MCA Monitor Blog
May 16, 2007
Armenia's Elections Are Given a Pass
Posted by Sarah Rose at 05:31 PM
In the run-up to Armenia's May 12 parliamentary elections, there was some concern that the elections would be less than transparent. Some MCC watchers, including the office of Congressman Frank Wolf (R-VA), questioned whether the MCC should be prepared to restrict funds to Armenia should the elections prove substandard. The MCC's response to these concerns was that they were monitoring the situation and working with Armenia to support the election process. Though they never specifically threatened putting the compact on hold if the elections were found to be fraudulent, the MCC was probably pleased to hear that international monitors deemed Armenia's elections relatively free and fair and an improvement over previous ones since the verdict both marks progress for Armenia and relieves the MCC of having to seriously assess its continued partnership with the country based on its commitment to ruling justly (particularly in the wake of its decision to put a hold on Sri Lanka).
January 31, 2006
Armenia Convinces MCC They Are Ruling Justly - Does it Convince You?
Posted by Sheila Herrling at 05:39 PM
You will recall my earlier posting on the MCC's decision to approve a compact with Armenia despite what looked like a downward trend in "ruling justly" indicators. A response from Armenian Foreign Minister Vartan Oskanian to the warnings issued by the MCC upon approval provided sufficient comfort for the MCC to proceed to signing and, one assumes, disbursing funds. Well, it wasn't hard for Armenia to meet the conditions set out in the MCC's letter -- they "acknowledged the issues" and "committed to address them."
I'm not on the ground in Armenia, so what do I know? I sure would love to hear from someone closer to the action. My concern is that it does appear to be a downward trend in the "ruly justly" criteria, not just a one-time bump in the road. And what happens come next year if Armenia fails the "ruly justly" indicators -- does the MCC just leave the Lifeline Road half paved?
January 10, 2006
The Armenia Decision: The Carrot that Should Have Been the Stick
Posted by Sheila Herrling at 12:07 PM
On December 19th, the MCC Board approved a $235 million compact with Armenia. Seeing as how the government of Armenia didn't take very seriously the advice offered by the MCC in September or the concerns expressed by Freedom House and Open Democracy, the approval came with a stern warning from CEO Danilovich:
“MCC is concerned about the government's lack of transparency and commitment to open and fair elections in the recent referendum. I have expressed those concerns to President Kocharyan and look forward to working with the government to protect Armenians' ability to participate fully in the electoral process. MCC was designed to reward and work with nations that take the hard steps necessary to create a policy framework to spur economic growth and reduce poverty. Consequently, Armenia's continued participation in the Millennium Challenge Program depends on its good performance in ruling justly, investing in people, and encouraging economic freedom. MCC will continue to monitor Armenia's policy performance in these three categories throughout the life of the Compact.”
The use of the carrot vs. the stick has always been a dilemma in foreign aid. The optimist in me had great hopes that one sign of the MCC's innovative model would be its ability to say no -- to demand measurable performance before approval, instead of approving on the hopes that performance will be addressed later (and, fingers-crossed, before the first significant disbursement). This modus operandi is old-school foreign aid. At a minimum, the measures laid out by the MCC to demonstrate Armenia's commitment to addressing slippages could have been time-bound and measurable. Better still, the MCC could have said, "show me the commitment before we show you the money."
So, why the carrot vs. the stick? Some folks say the MCC was under pressure to approve more compacts to show Congress they are truly operational. Some folks say it was political pressure to support a strategic ally. Some folks say Armenia really does have an innovative poverty reduction and growth strategy worthy of incentivizing. And some folks say there is still time for tough love from the MCC in terms of withholding disbursements if there is no progress on the measures they laid out. I would love to hear what you all are thinking...how you reacted...and whether you think there is still scope for tough love.
December 06, 2005
Armenia Tests the MCC's Willingness to Say No
Posted by Sheila Herrling at 05:45 PM
Days before the MCC is supposed to sign its compact with Armenia, an article from Open Democracy, "Armenia's Emptying Democracy," flags major slippages in political rights, civil liberties and corruption -- all policy indicators measured by the MCC in determining country eligibility.
And, recall that Freedom House flagged Armenia for the MCC in the FY 06 selection round as one of the weakest performers in political and civil rights.
If you look at the data used by the MCC to track policy performance, there will inevitably be linkages between the events outlined in Open Democracy's article and future MCC indicator performance. Indeed, Armenia has already showed policy slippages in the MCC indicators since its original selection in 2004. The rubber meets the road here for the MCC. Is the road too far paved to restrict driving?
I'd love to hear more from folks closer to the details on Armenia. This raised all sorts of theoretical questions, including use of foreign aid as an incentive vs. a reward, and whether the MCC can be different from other aid agencies in the ability to say no.