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.