- The Washington Times - Thursday, June 29, 2006

Earlier this month, the board of directors of the Millennium Challenge Corporation (MCC) met here in Washington and respectfully, but firmly, said “no” to Gambia, a small nation on the west coast of Africa.

The board of this new government corporation, formed just two years ago to dispense U.S. taxpayer dollars in the form of foreign assistance to deserving countries, told this prospective aid recipient that it would get nothing. The board, comprised of five senior members of the president’s inner circle including the secretaries of state and treasury, the USAID administrator and the U.S. trade representative, as well as the president of the respected charity, Catholic Relief Services, told Gambia that as long as its government continued to arrest its critics, the promise of MCC assistance would be remote.

The board’s decision is an important one because it draws a bright line for every country now wanting to get a share of this very unique foreign assistance program. It was a notable decision because it shows that the MCC is honoring the intent of its creators: Congress designed MCC assistance to be granted on the basis of demonstrated performance, not heavily reliant upon near-sighted foreign policy considerations, which have characterized U.S. assistance in the past.

The creation of the MCC, through the Millennium Challenge Act of 2004, was indeed a consequence of 40 years of frustration caused by meager results of our investment of billions of dollars of U.S. foreign assistance in countries across the globe. Despite decades of economic aid, most recipients of U.S. aid are poorer now than they were before first receiving development assistance.

Congress created the Millennium Challenge Corporation to administer this new form of foreign aid, eligible only to those countries that demonstrate a commitment to sound development policies and where U.S. support has the best opportunity for achieving results.

These “best-performers” are selected based on 16 measurements of how well each has done in developing transparent economic, fiscal and trade policies; protecting political freedom; investing in education and health care; controlling public corruption; respecting civil liberties; and ensuring judicial fairness. Of the approximately 70 countries currently eligible for some form of U.S. development assistance, only 22 countries have met the strict criteria stipulated by the Millennium Challenge Act of 2004.

To date, the MCC has signed agreements with eight countries, promising more than $1.6 billion for development projects designed to reduce poverty through economic growth. Too many of the problems in the developing world ? egregious labor violations, environmental degradation, slavery, sex trafficking and other human right violations ? stem from the wholesale absence of sustainable livelihoods. Reducing the grinding poverty that enslaves too many of the world’s poor is precisely the function of MCC.

By targeting poor but relatively well-governed countries for assistance, the competition for MCC grants among the nations that don’t qualify (more often than not for reasons of corruption) accelerates reforms and the adoption of good policies in those nations that fail to measure up. Indeed, we are already now seeing the “MCC effect” produce needed changes in El Salvador, Cameroon, Jordan, Guatemala and the Philippines, as these countries undertake the very policy reforms that will improve their chances to be eligible for MCC assistance programs.

It is precisely because of the need to protect the integrity of MCC that the board had to strip Gambia of eligibility for the program. With much fanfare, the same board last November announced that Gambia would be eligible for assistance. But even before the ink was dry on the press release announcing its eligibility, the government of President Jammeh began a widespread crackdown on its critics, including the closure of a newspaper and the arrest of three journalists. Complicating matters was growing evidence that the government’s bad choices extended to its handling of the economy.

Another positive aspect of the MCC approach is that the people of Gambia will now have the opportunity to ask President Jammeh to explain his actions. This type of foreign aid has greater potential than other forms of U.S. aid in encouraging governments to be more accountable to their people. We will be watching what happens in Gambia to see if the Gambian people take notice.

Congress holds out much hope for the MCC, and I suspect this will not be the last suspension that the board of directors will be compelled to make. Creation of the MCC was a calculated risk because Congress wanted it to operate in countries that have a history of poverty and government misrule. That’s why the decision the board made earlier this month was so important. By enforcing standards early in its history, MCC has established a precedent that other current and potential recipient countries would do well to understand.

Henry J. Hyde, a Republican member of the U.S House of Representatives from Illinois, is chairman of the House International Relations Committee.

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