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Rolling Stone : Bush’s Fake Aid

March 16, 2006

Bush’s Fake Aid
The president’s $5 billion program does more for foreign banks than the needy

In a pattern that has become a hallmark of the administration, however, Bush’s aid initiative — the Millennium Challenge Corporation — has become an object lesson in dramatic ideas followed by disastrous action. Over the past three months, Rolling Stone has reviewed the MCC’s “compacts” with foreign countries, compared the work of similar agencies and spoken with a wide range of supporters and critics — including many of the conservative insiders responsible for creating the program. Instead of hiring aid experts, the administration at first staffed the MCC with conservative ideologues. Rather than partnering with other countries, the White House operated on its own, disconnected from the rest of the world. And when experts criticized the new agency, the administration responded with a bunker mentality, refusing to talk to detractors and learn from its mistakes.

Today, four years after the president announced his initiative, the MCC has signed compacts with six countries — offering only $1.2 billion in assistance. In February, Bush released a budget for 2007 that falls another $2 billion short of his pledge, bringing the total aid to less than half of what he promised. And the new budget once again pushes back the goal, stating that the administration “expects” to provide $5 billion annually in 2008.

“Not only has President Bush broken his word on funding, he has not put in the effort required to turn this excellent idea into a lifesaving reality,” says Jamie Drummond, executive director of DATA, the international aid organization co-founded by Bono.

What went wrong: (according to the article, I just reformatted)
1. It took the MCC more than a year to establish guidelines for handing out aid.
2. the officials who created the MCC wanted to limit its staff to no more than 100 — making it effectively impossible to distribute $5 billion in aid. By comparison, MCC expert Steve Radelet has found, Britain’s Department for International Development, which disburses some $3.3 billion a year in aid, has a staff of 2,200. Today the MCC has a staff of fewer than 200 — not nearly enough to do the job. According to the GAO, the program lacks the “critical skills needed to carry out its mission.”
3. Those charged with setting up the MCC were drawn not from the world of international aid but from the Treasury Department and the White House budget office.
4. The CEO (an ex Bank of America executive) suggested, to quote the article’s conclusion of his report: “paying Wall Street honchos extra to aid the poor.”
5. A review of the program’s compacts reveals that the MCC has favored projects closely linked to the private sector — especially those that benefit commercial deals and investors. Rather than funding projects that directly aid the poor — building schools and hospitals, providing electricity and clean water to rural villages — the MCC takes a trickledown approach. Help private companies prosper, the reasoning goes, and jobs for the poor will follow.
6. In some cases, the MCC appears to be using aid to reward countries that support the president’s war on terror — even though it is not supposed to base assistance on political favoritism.
Go read the article, there’s sooo much more.

Rolling Stone : Bush’s Fake Aid

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