U.S. Awards Madagascar Aid for Good Governance

Three years after President Bush proposed linking U.S. foreign aid to good governance, his administration Monday awarded the first such grant: $110 million over four years to help Madagascar fight poverty and expand property rights.

The package of funds is expected to be the first in a series of Millennium Challenge Account grants awarded this year.

The administration designed the aid program after the Sept. 11 attacks in an attempt to foster reforms that emphasize human rights, education and economic equality in some of the poorest countries, many ruled by authoritarian regimes.

Although the program’s intentions have been widely applauded, there has been concern that it has gotten off to a slow start.

“Everyone thinks the concept is very positive and very good. People like this idea,” said Wendy Sherman, a top diplomat in the Clinton administration. “But it has to be operationalized” or it soon will lose credibility among target nations, she warned.

Paul V. Applegarth, head of the Millennium Challenge Corp., which administers the program, rejected such criticism. In an interview earlier this year, he noted that though the president articulated his vision for the program in 2002, the government corporation did not come into existence until January 2004.

Madagascar, an island nation off the southeastern coast of Africa, will use the grant for several projects, including making land registration services more efficient; improving the banking system to make financial services available to remote areas; helping rural residents identify investment opportunities; and training farmers and entrepreneurs in production, management and marketing techniques.

Rajaonarivony Narisoa, Madagascar’s ambassador to the U.S., called the grant “a tremendous and exciting opportunity.” Four out of five rural inhabitants of the island live on less than 41 cents a day.

Narisoa said his nation had launched an aggressive anti-corruption campaign, including suspending a dozen magistrates on suspicion of graft. To make the government more transparent, Madagascar has posted official information, such as economic performance data, online. In addition, Narisoa said, his government has divided the island into 22 regions to provide public services to its 17 million people more efficiently.

When Bush created the Millennium Challenge program, he proposed an annual budget of $5 billion. But Congress has refused to fully fund his request, and the current budget is $2.5 billion. The president is seeking $3 billion for the program for fiscal 2006.

Bush has described the strings-attached approach to foreign aid as a carrot in the country’s arsenal against extremism and anti-Americanism, dismissing as outdated “the old approach of writing checks without regard to results.”

Millennium Challenge has developed 16 indicators to assess a country’s performance in such areas as education, agriculture, private-sector development, health, poverty reduction and trade capacity. To be eligible, a country’s annual per capita income must be no more than $1,435. That figure will go up to $2,975 next year.