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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2648

Sri Lanka earmarked to get US $ 400-500 million from U.S. Millennium Challenge program

Daya Gamage – US National Correspondent Asian Tribune

Washington, D.C. 16 March ( The United States government has decided to include Sri Lanka, among several other countries, as a recipient of Millennium Challenge program, the Bush administrations most ambitious overseas economic development grant that promotes good governance, equality in disbursing economic benefits and arresting the growing poverty in the Third World.

The agreement between the two governments is expected to sign before the end of 2007, and the program is expected to bring approximately between US $ 400 to 500 million to Sri Lanka.

This was announced March 13 by the Chief Executive Officer of the Millennium Challenge Corporation (MCC) Ambassador John Danilovich when he testified before the U.S. House Subcommittee on State, Foreign Operations and Related Program at Capitol Hill in Washington.

Ambassador Danilovich, explaining the objectives of the program, told the Congress that the Millennium Challenge Corporation works to lift people around the world out of poverty through economic growth. Based on the American ideals of compassion for those in need, accountability, and responsibility, he said the U.S. innovative model awards development assistance to partner countries that

* practice sound policies, support good governance, invest in the health and education of their citizens, and promote economic freedom;

* are actively engaging in and pursuing their own development by identifying and implementing strategies for poverty reduction and economic growth; and

* demand nothing less than measurable and tangible results to make poverty reduction both sustainable and transformative.

To fulfill this mission and further U.S. track record of progress, the President has requested $3 billion in fiscal year 2008 for the Millennium Challenge Corporation, Danilovich said.

He disclosed, “In addition to the 11 countries with which we have already signed compacts, 14 others are compact-eligible: Bolivia, Burkina Faso, East Timor, Jordan, Lesotho, Moldova, Mongolia, Morocco, Mozambique, Namibia, Senegal, Sri Lanka, Tanzania, and Ukraine.”

“Of these, we expect Lesotho, Morocco, Mozambique, and Sri Lanka to sign compacts in fiscal year 2007,” said the CEO of the MCC. “The average size of each new compact has increased to between $400 and $500 million so as to reach an even greater number of beneficiaries and fund more transformative projects that will have a dramatic and long-lasting impact on poverty reduction through sustainable economic growth,” he told the Congressional Committee on March 13.

U.S. Forces Painful Policy Changes for Recipients: With the announcement of good news to Sri Lanka, and other countries, Asian Tribune presents here how the United States is forcing developing Third World nations to make painful policy changes, obviously toward establishing good governance, to be eligible for MCC grants.

On the other hand, the United States, through its overseas diplomatic missions and occasional visits of the State Department senior staffers to the region and the countries, categorically sound what the United States expect of them in the areas of market economy, human rights, freedom to dissent, freedom for international NGO’s to operate freely and restructuring of the system to enhance good governance to become eligible for grants from the MCC.

Based on the testimony of Ambassador John Danilovich to the House on 13 March, and other data collected by the Asian Tribune, this column will now give the reader a glimpse of U.S. objectives of the Bush administration’s most ambitious overseas ‘political program’ through the implementation of the MCC program.

Danilovich explained, in countries seeking to become U.S. partners, U.S. is seeing positive results unfold even before MCC spends one cent of taxpayer money. Presidents and ministers continue to approach the U.S., write, or ask American ambassadors in the field, “What reforms do we need to make to become eligible for MCC funding?” Even before spending any money, MCC has become a powerful incentive for countries to adopt good policies that lead to poverty reduction and economic growth.

The Millennium Challenge Corporation’s declared objectives, when President Bush announced it in 2002, are to reduce poverty and disease overseas. The MCC grant is so massive, in the case of Sri Lanka which will receive approximately US $400-500 million once the agreement is signed this year that would go only to nations that met U.S. criteria for open markets, social spending and honest, democratic governments which are the cornerstones of the foreign policy of the Bush administration.

Ambassador Danilovich admits that the MCC program creates an incentive for countries to make painful policy changes.
In June last year, the West African nation Gambia was taken out of the MCC program, and the U.S. Congress was told that “ evidence of growing human rights abuses, increased restrictions on political rights, civil liberties and press freedoms, as well as deteriorating economic policies and anticorruption efforts” made the MCC to take the policy decision.

The MCC’s continued performance-based approach to aid describes as the U.S use of indicators to assess whether a country rules justly, invests in its people, and promotes economic freedom reinforces the instrumental role policy performance plays in ensuring the most effective use of aid. This is the essence of Bush administration’s ‘promoting democracy overseas’ political program.
It goes hand in hand with: Sound policies create and sustain transformational development by strengthening free societies, opening markets, and lifting the less fortunate out of poverty. “The U.S. have witnessed”, according to the MCC chief, “remarkable improvements in data integrity, availability, and quality due to the increased pressure our candidate countries have placed on the third-party, non-U.S. governmental sources we use to supply our indicators. This allows MCC to continue making objective and transparent—rather than politically motivated—decisions about the countries with whom we partner”.

“There are many, many countries that want to be part of the Millennium Challenge account, and the competition is stiff, and the elbows are getting sharper,” says Ambassador Danilovich, and “if country X doesn’t want to participate, there are many other counties that do want to participate.”

Many countries like Sri Lanka will have to make painful decisions in the areas of human rights, good governance, freedom of speech which includes freedom of the press and equitable distribution wealth and development projects in all regions to continue getting the large grants from the MCC.

One incident that contributed to the suspension of MCC grants to Gambia was the 2005 murder of a prominent Gambian journalist gunned down on his way home from work.

- Asian Tribune -

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