Millennium Challenge Corporation Should Hold Countries to Higher Standards of Democratic Governance

Washington, D.C.

The American government should withhold foreign assistance under the Millennium Challenge Account from countries which fail to meet reasonable standards of political rights and civil liberties, Freedom House said today.

On November 8, the MCC Board of Directors will select governments eligible to apply for assistance in fiscal year 2007. Freedom House urges the MCC to bypass those countries with low scores on political rights and civil liberties that otherwise meet the eligibility criteria - namely Armenia, Bhutan, Egypt, Jordan, Maldives, Tunisia and Vietnam - during this year's selection process.

Additionally, Freedom House urges the MCC to rigorously follow up with those countries, like Armenia, that have been awarded compacts but have not met promised benchmarks in the area of democratic governance. Armenia is an important test case of MCC policy, as it signed a compact with the MCC earlier this year but has been backsliding on promised reforms since the agreement was signed.

"Freedom House strongly supports the MCC's efforts to reduce poverty by rewarding sound policies," said Jennifer Windsor, Executive Director of Freedom House. "However, because democratic governance plays such a key role in enabling broader social and economic development, it is vital--if the fund is to be truly effective--that only those governments that have demonstrated commitment to democracy and human rights be eligible to receive MCC funds," she added.

Currently, countries qualify for MCC funding based on their performance on three baskets of indicators that measure "ruling justly," "investing in people," and "economic freedom." At a minimum, a country needs to perform above average in half of the indicators in each of these three categories to qualify for the funds. However, because the agency views corruption as such a serious obstacle to development, a score below average in corruption automatically eliminates a country from consideration for the pool of eligible countries.

Freedom House encourages the MCC to consider officially amending the eligibility process to automatically disqualify any country that falls below the equivalent of a 4 (out of a worst possible 7) on Freedom House's index of civil liberties and political rights, which is used by the MCC to determine a country's level of democratic governance.

"Democratic governance is fundamental to development and can have an enormous effect on a country's future growth. Like anti-corruption efforts, therefore, it should be treated as a priority among priorities by the MCC," said Christopher Walker, Director of Studies at Freedom House. "On occasion, the MCC Board has exercised discretion to eliminate from consideration some of the worst democratic underachievers, and Freedom House would like to see this prioritization formalized as an official standard," he added.
 
Based on the published MCC scorecards for 2007, Armenia, Bhutan, Egypt, Jordan, Maldives, Tunisia and Vietnam officially pass the MCC criteria even though they fall below the equivalent of a 4 on Freedom House's index of political rights and civil liberties.


Armenia
Armenia has failed in its pledge made to the MCC to improve its institutional commitment to democracy and tolerance of opposition. Allegations of fraud in the November 2005 constitutional referendum have not been investigated, as called for by Ambassador Danilovich, Chief Executive Officer of the MCC. Implementation of the referendum's tepid reforms stalled in 2006, and the opposition expects upcoming parliamentary elections to once again be marred by fraud. Multiple anti-democratic methods are used to maintain a hold on power, including the following:

  • Election fraud characterized both the presidential and parliamentary elections of 2003 and the constitutional referendum of 2005. Harassment of opposition supporters, ballot box stuffing, and inflated turnout figures were among the methods used, and the elections were denounced by European observers.
  • The judicial branch remains subject to political pressure from the executive branch and suffers from considerable corruption, while proposed reforms have not been implemented.
  • While new legislation to improve media independence was passed, the Armenian media climate has not improved and violent attacks on journalists continue.

Freedom in the World 2006: Armenia
Countries at the Crossroads 2006: Armenia

Bhutan
Bhutan has made substantial progress on political rights, including the announcement of a handover of power from the king to his son and the formulation of a draft constitution. However, for now, the country remains a hereditary monarchy in which decision-making power rests in the hands of the king. In addition:

  • Freedom of assembly and association are restricted. Citizens may participate in a peaceful protest only if the government approves of its purpose.
  • Nongovernmental groups that work on human rights, refugee issues, or other overtly political issues are not legally allowed to operate inside the country.
  • The treatment of the Nepali-speaking minority remains harsh: citizenship is often denied, and ethnic Nepalese are still required to obtain official "security clearance certificates" to enter schools, receive health care, take government jobs, or travel within Bhutan or abroad.

Freedom in the World 2006: Bhutan
Countries at the Crossroads 2005: Bhutan

Egypt
Egyptian elections held in late 2005 resulted in a large increase in parliamentary representation for candidates associated with the banned Muslim Brotherhood. However, the elections remained flawed, and the subsequent arrest and conviction of presidential runner-up Ayman Nour demonstrated President Hosni Mubarak's intolerance of democratic opposition. Political rights and civil liberties are problematic in multiple areas, including the following:

  • The Emergency Law, which allows for government surveillance, indefinite detention without charge, and many other violations of civil liberties, was extended in April 2006 for an additional two years.
  • Parliament remains a feeble body that exercises limited influence on government policy.
  • The state exhibits economic control over most Egyptian media, and continues to arrest and convict journalists on defamation and other anti-free speech charges.

Freedom in the World 2006: Egypt
Countries at the Crossroads 2005: Egypt

Jordan
The December 2005 release of the National Agenda calling for a broadening of political participation was a positive step for Jordan. However, Jordan still must implement proposed reforms before real progress on political rights and civil liberties is achieved. King Abdullah continues to hold broad executive powers and may dissolve parliament and dismiss the cabinet at his discretion. Furthermore:

  • The Government Intelligence Directorate (GID) regularly intervenes in Parliamentary votes as well as electoral campaigns, and observers in and out of Jordan agree that the GID and affiliated military/security agencies regularly violate human rights through extra-constitutional detainment and abuse.
  • Discrimination and violence towards minorities living in Jordan is rampant; many citizens of Palestinian origin have had their Jordanian national numbers revoked arbitrarily by interior ministry employees.
  • Media freedom is weak; editors and journalists have received official warnings to refrain from publishing certain articles or to avoid certain topics, while vaguely worded laws criminalizing slander and defamation of public officials enable abuse of journalists.

Freedom in the World 2006: Jordan
Countries at the Crossroads: Jordan

Maldives
The government of the Maldives has shown an increasing willingness to discuss improvements in political and civil rights. However, implementation of proposed reforms has proceeded in fits and starts, and the country remains fundamentally undemocratic and dismissive of civil liberties. Among the areas of concern are:

  • The penal code bans speech or actions that could "arouse people against the government," while a 1968 law prohibits speech considered libelous, inimical to Islam, or a threat to national security. The law also allows authorities to shut newspapers and sanction journalists for articles containing unfounded criticism of the government.
  • Freedom of religion is severely restricted by the government's requirement that all citizens be Sunni Muslims, a legal ban against the practice of other religions, and a constitutional provision making Islam the state religion.
  • The executive exercises almost complete control over both the legislative and judicial branches, and nepotism and corruption are rampant.

Freedom in the World 2006: Maldives

Tunisia
Tunisia remains a country in which the exercise of democratic rights and civil liberties is permitted only sporadically. The incumbent regime acts with the preservation of its power as the foremost objective of governance. Among the political rights and civil liberties shortcomings it exhibits are the following:

  • No institution is able to act as an effective check on President Ben Ali. The parliament is a rubber-stamp body, and the judiciary is subject to stifling oversight by the executive branch.
  • The justice system is rife with rights violations, including weak investigations, the use of torture, and inhumane prison conditions.
  • Freedom of expression is held in low esteem; human rights and opposition groups face harassment and repression when attempting to engage in peaceful public demonstrations.

Freedom in the World 2006: Tunisia
Countries at the Crossroads 2005: Tunisia

Vietnam
Vietnam's extensive economic reform has not been accompanied by a loosening of limitations on political rights. Though discussion of a political opening has increased somewhat and some political and religious prisoners have been released, Vietnam remains a politically closed society also lacking in fundamental civil liberties. For example:

  • The Communist Party of Vietnam (CPV) remains an opaque body whose top leaders are not elected by Vietnamese citizens, and governance is implemented by Party diktat.
  • The police are known to abuse suspects and prisoners, and prison conditions are poor. The death penalty is enforced not only for violent crimes but also occasionally in cases involving economic and drug-related offenses.
  • The government tightly controls the media. Journalists who overstep the bounds of permissible reporting - for example, by writing about sensitive political and economic matters and the CPV's dictatorship - are brought to court, sent to prison, or harassed.

Freedom in the World 2006: Vietnam
Countries at the Crossroads 2006: Vietnam

Launched in 2002, the Millennium Challenge Account is a U.S. government assistance program that directs aid to countries that are governed well. Research by Freedom House, a strong proponent of the MCA since its inception, has helped inform the selection of aid recipients.

Freedom House, an independent non-governmental organization that supports the expansion of freedom in the world, has monitored political rights and civil liberties in every country in the world since 1972.

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