Bush Administration Unveils Structure of Federal ‘Corporation’ to Dispense $5B in Foreign Aid Grants That Could Be Used To Fight HIV/AIDS

The Bush administration yesterday unveiled the structure of the three-year, $5 billion foreign aid plan, called the Millennium Challenge Account, that will give poor countries grants, which could be used to combat HIV/AIDS, on a "kind of merit scholarship" basis, the Los Angeles Times reports. The account, which needs congressional approval, will be an independent federal "corporation," with a board of directors made up of Cabinet-level officials, chaired by the secretary of state and run by a CEO nominated by the president and approved by the Senate. The administration is using a corporate structure to gain "maximum flexibility" in contracting, hiring and salaries (Reynolds, Los Angeles Times, 11/26). To receive a grant from the Millennium Account, countries would have to prove that they are reducing corruption, spending more on education and health, promoting civil liberties and following free market economic principles, the New York Times reports. "This would be an important tool in making aid more effective. It's a big change, and it can work -- as long as we keep an eye on making sure there is sufficient funding for the nations that don't qualify, and for AIDS and famines and the needs of countries like Afghanistan," Mary McClymont, president of the international relief organization InterAction, said (Sanger, New York Times, 11/26). The Millennium Account, which would increase U.S. foreign aid by 50%, will not replace or reduce the $10 billion a year the United States spends on needs-based foreign aid through USAID (Los Angeles Times, 11/26).