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When President Bush announced the Millennium Challenge initiative in 2002, it sounded like a promising new approach to foreign aid. The idea was to supply U.S. taxpayer dollars only to governments that could meet strict standards of efficiency and accountability. The proposal would do so based on the countries' own expressed needs, not development fads or political fealty to the United States. Money would be provided in substantial amounts, over substantial periods, so as to make a genuine impact on poverty. And the whole project would be administered outside the traditional aid bureaucracy, by a congressionally established Millennium Challenge Corp. Typical of the Millennium Challenge approach is the five-year compact signed Friday with Mozambique. It will supply $507 million to help one of Africa's poorest countries build much-needed roads and improve access to safe drinking water.
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It's still a sound concept. But the Millennium Challenge may be approaching an institutional crossroads. Bush originally said he hoped to be sending $5 billion a year to poor countries by 2006, a pledge that never came close to being realized. Congress took two years to pass legislation setting up the program. Since then, the administration's annual budget requests have never reached $5 billion, and Congress has consistently shaved them even further. Most of the roughly $6 billion that has been appropriated so far has been committed to specific countries. But budget-cutters on Capitol Hill note that only about $71 million has actually been spent. The slow rate is an unfortunate consequence of the MCC's sensible policies: It won't write a check until recipients can document their capacity to use it appropriately, and for many poor countries making reforms and dealing with the MCC's paperwork take time - a lot of time. Meanwhile, urgent and expensive new U.S. overseas priorities - from securing U.S. embassies to fighting HIV-AIDS - keep coming up.
The administration asked for $3 billion for the MCC in its fiscal 2008 budget. House appropriators have cut that to $1.8 billion, about what the MCC got last year, while Senate appropriators have gone even lower, to $1.2 billion, a figure that the MCC says will cripple its ability to make new agreements with countries that have recently qualified for its programs. One benefit of the Millennium Challenge is that it creates an incentive for poor countries to improve their practices and procedures, but that could be lost if the impression spreads that the United States is pulling the plug.
Given the intense competition for foreign-aid resources, impatience with the Millennium Challenge is understandable and even helpful, if it forces the MCC to fix its sometimes burdensome procedures. But it is too early to start slashing a program that has been in business for only three years and still deserves a chance to show what it can do.