Wednesday, February 04, 2009

Is it time to accelerate MCA programs?

Through the MCA compact signed in 2006, the US is committed to spend $236 million to alleviate rural poverty. These funds are to be allocated through 2011. One major limitation of the compact is that the funding is not adjusted for the growth in global construction costs which has led to a reduction in the size and scope of the MCA program. The construction/infrastructure phase just begun (see here). With the collapse in global commodity (and capital equipment) prices, this might be a good time to accelerate the various projects taking advantage of current global conditions as well as providing extra stimulus to the rural sector. This will not present extra cost to the donor, but might go a long way in tackling rural poverty.

4 comments:

R said...

The Millenium Challenge Corporation stopped funding on the raod component of the propram pending improvements to, inter alia, democratic governance. The irrigation component continues.

http://www.reporter.am/go/article/2009-02-06-u-s-funded-construction-of-armenia-s-waterways-proceeds

David said...

Thanks R. My source is mcc.am, and you'll see that they signed the road construction contracts (with 6 companies) in August 2008 (check Aug08 releases/news archive). So???

Compared to the annual $70M in aid, the MCA program is by far superior (money not spent on consultants), and is directly aimed at reducing poverty in rural areas. So it is good that it is on track, in part or otherwise.

R said...

David, I agree with you. I have no patience with those who want to withhold funds to punish the state without regard for the impact on the poor.

However, it does seem that despite signing the contracts you mentioned the MCC has blocked the disbursement of funds because of dissatisfaction with politics.

http://www.armenialiberty.org/armeniareport/report/en/2008/12/CE78CAB4-0295-48F2-A65C-10F69A1B8765.ASP

David said...

Nazarian,
You had comments blocked in the past and were told that political comments are not welcome; you simply cannot use this platform to attack the government. You did not live up to this rule and your comments were blocked/deleted.
Please no longer comment on postings on this blog.