Kinsley High School
Kinsley, Kansas
Teacher:
Dr. Galen R. Boehme
How to Improve the Millennium
Challenge Account
By:
Paul R. Strong III
Grade 12
The
Millennium Challenge Account can become an effective program if the problems
with the corruption indicator and overextension of the program are overcome by
promoting self-reliance and using existing programs effectively.
Many
problems exist with current United States foreign aid programs. One of the largest problems is aid given to areas that are
not in desperate need of aid. Israel
receives 30 percent of the United States foreign aid, but it is the 16th
richest country in the world. Other
aid programs fail to make large improvements in the developing countries.
From 1980 to 2000, the median per capita gross domestic product fell 7.4
percent for the countries with reliable financial data who were receiving United
States foreign aid.
President
George W. Bush proposed the Millennium Challenge Account in 2002.
The program sets up an account in which developed countries donate money
to developing countries that meets the account’s criteria.
The 16 criteria used in deciding the participating countries are divided
into the areas of governing justly, investing in the people, and providing
economic freedom. The developing
countries write their own aid programs and the benchmarks to be used to judge
improvement. The developed
countries will approve the program before money is given for the developing
country's program.
Allowing
developing countries to write their own aid programs is a positive aspect of the
Millennium Challenge Account. The
developing country will have a better knowledge of the needs of the people and
how effective the aid program will be. Fair
involvement of both parties reduces the political pressures of first world
thinking that developed countries can exert on developing countries.
Furthermore, the performance indicators help to decide fairly which
developing countries are eligible for the program.
The 16 performance indicators push the three basic policies a country
needs to develop: A just
government, investment in the people, and sound economic policies.
These two positive attributes lay a good foundation for a successful
program. These guidelines must be
followed and applied fairly to everyone for the program to be effective though.
The
corruption indicator has mixed benefits. The
indicator is designed to prevent money from being stolen or wasted in highly
corrupted areas. The program
will attempt to force reforms in areas that score below the median on the
corruption indicator by refusing aid to those countries.
Refusing aid to the most corrupt areas will not force reforms in those
areas because many other aid programs exist besides for the Millennium Challenge
Account. Another downfall is that
the indicator refuses aid to some of the worst areas.
In the first year of the program, four eligible countries will be refused
aid because of the corruption indicator. Two
of the four countries are Benin, one of the top ranking of the heavily indebted
poor countries, and Nicaragua, one of the lowest ranking countries in gross
national product per capita.
The
program’s effectiveness will be reduced by the expansion of eligible countries
in the third year of the program. The
expansion of the program will decrease the amount of aid available to qualifying
countries. Consequentially, the
growth of the participating countries will decrease from the decrease in aid.
The program’s high cost is another drawback.
For the program to achieve its goal of doubling the size of the smallest
economies in ten years, $ 60 billion will be needed by 2015.
The United States’ proportionate share will be $ 15 billion in 2015.
The United States will continue to operate other foreign aid programs,
adding to the account’s cost. Convincing
American taxpayers to pay the bill will be difficult if the program fails to
show success. The program must ask
itself if its current goals are reasonable.
Even with the best structure the program will fail if it sets
unachievable goals.
An effective
method of giving aid must be devised to help the most corrupted areas and allow
aid to be effective in all countries. The
solution to this dilemma lies in teaching people how to help themselves.
Heifer Project International allows people to help themselves by giving
one family a heifer to sustain themselves and requiring the first female calf to
be given to another needy family. The
program also teaches poor farmers better farming techniques.
Teaching people how to help themselves may be a solution to providing aid
to the most corrupt areas. A
corrupt government will not care if its poor people receive a few heifers or its
poor farmers are taught how to farm. Neither
will the government care if its citizens learn to read and write as long as the
government does not have to pay for the education. As people’s education grows, their lives will improve.
As the lives of the people improve the level of corruption in the
government will lower. With higher
levels of education and lower levels of government corruption, the economy will
grow and less aid will be needed for the country.
Teaching
people to help themselves is one solution to the problem of the high costs of
the Millennium Challenge Account. Using
effective existing NGOs and grassroots organizations can also reduce costs.
NGOs and grassroots organizations are closer to the people in need and
have already established effective programs.
By using these organizations, fewer new programs will have to be
established, thus saving money. NGOs
and especially grassroots organizations can also be more efficient because they
have a better knowledge of the people in need.
If an aid program wants to be effective it must concentrate on the people
needing help. Any aid program will
eventually fail if improving the lives of people in need is not the program’s
top goal.
If the
Millennium Challenge Account adheres to its goals, sets reasonable goals, and
works for the people in need, the program will be a success and will merit
additional funding to provide more foreign aid.
Bush, George
W. “Millennium Challenge
Account.” Paper in Singer Packet,
Catholic
Relief Service. “Education.”
March 28, 2003. www.catholicrelie
Doherty,
Brian. “WHO Cares?.”
January 2002. March 29, 2003. www.r
Faith
Action for People-Centered Development Policy.
“Testimony before the
Fuller,
Terry. Presentation on World Aid.
Kinsley High School, Kinsley, Kansas,
Microsoft.
Encarta International World Atlas.
“GNP Per Capita, Statistics.”
MIFTAH.
“US Foreign Aid to Israel.” April
17, 2003 www.miftah.org/Display.cfm?Docld=753&Categoryld=4
“The
Millennium Challenge Account.” Singer
Contest packet, 2003. January 16, 2003. www.singerfoundation.org/Current%20Con
Pasicolan,
Paola. "The Millennium
Challenge Account: Creating
Effective
Radelet,
Steve. "Initial Reactions to
the Announcement on the MCA." Singer
Radelet,
Steve. "Qualifying for the
millennium Challenge Account." December
U.
M. C. O. R. Linked in Mission:
UMCOR/Heifer Project International.
Video. 1994
Question
# 1: President Bush claimed that
most funds for development do not come from international aid.
He mentions three things that do fund development.
What are they?
·
President
Bush claims that more than international aid is needed for developing countries.
Domestic investments, foreign investments, and trade are all needed for a
country to develop. A country must
have domestic investments to develop. Domestic
investments are when a country’s money is invested into the country’s
economy. Domestic investments can
also be investing in a country’s population by providing education and heath
care. Foreign investments are also
needed for a country to develop. International
companies entering the country and providing work illustrates foreign
investment. Foreign investments are
also money given by development banks to developing countries.
Most of the money given should be in the forms of grants so the
developing country does not fall deeply into debt. Trade is very important to a developing nation.
Trade helps to bring money into the developing country.
Money from trade helps a developing country’s industries to develop. Trade can also help to attract foreign investments.
Question
# 2: President Bush reminded his
audience that successful development in a third world country requires more than
funds. What two items did he
mention in this regard?
·
Bush
states that a country must have more than funds to develop.
A developing country must have a just government, good public health and
education, and sound economic policies. A
just government is needed for a developing country to develop.
Corruption and a lack of respect for a law in a government can make
development very difficult. Good
public health and education are also needed for development.
Healthy citizens are more willing to work and are happier.
Providing education allows citizens to improve their standard of living.
Sound economic practices are also crucial for a country’s development.
Economic policies that promote entrepreneurship and free trade increase
development in a country. More businesses will start in a developing country or be
attracted to a developing country if a business can easily start and operate in
the country.
Question
# 3: When is money sometimes
counterproductive, according to President Bush?
·
Bush
believes that foreign aid can sometimes be counterproductive when the aid is
given to countries that do not rule justly, promote public health and education,
and have sound economic policies. Foreign
aid under such circumstances promotes these bad policies and prevents
development. When a country does
not rule justly, development is hampered. Corruption
and greed in the government prevent aid from reaching programs that will benefit
the people and help to develop the country.
Foreign aid is also counterproductive when given to a country that does
not promote public health or public education.
Unhealthy citizens cannot work as well or be as happy as healthy
citizens. Citizens that are uneducated cannot effectively work to
improve their lives and consequently the economy cannot improve.
Foreign aid is not beneficial when given to a country that does not
promote sound economic policies. The
aid would promote a system that prevents individuals from starting businesses
and in consequentially the growth of the economy will be slowed or stopped.
Question
# 4: Describe the Millennium
Challenge Account and include in your description what is anticipated from
donors and recipients.
·
The
Millennium Challenge Account is an international fund with many different
nations contributing. Money will be
given from the account to developing countries if the money is used to meet one
of three different criteria: Ruling
justly, investing in the country's citizens, and promoting economic freedoms.
These criteria are needed for a country to develop.
The goal of the account is not to simply give out money.
The goal of the account is to give developing nations the tools to
improve their nation.
Question
# 5: What are the three broad
standards that President Bush expects the leaders of the developing nations to
adopt?
·
The three
standards that President Bush wants leaders of developing countries to adopt are
political, legal, and economic equality. Every citizen should have a say in the government.
A government cannot rule justly when it ignores a minority.
President Bush also wants leaders of developing countries to push for
legal equality. The economy is
hampered and people are unhappy when equal justice does not apply to everyone.
If citizens cannot depend on their government to provide fair and equal
legal recourse for grievances, citizens will take justice into their own hands.
Vigilantism will lead to social and economic chaos.
Last, President Bush asks leaders of developing countries to practice
economic equality. Every citizen in a country should have the right to enter
into the economy. A free market
economy helps to expand and strengthen a country’s economy.
Question
# 6: Describe President Bush’s
challenge to developing banks and explain why or why not you favor it.
·
President
Bush challenges development banks to give more grants than loans to developing
nations and set criteria on how grants and loans can be used.
Giving more grants than loans to developing nations will be beneficial.
Grants will help to prevent developing nations from falling further into
debt. President Bush also
challenges development banks to set criteria for how loans and grants can be
used. The criteria President Bush
wants are ruling justly, investing in a country’s citizens, and having sound
economic policies. These criteria
are the same criteria used in the Millennium Challenge Account. As a developing country meets these criteria, its development
will perhaps reach a point that foreign aid will no longer be needed.
Once a country becomes developed, the country can help less developed
countries to develop.
Question
# 7: What percentage of our
national income (GNP) do you think the
United States government committed to foreign aid in 2002? First answer this question and
then use the Internet to find the answer.
·
I believed
that the percentage of the United States Gross National Product used for foreign
aid is one to two percent. The
actual percentage of the GNP that the United States uses for foreign aid was
only .11 percent in 2001. In 1969,
the United Nations set the recommendation that a country give .7 percent of its
GNP to foreign aid. The United
States donates the most money to foreign aid but ranks only 22nd in
the percentage of GNP donated to foreign aid.
The percentage of GNP used for foreign aid has been falling since 1960.
Only Denmark, Norway, Netherlands, Luxembourg, and Sweden gave over .7
percent in 2001. The United States is the richest country in the world and
should reach the .7 percent donated to foreign aid.
America loves to be first. Donating
to foreign aid is a good activity to be a leader in.
Question
# 8: Describe and defend a “Me
First” attitude.
·
A “me
first” philosophy places the concerns of the person’s home nation over those
of other nations. In a “me
first” philosophy, all of a nation’s money would be used to improving
itself. A nation’s first concern
should be to maintain and improve itself. A
nation cannot improve if it gives all of its money away to other nations.
A nation should invest its money into programs to promote fair
government, quality public health and education, and to strengthen the economy
at home. According to the “me
first” attitude, the gains from domestic investments are greater and can
mature more quickly than any type of foreign investments.
Question # 9: Describe and defend a “Mutual Benefit” attitude.
·
A “mutual benefit” attitude promotes the sharing of
resources among all nations. Sharing
resources among all nations benefits by improving a country’s industry,
creating peace, and helping developing nations to develop.
A country’s industry can be improved by importing natural resources
from other countries. Countries can also share technology and professional
expertise. Cooperation between two
nations also helps to prevent conflicts from turning into wars.
The closer two nations become, the easier conflicts can be peacefully
settled. Countries would try to
find peaceful solutions to problems because the benefits of peace are greater
than the benefits of war. Sharing
of resources can also help developing nations to develop even more.
Providing help to a developing nation allows all of the country’s
possible resources to be discovered. These
additional resources can be used to improve the lifestyle of both developed and
developing countries.
Question
# 10: Describe three unsuccessful
foreign aid programs operated by the United States government or private
American citizens.
The World Health Organization is an
ineffective foreign aid program because it promotes unneeded programs.
The World Health Organization is a part of the United Nations.
The organization was started in 1946 and is comprised today of 192 member
countries including the United States. The
program’s goal is to provide health care to all people.
The program has had much success but useless programs hurts its
effectiveness. The organization is
trying to force first world concerns’ on third world countries.
One example of this is billboards promoting wearing seatbelts in
countries where the people are too poor to own automobiles.
The money spent on the billboards could be better used to pay for
medication or health education. A
program cannot reach its full potential if it runs useless programs.
The Push into Southern Colombia
program is a good example of a program being ineffective by trying to solve a
problem inefficiently. The program,
designed by the Clinton administration, is designed to give aid to the Colombia
military. The published purpose of
the program is to allow the Colombia government to regain full control of their
country. The program is also
designed to stop drug trafficking by stopping drug production at its source.
This program ignores the fact that treatment for drug addiction is 23
times more effective than stopping the source of the drug abuse.
The program also ignores the consequences of Colombia regaining control
of the entire country. More aid
will have to be spent to repair the damages from the war.
An aid program will also be
unsuccessful if the program does not actively follow its guidelines.
The Generalized System of Preferences is a prime example of a program
which does not work hard to follow its guidelines.
The program’s purpose is to allow developing countries to export duty
free to the United States. In 1984,
an amendment was added to the program requiring the countries in the program to
follow international labor standards. The
problem with the program is that the standards are not actively enforced. The GSP only investigates labor standards violations when a
petition is filed even if evidence of violations exists.
Also the program only requires a country to attempt to correct one
violation even if many violations exist. El
Salvador actively represses labor union but remains in the GSP by attempting to
establish a minimum wage. Many more
ways exist in which an aid program can fail.
The true measure of the quality of a foreign aid program is if it
improves the lives of all.
Question # 11: Describe
three successful foreign aid programs operated by the United States
government or private American citizens.
·
Foreign aid can be effective when the aid promotes
fairness, provides long-term food security, and allows people to help
themselves.
A good example of a program that promotes
fairness is the American Friends Service Committee. The AFSC promotes fairness because of its Affirmative Action
Program. The Affirmative Action
Program was started in 1978. The
program’s purpose is to find and correct discriminatory actions within the
AFSC. Even the actions of people
with the best intentions can be thwarted because of how they think. Pushing some parts of first world thinking onto third world
countries can be a useless effort and wastes the sparse resources of a program.
The Affirmative Action Program purpose is to make the AFSC’s efforts
stronger and more effective.
The Catholic Relief Service’s
Food-Assisted Education program is an effective program that provides long-term
food security. The Food-Assisted
Education program first started in 1958 and currently works in Albania, India,
Sudan, Sierra Leone, Uganda, and several other countries.
The program provides a nutritional lunch to pre-school and primary school
students. Besides giving children
food, the program allows more children to attend school.
The child’s family knows that the child is receiving a healthy meal
when the child may not have one. The
program especially centers on girls and minorities.
The program has also helped to improve family health and income.
Another type of foreign aid program that is
effective allows the participants to help themselves. A
good example of one of these programs is the Lutheran World Relief Handcraft
Project. The Handcraft Project
gives poor artisans a fair market to sell their goods.
The program works in Africa, Asia, the Middle East, Latin America, and
the United States. Besides allowing
poor artisans access to a fair market, the program helps to preserve the
cultural arts in these communities. The
money that the artisans receive is reinvested into the community. Consequently, the program improves the future outlook of the
community.
A foreign aid program is successful
when it improves the lives of all people.
Question # 12:
Steve Radelet, Senior Fellow at the Center for Global Development,
believes we can do both – take care of our own people and lend a helping hand
to citizens of less developed countries. Explain
why you think we can or cannot offer aid to both.
·
I believe that we can and should give aid to our
citizens and to those of developing nations.
Giving aid to both groups will be difficult but the awards outweigh the
difficulties. We must be efficient
and careful in how aid money is spent and to whom the money is given.
Working closely with existing aid programs will help to make aid to both
groups more effective and prevent overlapping of programs.
Making sure our aid money is properly used will also help to make aid
money more effective. Many benefits
exist from providing aid to ourselves and to developing countries.
We cannot call ourselves developed while we still have poverty and hunger
in our own country. We should not
center all our attention on ourselves though; we must help our neighbors.
Helping other countries to develop brings their resources to the world
and also promotes peace.
Question # 13:
What do you think about Mr. Radelet’s assertion that “the
administration is leaning towards a system in which eligible countries would
write proposals (or business plans) describing their objectives and strategy,
how they would use the money, the benchmarks used for evaluation. Giving recipient countries this responsibility is a
revolutionary change in United States foreign assistance.”?
·
Allowing developing countries to decide how they
will spend the aid money and the benchmarks for evaluation is a very wise
policy. The developing country will
have the best knowledge of its people and what needs to be done to improve the
country’s conditions. A foreign
country cannot know what is truly the best for a developing country.
Allowing a developing country to set the benchmarks for evaluation is
also effective. The developing
country that designs the aid program will have a better knowledge of how
effective the program will be. Having developed nations approve the proposals allows the
developed countries to share their expertise with the developing countries.
Having the developed country approve the program helps to ensure the
money will be wisely used. When a
developed country writes an effective policy for how aid money will be spent,
more chances exit that the money will be used for the aid program.
Question # 14:
Which of Mr. Radelet’s three concerns regarding the Millennium
Challenge Account concerns you and why?
1.
as more countries in this income range become
eligible, there will be
fewer Millennium Challenge Account funds available for the poorest
countries that are implementing sound development strategies.
2.
the make-or-break requirement may unnecessarily
eliminate some countries.
3.
the separation of United States foreign assistance
into two agencies could lead to a lack of coordination and overlapping
functions.
·
I am very concerned with the United States foreign
aid being separated into two separate programs. Having two separate foreign aid programs can lead to
overlapping projects and ineffective use of money.
If the two foreign aid programs do not cooperate and communicate well,
some projects can overlap. Having
two programs doing the exact same activity in the exact same area is useless.
Confusion can result and the costs for the projects will be much greater
than if only one project exists. Besides
for the risk of overlapping projects, having two foreign aid programs can be
inefficient. Both projects will
need to have managers to run the program. If
the two programs have the same managers the costs of a second set of managers
will not exist. This extra money
can be used to help people in need instead of paying for salaries. If only one program exists, aid money will not have to be
separated between programs. Allowing
one program to have all the money can help to make the program’s projects more
effective.
Question # 15:
There is evidence of an increase in negative world opinion towards United
States foreign policy, not necessarily the American people.
To counter this negative perception of the United States some people want
the United States to concentrate more on weapons of mass assistance (WMA) and
less on weapons of mass destruction (WMD).
Please comment.
·
Reducing the number of weapons of mass destruction
and enlarging weapons of mass assistance will not help to improve the world
opinion of United States foreign aid programs.
The United States foreign aid program is fundamentally flawed.
The program mostly ignores the fact that most people are too proud to be
given money for being poor. If the
United States were a poor developing country and a developed country gave the
United States money for being poor, many people would consider the aid as an
insult. This is how citizens of developing countries feel about the United
States aid program. The United
States aid program must realize that poor countries want to help themselves.
These countries just lack certain requirements to improve.
Foreign aid programs must be designed to allow people to help themselves.
The Heifer program is a great example of this.
We must remember to be respectful of people receiving the aid and the
fact that the receivers truly want to help themselves.
Question # 16:
What does the World Bank recommend as the United State’s “just and
appropriate share” to reach the Millennium Development Goals by 2015?
Do you think our citizens can afford that kind of increase?
Defend your views.
·
The World Bank states that the United States’
share in the cost of the Millennium Challenge Account should be $10 billion to
$15 billion. This is a very good
size amount of money. We must not
forget that the United States also has many foreign aid programs that will not
fall under the Millennium Challenge Account.
Many of these programs cannot be scraped and their funds turned over to
the Millennium Challenge Account. The
Millennium Challenge Account may be a good program, but its support from the
American people will evaporate once taxes begin to increase to pay for the
account. To keep the program in the
good graces of the American public, the program must become cheaper.
One way that the cost can be reduced is to use already existing programs
instead of creating new programs. Private
investments and private firms can be used to lower the costs of the program. The
Millennium Challenge Account needs the United States’ support to be effective.
For the United States to support the account, the account must be popular
with the American people.
Question # 17:
What do you think about the request of Faith Action for People Centered
Development Policy’s request that tax dollars be used to fund, not only
government-sponsored foreign aid programs, but “that funds also go the NGOs
and grassroots organizations.”?
·
Funding grassroots and nongovernmental agencies in
addition to government-sponsored foreign aid programs with tax dollars holds
much potential. Grassroots
organizations and nongovernmental agencies have many benefits over
government-sponsored aid programs. Grassroots
organizations are much closer to the people of a certain area and have a more
intimate knowledge of the problems that the local people face.
These organizations can more effectively use the money on the local scale
than a government foreign aid program can do.
NGOs can be closer to the people being assisted than a government foreign
aid program. Grassroots
organizations and NGOs can also be more effective because less political
pressure exists on these two types of programs than on government foreign aid
programs. Grassroots organizations and NGOs must also be closely
watched and the money closely regulated because of the increase risk of fraud
with these programs.
Question # 18:
How many countries would be affected positively by health-related
investments according to the Commission on Macroeconomics and Health (CMH)?
·
The Commission on Macroeconomics and Health decided
that a total of 83 countries would positively benefit from health-related
investments. The health-related
investments are prevention education, care for the afflicted, treatment
services, and enlarged health infrastructures.
Prevention education is educating the public on how to prevent being
infected by a disease, especially deadly diseases like AIDS.
Care for people afflicted by a disease must be increased.
The sooner a person is better, the sooner the person can work and
consequentially improve the economy. Treatment
services must also be increased. Treatment
services are the availability of drugs to treat diseases.
An enlarged health infrastructure is also needed to improve health.
The health infrastructure involves hospitals, pharmacies, doctors,
nurses, and other medical personnel. Without
a strong health infrastructure, prevention and treatment of diseases will be
very difficult.
Question # 19:
According to the Commission on Macroeconomics and Health, how much would
be gained annually between 2015-2020 due to saved lives and increased economic
growth, if an increased investment were made in global AIDS and other health
services?
·
The Commission on Macroeconomics and Health
predicted that a total of eight million lives could be saved per year if global
health programs were properly funded. The
commission also predicts that between 2015 and 2020, $ 360 billion could be gain
per year from the lives saved. To
achieve these great rewards, $ 10 billion must be put into health programs
during 2003. For the programs to
remain effective $ 15.5 billion must be allocated to health programs in 2007.
Because of the United States’ Global National Product, the United
States’ share would be $ 2.5 billion in 2003 and nearly $ 3.9 billion in 2007.
The costs to the Untied States for international health programs are
great but the rewards are even greater. The
most important benefit is that as a country’s health begins to improve, its
economy will improve also. As the
economy improves, less money will be needed for foreign aid programs thus
freeing up money for other programs.
Question # 20:
Use the Internet for your research and name the two congressmen who
introduced H. R. 4524. Give a
2-line synopsis of that bill.
·
H. R. 4524 was a bill presented in the House of
Representatives in April of 2002. The
bill was presented by Christopher Smith and John LaFalce, both representatives
of New Jersey. The bill was written
to improve the Enhanced Highly Indebted Poor Countries Initiative.
The Enhanced Highly Indebted Poor Countries Initiative is a program
designed to reduce the debt in developing counties.
H. R. 4524 was written to increase the amount of debt relief available to
poor countries in the initiative. The
program also added additional requirements for debt cancellation.
The additional requirements are having sound budget procedures, ruling
justly, preventing corruption, and incorporating the debt relief into programs
preventing AIDS. A companion bill
to H. R. 4524 was presented to the Senate named S. 2210. H. R. 4524 was sent to the House International Relations then
to the House Financial Services. The
bill finally died in the Subcommittee on International Monetary Policy and Trade
because the 107th Congress adjourned.