A delegation from the US Millennium Challenge Corporation (MCC) is visiting Mozambique to assess whether the country will indeed gain access to the funds available from the Millennium Challenge Account (MCA).
This is an initiative of US President George Bush, first announced in 2002, but only taking effect, after congressional approval, this year. Its initial funding is a billion dollars for the 2004 financial year. Bush has pledged to increase MCA funding to five billion dollars a year as from 2006. Although this would lift by 50 per cent what the US administration calls its "core development assistance", US foreign aid will still come nowhere near the United Nations target of 0.7 per cent of GDP.
Although Bush may well no longer be in office in 2006, the Millennium Challenge Corporation looks certain to continue, since the initiative enjoys bipartisan support in the US Congress.
By no means all developing countries are eligible to receive MCA funds. Initially only countries that can borrow from the World Bank's soft loans arm, the International Development Association (IDA), and which are not barred by US law from receiving assistance, may apply for funding. This means low income countries - the cut-off point for IDA assistance is a per capita national income of below 1,415 dollars a year.
The list will expand, however, and as from 2006, those countries which the World Bank regards as "lower middle income" (i.e. with a per capita annual income of up to 2,935 dollars) will be eligible for up to 25 per cent of MCA funding.
Not all candidate countries will receive MCA funding.
Countries will only be selected if the US administration believes that they are, in the words of Bush, "ruling justly, investing in their people and encouraging economic freedom". The MCC is to use 16 supposedly "objective" indicators to judge whether countries meet these criteria, and has given notice that it will pay particular attention to the level of corruption.
Just over a month ago, on 6 May, the MCC board of directors met and selected 16 countries eligible for the billion dollars to be disbursed in 2004. Although sub-Saharan Africa is easily the poorest region in the world, only eight African countries, including Mozambique, made it onto this short list. The others are: Benin, Cape Verde, Ghana, Lesotho, Madagascar, Mali and Senegal.
The remaining eight countries consist of three former Soviet bloc states (Armenia, Georgia and Mongolia), three in Latin America (Bolivia, Honduras and Nicaragua), and two in Asia (Sri Lanka and Vanuatu).
This list is only the first step. In its website, the MCC says it "will work with potential recipient countries to develop compacts that set forth a commitment between the United States and the developing country to meet agreed performance benchmarks".
So it is not enough that Mozambique already has its poverty relief strategy, known as PARPA (Action Plan for the Reduction of Absolute Poverty), and highly praised by the World Bank. Now it must draw up a complementary document to fit the Millennium Challenge criteria.
The MCC specifies that, in developing its "compact proposal", the country concerned should "Engage a broad array of its society in coming up with its development priorities; identify the measurable objectives that it wants to achieve; include a plan for achieving those objectives with targets to assess progress; develop transparent mechanisms to measure and evaluate whether targets are being met and to ensure financial accountability; and provide a plan for sustaining progress after the MCA compact ends".
Only if the MCC is satisfied with this proposal will the country receive any of the MCA funds.
A statement from the Finance Ministry announces that Mozambique has set up a high level group, coordinated by Prime Minister Luisa Diogo, to deal with this. It is backed up by a technical group including representatives from key ministries, business and civil society.
The MCC delegation arrived in Mozambique on Tuesday, and on Wednesday it met with Diogo, with the ministers of transport, industry and trade, public works, health and education, and the governor of the Bank of Mozambique.
On Thursday the delegation is scheduled to travel to Chokwe district in the southern province of Gaza, where it will visit the Macarretane dam, and the Limpopo railway line, which runs from Maputo port to Zimbabwe. The Limpopo line was severely damaged in the Limpopo floods of February 2000, and has been rehabilitated with US funding.
The MCC board is chaired by US secretary of state Colin Powell, and also includes treasury secretary John Snow, US trade representative Robert Zoellich, and the administrator of the US Agency for International Development (USAID), Andrew Natsios. The Chief Executive Office is Paul Applegarth, a senior advisor at the State Department.
Fonte: AIM
