Ghana To benefit From U.S' new approach on foreign aid

A revolution in U.S. foreign aid - rewarding countries for how they govern - is finally ready to get under way, almost two years after first promised by the Bush administration.

The program will favor countries whose governments are judged to be just rulers, welcoming hosts for foreign investment and promoters of projects to meet their people's basic health and education needs.

Corrupt police states need not apply.

Administration officials expect this year to inaugurate President Bush's plan, known as the Millennium Challenge Account, which he outlined in March 2002.

It contemplated $5 billion annually for the program starting in 2006, a 50 percent increase over the base foreign aid budget of $10 billion.

The administration had hoped for $1.3 billion for the current budget year, which began Oct. 1, as a starter; Congress has provided nothing so far but is expected to approve $1 billion after it reconvenes this month.

Bush's initiative came six months after the Sept. 11 attacks and clearly has a national security component.

"Poverty, weak institutions and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders," according to Bush's National Security Strategy report from September 2002.

Andrew Natsios, administrator of the Agency for International Development, calls it "a revolutionary new development initiative."

Based on long decades of experience, Natsios said, "money will not solve the problem of bad policy" but can accelerate progress in countries with enlightened governments.

Bush's idea is not without its critics.

Rep. Bob Menendez, D-N.J., an expert on Latin America, said the program does nothing over the short term to help that region's impoverished masses.

Chester Crocker, a top aide on Africa policy in the Reagan administration, said the program is worthwhile but limited. He points out that African countries being considered are small in number and in size.

"This particular approach is good in countries that sort of work," he said. "Philosophically, it makes some sense to do it this way. But it's not a silver bullet that answers all the problems."

The program seems to have attracted more interest abroad than at home. Natsios said in an interview that several governments are tailoring their policies so that they might be among the lucky dozen or so initial recipients of program money.

Natsios said he told the parliamentary leader in a European country that his government's inability to deal with corruption meant that it was out of the running for millennium challenge money.

Soon thereafter, Natsios said, the speaker saw to it that parliament approved three anti-corruption bills.

Natsios would not identify that country or any of the countries that are in the running.

Steve Radelet, of the Washington-based Center for Global Development, said potential beneficiaries in the first round, based on program criteria, are: Armenia, Bhutan, Ghana, Honduras, Lesotho, Mongolia, Nicaragua, Senegal, Sri Lanka and Vietnam.

Any administration move to include Vietnam would be contested in Congress because of the country's authoritarian government.

But Natsios said the lure of program money has galvanized a number of governments to mend their ways. Countries not selected the first time around could become eligible in the future.

It could go the other way as well. Bolivia, on Radelet's original list, may have disqualified itself after its pro-American president, Gonzalo Sanchez de Lozada, was forced out last month in a popular uprising. A rising star these days on the Bolivian political scene is Evo Morales, an avowed opponent of free markets.

Menendez and several colleagues are proposing a development fund of $500 million per year for Latin America to fight growing poverty. He noted that current U.S. aid for Latin America is skewed toward military and counternarcotics assistance.

Peru, Ecuador, Colombia, Guatemala and Venezuela, among others, "remain on the verge of chaos, increased conflict or political turmoil," Menendez said, and his information suggests none is a prospective first-round beneficiary country.

Rep. Tom Lantos, D-Calif., finds fault with the Bush program's eligibility criteria and its proposed organizational structure. Otherwise, Lantos said, the proposal is long overdue.

Lantos, senior Democrat on the House International Relations Committee, called the program "ambitious and farsighted," with "the potential of revolutionizing the way the United States promotes democracy and development abroad."