Whose Poor Governance?

The Millennium Challenge Corporation Board of Directors held its quarterly meeting today, the first chaired by U.S. Secretary of State Hillary Rodham Clinton and attended by new Board member Secretary of the Treasury Timothy Geithner, to discuss MCC programs generally and review in detail MCC’s current partnerships with Armenia and Nicaragua. Given ongoing concerns about governance issues in Armenia and Nicaragua, the Board decided to convene an extraordinary interim review session prior to its June meeting to assess its partnerships with these countries. The new Board will make a final determination regarding MCC’s ongoing engagement in these two countries once it has had time to assess the current status,” reads a press release issued by the MCC Wednesday immediately following the meeting.

The release goes on to state: “As a result of the meeting, the Board reiterated its concerns about the status of democratic governance in Armenia and will not lift the hold on MCC assistance for the rehabilitation of rural roads, while allowing the government of Armenia to fund construction. MCC will continue to provide assistance for irrigation infrastructure, which is well underway and assists Armenian farmers.”

“The Board’s decision today signals to the government that it has failed over several years to address concerns raised not only by MCC and other U.S. Government agencies, but the international community as well. It’s now incumbent upon the government of Armenia to restore the Board’s confidence to its commitment to democracy and good governance. MCC has given the government of Armenia every opportunity to make meaningful reforms and will continue its direct communication about its expectations moving forward,” said Acting MCC Chief Executive Officer Rodney Bent in the press release.

The MCC also cites the current economic crisis as an impetus for the board’s careful assessment in order to ensure that the funding it provides will be what it calls “performance-based foreign assistance.”

The so-called chances the MCC and other US government agencies have given Armenia followed the turbulent presidential elections last year and came at the time of the impending collapse of the US financial system under the watchful eye of the US government and its various agencies, among them the treasury and state departmen’s who had governed over the chaos ever since the first hint of economic doom which was the Enron fiasco.

The “meaningful reforms” and the “its expectations moving forward” come at a time when the United States should take a long and hard look at its own governance and ask itself whether it meets the standards to which it holds its allies in the international community.

After taking office, President Barack Obama has had to–and continues to–undo some of those standards, which the previous administration (and apparently this one too) have set for foreign aid, including respect for human rights, democratic principles and rule of law.

Guantanamo Bay anyone? Or, how about Bernard Madoff? Or, perhaps recently released reports about the Bush White House green-lighting federal officials to trample of freedoms of speech and expression in the name of its fight against terror?

This is not to say that Armenia does not need imperative and vital democratic reforms, which are inherent in nation-building. However, perhaps the MCC Board should have convened an emergency session, in the presence of the two newly-appointed secretaries, to discuss whether what the grantees meet the high standards to which they hold others.

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