Bush's Fake Aid

Rolling Stone
The president's $5 billion program does more for foreign banks than the needy

In March 2002, with one war raging in Afghanistan and another looming in Iraq, President Bush announced that he intended to undercut terrorism by attacking poverty overseas. "I'm here today to announce a major new commitment by the United States to bring hope and opportunity to the world's poorest," Bush declared. Under his watch, the president said, America would increase its annual foreign aid to $5 billion. And instead of giving handouts, he added, the program would employ an entirely new model: investing in countries to spark their economic growth and holding them accountable for their policies. "I carry this commitment in my soul," Bush said, concluding his speech with a trademark religious touch. "We will make the world not only safer but better."

The president's plan looked revolutionary. U.S. aid efforts, long hampered by an ossified bureaucracy, often fail to ensure that recipient nations spend the money wisely. Bush's plan, by contrast, recognized that poverty cannot be conquered without economic development, and that countries should continue to receive aid only if they use it effectively. "It seemed a bold, exciting new experiment in development policy," says Mary McClymont, the former head of InterAction, the largest alliance of aid organizations in the U.S.

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.

Even leading conservatives who initially supported the program are now blasting the MCC. "The great promise of the Millennium Challenge was met with tremendous hope and anticipation," said Rep. Henry Hyde, who voted to authorize the initiative as chairman of the House International Relations Committee. But now, he said, "we see a program struggling to get off the ground . . . lacking the boldness necessary to break the cycle of poverty" -- a failure that "belies the original vision."
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