MCC, Foreign Aid & Transformational Diplomacy

Much of last week’s presentations on the new "transformational diplomacy" agenda by officials such as Secretary Rice and Director for Policy Planning at the State Department Steve Krasner focused on the implications of the move for USAID. But what does "transformational diplomacy" hold in store for the Bush Administration's other, newer US aid agency, the MCC?It seems that for now the MCC will remain a distinct entity, with extensive "coordination" with Tobias, who has been chosen to take on a dual role as both the Administrator of USAID and a newly created position as Director of Foreign Assistance at State. Secretary Rice, at a presentation last week in front of USAID staff, was explicit that initiatives such as the MCC and PEPFAR would remain distinct entities, albeit with greater interaction among USAID and State. So while the MCC will technically remain unaffected by this round of reorganization, the changes nonetheless brings about some potentially tricky questions.For instance, will this new foreign aid structure have any effect on MCC Board decisions? The dual-hat role of new aid czar Tobias could cause some tension in MCC Board meetings, where key decisions are made regarding country eligibility and program funding approval. The presence of another representative from State (Secretary Rice chairs the Board) risks further importing political considerations into the body; at the very least, Tobias' involvement may send the wrong signals to applicants, who could perceive the MCC as no longer exempt from broader political considerations.Additionally, what exactly does Secretary’s Rice statement -- that the MCC will work more synergistically with USAID and State -- mean both at an operational level here in DC and on the ground? Do the architects of transformational diplomacy envision coordination by applicants? Interagency links here in Washington? Or something less formal?And will more closely joining up the efforts of USAID and State on foreign assistance -- an important plank of the Secretary's plan to reorient diplomacy to better serve our national security interests -- leave the MCC on the periphery of the larger foreign aid agenda? It is too early to say for certain. But the explicitly political thrust of the recent changes underscores a challenge the MCC has faced since its inception: proving that it has the mandate and the will to remain independent, impartial and de-political by rewarding good performers, not necessarily strategically important states.