Via the blog of the UN Foundation, UN Dispatch, quoting an AP story:
Secretary-General Kofi Annan has announced the creation of a fund to promote democratic institutions and practices around the world - an idea first proposed by the United States.

President Bush suggested the creation of a fund in a speech to the U.N. General Assembly in September. He said it would help countries lay the foundations of democracy by instituting the rule of law, independent courts, a free press, political parties and trade unions.

Somewhat ironically, given the recent run of rather depressing news about the state of democracy in Africa, it was at the African Union summit earlier this week that Annan announced the initiative (pdf). It's also not entirely clear whether Africa is all that high a geopolitical priority for the Bush Administration in proposing the fund, given its strategic emphasis on promoting democracy in other regions. But Kofi, ever the diplomat, made the most of his announcement.
Mr. Annan told the African Union (AU) Summit in Sirte that the new UN Democracy Fund will provide assistance to countries seeking to establish or strengthen their democracy. “A number of Member States have already indicated their intention to contribute,” he said, voicing hope that others would follow their example.

“Almost all of you have made clear your commitment to the democratic process, and your willingness to be guided by the will of your people, as expressed in regular and fair elections, and through open, participatory governance,” he told the assembled participants. The Fund, he said, would help alleviate the strain that maintaining democratic institutions can place on poor countries' resources.

The creation of such a fund is one of the proposals that the Secretary-General made in his report “In Larger Freedom,” which forms the basis for negotiations on decisions to be taken by national leaders attending the World Summit at UN Headquarters in September.

The Secretary-General said with record number of national leaders expected to attend, the Summit would offer “a once-in-a-generation opportunity for the world to come together and take action on grave global threats that require bold global solutions.”

The Democracy Fund is one of several "UN reform" initiatives that both the US and Annan have embraced, as highlighted in this briefing by Nicholas Burns in June. But though the fund has been included on Kofi's own list of recommended reforms, it looks like it's mostly Bush's baby. The UN's own publicity machine has focused this week on the Gleneagles poverty reduction agenda and linkages with the UN's own Millennium Development Goals, as highlighted by Kofi's speech at St Paul's Cathedral in London on Wednesday.

By announcing the creation of the fund now, with the September summit as a target date for unveiling the thing, it looks like Kofi is giving a boost to the US' fund-raising and organizing efforts. So far, it seems the US has rounded up 25 other countries who, in a letter last month to Annan, have supported Bush's proposal and indicated they are considering providing some financing. The list of countries includes: Argentina, Australia, Bangladesh, Brazil, Britain, India, Israel, Japan, South Korea, Sri Lanka and Thailand. Since some of the countries on the list are far more likely to be net recipients than donors, it's a bit unclear how much financial support has been lined up by the US so far.

The main virtue of a multilateral fund arrangement for the US is that it removes the "made in the USA" label from democracy promotion assistance, which can sometimes do more harm than good as we've seen in the Middle East. At the same time, as the leading donor and in effect the promoter of the fund, the US will retain significant influence over the fund's agenda and programs.

Like all ad hoc multilateral initiatives, the devil will be in the details: project eligibility requirements (e.g. to what extent will the local government have to be involved or endorse a project), the fund's governance structure, and its administrative mechanics, as well as in the level of political commitment of the donors. Details are so far sketchy at best, but according to the AP:
The General Assembly said the fund will provide assistance "for projects that consolidate and strengthen democratic institutions and facilitate democratic governance in new or restored democracies."

The U.N. said Tuesday the Democracy Fund will be a voluntary trust fund, overseen by an advisory board of member states which will consider and recommend proposals for funding. Any country and U.N. entity can apply.

An interesting wrinkle in the language of the final paragraph. Note the "any U.N. entity can apply" language. That covers the sorts of transition situations such as Kosovo or Afghanistan, which require some institutional structures and political processes to even get to the point where national status can be determined.

cross-posted at Liberals Against Terrorism