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First Meeting of the New MCC Board: More Orientation than Decision-Making
March 20, 2009
(with apologies for the late posting due to blog platform migration issues at CGD)
The new MCC Board of Directors, chaired by Secretary of State Clinton and with Secretary of Treasury Geithner in attendance, met for the first time on March 11th. On the agenda was a general discussion of MCC programs and a specific discussion on the partnerships with Armenia and Nicaragua. Both Nicaragua and Armenia previously had parts of their compacts suspended due to concerns over governance issues. In the case of Nicaragua, electoral integrity issues that were inconsistent with MCC political freedom, civil liberties and rule of law criteria led the Board to suspend all new disbursements. The main impact of this decision was that a major road project could not be initiated; the community-based rural agriculture program, however, was allowed to continue. At the December Board meeting (the last meeting of the Bush Administration Board) a decision was made to continue the suspension and defer any final decision on Nicaragua to the new Board.
In the case of Armenia, post-election crackdown on the opposition last May also led to a suspension of a road component. Armenia decided to start construction with its own money and wait for the MCC to lift the suspension. Almost one year later, with government resources now almost fully spent and little done to respond to the MCC’s policy concerns, Armenia waited anxiously for the new Board’s decision.
Well, the new Board did meet. But they did not take decisions on what to do in Nicaragua and Armenia. Apparently not ready to take a bolder decision to actually terminate the road components of both compacts until they could study the issues more fully, the new Board punted the issue to a “special session” apparently to occur before the regularly-scheduled June Board meeting.
Too bad, actually. Too bad the last Board didn’t have the courage to act on information it knew well in both cases and not put the new Board in a situation where it could claim it needed more time. And too bad that the new Board, based on the expertise of the MCC staff and the private sector Board members, weren’t prepared enough to take the decision. If there is no teeth to the MCC’s policy requirements on economic freedom, investing in people and ruling justly, I fear the MCC will head the way of other foreign aid programs where excuses around the costs — financially or politically — of cutting countries off will in substandard programs in countries that own bad policies. That is not the kind of country ownership embedded in the MCC model. The day the MCC terminates even a portion of a compact for bad policy or program performance will be the day the MCC will clearly separate itself from the rest of the foreign aid pack.
4 Responses to “First Meeting of the New MCC Board: More Orientation than Decision-Making”
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March 23rd, 2009 at 12:04 pm
A careful blog reader pointed out to me that, in the case of Armenia, the original suspension was an operational suspension made by the MCC CEO and not a Board suspension. Important to set the facts right; looking forward to the Board decision at the special session.
April 1st, 2009 at 5:07 pm
Agree with you, previous board should have had the guts to make decisions one way or another and not leave for the next guy. Must be politics. For next meeting the MCC board must make decisions based on facts, if a violation occurs and there is no willingness on the part of one of the parties to correct the violation ie: democratic values then taught decisions must be made otherwise for future don’t include penalties the Paper Tiger image will continue.
April 14th, 2009 at 12:38 pm
Sheila–
Well said. There are too many paper tigers in the aid business. And it is good to hear that the Secretary of the Treasury actually attended a Board meeting.
May 13th, 2009 at 7:35 pm
Is this lack of making decision on facts the harbinger on the ongoing compacts that do not qualify anymore given the FY 09 MCC Scorecards. Interesting that only the obvious cases are suspended like Madagascar, but how about the five or six compacts in Africa that have failed in the Investing in People area? I will be paying attention to see if politics is slowly taking over after all.