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U.S. picks 16 nations eligible for new aid fund

Bush lauds those chosen for Millennium Challenge dollars

From Elise Labott
CNN

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Bush: MCA selectees "are showing the way."
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George W. Bush
Economy
United States Agency for International Development

WASHINGTON (CNN) -- President Bush praised the first group of countries selected to apply for aid Monday from the Millennium Challenge Account, a new aid fund that was launched in February.

"The 16 chosen in this round are showing the way, are showing what is possible, are serving as a bright light in the developing world," Bush said in a White House ceremony. "You have taken the first courageous steps toward greater independence and greater wealth, and greater hopes for the people you serve."

The countries chosen were Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Mozambique, Nicaragua, Senegal, Sri Lanka and Vanuatu.

They were chosen from a list of 63 eligible nations released in February. Eligibility is based on meeting standards for good governance, the rule of law and economic reform. Each candidate must now submit a proposal with its priorities for economic growth as part of a three- to five-year compact before actually receiving the aid.

"In many ways, we did not pick the countries," said Paul Applegarth, CEO of Millennium Challenge Corp., which administers the account.

"The countries picked themselves through their actions in terms of implementing policies and promoting good governance, promoting economic freedom, in terms of how they are investing in their own people and in anticorruption," Applegarth said.

Applegarth held out the former Soviet republic of Georgia as a deserving recipient. While the new government has been in office only a short time, he said, some of the steps it has taken toward reform are "quite dramatic."

He said the selected countries will be held accountable for reaching benchmarks and outcomes set by the board. Countries with "a pattern of chronic underperformance or a lack of political will" will see their funding suspended or cut off.

"MCC is investing in growth, and will be asking itself, 'Is this a good investment for the American taxpayer? Does it provide the most benefit to the poor for the American taxpayer in terms of the dollars being expended?' " Applegarth said.

He added that MCC's board, made up of Cabinet officials, reserved $40 million of the first-year funding for "threshold countries" that didn't qualify for aid this year but could qualify next year with targeted assistance to improve their polices.

President Bush announced the initiative in 2002 in an effort to increase economic growth in the world's poorest countries, while promoting political, social and economic reforms.

The program is part of a pledge by Bush to increase core development assistance by 50 percent over three years, including increasing traditional assistance through the U.S. Agency for International Development and an expanded assistance program for combating HIV/AIDS.

The MCC board first met in February and is chaired by Secretary of State Colin Powell. Other board members are Secretary of the Treasury John Snow, U.S. Trade Representative Robert Zoellick, and USAID administrator Andrew Natsios. There are four vacancies.

Congress appropriated $1 billion for the program in 2004. The Bush administration has requested $2.5 billion for 2005, and hopes to reach $5 billion in 2006.


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