The Millennium Challenge Account: Congressional Consideration of a New Foreign Aid Initiative
Abstract
In a speech on March 14, 2002, at the Inter-American Development Bank, President Bush outlined a proposal for the United States to increase foreign economic assistance beginning in FY2004 so that by FY2006 American aid would be $5 billion higher than 3 years earlier. The new funds, which would supplement the roughly $16.3 billion economic aid budget for FY2003, would be placed in a separate fund, the Millennium Challenge Account (MCA), and be available on a competitive basis to a few countries that have demonstrated a commitment to sound development policies and where U.S. support is believed to have the best opportunities for achieving the intended results. These "best-performers" would be selected based on their records in three areas -- ruling justly, investing in people, and pursuing sound economic policies. Development of a new foreign aid initiative by the Bush Administration was influenced by a number of factors, including the widely perceived poor track record of past aid programs, recent evidence that the existence of certain policies by aid recipients may be more important for success than the amount of resources invested, the war on terrorism, and the March 2002 U.N.-sponsored International Conference on Financing for Development in Monterrey, Mexico. The MCA initiative is limited to countries with per capita incomes below $2,935, although in the first 2 years -- FY2004 and FY2005 -- only countries below the $1,415 level would compete for MCA resources. Participants will be selected based on a transparent evaluation of a country's performance on 16 economic and political indicators, divided into three clusters corresponding to the three policy areas of governance, economic policy, and investment in people. Congress plays a key role in the policy initiative by considering authorization and funding legislation, and confirming the head of the proposed Millennium Challenge Corporation (MCC).
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 19, 2004
- Accession Number
- ADA457851
Entities
People
- Larry Nowels
Organizations
- Library of Congress