NELSON INSTITUTE DIRECTOR’S WASHINGTON TIMES OP-ED QUESTIONS SENEGAL’S COMMITMENT TO MILLENNIUM CHALLENGE GOALS

January 4, 2009

HARRISONBURG—In an op-ed published in today’s Washington Times, Dr. J. Peter Pham, Director of the Nelson Institute for International and Public Affairs at James Madison University, questions Senegal’s commitment to the reform agenda of good governance and free markets at the heart of the Millennium Challenge Corporation (MCC) revolution in U.S. foreign assistance.

While he in favor of the MCC approach and notes that it enjoys broad bipartisan support in Washington, Dr. Pham acknowledges that it does suffer from an institutional weakness: “Once a country is declared ‘eligible’ for MCC support, bureaucratic inertia can set in and what was a reward morphs into an entitlement.” The example cited by the commentary is the fact that MCC’s chief executive officer, Ambassador John Danilovich, singled out Senegal as one of six “deserving” countries and the transaction team responsible for the West African country has recommended proceeding with funding six proposed projects at the very time when “Senegal’s commitment to economic freedom and, consequently, to poverty reduction through sustainable growth has deteriorated.”

Specifically, Dr. Pham points to Senegal’s decline on several MCC indicators, including failing scores on land rights and access, business start-up, and fiscal policy; the U.S. State Department’s report that “the investment climate in Senegal is worsening”; and the egregious treatment of a number of foreign and domestic investors since the current president, the octogenarian Abdoulaye Wade, assumed office in 2000. Emblematic of the latter is the experience of Millicom International Cellular S.A., a NASDAQ-traded company traded specializing in cellular telephone service for emerging markets. Since it was granted a 20-year license in 1998, Millicom’s local subsidiary has grown a nationwide network with a loyal base of 1.8 million subscribers, one-sixth of Senegal’s population. Ever since the Wade administration took office in 2000, it has tried to pressure Millicom into renegotiating the license and paying an additional $200 million, threatening to otherwise revoke the franchise. When the company failed to buckle under, it was presented in September with a decree which purported to terminate its license—with the revocation backdated to 2000 for good measure.

The article concludes: “ Senegal should not be in line for a half-billion dollars from U.S. taxpayers at a time when Americans have fiscal worries of their own and the African country’s behavior mocks the economic premises of the program under which the money is made available in the first place. President-elect Obama has pledged not only to make development ‘a key pillar of U.S. foreign policy,’ but to also ‘use tax dollars more responsibly’ in pursuit of that goal. One place to start would be to review MCC proposals currently under development and determine whether, on the basis of the latest information from the field, governments like Senegal are living up to their commitments. ”

To read the full text of the op-ed, “A Challenge from Senegal,” click here.