Leading International NGOs, Think Tanks and Senators join President Bush in Support of Full Funding for MCC

Senate cuts called shortsighted and damaging to U.S. foreign policy interests.

Washington, D.C. – The Initiative for Global Development (IGD), a national alliance of business leaders championing effective solutions to global poverty, today joined a growing list of influential NGOs, other development policy experts and administration officials in speaking out strongly against a $525 million cut to the poverty fighting Millennium Challenge Corporation. The cut was part of the recently passed Senate 2008 Supplemental Appropriations Bill.

The IGD letter, signed by leading experts in international affairs and business, joins a chorus of support for MCC and its results-driven approach to poverty reduction in face of the Senate. Other organizations include the Center for Global Development, Interaction’s MCC Working Group, and the U.S Global Leadership Council, all of whom have reacted sharply to the Senate’s moves to cut funding for MCC. In addition, the respected human rights organization Freedom House came out in support of full funding for the Millennium Challenge Corporation and a bipartisan group of Senators, lead by Senators Sununu, Casey and Hagel, released a letter on June 10th asking for the cuts to be removed.

“The MCC is the only U.S. government agency tasked with fostering the long-term economic development of well-governed poor countries. With its emphasis on country ownership, increased transparency, and measurable results, it is the most forward-thinking and innovative development initiative in our foreign assistance portfolio,” the IGD signers stated. “We urge you to restore the MCC’s FY08 funding during the final negotiations on the emergency supplemental in order to preserve the U.S. commitment to reducing poverty through promoting long-term economic development.”

Late last month, immediately after the Senate acted to cut MCC funds, The Center for Global Development, an independent, not-for-profit think tank in Washington, DC, also criticized the action. “First, the amendments poach from the one agency dedicated to long-term global development and poverty reduction investments,” CGD analyst Shelia Herrling wrote on their website, “to service short-term humanitarian and political objectives. Ultimately this is a short-sighted response. It does not provide lasting solutions to the problems at hand or help as much the very countries the amendments are trying to help. In the case of food insecurity, the real answer is economic growth, particularly through investments in agricultural development, infrastructure and rural roads – the overwhelming portion of MCC investments… Second, the amendments undercut America's credibility as a trusted, credible partner.” CGD’s full statement “Sacrificing the MCA to be Good Just Isn’t Smart” can be found at: http://blogs.cgdev.org/mca-monitor/archives/2008/05/sacrificing_the.php

In a May press release, InterAction, the largest alliance of U.S.-based international development and humanitarian nongovernmental organizations, urged full restoration of MCC funding, saying “In a time when we are reminded every day of the terrible human toll when vulnerable societies are hit by high food prices or natural disasters, InterAction calls on Congress and the President to reject this false choice between short-term and long-term humanitarian action, and to find a fiscally responsible way to restore MCC funding.” The statement can be found at http://www.interaction.org/newswire/detail.php?id=6221. These sentiments were reinforced last week by InterAction’s Working Group on MCC which issued a strongly worded letter to congressional leadership and the President saying that by cutting MCC funds, “We are sacrificing the long-term sustainable solutions to poverty and rising food prices in the interest of emergency needs.” The InterAction Working Group letter also states, “The Millennium Challenge Account is an innovative way of doing development and deserves the chance to succeed.”

U.S. Global Leadership Campaign also last week weighed in on the issue and urged Congress “not to shortchange long-term development needs” and cut MCC funding. “While funding for Myanmar Cyclone relief and assistance to support Jordan's aid to hundreds of thousands of Iraqi refugees is urgent, it should not come at the expense of America's long-term development programs essential to combating global poverty and saving millions of lives around the world," stated Nancy Lindborg, Co-President of the U.S. Global Leadership Campaign. In their statement, Bill Lane, Co-President of the U.S. Global Leadership Campaign, said, "This is not an 'either or' proposition. Foreign assistance helps provide security at home while meeting humanitarian needs abroad. Congress should not shortchange existing international affairs programs to meet current emergencies, rather Congress should support both by providing emergency assistance and fully funding the MCC." The statement also reiterated that “adequate investments in the International Affairs Budget are critical to building global stability and achieving our national security and foreign policy goals. The U.S. Global Leadership Campaign calls on Congress and the Administration to reject the false choice between short-term and long-term humanitarian and development assistance and restore MCC funding. Their statement can be found at http://www.usglc.org/index.php?option=com_content&task=blogcategory&id=3&Itemid=26.

In addition, a bipartisan group of Senators, lead by Sens. Sununu, Casey and Hagel, released a letter asking for the cuts to be removed. The bipartisan letter, signed by 14 Senators, urged the Appropriators to restore MCC’s funding. “These cuts will severely curtail the MCC’s long-term programs for poverty reduction in Africa and send a dangerous message to the developing world regarding the U.S. government’s commitment to long-term economic development,” the senators said. MCC programs “buttress U.S. national security endeavors by expanding trade, promoting democracy, and engaging in effective diplomacy. Moreover, the MCC is designed to complement and support other U.S. development agencies by tackling poverty through the promotion of sustained economic growth.”

Speaking at the U.S Institute of Peace last week, President George W. Bush called on Congress to support the Millennium Challenge Corporation’s efforts to “help poor and struggling societies become healthy and prosperous.” He said that “the Millennium Challenge Account represents a different approach to development. It rewards nations that govern responsibly and fight corruption, and invest in the health and education of their people, and use the power of free markets and free trade to lift the people out of poverty. One thing in common for all these programs is we insist upon results and we measure. And the results are coming in, and millions of people are benefitting from this foreign policy initiative. And they deserve to be fully supported by the United States Congress.” Full text of the speech is at http://www.whitehouse.gov/news/releases/2008/06/20080605-2.html.

At the same event, National Security Advisor Stephen Hadley reiterated the president’s comments. “By signing a compact with the MCC, a nation commits to specific goals to improve health and education, fight corruption, and expand political and economic freedom. The United States, in turn, agrees to help and back projects that can produce transformational change in the countries that receive those grants. We urge Congress to recognize the value of this approach, and fully fund the President's request for the Millennium Challenge Corporation.” His remarks can be found at http://www.whitehouse.gov/news/releases/2008/06/20080605-10.html

Secretary of State Condoleezza Rice has also weighed in and written letters to Members of Congress urging full funding and opposing the Senate rescissions to MCC that offset increases in other accounts in the supplemental appropriations bill. “The MCC is a very significant component of our overall long-term development strategy, and I ask for your support to ensure that it retains the funds which Congress has appropriated to carry out its important work,” she wrote on May 21, 2008.

On a related note, Freedom House urged Congress to fully fund MCC in their Fiscal Year 2009 budget analysis, saying that MCC is “a valuable complement to other assistance programs as it rewards those countries whose governments govern justly and democratically and invest in their own people’s betterment…”

Immediately after the Senate cuts were announced, MCC’s Chief Executive Officer, Ambassador John Danilovich, said the action was “shortsighted and damaging to U.S. foreign policy interests.”

“Reneging on these agreements negotiated in good faith and based on predictable funding - - after countries have made substantial political, economic, and social reforms to qualify for this performance-based program, and have expended substantial amounts of their resources to develop proposals - - will seriously damage MCC’s ability to incentivize reform and jeopardize U.S. engagement with developing countries. The proposed Senate cuts have sent shockwaves through the 16 countries, over half of which are in sub-Sahara Africa, that already have MCC compacts,” Danilovich said. http://www.mcc.gov/press/releases/documents/release-052208-senatecuts.php