May 11, 2004

New US aid based on commitment to reform

Lesotho, Madagascar and Mozambique are among 16 developing countries eligible to apply for a new US-sponsored aid programme, but disbursement of the funds will depend on their ongoing commitment to political and socioeconomic reforms. US Secretary of State Colin Powell said in a statement that the candidate countries were chosen to participate in the Millennium Challenge Account (MCA), based on "both the past and current policy performance in the areas of governing justly, investing in their own people and promoting economic freedom". According to a senior researcher at the Pretoria-based Institute of Security Studies, Jenni Clover, Mozambique and Madagascar were obvious choices because of their recent push towards greater economic liberalisation. On the corruption front, both countries had also introduced strict policies to control graft. Lesotho, on the other hand, had managed to maintain relative political stability in recent years, Clover said. Among other conditions, countries accessing the aid package have to agree to regular independent assessment of their progress towards improving social conditions.

However, some African countries have found fault with the programme's eligibility criteria, arguing that structural adjustment programmes had negatively impacted on their chances of qualifying for participation in the MCA. There were also concerns that the information used to assess eligibility was outdated. According to Richard Cornwell, a regional analyst, "the countries chosen were assessed on data retrieved in 2002. Since then there have been regime changes in Africa, and subsequent efforts to improve governance. The MCA does not take into consideration these developments". The MCA also approved the "Threshold Country" programme, in which countries displaying commitment to political and economic reform will have an added incentive to speed up reform, to make them eligible for MCA assistance in future years. (Business Day, Johannesburg)

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