18 January 2007
Millennium Challenge Corporation Motivating Countries To Reform
U.S. development agency to observe third anniversary January 23
Washington -- Three years after it was established, the U.S. Millennium Challenge Corporation (MCC) has evolved into a major factor in the developing world in motivating countries to adopt economic, political and social reforms, says the agency's chief executive officer.
The MCC provides specified developing countries multiyear funding once they meet goals identified by the country's government, business and community leaders. Such pacts have "become a badge of honor" for recipient countries, said MCC CEO John Danilovich during a January 17 interview with USINFO.
MCC so far has committed close to $3 billion in results-oriented development "compacts" to 11 countries and a total of $300 million in threshold grants to another 11. Threshold grants are provided to countries that are close to, but not yet eligible for longer-term compact funding.
MCC AT THREE
MCC will recognize its third anniversary on January 23. President Bush advanced the idea for a new model for foreign aid in 2002 at an international development financing conference in Mexico. The resulting MCC has evolved into a leading promoter of poverty reduction through sustainable economic growth.
Developing countries increasingly are asking leaders of the 22 countries that so far have been awarded MCC grants for proposal development advice, Danilovich said.
In March developing country representatives will come to Washington to attend the second annual MCC “university,” a series of information exchanges offering leaders from countries hoping for MCC funding the opportunity to learn about how other countries have been able to adopt policies that meet MCC requirements, Danilovich said.
MCC evaluates how well countries have advanced policies of ruling justly, investing in people and encouraging economic freedom, as measured by 16 indicators.
"It is no accident that some of the most aggressive policy reformers in the world are MCC-eligible," he said.
He said government leaders of El Salvador, Ghana, Albania and Jordan are examples of countries that have been very active.
For instance, he said, some of these countries have established interministerial committees to devise their MCC proposal development and implementation strategies.
NEW ENVIRONMENTAL INDICATORS
MCC will add two new environmental performance indicators during its proposal review process for grants that begin in fiscal year 2008, Danilovich said.
Nongovernmental organizations (NGOs) suggested the addition of indicators relating to natural resources management and land rights and access. These two indicators will help MCC determine how well a country is working to provide clean drinking water and expand sanitation services, and make land rights accessible and secure for poor and vulnerable populations, he said.
INCORPORATING GENDER INTO ALL OPERATIONS
In a January 18 speech to the Society for International Development in Washington, Danilovich called 2006 "a banner year" for MCC, which also is working with an additional 17 countries that have not yet received MCC funding but are "committed to a culture of reform."
During 2006, MCC adopted a gender equality policy calling for the incorporation of gender into "all aspects of MCC operations, including country selection, compact development and implementation, and program monitoring and evaluation," Danilovich said.
"Gender inequality is a significant constraint to economic growth and poverty reduction," Danilovich said in an earlier speech.
He said another sign of progress is that MCC partner countries are learning more and more how to leverage and coordinate their MCC assistance with that from other donors, he said.
MCC currently has compacts -- generally, five-year agreements awarded in installments -- with Madagascar (its first compact country), Honduras, Cape Verde, Nicaragua, Georgia, Vanuatu, Benin, Armenia, Ghana, Mali and, most recently, El Salvador.
The 11 threshold countries include Albania, Burkina Faso and Indonesia, which is receiving the largest threshold grant to prevent childhood infectious diseases and malaria. Others receiving two-year threshold funding are Jordan, Malawi, Moldova, Paraguay, Philippines, Tanzania, Ukraine and Zambia.
Danilovich said corruption in their political and economic systems is the threshold area most compact-hopeful countries seek to improve.
The full text of Danilovich's remarks, as prepared for delivery, and more information about MCC are available on the agency's Web site.
For more information on how the United States is assisting developing countries see Partnership for a Better Life.
(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
