March 6, 2003
Speaking on behalf of the nation's largest humanitarian relief and development agencies, Save the Children President Charles F. MacCormack urges Congress to support the Bush administration’s pledge to increase by 50 percent funding for international programs that help children and their families survive and thrive through the Millennium Challenge Account; to ensure that these new funds do not come at the expense of other core development programs; and to consider this an opportunity to map out a U.S. foreign-assistance strategy that supplements the roles that the U.S. Agency for International Development and private, nongovernmental organizations like Save the Children can play in delivering these services. Here is his statement on the administration's proposed Millennium Challenge Account, made before the House International Relations Committee.
Thank you Mr. Chairman and Representative Lantos, for the opportunity to testify before this committee on the Millennium Challenge Account (MCA). I know that I speak for my colleagues in the non-governmental organization (NGO) community, when I say how much we appreciate your leadership, commitment and cooperation to ensuring that the Millennium Challenge Account enhances the U.S. foreign assistance program.
Save the Children was founded in 1932 as a nonprofit child-assistance organization to make lasting, positive change in the lives of children in need. Today we work in 18 states across the United States as well as in more than 40 countries in the developing world to help children and families improve their health, education and economic opportunities. We also mobilize rapid life-support assistance for children and families caught in conflicts and other humanitarian emergencies. We have been working with a coalition of organizations on developing a policy consensus around the Millennium Challenge Account. Today I am going to try to represent broadly some of the views and concerns from the NGO community around the MCA.
An opportunity to revitalize and redefine U.S. foreign-assistance strategy
When the President announced the MCA initiative at the Monterey Conference nearly a year ago, we in the NGO community were among those cheering the loudest. Not only because the President announced a 50 percent increase in resources going towards development, though that would be reason enough. To us the most important part of the announcement was that the President recognized combating poverty to be -- and I quote --“a moral imperative and one of the top priorities of U.S. international policy.”
We believe President Bush’s strong and consistent statements reflect a growing consensus in this country that development assistance can bring lasting and positive change in the lives of the world’s poorest people. The MCA provides the opportunity to revitalize and redefine the foreign assistance strategy of the United States and to maximize the impact, effectiveness and coherence of our aid programs. The debate and discussion around the creation of the Millennium Challenge Corporation will have a critical effect on how development is carried out in the years to come by the United States and other donor nations.
Save the Children sees successful results of U.S. support
Why does Save the Children support the MCA? We know from our own experience that sustainable economic and social growth is the best form of development. Three decades ago, we were working in Korea, Thailand, Malaysia, Lebanon, Tunisia, the Dominican Republic and Mexico. These countries have now all “graduated” from our direct support, and are able to fund their basic programs for children and families from their own resources. We have seen lasting and positive change.
My remarks will attempt to define a framework for development that would help expand the moral imperative the President talks about and increase our nation’s ability to help many more children and their families around the world break the cycle of poverty, and build a brighter, more prosperous and stable future.
Let me make four key points:
Millennium Challenge Account only one piece of the puzzle
First, we believe that the MCA, although representing a significant step forward, should be seen as one piece of the larger U.S. foreign assistance strategy puzzle. We believe that a new corporation to administer MCA should work collaboratively with the U.S. Agency for International Development. USAID is essential to the success of the MCA initiative. We need one strong foreign aid program where the best of both the MCA and USAID are combined. We believe that the accountability measures, the focus on results and the absence of earmarking in the MCA should be a key part of the work of USAID. Likewise we want to see the knowledge, skills, and hands-on development assistance experience of USAID brought to bear in the delivery of MCA assistance. We should be using the MCA to improve the impact of our overall development program and not to replace it.
Similarly, we must seek coherence in the implementation of our foreign assistance programs. For example, while it is clear that the U.S. Department of Health and Human Services (HHS) has an important role to play in key technical areas related to HIV/AIDS, we believe that USAID can and should continue to play a leadership and coordinating role in delivering such assistance. USAID has the technical staff, field-based presence, and technical and operational partners already in place, and working on prevention, care, and treatment efforts in developing countries. We become concerned when we hear about domestic agencies hiring staff and gearing up in such areas as child labor, civil society strengthening and basic education in the developing world when those same resources could be used much more effectively to expand the reach of existing USAID programs. We call on Congress to support these important programs, but to do so in a way that creates a cohesive development strategy. We believe that this is best done when programs are coordinated by one development agency.
Nonetheless, the President has decided he wants to create a separate agency to administer the MCA – the Millennium Challenge Corporation (MCC). As Congress moves to consider this proposal, I would make the following recommendations:
- USAID should be on the Board of the MCC and an active participant in MCC decision-making.
- USAID, as the most experienced and knowledgeable U.S. government development agency, must be positioned to inform Board decisions and policies, including selection of countries, development of country strategies, review of funding proposals and assessment of performance.
- The MCC should utilize existing mechanisms for implementing programs and disbursing funds.
- The MCC should use the field infrastructure of USAID and of U.S. embassies rather than trying to establish a new field presence in MCA countries. This will also help improve coordination between USAID run programs and MCA programs.
The MCA is not meant to replace the development assistance programs being provided by USAID. The MCA must be in addition to, and not a substitute for, other core bilateral development and humanitarian programs. The MCA can help serve as a catalyst for a comprehensive and coherent new aid policy that recognizes progress and encourages change.
Assistance should go to the poorest of the poor
Second, the Millennium Challenge Account must provide focused assistance to the poorest of the poor. It is very important that we remember that the MCA as the President has defined it is a bonus pool or incentive pool of large concentrated assistance that we will provide to a small, select group of countries that meet the eligibility criteria set forth in the President’s proposal.
So how should an MCA for high-performing countries be structured? I won’t focus on the criteria. Steve Radelet is the resident expert on that. But one thing I want to emphasize is that the MCA should target the best performers among the poorest countries. We would target MCA assistance on the IDA countries -- those that have a per capita income below $1,435 and are eligible to borrow from the World Bank. The Administration seeks to expand the MCA to lower middle-income countries.
Many of these lower middle-income countries do indeed have a lot of poor people. But most of these lower middle-income countries also have many more means of attracting capital and alternative sources of financing through larger flows of private capital, greater tax revenue and higher domestic savings rates. Additionally, as Steve Radelet has often noted, the lower-middle income group of countries is more than four times richer than the combined low-income group of countries and has substantially lower illiteracy rates, higher life expectancy and lower infant mortality.
If there is a concern that not enough poor countries will meet the eligibility criteria, then we would advise that the pool be expanded by providing a lesser amount of MCA funds to the “near miss” countries to help them qualify in future years. The legislation that we’ve worked on with the NGO consortium, InterAction, calls for a second tier of MCA countries that would fall into this category. Thus a part of the MCA funds could be directed towards building capacity and creating incentives for countries to graduate to the first tier. If we agree with the Administration that the MCA is about reducing poverty and encouraging growth – and we do – then we must use these resources where they can make the greatest impact on poverty.
MCA must not undercut efforts of non-governmental organizations
Third, the Millennium Challenge Account should not undermine the important role that NGOs and civil society can play in building safer, healthier, more effective civil societies around the world. Government-to-government aid alone is not going to solve our toughest problems. NGOs are often best equipped to deliver assistance at the grassroots level. NGOs have the experience and expertise to help design and implement programs that work. They also can play an important role in making sure that governments practice what they preach – that they deliver on their promises.
The truth is, some of our most successful efforts involve innovative programs launched by concerned non-profits that have mobilized tremendous resources from a wide range of corporate, government, multi-lateral and non-profit partners. Consider the fight to eradicate polio -- this was an initiative spearheaded by Rotary International that cut across many governments and agencies and involved many NGOs as well.
The results have been remarkable. More than 550 million children have been immunized against polio, and the number of countries still plagued by this disease has plummeted from 125 to 9. This program has already prevented over five million cases of paralysis worldwide – an astounding achievement. This success story would not have happened without the essential partnership between governments and NGOs. It was Rotary International that joined with the U.S. government, UNICEF, and key NGOs such as Save the Children to ensure that the campaign to eliminate polio is a success.
Congress should make sure that the new MCA initiative encourages and nurtures such partnerships.
New funds must not be taken from existing assistance initiatives
And this brings me to my final point, these development successes can only be realized if we encourage the Congress to make good on the President’s pledge that the funding for the MCA not come at the expense of other development assistance initiatives. For example, a review of the proposed FY04 budget indicates a nearly 15 percent cut in basic child survival and maternal health programs – both are exemplary USAID-supported development programs that have delivered cost effective, life-saving services to millions of children and mothers around the world. But more remains to be done. Nearly 11 million children under age five continue to die each year because they lack access to the proven, basic, low-cost services delivered through these programs.
We call on the Administration and Congress to recognize the great success stories in development assistance – child survival, birth spacing, basic education and micro-enterprise, to name a few – by continuing to increase and support these programs.
We continue to believe that the MCA can play a transforming role in U.S. development policy. The President has laid out a bold new vision for expanding the circle of development. You in the Congress will play a critical role in shaping this initiative and we look forward to working with you.
