02 December 2004

(Millennium Challenge Account helps countries that target growth)

By Kathryn McConnell
Washington File Staff Writer

Washington -- The Millennium Challenge Corporation (MCC) expects to notify Congress soon that it has selected four countries to receive funding for multi-year development projects that target poverty reduction and economic growth, says the MCC's John Hewko.
 
Speaking December 1 to the Society for International Development (SID) in Washington, Hewko said MCC continues to work with the other 11 countries that so far have submitted proposals or concept papers for Millennium Challenge Account (MCA) project funding from fiscal year 2004 (FY04) appropriations.
 
Initial concept papers tend to be "too complex" in scope, said Stephen Brent, U.S. Agency for International Development (USAID) liaison to the MCC. MCC staff members work with countries to narrow their focus and concentrate on what they would like to accomplish first, he said.
 
The secretary of state chairs the MCC Board of Directors, which decides which countries are to be eligible for funding. The USAID administrator is a member of the board.
 
The FY04 foreign operations bill awaiting final passage by Congress and signature by the president allocates $2.5 billion for MCA.
 
In May, MCC named 16 countries as eligible to submit proposals for FY04 project funding. In September, it named seven additional countries eligible to apply for threshold funding.
 
Eligible countries must meet a maximum per capita income level and must have demonstrated a commitment to economic growth, good governance and investment in people.
 
Threshold countries are close to eligibility, but not yet qualified to submit proposals. Those countries work with MCC teams so they can eventually qualify to submit project proposals.
 
In November, MCC named 16 countries eligible to submit proposals for FY05 funding and 14 countries for FY05 threshold funding. Some of the FY05 proposal eligible countries also were FY04 eligible.
 
Proposals must show that the submitting government has consulted with all sectors of its society in prioritizing the country's development goals, Hewko said.
 
"We don't tell countries what their priorities are, we listen" to countries explainwhat they have decided are their priorities, said Alan Larson, under secretaryof state and MCC's former interim executive director. Larson, also speaking atthe meeting, was key in developing the MCA concept, which was initially publiclydiscussed at the U.N. Financing for Development conference in Monterrey, Mexico,in 2002.
 
MCA proposals also must indicate what specific results are expected from the project and how those results will be monitored and measured.
 
The requirement that eligible countries demonstrate they have made progress toward reducing corruption is one mandate that all threshold counties currently are having trouble satisfying, said Brent. Therefore, some of the funding for the threshold program will go toward helping these countries learn how to meet the requirement, he explained.
 
Larson said the MCA concept recognizes that economic growth is essential to a country's overall development.
 
He said that by encouraging good governance and economic growth policies, MCC can help mobilize all resources available -- not just aid funds -- that can assist a country's development. These resources include workers remittances, foreign direct investment and "dead capital" within countries not being utilized for development because of a lack of good government policies.
 
Because the MCA model of aid is competitive, it has generated "energy and creativity" within countries named eligible. MCA requirements, proposal guidelines and proposals submitted are all posted on the MCA/MCC Web site: http://www.mcc.gov/
 
"We are happy with the program but we will have to work hard" to meet MCA requirementsof project planning and accountability, said Amadou Ba, Senegal ambassador tothe United States. Ba also spoke at the meeting.
 
Senegal has appointed a team to coordinate its consultative process to ensure all parts of its society have input into the country's development priorities, Ba said. The program is already making a difference, not only in Senegal but in all of Africa, he concluded.