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December 11, 2006

MCA Reauthorization Bill Killed

Posted by Sheila Herrling at 01:23 PM

A long, hard-fought battle by the House International Relations Committee to pass a compromise bill to reauthorize the Millennium Challenge Account came to an abrupt halt on Friday when it could not garner the required support of the Senate Foreign Relations Committee. A mixed message on why, but here's some of the buzz I heard:

1. The MCA didn't technically need to be reauthorized to continue operations and, what with all the more pressing issues.... A credible argument -- in fact, the MCA was never purely authorized, rather it has been authorized through appropriations bills -- but unfortunate. There were some very important amendments in the reauthorization bill that made good development effectiveness sense, which I'll cover below.
2. There was a concerted effort to stop the bad practice of last minute tag-ons to other pressing, and often contentious, bills. (Given the heavy docket, the HIRC had contemplated adding the bill onto either the India conference bill or the State Department Authorization bill. ) Partially-credible; it would be great to see such discipline on the Hill, but c'mon, this has been standard operating procedure for years.
3. Members opposed the bill language changing the purpose of the MCA assistance from promoting "economic growth and the elimination of extreme poverty" to "the reduction of poverty through sustainable, broad-based economic growth." I think we have a winner! This language had been the source of much partisan debate about the proposed amendment.

Why should we care about this bill's failure to proceed if the MCA didn't require it to continue it's operations? In my view, there were two reasons to care:
1. The bill contained language that would allow for concurrent and longer-term compacts, currently prohibited by the MCA Act of 2003. Concurrent compacts would allow countries to better sequence short-term and medium-term reforms and measure progress accordingly. Longer-term compacts allow countries to sequence short-term and longer-term activities (e.g. building roads vs. graduating kids) and measure progress accordingly. Without the ability to have concurrent and longer-term compacts, I fear we will see trends toward "go-for-it-all-while-you-can" compacts.
2. The intent underlying the changed purpose language came from a sense that, based on experience to date, the MCA was not evaluating the poverty reduction impact of its investments to the same degree it was evaluating their economic rate of return. The focus of the MCA should continue to be economic growth as the key driver of development, however, better diagnostics on the distribution of that growth should feature more prominently in country compact and MCA funding decisions.

All is not entirely lost, although it doesn't look good either. As in past years, amendments can be made through the annual Appropriations Bill. The complication this year is that it looks like we're headed toward a Continiuing Resolution which, for the MCA, likely means low-level funding and no amendments.

What do you know? What do you think? Join in the discussion.

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Comments

MCC is a fiasco. However, concept is good. Bush managed to mess it up from the get go. by trying to hook in all the busuiess interests and business cronies he could. The first management team almost killed it. But they turned around a bit and started to get their act together but I still have my doubts that if it will be far enough along now that the Republicans are turned out of Congress to show success or any real sustainability - it is yet to be entrenched. The democrats made it clear that they wanted to shut it down ... and the only hope was that it would have enough momentum and success that they couldn't do that.

Posted by: Margarita Sarishvili at December 13, 2006 03:52 AM

it seems to me that a big challenge for the MCC, and for all of us, is how to make sure that development initiatives that have a Republican brand are adopted by new Democratic majorities. In the process, there's certainly scope for thinking about how to improve - even re-brand - these initiatives. But, the politics of these efforts could get in the way of legitimate development and anti-poverty programs. That would be a shame.

Posted by: Gawain Kripke at December 19, 2006 10:58 AM

The MCA is probably the best thing that has happened to foreign aid in decades. Sure there were start-up problems and countries confused about what to do but the objective standards by which country performance are measured and the demand drive approach of the compacts works.

As for the Republican-Democratic change in Congress it is wishful thinking to think this will lead to the end of the MCC. President Reagan was going to vaporize the Inter-American Foudnation and they are still around. Speaker Gingrich, following the Compact with America landslide was going to close down the Commerce Department but everyone objected becasue where would the fish go? Once an institution is in law and has a budget it is around to stay and both parties enjoy apppointing their folk to run these institutions generally with cosmetic reorganzaitions while the permanent bureacracy continues to run the show. Who would have thought that Mrs Harkin could have done such a good job directing OPIC, the agency that supposedly "exports jobs" given that her hsuband is the standard bearer of worker rights in the Senate.

The only foreign aid entity that was starved of a budget and into extinction by President Reagan was the International Development and Cooperation Agency or IDCA that wasinvented by President Carter to coordinate and oversee all of the foreign assistance agencies. Now we have "F," probably not a reference to clients who are failed, failing or fragile yet still a curious acronym for an office in the State Department, largely re-inventing IDCA.

It is still as President Reagan once said "a shinning City on the Hill" to me too.

Happy New Year!

Posted by: Brian Hannon at December 20, 2006 09:38 AM

One can only look at the fundamental flaws of US and international assistance by looking at the country of Georgia where roughly 300 million USD will be allocated for various MCC development projects. Let's cut to the chase, this is country is one giant money laundering operation, and never met the qualifications in the first place. I guess there's some politics involved in the selection process. Perhaps Bush failed to realize that over a billion has already been poured into this country over the last decade and hardly a brick has been laid. It has done more harm than good, besides help create a new generation of corrupted politicians who see US assistance as a opportunity to maintain their lives to which they have become accustomed. The poor are becoming poorer, crime is on the rise and human rights have become something that is all in the rhetoric not too mention democracy and the rule of law. Foreign assistance must be based on a careful plan that is based on actual needs and organized together with those whom which it is actually intended to help. MCC is perceived as just another entitlement program with accountability to none. MCC is carefully designed in Georgia to discriminate against those who could actually benefit the most; the many ethnic minorities, IDPs and SMEs. I am sure that this is not by accident but by intent. Just look at the required languages to fill out applications: English and Georgian, but not any of the languages that are spoken by ethnic minorities or in Russian, which most people in the region, both older and younger have a great knowledge of. These are the ones who are in most need of assistance. MCC assistance would appear to be closely linked with the central government's nationalism and narrow political agenda. This is not building democracy but rather assisting countries due to their geographical and strategic location and blind support for US foreign policy. In the end, as before, the money will pass through a multitude of middle men all wanting a cut, those who are well connected to the political elite and directed to reinforce aggressive policy agendas.

Posted by: Ian at December 24, 2006 11:37 AM

the war has begun...
killing MCA funding (or bludgeoning it with bureaucracy) most likely means more funding for USAID and the State boys...which thru default means "top down" approach to aid

some never learn

Posted by: mitchell at January 10, 2007 11:19 PM

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