The Millennium Challenge Corporation In Africa

Floor Speech

THE MILLENNIUM CHALLENGE CORPORATION IN AFRICA -- (Extensions of Remarks - June 29, 2007)

* Mr. SMITH of New Jersey. Madam Speaker, this afternoon the Subcommittee on Africa and Global Health held a hearing on the Millennium Challenge Corporation in Africa. The MCC program, which was announced by President Bush on March 14, 2002 and established in January 2004, marked an incredible new approach to U.S. foreign assistance. It is based on the principle that assistance is most effective when it promotes good governance, investments in people, and economic freedom. Its goal is to reduce global poverty through the promotion of sustainable economic growth.

* Grants from the Millennium Challenge Account are limited to countries with a per capita income less than $3,465. In addition, eligible countries must have an established record that satisfies 16 performance indicators in the three areas I just noted. One of the most important is a pass/fail test for fighting corruption. Seven grants--called compacts--have been signed so far for countries in Africa, with a total value of about $2.4 billion. Additional compacts are pending for the Continent.

* The establishment of the Millennium Challenge Account is innovative in several respects. For one, it mandates that program proposals be developed solely by qualified countries themselves with the involvement of a broad base of their civil society. It also provides assistance to countries without regard to U.S. strategic foreign policy objectives, providing an opportunity to countries that may normally be overlooked by the United States as well as other bilateral donors. However, it cannot be said that the MCC for that reason does not serve U.S. interests. In fact, authentic development as envisioned by the MCC principle leads to a more prosperous, peaceful, and just world for all of us.

* Finally, I would assert that MCC is most laudable because it recognizes the potential of the poor to lift themselves and their country out of the clutches of poverty if they are provided with the necessary infrastructure and tools. An important correlative to this is the incentive provided by MCC to the recipient country's government to focus on and respond to the needs of the poor segment of their population. The MCC provides an important means of empowerment for those who have the greatest difficulty attaining it.

* A glance at the various compacts and threshold programs in Africa highlights the extraordinary needs and the necessity of expanding those programs. The subcommittee held a hearing on Africa's water crisis just a few weeks ago on May 16th, where we lamented the fact that over 1.1 billion people in developing countries do not have adequate access to safe water and approximately 2.6 billion people live without basic sanitation. We heard testimony that the reasons for these deficiencies are rooted in inequalities. The poor not only have significantly less access to water, but even when they do have access, they pay significantly more for it. The MCC with its focus on programming for the poor is one mechanism that the United States is utilizing to address this issue at its root cause.

* On the political level, it is worth noting that our parliamentary colleagues in developing countries do not always have the resources they need to fulfill their role in a democracy. The MCC threshold program in Malawi will provide the National Assembly of that country with the capacity for all 13 committees to meet and perform their oversight function--a first in Malawi's history.

* As with all new programs, the MCC has encountered challenges in Africa that we examined in the course of the hearing. One of the greatest has been providing disbursements in a timely manner while ensuring accountability and sustainability. Another that we are encountering time and again in numerous development efforts for Africa, including programs for HIV/AIDS, is partner country capacity. It is extremely difficult to implement country-driven initiatives when the country itself is lacking educated, experienced personnel to do the work. However, neither of these or other challenges warrant scaling back on MCC programming, but instead provide the opportunity to search for solutions to these issues together with the recipient country government as well as other bilateral and multilateral assistance donors. The MCC is not the total solution to African development, but it is an important and significant contribution, both in terms of resources and philosophy, to a more global strategy.

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