what is the Millennium Challenge Account, what is its purpose?

SECRETARY RICE: Yes, absolutely. The Millennium Challenge Account was announced by the President a couple of years ago and it was a part of something that was developing which came to be known as the Monterrey Consensus on Development Assistance. It essentially went this way, that there has been a lot of development assistance over the last decades that has gone to waste. And it has gone to waste because governments to whom it was given spent it badly, spent it in corrupt fashion and ended up with huge debt burdens but nothing really for their people. And in many places, people got poorer, not better.

The President believes that the key to spending development assistance well is to have governments that govern justly, govern transparently, that fight corruption, that have open economies, that demonstrate a commitment to the education of their people and to the health of their people. And that development assistance needs to go to those countries that are demonstrating that.

So the Millennium Challenge Account was a promise to increase over a period of three years -- it is now four years, because of getting it set up -- over a period of four years, American development assistance, official development assistance, by 50 percent. It was a $5 billion over that period commitment. Now the United States has in various ways doubled its commitment to development assistance. But this increase in development assistance was to go to those countries that are, in fact, governing wisely.

We have a number of countries that have been chosen for Millennium Compacts. What they do is they actually work with the government, with civil society, with non-governmental institutions, to create projects that the whole society can buy into. We've just signed one with Madagascar. We have them pending with countries like Honduras and Nicaragua. We have them pending with countries like Senegal. And we work with them to develop projects that will help to alleviate poverty and stimulate economic growth. But it's deliberately for countries that are governing wisely and that we believe will use the money well.

There are a number of countries that are in so-called threshold category that is they're not quite there on the very strict criteria, but we want to work with them to get there. And, of course, we continue to do through USAID, development assistance for the poorest countries, regardless of governing, but strategy. But I think this is a -- something that is now starting to catch on around the world that development is a two-way street. Yes, there are responsibilities of the donor, but there are responsibilities of the recipient, as well.

Regional-USA, Politics, 5/28/2005 US Secretary Condoleezza Rice, At the Commonwealth Club, in San Francisco.

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