Wednesday, 14-March-2007 Wall Street Journal - WASHINGTON -- In 2005, on his first day as head of President Bush's signature foreign-aid program, John Danilovich's to-do list included the unpleasant task of telling Yemen's president that his reform efforts had slipped so badly that the country was being cut off.
Last month, Mr. Danilovich phoned Yemeni President Ali Abdallah Saleh with better news: Yemen was back on the list of countries eligible for grants from the Millennium Challenge program.
What happened during those 15 months is evidence of the potential ripple effects of the high-profile aid program -- and the power of the threat to publicly shame countries that veer off the path of economic and political overhaul. Mr. Saleh implemented changes aimed at, among other things, battling corruption, reducing a budget deficit and cleaning up the court system.
"There are many, many countries that want to be part of the Millennium Challenge account, and the competition is stiff, and the elbows are getting sharper," says Mr. Danilovich, a former oil-shipping executive and Republican activist. "If Country X doesn't want to participate, there are many other countries that do want to participate."
When he announced the initiative in 2002, Mr. Bush promised it would be an effective way to fight poverty and disease overseas. The grants would be big enough to jolt a country into economic growth but would go only to nations that met criteria for open markets, social spending and honest, democratic government. So far, the Millennium Challenge Corp., which runs the program, has approved grants valued at $3 billion to 11 countries. Another 11 countries have gotten "threshold" grants aimed at improving their scores on the 18 eligibility criteria. Altogether, 40 countries -- from Nicaragua to Madagascar -- perform well enough to compete for aid.
Mr. Danilovich says the program creates an incentive for countries to make sometimes-painful policy changes, and points to Lesotho as proof. Traditionally, married women in the southern African country had the same legal rights as children; they couldn't buy land or borrow money without permission from their husbands. With the Millennium Challenge Corp. pressing for changes, the Lesotho Parliament passed a law in November putting married women on equal legal footing with their husbands.
"We were very instrumental in getting that bill into Parliament," says Sophia Mohapi, the Millennium Challenge Corp.'s representative in Lesotho. The country is now negotiating a $360 million aid package.
Only twice has the Millennium Challenge Corp. suspended a country that had already qualified to apply for aid, and the results were sharply different.

This story was printed at: Friday, 18-January-2019 Time: 03:44 PM
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