Former Senior Treasury Department Official, Think-Tank President Comment on White House Plans for Millennium Challenge Account

11/25/2002

From: Andrew Stober of the Center for Global Development, 202-416-0705, E-mail: astober@cdgev.org

WASHINGTON, Nov. 25 -- The Bush administration announced today that it will establish an agency to deliver the $5 billion annually of additional foreign assistance announced earlier this year as the Millennium Challenge Account (MCA). Administration officials also released information about the criteria that the MCA will use to select countries eligible to receive the new funds.

Under the plan, the President will request funding to increase the U.S.'s economic assistance by 50 percent to $15 billion, with the new $5 billion targeted specifically to countries already pursuing development-friendly reforms.

Steven Radelet, a former Deputy Assistant Treasury Secretary for Asia, Africa and the Middle East and currently a senior fellow at the Center for Global Development, said of today's announcement, "This program has the potential to fundamentally change the way the U.S. delivers foreign assistance. The steps announced today are an important move in that direction. Going forward the administration and Congress will have to work out details, including precise levels of funding, the most appropriate delivery mechanisms and the organizational structures of the new agency. I also look forward to the administration outlining strategies for countries that will not qualify for MCA funds."

Nancy Birdsall, president of the Center for Global Development and former executive vice-president of the Inter-American Development Bank, believes the U.S. is once again taking the kind of leadership on aid issues that the post-World War II Marshall Plan represented. "Selecting countries with strong records of good governance makes recipient countries trusted business partners in the joint endeavor of development, and allows them the ownership they need to make aid effective," Birdsall said.

The Center has performed analysis of and offered comment about the MCA since it was first announced last spring. The Center's work on the MCA is available at http://www.cgdev.org/nv/features_MCA.html. The Center for Global Development is an independent, non-partisan, non-profit think thank dedicated to reducing global poverty and inequality through policy oriented research and active engagement on development issues with the policy community and the public.