The Millennium Challenge Corp. is a hot prospect in the world of foreign aid, and a way of reinventing US foreign aid by the Bush Administration, reports the World Bank press Review Tuesday.
It represents an audacious attempt by the Bush administration to rewrite the rules of foreign development assistance, focusing less on foreign policy considerations and more on whether countries create the conditions to use the money wisely, according to The Washington Post.
The federal agency will hand over huge sums of money to a select group of countries that are evaluated and ranked according to series of benchmarks graded by outside parties. Only 16 countries – out of a potential pool of 75 of the worlds poorest nations – qualified for the first round of funding, based on the quality of the government, public investment in people and economic freedoms.
When the program is fully funded, each eligible country could receive as much as 300 million US dollar in additional aid per year beyond its current foreign assistance.
Millennium is based on an idea that had been kicking around foreign aid circles but which the Bush administration – suspicious of the bureaucracy exemplified by the US Agency for International Development – has actively promoted.
Millennium has a high-powered board – Secretary of State Colin L. Powell is chairman, and Treasury Secretary John W. Snow is vice chairman – and is designed to be independent of State and USAID, with as little bureaucracy as possible.
Paul V. Applegarth, the chief executive of the corporation, has outsourced most of the administrative functions – such as financial accounting, security clearance and information technology – to contractors.
Some have expressed concern that the Millennium program will drain funding from USAID and other foreign aid initiatives and, because it is a separate entity, complicate the coordination of foreign aid.
In the developing world, Millennium is a huge deal.
Once countries are placed in a pool based on such factors as per capita income (under 1.415 US dollar), they are then rated on 16 criteria – corruption, political rights, education expenditures and days it takes to start a business, among others – that are assembled by independent groups, such as the World Bank, World Health Organization and the Heritage Foundation.
The hope is that countries will feel a sense of competition and improve their performance. Every year, countries selected for Millennium money will be reassessed.
Already, Applegarth said, there is evidence that the average number of days to start a business – indicative of regulatory and bureaucratic burdens – has begun to decrease in some countries.
Kilde: www.worldbank.org
