Byline: J. Peter Pham, SPECIAL TO THE WASHINGTON TIMES
To millions of Africans, last month's electoral victory by Barack Obama carried with it the promise of renewed commitment from and enhanced engagement with America. The 44th president of the United States will build on the foundations laid by his predecessor who, to the surprise of many, elevated relations with the countries of the continent to a level unprecedented in American diplomatic history.
One of the most significant legacies George W. Bush bequeaths the new president is the Millennium Challenge Corp. (MCC), an initiative that has revolutionized U.S. foreign assistance. The MCC targets a select group of countries based on their demonstrated commitment to good governance, free markets and investments in people. Targeted countries are provided with sums of money large enough and with flexible enough terms to make a real difference. Half of the 39 countries worldwide currently eligible for some MCC funding are in Africa and more than two-thirds of the funding committed so far has been destined for Africa.
Although initiated by a Republican administration, the MCC has enjoyed broad bipartisan support. A report co-authored last year by Gayle E. Smith, one of President-elect Obama's leading advisers on development, hailed the program as a significant mechanism and lamented that its funding was not at least twice what it was. Another Obama adviser, Susan E. Rice, who has been nominated U.S. ambassador to the United Nations has even argued that the Millennium Challenge philosophy should be applied to Iraq's reconstruction.
Despite strong support in Washington, the MCC has serious weaknesses. Recent history shows that once a country is declared eligible for MCC support, bureaucratic inertia can set in and what was a reward morphs into an entitlement. If not addressed, these will undermine support for an otherwise worthy program.
An example of this is the West African country of Senegal, which earlier this year was upheld by the MCC's chief executive officer, Ambassador John Danilovich, as one of six deserving countries. Surely Senegal deserves recognition as one of the few African states that has never had a coup d' etat, boasting two peaceful transfers of power since independence in 1960. The current president, Abdoulaye Wade, was elected in 2000 after leading the political opposition for nearly a quarter-century. Senegal consistently scores above the median for countries in its income peer group in terms of political rights and civil liberties.
Despite this, Senegal's commitment to economic freedom and, consequently, to poverty reduction through sustainable growth has deteriorated since the country was deemed eligible for the program. And this strikes at the very heart of the MCC innovation in aid to developing countries.
In the most recent report of indicators, Senegal registered failing scores on land rights and access, business start-up, and fiscal policy. The State Department's most recent annual report on investment climate noted that while the government of Senegal officially welcomes foreign investment, nontransparent regulation combined with high cost factors are obstacles to potential investors and settlement of disputes within the cumbersome, slow and occasionally nontransparent Senegalese judiciary can be a significant burden to business.
The State Department noted that court decisions can be inconsistent, arbitrary and nontransparent. Consequently, the report concluded, some foreign and domestic investors believe that the investment climate in Senegal is worsening. …