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Development Assistance

 

Almost three billion people in the world continue to struggle on less than $2 per day,suffering from extreme poverty, hunger and disease. Heavy debt burdens continue to draw precious resources away from health care, education, and other crucial development needs. Recently, President Bush announced a tripling of funding for HIV/AIDS in Africa, and a new initiative, the "Millennium Challenge Account" (MCA) that, if fully funded, would provide the most dramatic increase in development assistance in two decades. The USCCB and CRS welcome this new initiative and new funding, while working to ensure they be carried out to serve the poor.

Some Statistics

  • the richest 1% of the world's people receive as much income each year as the poorest 57%.
  • In sub-Saharan Africa, more people live in poverty than the entire population of the United States.
  • In 2002, Zambia spent 25% of its revenue on debt servicing; Malawi spent 15%.
  • 113 million school-age children are not in school
  • 97% of them in developing countries.
  • 60% of children not in primary school worldwide are girls.
Millennium Challenge AccountHow much money is proposed for the Millennium Challenge Account (MCA)?

The President has promised $5 billion annually beginning in FY06, with a possible $1.6 billion in FY04 and $3.3 billion in FY05.

What countries are eligible for aid from the MCA?
Poor countries that meet the Administration's three criteria: just rule, economic freedom, and investment in people. In 2006, some middle-income countries will also be eligible to receive MCA funds.

What is the current status of the MCA?
As of this printing, legislation is being drafted that will determine funding levels for the MCA as well as how the program will be structured.

Congress should authorize an MCA in FY04 which addresses the following concerns:

The MCA eligibility criteria (just rule, economic freedom, investing in people) may mean that only a few poor countries can qualify. Countries eligible for MCA funding should be poor countries that protect human rights, apply anti-corruption standards and have credible programs for combating poverty. Proposals to include middle-income countries in FY06 may further restrict the funds available to poor countries.

 

The MCA lacks sufficient emphasis on engaging civil society in designing and implementing development programs. The MCA should also be implemented in a manner that supports national anti-poverty programs developed with civil society participation.

Non-MCA CountriesAs many very poor countries in Africa will likely be ineligible for MCA funding, and since U.S aid funds available to these countries have been extremely limited in recent years, it is important that funding for those ineligible for the MCA be substantially increased (above new funding for global health see below).

  • Advocate an increase above current levels of at least $1 billion in development aid for poor countries in Africa which do not qualify for the MCA, but have critical development needs.

Africa Food CrisisAccording to United Nations World Food Program, as many as 38 million people in southern Africa, the Horn (e.g., Ethiopia) and the region of the Sahel are threatened by a severe food crisis as a result of drought, infectious diseases and other factors.

  • Urge Congress to immediately approve $1.2 billion for food aid in the FY03 agricultural appropriations bill, and to support the provisions for additional assistance to sub-Saharan Africa found in the Africa Famine Relief Act (S. 185 and H.R. 390), which include $600 million in food aid and $200 million for reconstruction and relief.

Global Health Diseases such as HIV/AIDS, tuberculosis and malaria are devastating people in the poorest countries, particularly in sub-Saharan Africa. The means and medicines are available to treat HIV/AIDS and to prevent malaria and tuberculosis, but funds and health infrastructure are lacking. We commend President Bush's recent announcement to triple funding for HIV/AIDS in Africa.

  • Support increases that would bring total funding to at least $3 billion in FY 2004 for morally responsible programs to combat HIV/AIDS and other life-threatening communicable diseases such as malaria and tuberculosis, especially in sub-Saharan Africa. Funding for HIV/AIDS should provide assistance to those already infected, to communities suffering the consequences of the pandemic, and for morally appropriate educational programs designed to promote behavioral change so as to attain responsible and mutually respectful relationships.

Debt Relief As the improved debt-relief of the Heavily Indebted Poor Countries (HIPC) program began to be implemented, there was still a substantial disparity in the amount of debt relief being received by HIPC countries. This was because the amount of a country's debt relief under HIPC is determined by its export earnings rather than its budgetary resources. Thus, while countries such as Rwanda and Ethiopia are receiving relief sufficient to free up substantial resources for critical development needs, many HIPC countries, such as Zambia and Malawi, are receiving much less.
  • Advocate limiting the annual debt payments of heavily-indebted poor countries to no more than 10% of government revenues, or in the case of countries suffering a public health crisis (such as high incidence of HIV/AIDS) to no more than 5% of government revenues.

Action Requested:
  • support authorization of an MCA in FY04 which

    • provides MCA funding to those countries that demonstrate the greatest need, protect human rights, apply anti-corruption standards and have credible programs for combating poverty and

    • emphasizes engaging civil society in designing and implementing development programs;

  • support an increase above current levels of at least $1 billion in development aid for poor countries in Africa which do not qualify for the MCA, but have critical development needs;

  • provide $1.2 billion for food aid (Title II in PL 480) in the agricultural appropriations bill, and to support the provisions for additional assistance to sub-Saharan Africa found in the Africa Famine Relief Act (S. 185 and H.R. 390), which include $600 million in food aid and $200 million for reconstruction and relief;

  • support increases that would bring total funding to at least $2 billion in FY 2004 for morally responsible programs to combat HIV/AIDS and other life-threatening communicable diseases such as malaria and tuberculosis;

  • support efforts to limit debt service payments of heavily-indebted poor countries to 10% of government revenues, and 5% of government revenues for countries with severe health crises.

Legislation is in the process of being drafted. Updates will be given as legislation becomes available.

For Further Information:

Kelly A. Hicks, 202 541-3153 (ph), 202 541-3339 (fax) khicks@usccb.org;
Gerry Flood
, 202 541-3167 (ph), 202 541-3339 (fax) gflood@usccb.org;
Kathy Brown
, 410 951-7232 (ph), 410 234-2987 (fax) kbrown@catholicrelief.org



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