Statement Of Sen. Alexander - Foreign Relations Hearing: Millennium Challenge Accounts

Posted on April 11, 2005

Millennium Challenge Accounts represent a bold new approach to foreign aid. If properly executed, it should prove quite successful. The principle is simple: reward poorer countries that have established sound policies, giving them the needed boost to achieve the next level in their nation's development. The result is a double bonus: we're providing incentive for good policy choices by rewarding them, and we're providing aid where it is most likely to do good - in those countries that already have the right policies in place. By rewarding poorer countries that put an emphasis on open markets and the rule of law, we will help put more countries on the path to prosperity. That's why earlier this year I sent a letter - that was also signed by Senators Santorum, Sununu, and Sessions - to appropriators asking them to appropriate as nearly as possible the amount requested by the President for this important initiative. I'm sorry to report that both the House and Senate came up short. The House version of the Foreign Operations Appropriations Bill funds only half the President's request, and the Senate version even less. I hope conferees on the bill will do better, but I'm not optimistic. At the same time, we also need to see some positive results coming from the Millennium Challenge Corporation. To date, no money has been awarded, and the MCC is still severely understaffed. We need a success story. Unless Congress can see an example of the MCC working - efficiently and effectively - we are unlikely to fund the MCC to requested levels. To that end, I hope the MCC will remain true to its purpose: to provide a relatively large sum for major projects in a few qualified countries. Sixteen countries qualified for funding under the MCC this year, and another seven threshold countries, who came close to qualifying, were announced last week. I'm pleased that eight of the sixteen and four of the seven are in sub-Saharan Africa. The temptation will be to fund qualified projects in all those countries. While I sympathize with that desire, given that the MCC has been severely under-funded to date, we should not give in to that temptation. Rather, the best projects in a few of the qualified countries should be fully funded. That may not seem fair to every country that has qualified, but it will ensure that Millennium Challenge Accounts achieve the desired impact - greatly improving a few qualified countries so they can rise up to the next level of development. If the MCC chooses to sprinkle its limited funds around all the qualified and threshold countries, the impact will be greatly diminished and the program will end up looking more like our traditional foreign aid programs rather than a new, bold initiative.