Guyana on list for possible US aid
Stabroek News
February 12, 2004
Guyana is among 63 countries eligible to compete for aid under a new US foreign aid account designed to reward developing countries committed to democratic and free market reforms.
The aid is available to states with a per capita income under US$1415 per annum and which are eligible for loans from the World Bank concessionary window (the International Development Association).
However, the board of the recently established Millennium Challenged Corporation (MCC), a new government corporation chaired by Secretary of State, Colin Powell, will select the countries to compete for the resources based on their demonstrated commitment to "ruling justly, investing in people, and encouraging economic freedom," the MCC website says.
This is in keeping with the compact proposed by US President, George Bush, two years ago when he said greater contributions from developed nations to developing nations should be linked to them taking on greater responsibility. He suggested the Millennium Challenged Account (MCA) as a concrete mechanism to implement this compact and on January 23, 2004, he signed into law the Millennium Challenged Corporation to oversee this project.
The US Congress has already provided $1 billion in initial funding for fiscal year 2004 and last Monday, the President Bush asked lawmakers to make available US$2.5B to the account for 2005. Bush has pledged to increase funding for the MCA to $5 billion a year starting in 2006, roughly a 50% increase over current US core development assistance.
Last Wednesday, the MCC board met and among other things, approved the list of candidate countries for selection under the new scheme, and Guyana is listed.
The MCC's website says to the maximum extent possible, the Board's determination of eligible countries will be based on objective and quantifiable indicators of a country's commitment to the principles of ruling justly, investing in people and encouraging economic freedom. Countries selected would be required to submit a proposal for funding to the MCC.
Early next month, the MCC is to send to Congress a report describing the criteria and the methodology by which eligible countries will be selected from the list of candidate countries and in early May, the MCC board will select the eligible countries that will be invited to develop a proposal to receive MCA assistance.
The new aid programme is being marketed as a revolutionary way to wean poor nations off long-term aid and prevent assistance from disappearing into the coffers of corrupt states.
Eligible recipients include fledgling states like East Timor and Bosnia-Herzegovina, South Asian giants India and Pakistan, and Uganda, Nigeria and Senegal, which Bush visited during a quick tour of Africa last year.
The new programme draws on lessons learned about development over the past 50 years including that aid is most effective when it reinforces sound political, economic and social policies which are key to encouraging the inflows of private capital and increased trade - the real engines of economic growth; that development plans supported by a broad range of stakeholders, and for which countries have primary responsibility, engender country ownership and are more likely to succeed; and that integrating monitoring and evaluation into the design of activities boosts effectiveness, accountability, and the transparency with which taxpayer resources are used.
"President Bush's Millennium Challenge Account initiative is a challenge to America to use our great power for good, and a challenge to developing nations to empower their people to build a better future. It reflects America at our best: generous and pragmatic, compassionate and focused on results," Powell said recently of the MCA.
The key principles of the MCC are to focus on promoting sustained economic growth through investments in areas such as agriculture, education, private sector and capacity building to reduce poverty and as a reward to countries who meet the eligibility requirements as well as allow for a genuine partnership where countries will identify the barriers to their own development with civil society's participation.
"MCA assistance will go to those countries that have developed well-designed programmes with clear objectives, measure baseline data and provide for an objective evaluation of results. MCA participation will require a high-level commitment from the host government. Each country will be required to enter into a public agreement with the MCC that includes a multi-year plan for achieving shared development objectives and the responsibilities of each country in achieving those objectives, regular benchmarks to measure progress, a multi-year financial plan and a plan to ensure fiscal accountability for the use of MCA assistance. Programmes and shared efforts will be designed to enable progress to be sustained after the funding under the MCA Compact has ended," the MCC website says.
Interim Chief Executive Officer of the MCC is Ambassador Alan Larson, the Under Secretary of State for Economic, Business, and Agricultural Affairs.