesburg—of $4 billion in aid for Africa.

For much of the last year details of the plan have been missing. How was the criteria to be applied? How was the fund to be administered? How much money would come in 2004? And, from Catholic Relief Services: How would the MCA “encompass equitable human development”?

In the spring, chairpersons of the House International Relations Committee and the Senate Foreign Relations Committee introduced legislation authorizing the MCA. Both bills, similar in nature, have cleared their committees.

HR 2441 would create a Millennium Challenge Corporation, a new government corporation separate from the general development assistance programs of the U.S. Agency for International Development (US AID). Its board would consist of Cabinet-level officials and would be chaired by the Secretary of State. Its stated objective of MCA assistance was to “foster democratic societies, human rights and the rule of law; foster investment in education and health infrastructure; and promote economic freedom, broad-based economic growth, and free market systems.”

The bill restricted support to the poorest countries in 2004, then, regrettably, expanded to include countries with higher per capita incomes by 2006. It authorized $1.3 billion in 2004, $3 billion in 2005, and $5 billion in 2006.

S 1160 largely ended up at the same place, though Senators took the trouble to assert clearly that the Secretary of State had the authority to coordinate all assistance. They did not provide details about the proposed corporation.

What does it mean for those of us concerned about our role in alleviating poverty?

First, let us note that few of the poorest countries will meet the criteria set for the MCA. Some estimate that in 2004 only four African countries will be included.

Desperate need in countries that cannot meet the MCA criteria must not be ignored. That funding will have to come from the development assistance accounts normally administered by U.S. AID. The MCA must remain “above and beyond existing aid.”

Second, poverty levels should be the principal criteria for country eligibility, together with country intent to improve on the MCA’s three criteria. With the number of countries represented so very small, the temptation to reward those who support the U.S. international agenda may be very great indeed.

Third, the criteria need to be applied in a way that respects the sovereignty of the recipient country. This is particularly true with the “economic freedom” theme, where the U.S., World Bank and IMF have imposed their economic agenda upon much of the Global South. That agenda does not promote equitable human development, so it is fair to ask what the U.S. means by “sound economic policies.”

Finally, will the money even be there? The House has cut the 2004 appropriations from $1.3 billion to $800 million. Pressure is on to fund the HIV/AIDS initiative at levels higher than the administration sought. Despite the pledge to maintain current levels of existing aid, the Bush Administration had already cut its budget request for 2004. What happens in a Congress increasingly concerned with a soaring federal budget deficit that may reach $450 billion in 2004?

The Millennium Challenge Account deserves some cautious support as long as it is seen as only one aspect of U.S. development assistance. Humanitarian concerns worldwide, HIV/AIDS, poverty in countries not eligible under the MCA – all need to remain within a broader aid strategy.

The 208th General Assembly (1996): “Calls to the attention of all Presbyterians the intolerable suffering that characterizes today’s world, especially in the poorest developing countries of the south. Widespread hunger, disease, and social unrest persist in tandem with environmental degradation, massive landlessness and unemployment, meager wages, and racial/ethnic/religious conflict.”

By Leon Spencer
Washington Office on Africa