US's main development fund reorganizes

WASHINGTON, Oct 1 (Reuters) - The head of the U.S. government's main global development fund on Monday announced a restructuring of the agency he said would speed up implementation of its anti-poverty programs in poor countries.

The move comes as Millennium Challenge Corp Chief Executive, John Danilovich, has called on Congress not to cut the agency's budget just when it is making progress in the fight against poverty in Africa and elsewhere.

U.S. President George W. Bush requested $3 billion for the MCC for fiscal 2008 but the Senate has slashed it to $1.2 billion amid increased expenditures for the war in Iraq. A final decision is likely to take several months.

Danilovich has said the $1.2 billion would be devastating to the MCC's programs, known as compacts, and would affect grants promised to at least four countries, which have already qualified for aid. In addition it would affect another half a dozen countries that have indicated they intend to seek MCC funding.

"We now enter a new phase of our evolution," Danilovich said in a statement.

"By necessity, compact development has been at the core of our efforts. Over the long term, however, our core activity must ultimately focus on compact implementation. This reorganization will help us to achieve our goal -- to implement compacts that will deliver sustainable improvements in the lives of the poor."

In the reorganization, Danilovich said he would integrate the operations and accountability departments and form two new divisions, one focused on the development of MCC programs and the other on implementation.

The new structure, he said, would streamline the decision-making processes and decentralize the implementation of the programs to MCC country managers on the ground.