A Better Way to Fight Global Poverty: Broadening the Millennium Challenge Account

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Last March, at the un-sponsored International Conference on Financing for Development in Monterrey, Mexico, President George W. Bush pledged to significantly increase U.S. development assistance to poor nations through the creation of a new Millennium Challenge Account (MCA). The fund would set strict standards of accountability and performance for recipients and would reward a select set of poor countries with as much as $5 billion in new aid by 2006. This initiative has the potential to be a step forward in the evolution of U.S. development policy. But, in its current form, the MCA could also be a step backward in the ongoing U.S. effort to reach out to the majority of poor countries in a coordinated and effective way.

The proposed MCA is a step forward because it builds on an emerging consensus that development works best when poor countries have strong policies on governance and economic reform and take responsibility for reducing poverty and spurring economic growth. This philosophy has helped shape a number of major development initiatives in recent years, including the Heavily Indebted Poor Country (HIPC) debt relief program (which reduces debt for countries that develop independent national poverty-reduction strategies); the Global Fund to Fight aids, Tuberculosis, and Malaria (usually referred to simply as "the Global Fund," it awards money to countries with the most comprehensive strategies to combat infectious diseases); and the Education for All (EFA) initiative (which makes funding contingent on countries' producing credible national plans for achieving universal education).

In addition, the MCA is a step forward because it underscores a growing bipartisan commitment to development assistance. Although some notable Republicans joined the Clinton administration and a coalition of religious groups in pushing for debt relief, during most of the 1990s the Republican Congress sought to limit funding for development assistance. Given that history, President Bush's call for such a substantial increase in effective development assistance has strengthened the emerging consensus that the United States must do more to help the world's poorest countries.