MCA: Iraq War, Budget Pressures Squeeze Aid for Poor Nations

Iraq War, Budget Pressures Squeeze Aid for Poor Nations

Fri Jan 28, 2005 -10:57 AM ET

Jim Lobe, OneWorld US

WASHINGTON, D.C., Jan 28 (OneWorld) – Even as the Bush administration
refutes charges by critics that U.S. aid to poor nations is miserly
compared to the contributions of other wealthy countries, it appears
to be quietly rolling back its previous commitments to increase
development assistance by 50 percent beginning next year.

According to the Wall Street Journal, the website for the Bush
administration’s new Millennium Challenge Account (MCA)–an innovative
program designed to substantially increase aid going to poor countries
that are implementing far-reaching political and economic reforms–has
been updated to erase a reference to his 2002 pledge to provide it
with US$5 billion by next October 1, the first day of the fiscal year.

Last Friday, according to the Journal, the website of the Millennium
Challenge Corporation (MCC)–which administers the MCA–noted that
“President Bush has pledged to increase funding to $5 billion a year
starting in FY06,” roughly a 50% increase over current U.S. core
development assistance.

This week, the MCC site now reads: “The president has pledged to
increase funding for the MCA to $5 billion in the future.”

Bush made his original pledge in the spring of 2002 at the UN’s
development aid conference in Monterey, Mexico where he said, “there
are no second class citizens in the human race. I carry this
commitment in my soul.”

MCC officials said they were informed by the White House’s Office of
Management and Budget (OMB) that, instead of the $5 billion request
they were expecting, Bush intended to ask for only $3 billion when he
submits his FY06 budget proposal to Congress after delivering his
State of the Union Address early next month.

As noted by the Journal, even if Congress funds Bush’s full request,
the MCA will still be $4.5 billion short of the total amount the
administration promised to provide over the program’s first three
years of operation. So far, Congress has provided only $2.5 billion to
the MCA, about 40 percent less than what Bush had originally proposed.

“From what we hear, the president appears to be stepping back from his
promise to fully fund (the MCA),” Mary McClymont, president of
Interaction–a coalition of 160 U.S. aid groups–told the Journal.

The cuts–and the effort to obscure them–come less than a month after
the U.S. was strongly criticized for initially pledging $15 million in
disaster relief for the December 26 tsunami disaster that took as many
as 200,000 lives in the Indian Ocean region.

Stung by one UN official’s observation that wealthy countries in
general had been “stingy” with aid to poor countries, the
administration raised its commitment to $350 million, an amount it
doubled this past week. The episode, however, drew renewed attention
to the fact that, of the world’s 21 biggest donors, the United States
ranks 19th in the amount of development aid it provides as a
percentage of its gross domestic product (GDP )–or only 0.15 percent.

Bush has in fact tried to increase that percentage through the MCA and
a five-year $10 billion emergency program to fight AIDS ,
tuberculosis, and malaria in 15 mainly African nations. But the
increase is not enough to significantly alter Washington’s low
ranking, particularly compared to the Nordic and Benelux countries of
Europe whose per capita GDP aid contributions are five or six times

Meanwhile, in a major report released earlier this month, economist
Jeffrey Sachs, director of the UN’s Millennium Project, warned that
poor countries would not be able to reach the “Millennium Development
Goals” (MDGs)–among them, halving the number of people living in
absolute poverty and hunger by 2015–without a doubling of development
assistance from the world’s wealthy countries.

At the same time, British Prime Minister Tony Blair is calling for the
world’s wealthiest nations to commit themselves to a global Marshall
Plan that would provide the world’s poorest nations with the resources
they need to achieve the MDGs on time, as agreed to by the world’s
leaders at the Millennium Summit in 2000.

“Time is running out for millions living in poverty and rich countries
must act now,” noted Katia Maia of the international development
agency Oxfam at the World Social Summit in Porto Alegre, Brazil
Thursday. “It is absolutely shameful that at the start of the 21st
century, more than a billion people are living in abject poverty, and
more than 100 million children don’t go to primary school.”

In this context, any retreat from previous public commitments to
increase aid is particularly damaging. Development groups and
activists argue that Bush has sufficient political capital to fulfill
his promise if he were as devoted to doing so as he is to other
priorities–such as the Iraq war for which he just asked Congress to
approve $80 billion in a supplemental appropriation for FY05.

“Bush’s ‘compassionate conservatism’, it turns out, is really
‘compassionate charades’,” noted Salih Booker, director of Africa
Action. The organization has called for Bush to increase aid to Africa
and support comprehensive debt relief for the poorest nations of the
region as proposed by Blair’s government. “The sad reality is that
2005 risks being another year of compassionate showmanship rather than
a year of sea change.”

Eight low-income African countries are among the 15 nations worldwide
whose record on fighting corruption, implementing market reforms,
respecting human rights, and fighting absolute poverty and disease
make them eligible for MCA assistance.

Countries that meet these criteria include Armenia, Benin, Bolivia,
Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali,
Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, and