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"Today, I call for a new compact for global development, defined by new accountability for both rich and poor nations alike," states President George W. Bush in his address at the Inter-American Development Bank in Washington, D.C. March 14, 2002. Accompanying the President from left to right are: the lead singer of U2, Bono; Cardinal McCarrick and Worldbank President Jim Wolfensohn. White House photo by Tina Hager.

Helping Developing Nations

President George W. Bush has said that combating poverty is a moral imperative and has made it a U.S. foreign policy priority. To meet this challenge, the President has proposed a "new compact for development" that increases accountability for rich and poor nations alike, linking greater contributions by developed nations to greater responsibility by developing nations.

Increased Development Assistance

The President announced in a speech at the Inter-American Development Bank on March 14, 2002, that the United States will increase its core development assistance by 50% over the next 3 years, resulting in a $5 billion annual increase over current levels. These additional funds will go to a new Millennium Challenge Account that will fund initiatives to help developing nations improve their economies and standards of living.

Aid Linked to Sound Policies

The new compact recognizes that economic development assistance can be successful only if it is linked to sound policies in developing countries. In sound policy environments, aid attracts private investment by two to one - that is, every dollar of aid attracts two dollars of private capital. In countries where poor public policy dominates, aid can actually harm the very citizens it was meant to help.

The funds into the Millennium Challenge Account will be distributed to developing countries that demonstrate a strong commitment toward:

  • Good governance. Rooting out corruption, upholding human rights, and adherence to the rule of law are essential conditions for successful development.
  • The health and education of their people. Investment in schools, health care, and immunization provide for healthy and educated citizens who become agents of development.
  • Sound economic policies that foster enterprise and entrepreneurship. More open markets, sustainable budget policies, and strong support for development will unleash the enterprise and creativity for lasting growth and prosperity.

The President has instructed the Secretary of State and the Secretary of the Treasury to reach out to the world community to develop a set of clear, concrete and objective criteria for measuring progress in the above areas.

>>Read more about the President's initiative

December 10, 2004
AGOA Act with Respect to Burkina Faso Proclamation
January 15, 2003
President Addresses African Growth and Opportunity Act Forum
March 24, 2002
President Bush Meets with President Flores in El Salvador
March 23, 2002
President Bush Meets with President Toledo in Peru
March 23, 2002
Fact Sheet
More News »
More News »
  Why is the President Proposing This New Initiative?
  The Administration's Commitment to the Developing World
  Growth Agenda for the World Bank & Other Development Banks
  The Administration's Commitment to Fighting HIV/AIDS

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