U.S. takes on new sensible approach to tackle poverty


Thursday, October 21, 2004, 12:00 A.M.
Jerry Large / Times staff columnist

U.S. takes on new sensible approach to tackle poverty

We’re still trying to figure out how best to relate to the rest of the
world. For most of my life, our foreign relations were all about countering
the communists.

In the aftermath of 9/11 we’ve been fighting mad, striking out with our
military power and offending much of the world community in the process.

But something else has been going on in the background that makes more sense
for us and for the world. It’s a new approach, embodied in a new federal
agency, the Millennium Challenge Corporation.

Specifically it is about reducing poverty, but more generally it is about
bringing the best of ourselves to our relationships with other countries.

Inside and outside of government, influential people are talking about
development aid as a way to make a safer world for ourselves while we help
the world’s poorest people move up. This is not about foreign aid as it
existed during the Cold War, which often meant writing checks to any
dictator who’d promise to be anti-communist.

And it isn’t the kind of aid in which the donor country decides what is best
for the recipient without understanding local needs. Or at least it isn’t
supposed to be.

Paul Applegarth, the chief executive officer of the Millennium Challenge
Corporation, was in Seattle last week speaking to local business and
political leaders who are championing some of the same ideas MCC represents.

He told me the idea for MCC grew out of the Monterrey International
Conference on Financing for Development in 2002. The Bush administration
proposed a Millennium Challenge Account to help developing countries, and
Congress created the MCC to administer it.

The MCC opened for business in January. Business is the key word. The
expectation is that business is what will change the status of poor
countries, and toward that end the MCC seeks to reward countries that create
the right climate for economic growth.

“Our mission is poverty reduction in the poorest countries. Our technique is
growth,” Applegarth said.

Here’s how it works.

Seventy-five of the poorest countries were eligible for the first step, in
which they are graded based on report cards from several international
organizations. MCC uses 16 indicators to measure how each country is doing
in three areas, “ruling justly, investing in their people, and encouraging
economic freedom.”

Countries aren’t expected to be perfect, but better than most.

Sixteen countries made the cut this first time: Honduras, Nicaragua,
Bolivia, Mongolia, Georgia, Armenia, Sri Lanka, Vanuatu, Mozambique,
Madagascar, Lesotho, Mali, Benin, Senegal, Ghana and Cape Verde.

They don’t get money yet. There’s a second phase in which the countries tell
MCC their priorities. They present MCC with proposals that are judged on
whether they will work, how success will be measured, how the priorities
were picked (who all had a say), and what additional improvements will be
made in governance, education and so on.

The successful ones will enter a three- to five-year development partnership
with MCC.

In this arrangement, Applegarth said, “the country has to take
responsibility for its own growth, policies matter, and the focus is on

If the program is ever fully funded – Bush called for $5 billion a year
beginning in 2006 – it would be huge for a foreign-aid program.

It would be money well spent.

The Seattle group that invited Applegarth to speak here last week, the
Initiative for Global Development (founded by William H. Gates Sr., Dan
Evans, Bill Ruckelshaus and Bill Clapp) came together to push the idea that
eliminating extreme poverty is in America’s best interest, “a safer, more
humane and more prosperous world for all.”

Applegarth says no one imagined the United States would take the lead on
something like this, but he says the administration and people in both
parties in Congress recognized something was missing from our national
security strategy, which was based on two D’s: defense and diplomacy. There
needed to be a third D: development.

“Fundamentally, this is the way people want America to be in the world,” he
said, “This is the U.S. going out and trying to do something good for the
world, reduce poverty, but do it in a way that is very American.”

Jerry Large: 206-464-3346 or [email protected]