Gutting Good Will

The Millennium Challenge Corp. is grown-up foreign aid. Under this three-year-old program, a board certifies countries that are likely to use assistance wisely -- nations committed to democratic and free-market reform and fighting corruption -- and works with them as partners on projects to combat poverty and encourage economic growth.
Nations that backtrack on reform and good governance have their "compacts" cut off, causing humiliation and occasional repentance.

After a slow start, the MCC has made agreements with 13 nations. But at a recent breakfast, Ambassador John Danilovich, who heads the program, was in a state of dignified bewilderment. The Senate Appropriations Committee, demonstrating bipartisan shortsightedness, had just reduced funding for the MCC from the administration's $3 billion request to $1.2 billion, throwing future compacts into question.

"Why," he asked, "do they want to undermine a foreign policy lever which is actually working?" Danilovich was fresh from a meeting with America's traditional Nicaraguan nemesis, President Daniel Ortega. Venezuelan dictator Hugo Chávez has been courting Ortega and his leftist Sandinista comrades with elaborate (and so far unfulfilled) promises of aid. But Danilovich found Ortega enthusiastic about Nicaragua's MCC compact, which helps increase the income of rural farmers.

The MCC is the main counterweight to Chávez's influence in that country, allowing America to maintain ties with the Nicaraguan people even as political relations with the government grow complicated.