"...…if Tonga restored the political rights enjoyed by its citizens before 2003 when it was above the median, it might qualify for access to tens of millions of dollars in US aid funding."

Tonga has been dropped from a list, announced on July 20, of the world's poorest countries that the United States will allow to become candidates in 2005 for a new multi-billion dollar aid fund that US Secretary of State Colin Powell has called the most significant development program since the Marshall Plan.

Tonga was on the initial candidate list in 2004 but was rated low in a political assessment and narrowly missed out on joining the first 16 countries selected for access this year to the new Millennium Challenge Account. The board decided that although Tonga passed most criteria it had "slipped" and therefore should be denied selection.

In Washington DC two weeks ago, the Board of Directors of the Millennium Challenge Corporation identified another seventy "candidate countries" for the next fiscal year, 2005. Under MCC's legislation, this is the first step in the process of choosing the countries that will be eligible for assistance. The Board will subsequently determine which of these "candidate countries" will be eligible to apply to the Millennium Challenge Account for assistance in future based on their relative performance in ruling justly, investing in people, and encouraging economic freedom.

But for 2005 Tonga has not even made the candidate list, and according to the MCC's report to Congress, Tonga was not included, "due to an increase in the level of per capita income...…". For FY05, all countries with incomes below US$1,465 were considered.

However, Tonga may have a chance to get back on the list in 2006 when all countries with incomes up to US$2,975 (the current World Bank cut-off for lower middle income countries) will be eligible. But Tonga may need to address its poor indicator for political rights in order to win selection for access to the MCA funding.

Aid linked to reform

The Millennium Challenge Corporation was set up in January this year with $1 billion in initial funding following a White House initiative by President Bush aimed at linking aid funds to greater responsibility from developing nations, and as part of his war against terror. "To make sure that governments make the right choices for their people, we link new aid to clear standards of economic political and social reform," he said in selecting the first countries.

This year on July 15 the US House of Representatives approved a further $1.25 billion for the Millennium Challenge Account to be made available to countries that pass the test for FY05. The White House aims that the funding for the MCA will increase over three years to $5 billion per year in the fiscal year 2006. "To be eligible for this new money, nations must root out corruption, respect human rights, and adhere to the rule of law," Bush said. Countries have to demonstrate commitment and better performance in three policy areas before they can qualify for aid.

Vanuatu was the only successful poor Pacific Island country in the first group of 16 countries who may this year apply for multi-million dollar funding from the MCA. In the 2004 country indicators Tonga did as well as and even better than Vanuatu when it came to the Health, Education and Fiscal Policy indicators, but Tonga dropped notably in the indicators for just and democratic government. Top scores in Political Rights went to Kiribati and Cape Verde, being the only two countries with an indicator of # 1; while war-torn Eritrea and Sudan were the worst off, with indicator # 7. Tonga had an indicator # 5 for Political Rights, in company with Uganda, Ethiopia and Burundi; and was only a shade better off than Zimbabwe, Somalia, Afghanistan and others who rated # 6.

Tonga's position was made clear at a special briefing on the designation of 16 Countries Eligible for Funding, on May 10, 2004, when Paul Applegarth, CEO of the Board of Directors of the Millennium Challenge Corporation said that one country had been sent a signal. "There was one country that was really, things had been going the wrong way, and the Board - even though it passed everything, the Board concluded that it just didn't - it felt that it would have been slippage, and it wanted to at least give a signal that this was important, and the Board does have discretion.... The intention is to make the process transparent, to make it clear to the countries what they have to do to qualify..." he said.

When a CNN reporter asked, "which country was that you thought that there might be slippage and you wanted to send a signal?" Applegarth replied, "Well, I think if you look at the criteria, you will see... Tonga has slipped."

Going back to the criteria, posted on the MCC web site, Matangi Tonga Online found that the slippage occurred in 2003 in Political Rights. Therefore, if Tonga restored the political rights enjoyed by its citizens before 2003 when it was above the median, it might qualify for access to tens of millions of dollars in US aid funding. This line of thinking has been laid out by the US administration.

Open Session

US Secretary of State Colin L. Powell, said on July 20 during an MCC Board of Directors Open Session, that countries that were not selected were asking why. "We lay it out for them. And say if you do these things, then you will enhance your prospects of being selected. And we're going to get more money in '05 and we're going to get even more money in '06. So this is the most significant development program since the Marshall Plan, and you can be a recipient, you can work out a compact with us, but you've got to do the right things."

Powell said that the first 16 nations that were selected, "give me all their promises of what they're going to do, and I said that's fine because we're entering into a compact, a contract, and if you want this funding and if you want it to continue, and you want it to be multi-year, if you want us to stick with you, you've got to get better every year with respect to these basic tests of democracy and openness and economic freedom and end of corruption, and the rule of law...….

"You have this unique Millennium Challenge approach to development assistance. And not development assistance for the purpose of keeping people on the dole forever, but for the purpose of creating conditions in those countries so they will start to attract investment and trade ...— non-aid. It's not for the purpose of giving them aid forever. This is the purpose of putting them on a solid footing so that they will attract investment and trade and get off aid, and we can use the Millennium Challenge Account money in future years for other countries that have met the test.

"We will be talking about threshold funding. There are a number of countries that were getting closer and they may need a little walking around - no, I won't call it that. They need a little help. And that's what the threshold program is for, to give them a little help and bring them along, make sure they understand what's going to be required of them, make sure they understand the demanding nature of the tests that they will be asked to take and pass," Powell said.