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Fund the fight against global poverty

The Millennium Challenge Corporation is a critical investment.

By Stephen P. Groff, Raymond C. Offenheiser / October 3, 2008

Paris and Boston

There is too much at stake for the United States to allow millions worldwide to continue living in extreme poverty.

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Sens. John McCain and Barack Obama both made this clear at the Clinton Global Initiative annual meeting last week.

Alleviating poverty, they said, not only reflects the fundamental values of generosity and caring held by the US and its citizens, but also serves our national interests by striving for security and prosperity for all.

So if the US is serious about alleviating poverty, why has the Senate set the stage for the next president to shut down the first major innovation in US foreign assistance in 50 years?

The Millennium Challenge Corporation (MCC) was globally recognized as a bold innovation in US foreign assistance when it was set up in 2004. Its mission is to reduce global poverty. It promotes sustainable economic growth based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people. The model also recognizes the fact that governments, in developed or developing countries, cannot work with volatile financial flows when planning for the future.

In the middle of the US presidential campaign, the Senate Appropriations Committee has provided only $254 million for the MCC, just 13 percent of the administration's request. This decision fails to take into account the importance of a long-term view of US foreign assistance.

Fully funding the MCC – less than a mere 0.3 percent of the amount being contemplated to bail out the country's financial systems – would demonstrate the pivotal role of the US in addressing a critical systemic weakness in the global economy: the fact that 1.4 billion people live in poverty. As we stand on the precipice of a global financial crisis, the US must reassert leadership in addressing poverty reduction and economic growth in the developing world.

More predictable aid is more effective aid, for the recipient country and for the US taxpayer. Because of this, and the fact that economic growth takes time, the MCC's financing instrument is a multiyear agreement with an eligible country to fund specific projects.

This is not charity; it is wise long-term investment in a safer, healthier, and more prosperous world. And the metric for measuring its success must be in demidecades, not in months or even in years.