Newell-Fonda High School
Newell, Iowa
Teacher: Mrs. Doonan

 

Millennium Challenge Account
By Eric Johnson
12th Grade

“Give a man an ear of corn and he will eat for a day.  Teach a man to plant corn, and he will eat for a lifetime.”  This famous saying is at the root of the modifications President Bush has recently proposed for foreign aid to needy countries.  Many countries in the world oppress their citizens and do not promote basic economic growth for themselves. Yet, the United States continues to pour billions of dollars into these countries without expecting reform in exchange.  While the Millennium Challenge Account concept that President Bush is proposing would initially cost the American taxpayers more money, it would allow Third World countries to stand by themselves in the long run.

The first question that must be answered in regards to additional foreign aid is this:  can the United States taxpayers afford to be taxed any more than they already are?  The real question is can they afford not to encourage economic and social growth in countries that have so much less than the United States?  These countries need to be encouraged in developing their own standard for growth and reform as a nation.  To use taxpayers money today in this way can encourage these countries toward independence for tomorrow. 

Many Americans do not agree with President Bush.  They say that the United States is already giving enough toward foreign aid.  Some may say that giving 17.1 billion dollars in aid each year is more that enough to give to struggling countries, so why would the President want to increase that number by 50% by the year 2006?  Because by the year 2106, those destitute countries might be able to take the initiative to get off the aid and be able to fend for themselves as able members of global society.  The reason that this idea will work is because we are not just giving the money to all countries in need.  A set of guidelines will be put into place so that only deserving countries will receive aid. It is still the United States’ money until it has been given away.  They and they alone can decide who is worthy of the foreign aid.  If those countries receiving U.S. aid actually succeed in the necessary reforms, then all doubters will be proven wrong.

The three requirements set up to allow a country to receive aid from the United States are the fundamentals of a healthy society.  The first of these fundamentals is good governance.  Putting value on human rights, getting rid of corruption, and following the rule of law must take place if this plan is going to be successful and flourish.  The second concept promotes the health and education of their people.  Taking a stock in education, and putting emphasis on health care and immunization is a key for this plan to work.  It is vital to promote health and education to citizens who can then give back to the country that has assisted them.  The final requirement for a receiving country to earn aid is to promote sound economic policies that foster enterprise and entrepreneurship.  This means that they have to encourage the creativity of their private citizens to develop new products and services that will serve the need of all who inhabit the country.

Under President Bush’s plan, Third World countries have hope for development that would reduce their dependence on wealthier nations.  As the countries strive to meet the criteria set forth in the Millennium Challenge Account, the benefits that will come to the country will be two fold.  Initially the immediate benefit will be receiving the financial aid, but in the process of qualifying for the aid, as the developing countries improve their own economic growth, root out corruption, and improve education and health care for their people, they will receive even greater rewards.  They will develop the independence that will eventually allow them to stand-alone.  This is the goal of the Millennium Challenge Account.  As President Bush stated in his speech on March 14, 2002,

“The evidence shows that where nations adopt sounds policies, a dollar of foreign aid attracts $2 of private investment.  And when development aid rewards reform and responsibility, it lifts almost four times as many people out of poverty, compared to the old approach of writing checks without regard to results.”

The idea of the Millennium Challenge Account that President is proposing in the beginning would cost the American taxpayer money, but soon poverty stricken countries would be able to take responsibility for their own economic well-being. All Americans are financially able to give of themselves in order to help out a fellow man.  All of the guidelines presented in the Presidents plan are moving in the right direction and soon will be setting the world free, free from dependence on other nations.  Handouts are not the answer. They encourage dependence. The United States must be at the forefront of leading and teaching.  Soon the whole world will be eating for a lifetime.

Works Cited

“Millennium Challenge Account Update.”  3 June, 2002, 6 January, 2003 http://www.usaid.gov/press/releases/2002/fs_mca.html

Questions 

Q1- 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?


A-  Domestic capital, foreign investment, and trade.


Q2- 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?


A- Security, and People who are literate, healthy and prepared and ready to work.


Q3- When is money sometimes counterproductive, according to President Bush?


A-  Money that is not accompanied by legal and economic reform.


Q4- Describe the Millennium Challenge Account and include in your description what is anticipated 
from donors and recipients.


A- An account set up by the U.S. Government to help countries that govern fairly and promote 
freedom that need financial aid.


Q5- What are the three broad standards that President Bush expects the leaders of the developing 
nations to adopt?


A- Govern justly, invest in their people and encourage economic freedoms.


Q6- Describe President Bush’s challenge to development banks and explain why or why not 
you favor it.


A- Adopt the same policies as the government. The money should be in the form of grants rather 
than loans. Yes, because it will only help other people in the pursuit to solve the poverty problem.


Q7- 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.


A- 35%, 1%


Q8- Describe and defend a “Me First” attitude. (Use your head ¾ you won’t find the answer in 
the required reading.)


A- Looking out for yourself only.  Somebody will always be the poorest so why even try to help 
them out.


Q9- Describe and defend a “Mutual Benefit” attitude. (Use your head ¾ you won’t find the answer 
in the required reading.)


A- You help somebody and they will help you out in return.  If  we all work together then maybe 
the poverty level will not be as great.


Q10- Describe three unsuccessful foreign aid programs operated by the U.S. government or 
private American citizens. (Do not use the programs discussed in the testimony of Faith Action 
for People-Centered Development Policy included in your required reading. Conduct research 
using the Internet. Duplicate examples from the same class will not be accepted.)


	A- The Roosevelt-Litvinov pact did not bring about a great increase in trade with the U.S.S.R. 
though Franklin D. Roosevelt had hoped to alleviate the Depression through increased foreign trade. This pact did not work out well for the U.S. because the Russians never offered a debt settlement satisfactory to American negotiators, nor did they buy much American goods. Nor did the Russians refrain from continuing their support of subversive agents in our country.


	B- The economist Walt Rostow calculated in 1960 the aid increase (roughly double the aid levels 
at the time) that would lift Asia, Africa, and Latin America into self-sustaining growth.  Despite the 
looming expiration of the 15-year aid window, then World Bank President Robert McNamara 
called for a doubling of aid in 1973. The call for doubling was repeated at the World Bank in its 
1990 “World

 Development Report.” Not to be outdone, current World Bank President James 
Wolfensohn is now advocating a doubling of aid. The growth outcome in most aid recipients 
has been extremely disappointing. For example, on average, aid-intensive African nations saw 
growth decline despite constant increases in aid as a percentage of their income.


	C-Kenya, where President Daniel arap Moi has mismanaged the economy since 1978.  
Moi has consistently failed to keep conditions on the 19 economic reform loans his government 
obtained from the World Bank and IMF since he took office. How might international aid 
organizations explain the selectivity guidelines that awarded President Moi yet another reform 
loan from the World Bank and another from the IMF in 2000, the same year prominent members 
of Moi’s government appeared on a corruption “list of shame” issued by Kenya’s parliament? 
Since then, Moi has again failed to deliver on his economic reform promises, and international 
rating agencies still rank the Kenyan government among the world’s most corrupt and lawless.


Q11- Describe three successful foreign aid programs operated by the U.S. government or private 
American citizens. (Do not use the programs discussed in the testimony of Faith Action for 
People-Centered Development Policy included in your required reading. Conduct research using 
the Internet. Duplicate examples from the same class will not be accepted.)


	A- The cartel’s efforts have succeeded: Total assistance flows to developing countries have doubled several times since the early days of large-scale foreign aid. (Meanwhile, the World Bank’s staff increased from 657 people in 1959–60 to some 10,000 today.) In fact, if all foreign aid given since 1950 had been invested in U.S. Treasury bills, the cumulative assets of poor countries by 2001 from foreign aid alone would have amounted to $2.3 trillion. This aid may have helped achieve such important accomplishments as lower infant mortality and rising literacy throughout the developing world. And high growth in aid-intensive countries like Botswana and Uganda is something to which aid agencies can (and do) point.


	B- Meimouna is one of many women in her village who have benefitted from a Lutheran World Federation (LWF) program to help them generate income for themselves so they can help support their families. When LWF first began its work in the village, it was strategically planting trees to keep the Sahara Desert sands back so villagers could grow more of their own food on what little fertile land they have. The village had already lost several buildings to the encroaching sand dunes as well. Then LWF constructed a small building in which women artisans could work. With the addition of small loans to some of the women so they can buy supplies, the program has enabled them to work on crafts which they can then sell in the capital city.


	C- Catholic Relief Services provides humanitarian assistance to the people of Iraq on the basis of need not creed through the local church, mainly through Caritas Iraq. In order to better assist those in need, especially the most vulnerable populations, CRS has helped Caritas Iraq improve its organizational capacities and create relation-ships with other local partners such as the Iraqi Red Crescent Society. CRS also works directly with the Archdiocese of Basra in southern Iraq, where it supports the distribution of basic medicines for vulnerable people and vocational training.


Q12- Steve Radelet, Senior Fellow at the Center for Global Development, believes we can do both ¾ 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.


A- Yes, because we have enough money to go around.


Q13- 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 US foreign assistance.”?


A- Yes. Because unless they express interest they should not receive money from us.


Q14- Which of Mr. Radelet’s three concerns regarding the MCA concerns you and why?


	1. as more countries in this income range become eligible, there will be fewer MCA 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 US foreign assistance into two agencies could lead to a lack of coordination 
	and overlapping functions.


A- 1. The more countries that figure out that this is a good plan the less money that there will be to 
go around or they will have to put more money into the project which will put a strain on the American 
Tax payer


Q15- There is evidence of an increase in negative world opinion towards U.S. foreign policy, not 
necessarily the American people. To counter this negative perception of the U.S. some people 
want the U.S. to concentrate more on weapons of mass assistance (WMA) and less on weapons 
of mass destruction (WMD). Please comment.


A- Helping people is always going to be better than killing them.


Q16- 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.


A- $10-15 Billion a Year in additional foreign aid.  Yes we are all rich in comparison to the other 
countries and it won’t hurt us to give of ourselves to help others


Q17- 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 to NGOs and grassroots organizations.”?


A- No, because then government will start to control the organizations.  They can function quite well 
on their own.


Q18- How many countries would be affected positively y health-related investments according to 
the Commission on Macro-economics and Health (CMH)?

A- 83


Q19- According to the CMH, 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?
A- $360 billion


Q20- Use the Internet for your research and name the two congressmen who introduced H.R. 4524. 
Give a 2-line synopsis of that bill.
A- Mr. Christopher H. Smith, New Jersey and Mr. James A Leach, Iowa.

B- To ensure that the Enhanced Highly Indebted Poor Countries Initiative achieves the objective 
of substantially increasing resources available for human development and poverty reduction in 
heavily indebted poor countries, and for other purposes.

                                                                                 Back