Ghana still eligible for $1 bln aid share

....None of the 2004 money has been handed over
WASHINGTON, Nov 8 - Ghana is one of 16 countries eligible to share more than $1 billion in new aid, in a decision on Monday, that left some advocacy groups asking why more countries were not included.

Morocco was the only new addition to the list of so called "poor nations". Cape Verde was removed because it was no longer poor enough to qualify.

The Bush administration selected 16 nations for the second year of its Millennium Challenge Account(MCA), a program that provides cash in exchange for economic and democratic reforms to some of the world's poorest nations.

In summarizing today's meeting, Secretary of State and MCC Chairman Colin Powell discussed how MCC fits into the United States' security framework. "Let me underscore that the global and regional security challenges that we face today require us to be creative in the way we handle these issues, and to look for innovative solutions to address them, and MCC is one of those innovative solutions."

In addition to Morocco, 15 nations that were selected for the first year's aid were kept on the list for fiscal year 2005. They were Benin, Ghana, Lesotho, Madagascar, Mali, Mozambique, Senegal, Armenia, Georgia, Mongolia, Sri Lanka, Vanuatu, Bolivia, Honduras and Nicaragua.

Once determined eligible, a country is invited to submit a proposal for assistance, which MCC will evaluate based on its potential to improve economic growth and reduce poverty, the quality of the consultative process that guided the development of the proposal, and the country's commitment to continued policy improvement. MCC is currently assessing fourteen proposals and concept papers from countries that were eligible in Fiscal Year 2004.

Sarah Lucas of the Center for Global Development said it was inconsistent for the administration to exclude countries such as Nepal and Swaziland, which appeared to have met the same criteria as Morocco.

Seth Amgott of DATA, the group founded by the rock musician Bono to advocate for Africa, complained the list could have been expanded. The U.S. Congress had effectively limited the aid options by opposing President George W. Bush's ambitious funding plans for the program that encourages countries to compete for aid through reforms.

"The genius of the programs is to have countries compete to fight corruption and poverty. But that cannot be done if the pot isn't growing," he said.

In fiscal year 2004, which ended Sept. 30, the countries were eligible for a share of $1 billion for infrastructure, banking and education projects as a reward for embracing civil rights, rooting out corruption and opening up markets.

For 2005, Bush proposed $2.5 billion but Congress has so far agreed to provide $1.25 billion. Bush wants the program to reach $5 billion a year.

Washington is often criticized for trying to impose reforms on weaker countries. But unlike traditional schemes where the donor designates how funds are used, the selected nations may propose programs to receive the aid.

Still, the administration has little concrete evidence to show the scheme will work.

None of the 2004 money has been handed to the selected countries and only four nations, Nicaragua, Honduras, Madagascar and Georgia, have begun serious negotiations on their projects, Millennium Challenge officials said.

The Bush administration also selected nations that will be able to apply for up to a tenth of the aid of the major fund.

Burkina Faso, Guyana, Malawi, Paraguay, the Philippines and Zambia joined a so-called threshold program, which already includes East Timor, Kenya, Sao Tome, Tanzania, Uganda and Yemen from 2004.

The administration set aside $40 million in 2004 for these countries to share to encourage reforms that could eventually make them eligible for the larger fund program.