The Millenium Challenge Account: Foreign Aid and International Development Programs of the Bush Administration

Beyond being held accountable for meeting eligibility requirements and implementing development projects, the Bush administration and the MCC held recipient nations accountable for remaining consistent with MCC principles. There are several examples in which MCA compacts were terminated or suspended due to a drop in performance. For example, in 2008, Nicaragua’s grant was suspended due to voting irregularities in the country’s municipal elections.50 Honduras signed a $215 million compact with the MCC in 2005 aimed at reducing the burden of low agricultural productivity and high transportation costs, only to have that compact partially terminated due to what the MCC termed “actions by the government of Honduras that are inconsistent with MCC’s eligibility criteria.”51 While the MCC encouraged independent accountability, it did put a major emphasis on remaining accountable to the goals of the program as well.

NATIONAL SECURITY

Poverty doesn't cause terrorism. Being poor doesn't make you a murderer. Most of the plotters of September the 11th were raised in comfort. Yet persistent poverty and oppression can lead to hopelessness and despair. And when governments fail to meet the most basic needs of their people, these failed states can become havens for terror.52

The relationship between poverty and terrorism is more complex than many may believe. Bush cited the example of Afghanistan prior to September 11^th, saying that poverty was a key factor for the Taliban’s rise to power.53 Based on the example of Afghanistan, President Bush was using the MCA and the administration’s new policy toward foreign aid to prevent another Afghanistan.

While the link between poverty and terrorism may prove true in the instance of Afghanistan, this link cannot simply be universally applied to every poor and underdeveloped nation. There are several examples of poverty and underdevelopment linked to terrorism, but there are those who question this link. Many believe that terrorism is rooted in history and transcends economic conditions.54 To assume that all poor nations and its citizens are subject to terrorism is incorrect and overly simplified. Empirical data supports the notion that many revolutionary and terrorist organizations have members who are highly educated and come from wealthier backgrounds, suggesting that terrorism is not merely a response to economic conditions, but is rooted in other aspects of society including political imbalance and frustrations.55 Additionally, Africa, where many of the MCA compacts are held, has the fewest number of terrorist organizations, none of which were designated by the State Department as threatening Foreign Terrorist Organizations in 2003.56 To reconcile the fact that poverty does not necessarily equate to terrorism, the Bush administration and the MCC raised the income level for eligibility to include those wealthier developing nations that may be at risk for terrorist activity. In its first year, the income eligibility requirement was a per-capita income equal to or less than $1415; in the program’s third year, the maximum per-capita income level was raised to $3255, allowing for the consideration of many more countries.57

The evidence suggests that the Bush Administration had misguided aims in developing the MCA as an anti-terrorism tool. Using development to combat terrorism relies on faulty assumptions that do not hold true for all developing nations. As part of the greater context of battling a war on terrorism, the MCA misses the mark. First of all, many of the countries that are most in danger of becoming havens for terrorists are those that would not come close to qualifying for aid from the MCA. President Bush claimed that the MCA would provide hope to failed states to combat terrorism, but many of these states would fail to meet the economic and governance performance standards necessary to qualify for developmental assistance.58 The emphasis that the MCA puts on good performance ignores those failed and weak states that President Bush claimed would present the most significant national security threat.59 If the MCA had been in place prior to September 11^th, Afghanistan would certainly not have met the eligibility requirements for developmental assistance. Other failed states such as Sudan and Somalia, both of which have been famous for harboring terrorist groups, would not have qualified either. Therefore, if Bush’s intention in creating the MCA was to prevent another Afghanistan, he largely failed in that regard. Potential terrorist harboring nations would require more than simple development projects such as sanitation or drinking water improvements. It may be said that the MCA may be the added boost to a country that may have eventually fallen into insurrection and terrorism, but the link is so weak that it can hardly be attributed to the policies of the Bush administration and the MCA.

CONCLUSION

President Bush’s Millennium Challenge Account was viewed as an innovative approach to address the problems of persistent poverty and underdevelopment in the Third World. This new approach strayed from the mistakes of the past and put a large emphasis on results and accountability. The Bush administration and the MCC were truly working toward independence and wealth of the MCA recipients, and were structured to hold those recipient nations accountable for their own success or failure. Assessing whether or not President Bush’s Millennium Challenge Account program was a success in the Third World requires a multifaceted approach that examines to what extent the stated goals and visions of the program were accomplished.

One of the major drawbacks of the MCA in terms of development was that Congress ultimately decided the amount of money to be allocated to the MCA each year for development projects. At the outset of the program, President Bush set forth a lofty financial goal of increasing aid by $5 billion each year; however, as the economy soured throughout the Bush presidency, funding levels dwindled and did not meet the levels Bush had anticipated, and Bush was ultimately forced to suffer the consequences of his other policy decisions. As a result, the MCA may not have been as effective in the Third World as it could have been. Because of the funding shortfalls, the MCA faced a major challenge in providing compacts to countries that had worked toward dramatic change in order to qualify for MCA funding.60 In 2007, Congress appropriated only about half of the amount for foreign aid requested by President Bush.61 Had President Bush’s $5 billion per year goal had been achieved, the MCA may have had the potential to serve more countries, enter into more compacts, and maybe even expand to the point that it could offer some assistance to those countries that did not meet threshold or compact requirements.

The accountability aspect of the program can also be viewed as both a blessing and a curse for MCA recipients. On the one hand, holding a nation accountable for its own development instilled the idea of independence. The MCA would provide the funds and limited oversight, but it was ultimately the responsibility of the recipient nation to ensure that the compact projects were achieving the goals set forth by the MCC and the country. It also required recipient nations to collaborate with other civil organizations in the planning and implementation of compact projects. As was the case in Burkina Faso, the requirements set forth by the MCC also led many nations to strive and aspire to become eligible for MCA assistance. On the other hand, recipient nations were held to an extremely high standard. Violations of terms would result in the suspension or termination of compacts. Compact countries were expected to remain within the well-defined bounds of the MCC, especially since the MCC had millions of American taxpayer dollars invested in the development projects of compact countries. The performance and results of compact countries would be tied to the performance of the MCA, translating into more or less funding appropriated by Congress for development projects through the MCA.

Lastly, the Bush administration truly miscalculated the MCA as an anti-terror tool. From its very inception, the MCA did not resemble a program designed at combating terrorism, despite what President Bush may have believed. The indicators and requirements set forth by the MCC certainly did not apply to those countries that posed a most obvious and immediate threat, so it is debatable to what extent the MCA provided for national security in any sense. In creating the MCA as an anti-terror tool, the Bush administration was operating under false pretences that poverty and terrorism are always linked, an assumption that has proved to be widely untrue. However, it is not the case that the two – poverty and terrorism – have never and can never be linked. The link between terrorism and poverty is extremely complex, and therefore, cannot serve as a central policy aim. In addition, linking poverty to terrorism could result in a shift of resources away from actual poverty alleviation and toward anti-terror efforts.62 When the focus is put on ensuring security, it is the citizens of poor and developing nations who will ultimately pay the price.

Ultimately, the Bush administration had honorable intentions in establishing and implementing the Millennium Challenge Account. The program did impart some level development on recipient nations, and certainly boost the perception of the United States in the Third World. It gave Third World nations something to strive toward and ushered in a new strategy toward development. In a post-9/11 atmosphere, the Bush administration cannot be faulted for its attempts to ensure its national security, however misguided those attempts may have been. As the world becomes increasingly globalized and interconnected, it will be up to the United States to continually reevaluate its role as a major donor to international development. The Millennium Challenge Account is still in existence today, and its legacy will be determined by its ability to continually provide for development within the Third World. President Bush’s legacy in terms of the MCA still hangs in the balance. President Bush laid the groundwork for the United States to lead many developing nations toward independence and wealth through assistance from the Millennium Challenge Account. If the Millennium Challenge Account can improve upon itself and continue to offer assistance to the developing world, then it is arguable that President Bush will be regarded as one of the most influential presidents in the foreign aid arena.

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for Millennium Challenge Account Assistance in FY 2005,

http://www.mcc.gov/mcc/bm.doc/fy05_criteria_methodology.pdf.

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1.) Lael Brainard and others, The Other War: Global Poverty and the Millennium Challenge Account (Washington, DC: Brookings Institution, 2003), 2.

2.) George W. Bush, “Message to the Congress of the United States, February 5, 2003,” White House Archives, http://georgewbush-whitehouse.archives.gov/news/releases/2003/02/20030205-4.html.

3.) Ibid.

4.) Ibid.

5.) Arthur A. Goldsmith, “No Country Left Behind? Performance Standard and Accountability in US Foreign Assistance,” Development Policy Review, 28, no. 1 (2010): 9, http://0-search.ebscohost.com.ilsprod.lib.neu.edu/login.aspx?direct=true&db=aph&AN=45671109&site=ehost-live.

6.) Millennium Challenge Corporation, “Millennium Challenge Act of 2003, Pub. L. 108-199, Div. D,” Millennium Challenge Corporation, Office of the Inspector General, http://www.mcc.gov/mcc/bm.doc/mca_legislation.pdf.

7.) Ibid.

8.) Ibid.

9.) Millennium Challenge Corporation, “Millennium Challenge Act of 2003, Pub. L. 108-199, Div. D,” Millennium Challenge Corporation, Office of the Inspector General, http://www.mcc.gov/mcc/bm.doc/mca_legislation.pdf.

10.) Ibid., 8.

11.) Ibid., 9.

12.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2004, http://www.mcc.gov/mcc/bm.doc/fy04_criteria_methodology.pdf, 1.

13.) Ibid., 1-2.

14.) Ibid., 2.

15.) Ibid., 2.

16.) Ibid., 2.

17.) Ibid., 2.

18.) Ibid., 2.

19.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2005, http://www.mcc.gov/mcc/bm.doc/fy05_criteria_methodology.pdf, 3.

20.) Ibid., 3.

21.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2006, http://www.mcc.gov/mcc/bm.doc/fy06_criteria_methodology.pdf, 2.

22.) Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in FY 2008, http://www.mcc.gov/mcc/bm.doc/mcc-report-fy08-criteria-and-methodology.pdf, 4.

23.) Ibid., 4.

24.) Ibid., 4.

25.) Jennifer M. Brinkerhoff, Stephen C. Smith and Hildy Teegen, NGOs and the Millennium Development Goals (New York: Palgrave Macmillan, 2007), 1.

26.) Ibid., 4.

27.) Ibid., 4.

28.) Celia W. Dugger, “U.S. Agency’s Slow Pace Endangers Foreign Aid,” New York Times, December 7, 2007, http://www.nytimes.com/2007/12/07/world/africa/07millennium.html?_r=1&sq=millennium%20challenge%20account&st=cse&scp=2&pagewanted=all.

29.) Ibid.

30.) ONE Campaign, “Issue Brief: The Millennium Challenge Account,” One.org, http://www.one.org/c/us/issuebrief/743/.

31.) Ibid.

32.) Ibid.

33.) Francis Y. Owusu, “Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa: How Many Birds Can One Stone Kill?” Africa Today 54, no. 1 (2007): 11, http://0-web.ebscohost.com.ilsprod.lib.neu.edu/ehost/pdfviewer/pdfviewer?vid=5&hid=6&sid=c8f0b1b2-aec3-4c7f-9c00-35aebf8a2d88%40sessionmgr14.

34.) Ibid., 11.

35.) Ibid., 11.

36.) Brainard and others, The Other War, 30.

37.) Ibid., 30.

38.) Ibid., 30.

39.) Ibid., 31.

40.) Neil A. Englehart, “U.S. Aid Should Not Target Nations That Practice Good Governance,” in The Third World, ed. David M. Haugen (Detroit: Greenhaven Press, 2006), 177.

41.) Ibid., 177.

42.) Ibid., 177-178.

43.) Ibid., 178.

44.) Goldsmith, “No Country Left Behind?,”7.

45.) Ibid., 8.

46.) Steven Radalet and Ruth Levine, “Can We Build a Better Mousetrap? Three New Institutions Designed to Improve Aid Effectiveness,” in Reinventing Foreign Aid, ed. William Easterly (Cambridge: The MIT Press, 2008), 440.

47.) Ibid., 440.

48.) Ibid., 440-441.

49.) Goldsmith, “No Country Left Behind?,” 22.

50.) Ibid., 12.

51.) Millennium Challenge Corporation, “Honduras,” Millennium Challenge Corporation, Office of the Inspector General, http://www.mcc.gov/mcc/countries/honduras/index.shtml.

52.) George W. Bush, “Remarks at the Inter-American Development Bank, March 14, 2002, http://www.presidency.ucsb.edu/ws/?pid=64974.

53.) Owusu, “Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa,” 8.

54.) Ibid., 9.

55.) Ibid., 9.

56.) Ibid., 9-10.

57.) Ibid., 7.

58.) Brainard and others, The Other War, 204.

59.) Ibid., 166.

60.) Dugger, “U.S. Agency’s Slow Pace Endangers Foreign Aid.”

61.) Ibid.

62.) Owusu, “Post-9/11 U.S. Foreign Aid, the Millennium Challenge Account, and Africa,” 21.