Foreign Aid With a Carrot

Ukraine's voters may not have seen Sunday's election in these terms, but if they supported the Western-leaning presidential candidate Viktor Yushchenko, they voted for a much better chance to increase US financial aid to their desperately poor country.

That's because Mr. Yushchenko wants to clean up Ukraine's notorious corruption. Thanks to a new foreign policy tool, that effort could - in theory - be assisted by US aid meant to reward reforms that sustain economic growth in the poorest countries.

The US program is called the Millennium Challenge Account, announced in 2002. Called visionary by foreign-aid experts, the MCA provides an alternative to blank-check aid. If countries below a certain income level meet a set of criteria relating to fair and open government, economic freedom, and investment in people (i.e. health and education), they can apply for funds - a planned $5 billion pot in fiscal year 2006.

But the program's off to a very slow start. The first countries to meet the criteria (16 nations in all) were only announced last May, and just one country was added to the list for 2005. No funds have been released.

The excuse for the slow speed is perhaps understandable. Part of the promise of the MCA is that countries must develop their own programs on how to use the assistance - in today's parlance, "taking ownership" of their challenges. That's not easy if you're just getting used to the idea.

But the other problem is far more serious. President Bush has underrequested funding for the MCA, and worse, Congress has not come close to granting his requests. For the '05 budget just passed by lawmakers, the administration asked for $2.5 billion, and got about half that.

With the Millennium Challenge, the US has the opportunity to effect real change in the global war on poverty (and related, the war on terrorism). Countries like Ukraine - of no little strategic importance - need to know the US is committed to their struggle.