Challenge Us

There is little public discussion in Georgia about which types of international assistance the Georgian public likes and wants. The assumption is that it is a matter decided alone by the donors and the state. Another reason could be because there is little understanding of the different types, how it is allocated, from where it comes and how country funds are mixed with state and private funds, which funds are loans and which are outright grants and how to get information about all of this. But one mechanism stands out.

The Millennium Challenge Corporation is the most innovative and important US international assistance mechanism currently running. The US Government provides long term assistance via a variety of US based implementers mainly through USAID, as well as emergency help when there is a disaster. At the same time, the US participates in many international efforts via the UN, World Bank and other organizations. There are earmarks, not to mention aid tied to treaty obligations and the Pentagon.

But Millennium Challenge is different. First of all, it formally and publicly assesses countries according to ruling justly, investing in people, and economic freedom. If the numbers don’t improve, the counties don’t get the funds. With other methods of assistance, even if the government is backsliding, the funds are still in the pipeline and get delivered anyway.

Second, compared with other methods of assistance delivery, MCC is transparent. On its website, it shows how it judges the country’s progress, what its funds do, and the time line. It is much easier for in-country or international journalists or watchdog groups to monitor it than any other donor activity.

And finally, the government of the country decides what it will be spent on. This is rare. With other programs, the donors decide where the money goes, and the government may be ambivalent about the importance of the effort since they had little to do with the decision.

Millennium Challenge countries tend not to be in the news. They are the ones that are working quietly to build institutions, and pull their citizens out of poverty and stabilize. There is a growing recognition that instead of careening from disaster to disaster, from headline to headline, the US needs to help those countries that keep themselves out of the news as well. The US government made a big mistake by ignoring Afghanistan in the nineties after we had helped them throw out the Soviet invaders. The Taliban didn’t stop paying attention when Afghanistan left the evening news.

With the Millennium Challenge, each country seeks a compact but must prove that they have thought and consulted comprehensively about the projects they propose, that they can oversee the expenditure, and they have fair and transparent contracting and reporting.

The best thing about Millennium Challenge is that a second compact is possible but by no means guaranteed. The country has to prove that not only is its overall record improving but that the projects of the first compact were successfully implemented. So far only one country, Cape Verde, has been given a second compact due to is successful implementation of the first and its laudable democratic development.

In a few days, the board of the Millennium Challenge Corporation will pass judgment on Georgia. Although located in a rough neighborhood, in the last six years, Georgia has been one of the counties in the world that has been most successful in its fight against petty corruption and in fostering economic development. It is successfully bringing to a close the infrastructure projects of the first compact. As with the rest of the world, Georgia has suffered as a result of the global economic crisis and requires increased investments in health and education to sustain its economic development.

As Washington seeks to identify fat in the US budget, nothing should be sacred. But the transparency and conditionality of the Millennium Challenge makes it the most cost effective international assistance the US gives. Congress should help it continue its vital work. And when it meets in December, the Millennium Challenge board should recognize the progress that Georgia has made and award it a second compact.

Mark Mullen moved to Georgia in 1997 to head the National Democratic Institute, was the Chair of the Georgia Institute of Public Affairs, and a Sloan Fellow at London Business School. He lives in Tbilisi and is the Chair of Transparency International Georgia.