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US Development Policy


Lots of crossed fingers both within the MCC and in the larger development community that John Danilovich will jumpstart the MCC. Interesting article in Wall Street Journal on Danilovich, copied below. And, as always, check out our MCA Monitor for more analysis on MCA issues.
New Chief of Bush's Foreign-Aid Plan Grapples With Cash Crunch
November 10, 2005; Page A6
WASHINGTON -- In 2002, President Bush announced that he would revolutionize how the U.S. distributes foreign aid, promising billions of dollars to stimulate economic growth in certain poor countries.
Three years later, that effort is in trouble. Mr. Bush has sought far less funding for his Millennium Challenge Corp. than he initially promised to request from Congress; lawmakers have given even less money than he has requested; the agency has awarded grants to just five countries, and critics say those it has given are too small to alter the fortunes of the recipients.
This means that John Danilovich, the former oil shipping executive and Republican activist who took over the agency this week, figures he has less than nine months to restore its reputation -- and, in the view of its supporters, save it from becoming a footnote in America's efforts to fight poverty overseas.
"I'd like to put the disenchantment that has grown in recent months behind us and move forward," Mr. Danilovich said in an interview. Instead of traveling abroad, he plans to spend his first two months on the job in the U.S. persuading lawmakers and antipoverty activists to give the agency another chance.
It is a new challenge for the 55-year-old Mr. Danilovich, who spent decades in the shipping industry and was a director of the Panama Canal Commission. Formerly a resident of London, he organized get-out-the-vote efforts among Republicans abroad for both presidents Bush, and served as ambassador to Costa Rica and Brazil.
But Mr. Danilovich has little experience addressing the severe poverty in the countries, such as Gambia and Mongolia, that could benefit most from Millennium Challenge grants. A number of the agency's supporters said they had hoped Mr. Bush would pick a more familiar figure to succeed Chief Executive Paul Appelgarth, whose tenure generated complaints on Capitol Hill that the corporation was too slow and provided grants -- called "compacts" -- that were too small.
"We see a program struggling to get off the ground and funding levels for compacts now emerging that lack the boldness necessary to break the cycle of poverty in countries prepared to take that step," Rep. Henry Hyde (R., Ill.), chairman of the House International Relations Committee, said during a hearing in April.
In Mr. Bush's original vision, the Millennium Challenge grants would be big enough to transform the local economy. They would go only to governments that met specific benchmarks for democratic rule, honest administration and free-market policies. Currently 23 countries are eligible to apply, and 18 are being coached through the process of becoming eligible. Madagascar, Honduras, Nicaragua, Georgia and Cape Verde have reached grant agreements with the agency, with three more in the pipeline.
Despite the initial hoopla over the Millennium Challenge Corp., Congress hasn't funded Mr. Bush's $3 billion budget request for the agency for the fiscal year starting Oct. 1. Mr. Bush initially had promised $5 billion; in the end, the House and Senate agreed on $1.77 billion for the year. In all, the agency has committed $1 billion of the $4.25 billion allocated by Congress.
"Left to me, once my country is listed (as eligible) I should be able to go and say, 'Give me the money to help my people,' " Ghana's president, John Kufuor, said in a recent interview.
Steve Radelet, a senior fellow at the Center for Global Development, a Washington think tank, said that if the agency doesn't improve its reputation, it may well find its funding frozen near the current level, instead of on the upward trajectory Mr. Bush envisioned. "This is kind of a make-or-break year for them," Mr. Radelet predicted.
Write to Michael M. Phillips at


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