MCC
Last week the Millennium Challenge Corporation (MCC) approved two new threshold programs, one with Liberia and one with Timor-Leste. $15 million was approved for Liberia to support the country’s ongoing reforms, and will focus in particular on land rights, girls’ education, and trade policy. Timor-Leste’s threshold program will provide $10.5 million to bolster the country’s health care system and address corruption issues. Liberia and Timor-Leste were selected as compact-eligible in December 2008.
As you may already know, the MCC threshold program works with countries to undertake target policy reforms to improve a country’s score on a particular MCC indicator. The hope is that the country will perform better on the indicator(s) that determine compact eligibility, and that if they are selected as compact-eligible the country will be prepared to successfully implement their compact. MCC CEO Daniel Yohannes said of the threshold program, “With vital support from Congress for MCC’s budget and critical legislative fixes, we will continue to have the ability to partner with reform-minded countries committed to wisely investing American taxpayer resources in sustainable development that benefits us all in our interconnected global marketplace.”
Liberia’s threshold program will improve land registration capacity, improve land administration, and assist with land rights education. It will also support a scholarship program for girls, provide schools with grants to improve the school environment, and support mentoring programs. With regard to trade policies, the funding will assist with harmonizing tariffs and strengthening regulatory capacity.
In Timor-Leste, the threshold program will focus on strengthening local community health units, improving vaccine-preventable disease monitoring and immunization systems, and training health service providers. The program will also help build effective anti-corruption institutions.
Both threshold programs are currently in their 15-day congressional notification and consultation period. Following this, USAID will assume responsibility for implementing the threshold programs while MCC will remain the primary overseer. It is encouraging to see countries continuing to move through the MCC system and making reforms in the hope of becoming compact-eligible. If you’d like to learn more, you can read the press releases about the Timor-Leste and Liberia threshold program announcements.
Yesterday, Daniel Yohannes– head of the Millennium Challenge Campaign– was on NPR to discuss a host of issues including aid effectiveness, good governance, and transparency. They also profiled his background a bit.
It’s a great, insightful piece. Give it a listen:
Earlier this month, Beth Adler took a look at the proposed increase to the Millennium Challenge Account in the President’s FY2011 budget request.
Now the Millennium Challenge Corporation’s CEO has weighed in on his blog, stating that the increase would allow the MCC to “pursue partnerships with Malawi, Indonesia, and Zambia, with the hope of signing compacts with each of these countries” as well as a second compact with Cape Verde.
You can read his full take here.
On a related note, Reuters has an interview with Daniel Yohannes in which he elaborates a bit more on corporate investments in developing nations. Worth a read.
On Friday Moldova signed a compact with the Millennium Challenge Corporation (MCC), making it the 20th country to receive innovative development financing from the MCC. The five-year, $262 million Compact will focus on irrigation infrastructure, high-value agricultural production, and road rehabilitation. As the MCC notes, Moldova is the poorest country in Europe, and relies heavily on farming which employs 40 percent of the population and accounts for 17 percent of their GDP.
Investment in the transportation, infrastructure, and agriculture sectors will enable Moldova to make the most of their agricultural production and use it to enhance economic growth. The high-value agriculture project is intended to increase production of and marketing opportunities for lucrative produce like fruits and vegetables. This project could help increase farmers’ incomes and generate opportunities in Moldova’s rural areas. Farmers could also benefit from improved access to credit as well as a technical assistance scheme co-financed by USAID, which will help farmers transition to higher-value agriculture, post-harvest processing, storage, and marketing.
The irrigation project is slated to repair 11 large irrigation systems which irrigate 15,500 hectares of land, while the road rehabilitation project includes repairs to a 93 kilometer stretch of highway that is a key link for passenger travel as well as trade.
Moldova previously completed an MCC Threshold program in which they focused on combating corruption in the country. As MCC CEO Daniel Yohannes mentioned, “I commend Moldova’s commitment to poverty reduction and economic development opportunities. Moldova’s MCC threshold program has already created an environment where innovative technologies, productivity, and increased access to markets can flourish. Now, with this Compact, MCC looks forward to deepening our partnership with the people of Moldova to foster long-term economic growth.”
Moldovan Prime Minister Filat commented that the Compact will greatly assist Moldova in moving from a difficult past towards a successful future.
The Millennium Challenge Campaign’s (MCC) Poverty Reduction Blog has a nice post about the work they’re doing to bring “sustainable poverty reduction” to rural Georgia. You can read the full story here.
Investments in agricultural development are integral to MCC’s commitment to sustainable poverty reduction in rural Georgia. The Millennium Challenge Georgia Fund (MCG), implementing Georgia’s $395 million MCC compact, is nearing completion of the Agribusiness Development Activity (ADA), a $20 million program designed to strengthen commercial linkages among agricultural service providers, producers, processors, wholesalers/distributors, and markets. The 287 targeted matching grants already awarded to Georgian agribusinesses and farmers are supporting sustainable, long-term growth.
In addition to providing grants focused on enterprise and value chain development, MCG responded to a request from the Georgian Ministry of Agriculture to support the introduction of new agricultural machinery into the country by developing a new ADA component. The inability of small farmers to access machinery has been cited as a major constraint to agricultural development in Georgia. To meet the needs of Georgian farmers for increased mechanization of their agricultural techniques, MCG is providing grants up to $150,000 to a number of farm service centers. Over the past 4.5 years, ADA has focused, in part, on the creation of a privately-owned retail network of farm service centers to provide a complete range of agricultural goods and services for Georgian farmers.
On Wednesday the Millennium Challenge Corporation (MCC) Board held their last meeting of the year. At the meeting, the Board determined which countries are eligible to apply for compact funding in FY2010, and which are eligible to continue with the compact development process.
At the event yesterday to discuss the Board’s decisions, we heard from new MCC CEO Daniel Yohannes, who was on his ninth day on the job. Yohannes outlined his priorities for the MCC: a renewed commitment to innovation, increasing private sector engagement, like leveraging MCC monies to generate additional funding, working effectively and efficiently with other U.S. agencies, and with country-governments to reform their economic policy.
A panel of MCC Vice Presidents further explained the Board’s decisions. Cape Verde was selected as eligible for a second compact. As one of the first countries to complete a compact, Cape Verde has demonstrated results. Cape Verde will pioneer the second-compact process, which is never a given for compact countries. Countries not only have to pass the indicators to be eligible for a second compact, but they have to have a proven track record for effective implementation, show early results from the first compact, and embrace policy changes that will enable further successes. The ambassador from Cape Verde spoke briefly, expressing gratitude for the second compact and determination to further poverty reduction and economic growth in Cape Verde.
Zambia, Jordan, Malawi, Indonesia, and the Philippines were deemed eligible to continue with their processes of compact development. Indonesia and the Philippines graduated from the low-income country category and did not pass the indicators in the new, more competitive, lower-middle income country category. Considering that there was no evidence of policy deterioration, and they would have met the targets in the low-income category, the Board approved them to continue with compact development. The Moldova compact was also recently approved, and will likely be signed early in 2010.
The Board voted to suspend the Threshold program in Niger due to significant policy reversals by the Government of Niger since the Threshold program began. The MCC will work with USAID, who are implementing the Threshold program, to responsibly wind-down the program. The Board did not select any new Threshold program partners, but Liberia and Timor Leste are in the process of finalizing their Threshold programs.
The Board also approved several new projects in the Mongolia compact. The government began working with the MCC to design an alternative energy program and road-rehabilitation project after it became clear that they would be unable to complete the rail project originally in the compact.
We here at ONE are very excited about working with the MCC—and their new CEO—in the New Year.
Yesterday, Daniel Yohannes was sworn in as the new Chief Executive Officer of the Millennium Challenge Corporation (MCC). At the ceremony (presided over by Secretary of State Hillary Clinton), Yohannes said that he was proud to lead an organization that was making great strides in the fight against global poverty—and that moving forward, he was committed to producing even stronger results.
“MCC has learned a great deal from its first few years. We must show more results, be more innovative with MCC programs, and find more ways to involve and encourage the private sector. This means working with countries committed to the sound policies of good governance. We know U.S. assistance can do the most good in countries where transparency and the rule of law already nurture a climate for lasting growth. This means building stronger partnerships. This means being accountable and delivering results.”
Yohannes, a native of Addis Ababa, Ethiopia, has more than 30 years experience in banking and economic development. You can read his full bio here.
