The Millenium Challenge Corporation (MCC) is a unique political institution (yes, a political entity!) created by US Congress. It parlays massive financial aid to attain clear political, governance, or geostrategic goals in recipient countries. Usually and ostensibly, it is the anti-corruption issue which it is fond of publicly advocating as its principal criterium, among the 17 main criteria it uses.
Its action is usually a good indicator of the US foreign policy. Targeted at borderline countries–whether in terms of the fragility of their Western democratic models, dangerous flirtation of allies with US rivals, or opportunistic raiding of allied countries in the rivals’ sphere of influence, the MCC is a more flexible instrument than, let’s say the USAID or World Bank in furthering US interests.
The MCC became involved in the Philippines through its Threshold Program in 2006 at a time when the ZTE-NBN scandal was just starting to be felt and it seems Chinese aid was poised to become the ruling rooster in the foreign aid scene. High-level ties between no less than the leaderships of the Philippines and China threatens to upset the hitherto US-Philippines cozy “special relationship.”
The US government had to do something to maintain its goodwill and influence, prop up an increasingly fragile Philippine democracy, and help resolve the debilitating political crisis that is the GMA administration. Among other initiatives, the MCC entry may be seen as a key component.
The MCC program promised to build the capacity of the perceived most-corrupt agencies that are the Bureau of Customs and Bureau of Internal Revenue, as well as the Office of the Ombudsman. It also promised a more massive financial aid in the form of the Compact Program. In return, the GMA government is supposed to address the deteriorating record of government corruption.
Obviously, this failed when–at the end of the threshold program–it turned out that the GMA administration’s corruption record just kept on slipping. There simply is no political will to address the issue, particularly the major ones such as the ZTE-NBN deal, the fertilizer scam, the Diosdado Macapagal highway, the Cebu lampposts, the NAIA 3, etc., etc. The Ombudsman also lost a credible head when former Ombudsman Simeon Marcelo resigned and was replaced by someone perceived to be closer to the Arroyos.
The MCC had no choice. Giving the Philippines the reportedly more than $700 million (PhP 34 billion) in the Compact program (for DPWH, DSWD and other agencies with perceived 2010 electoral roles) is easily a matter of throwing good money after bad. This is aside from the fact that, effectively, the 2010 elections are just around the corner and the new president may have different ideas about the whole thing.
The MCC decision to postpone the decision on the Compact program is a slap in the face of the GMA administration.This comes at the heel of the position of the US Chamber of Commerce that no urgent revision of the economic provisions is necessary. However, more than this, it is perceived here to be a No vote to the GMA administration, and by extension, to her attempt to stay in power.
At this crucial moment of a GMA charter change bid, The US cannot but be perceived as, at the least, unapproving.