The Foreign Service Journal, January 2013

36 JANUARY 2013 | THE FOREIGN SERVICE JOURNAL S ince 2004, U.S. foreign aid has been split into two camps. That is when President George W. Bush cre- ated a new aid agency separate from the U.S. Agency for International Development: the MillenniumChal- lenge Corporation. Since 1961, USAID had been the centerpiece of U.S. aid programs that, in principle, are focused on getting help to those who need it most—the poor, the ill, the illiterate and those hurt by storms and earthquakes and famine. But its staff had shrunk from perhaps 15,000 during the VietnamWar to about 1,000 Foreign Service officers and 1,000 Civil Service staff as of 2002. (USAID is now in the process of doubling its FS staff.) Sometimes the State Department has intervened on political grounds to cut aid to governments seen as hostile to U.S. interests. In contrast, the MillenniumChallenge Corporation is tasked with applying a neutral yardstick, using business acumen to improve the economies of developing countries. Like a global banker, the MCC grades developing countries on whether they invest in health and education, move toward democracy and allow free press andmarkets. Countries with better THEMILLENNIUM CHALLENGE CORPORATION: OFF TOA GOOD START Eight years after the MCC’s creation, the verdict on its efforts to jump-start the process of development is not yet in. But there are reasons for optimism. BY BEN BARBER performance are eligible for potentially game-changing develop- ment grants of $500 million andmore, payable over five years. In addition, some poorly-performing countries can obtain “thresh- old” grants to bring themup to eligibility. The new agency was intended to stop wasting foreign aid by grading all recipient countries on howwell they govern their citi- zens. There would be nomore funding for corrupt dictators who let their own people starve. The flip side of the coin was the idea that USAIDwould spend the remainder of the foreign assistance budget on what some call the basket cases—e.g., Haiti and the Democratic Republic of the Congo. Its focus would be on humanitarian relief, education, medicine and food. A Too-Ambitious Goal? Some aid experts in Congress and at think-tanks say Pres. Bush was working from a Republican agenda dating back to the late Senator Jesse Helms, R-N.C., who tried to abolish USAID—which he famously claimed poured U.S. aid “down a rathole.” “The MCC evolved out of frustration at USAIDwithin the Bush administration,” says a senior congressional staffmember, speak- ing on condition of anonymity. “It was a different approach to foreign aid—not dealing with the basket cases but with countries capable of reaching the next level of development. “The MCC had a lot to recommend it—a lot which could apply to USAID,” the staffer adds. But the Bush administration “never wanted the MCC to be a separate agency fromUSAID.” Pres. Bush set an ambitious goal of $5 billion a year in funding, Ben Barber writes about the developing world for McClatchy Newspa- pers, and has also contributed to Newsday , the London Observer , the Christian Science Monitor , Foreign Affairs , the Washington Times , USA Today and Salon.com. From 2003 to 2010, he was a senior writer at the U.S. Agency for International Development. His photojournal- ism book, Ground Truth: Work, Play and Conflict inThe Third World , will be published later this year by de.MO Design.org.