The Millennium Challenge Corporation was created in January 2004 as a new way to deliver U.S. foreign assistance. Lawmakers on both sides of the aisle champion MCC’s mandate to reduce poverty through economic growth in a select group of poor, well-governed countries. MCC treats development like a business and focuses on country ownership, accountability and evidence-based decision making. The result: in 10 short years, MCC has had a big impact on efforts to reduce global poverty.
- 1,389 miles of roads completed
- 1,350 miles of roads under construction
- In El Salvador, MCC financed the rehabilitation and construction of a key highway connecting close to 500,000 Salvadorans in the remote Northern Zone with the rest of the country, ensuring greater access to social services and jobs as well as local, regional and international markets.
- 187,003 households now have legal protections for their land
- In Burkina Faso, MCC launched its largest and most ambitious land and property rights project to date. By helping establish household land rights and resolve land conflicts, the project makes it easier for rural people to secure an asset to farm and build on, use as collateral for a loan or pass along to their children.
- 247,683 farmers trained
- 344,167 acres under improved irrigation
- In Armenia, MCC made the single largest investment in the country’s irrigation infrastructure in the last 30 years. MCC-funded investments improved 485 miles of irrigation canals, providing access to reliable irrigation for over 420,000 farmers, 40 percent of the rural population.
- 610,571 people can now access clean water from:
- 1,138 new or rehabilitated water sources
- In Mozambique, over 600 communities now have improved water access through the construction of 611 manual water pumps. This provides women, often the primary water gatherers, more time for child care, education and income generating activities.
- 715 schools built or rehabilitated
- 211,127 students participating in education activities
- In Morocco, tens of thousands of adults learned to read and write while building valuable business skills they can use to find work and earn more income. More than 38,700 fishers, artisans and farmers—81 percent of whom are women—graduated from the MCC-funded literacy program.
- 2,677 miles of electricty lines completed
- In Mongolia, MCC supported a bold new approach to clean energy by funding transmission upgrades to allow electricity from the country’s first commercial wind farm to be introduced into the national grid and by investing in over 100,000 new energy efficient stoves, which are expected to reduce household emissions by 57 percent.
MCCs eligibility criteria have a bigger influence on developing countries than any other external assessment, according to a 2013 College of William and Mary survey of government officials, civil society and the private sector.
U.S. companies compete and win more MCC-funded contracts than companies from any other country.
MCC emphasizes gender and social equality because it is the right thing to do and because such inequality impedes poverty reduction and economic growth. In Lesotho, for example, MCC only approved a compact after the country passed legislation to ensure women have basic economic rights.
MCC is the most transparent aid agency in the world according to Publish What You Fund’s 2013 Aid Transparency Index.
Fighting Global Poverty
Investing in Infrastructure
With MCC funding, oversight and assistance, partner countries have effectively undertaken large, complex infrastructure projects, such as expanded irrigation networks to improve agricultural production, roads to link markets, ports to facilitate trade, water and sanitation systems to improve hygiene, and power grids to supply more reliable electricity to fuel factories and provide lights to villages and homes. Successful projects include:
By rehabilitating a 136-mile highway in northern El Salvador, MCC linked a previously isolated region with the rest of the country and with Guatemala and Honduras, connecting more than 533,000 poor rural Salvadorans to jobs, markets and social services.
Thanks to MCC, more than 3 million people in Jordan, nearly half of the population, will have reliable access to clean water in one of the world’s driest countries. By mobilizing an additional $110 million in private financing, MCC more than doubled its $93 million investment in treating wastewater. The result: an award-winning public-private partnership to expand the As-Samra Wastewater Treatment Plant that will produce enough treated water for irrigation to support agricultural production, equaling more than 10 percent of Jordan’s total water resources.
Some 1.4 million Tanzanians now have access to electricity, many for the first time, thanks to MCC’s more than $205 million investment in Tanzania’s energy sector. With new power generation, transmission and distribution, including the installation of a 100-megawatt submarine power cable from the mainland to the island of Zanzibar, homes and businesses have access to more reliable electricity service.
In Mongolia, MCC supported a bold new approach to clean energy by funding transmission upgrades to allow electricity from the country’s first commercial wind farm to be introduced into the national grid and by investing in nearly 100,000 new energy-efficient stoves, which are expected to reduce household air pollution by 57 percent in Ulaanbaatar, one of the top three most polluted capital cities in the world.
Supporting Shared Values
By seeking partner countries that are committed to governing fairly, respecting the rule of law, upholding the rights of women, and fighting corruption, MCC has fostered democracy, basic rights and good governance around the globe. And by sticking to its core values of accountability and transparency, MCC has set a new standard for aid effectiveness. MCC’s pioneering approach has included:
MCC has shown that picking countries based on publicly available data measuring their commitment to fundamental values works. Passing MCC’s scorecard has become a badge of distinction, and the competition to be part of that exclusive group has motivated countries to change laws, reform policies and rebuild institutions. MCC’s ability to incentivize reform even has a name—the MCC Effect.
- A study found the MCC Effect is having a major impact. According to a 2013 College of William and Mary global survey of government officials, civil society and the private sector, MCC’s scorecard ranked as the most influential tool to incentivize policy reform.
Holding Partners Accountable
MCC has insisted that countries uphold their commitment to MCC values throughout the partnership. The agency has suspended or terminated assistance to countries that fail to uphold their end of the bargain—as Armenia, Honduras, Madagascar, Malawi, Mali, Nicaragua, and Niger experienced during MCC’s first decade. By holding partners accountable, MCC has punished bad performance and encouraged countries to make the right decisions.
- MCC suspended Malawi’s $350 million compact in March 2012, following political violence and a pattern of actions inconsistent with MCC’s good governance standards. When President Joyce Banda came to office she immediately took action to reinstate the compact, strengthening laws and institutions to support democratic rights, stabilizing the economy and promoting greater respect for human rights. In recognition of these strong steps, MCC’s Board reinstated the Malawi Compact, demonstrating that MCC’s willingness to hold countries accountable is the right approach. Other countries too have taken steps to redeem themselves after backsliding on MCC’s standards.
Advancing Gender Equality
MCC has worked to remove gender and other social barriers that can limit who benefits from the agency’s investments, and held off disbursing funds until partner countries met strict gender requirements. From a Gender Policy many hail as groundbreaking to the operational guidance provided to partner countries for putting that policy into action, MCC has made gender equality an essential part of how the agency fights poverty.
- In Lesotho, MCC only approved a compact after the country passed landmark legislation to ensure that married women—who had been treated as second-class citizens—could enjoy basic economic rights, like owning a business and obtaining a loan without a husband’s consent.
- In an attempt to qualify for MCC assistance, Côte d’Ivoire passed a new family code in 2012, giving women the same rights as men to choose where they live, apply for a passport, pursue a job or profession, and become head of household. Côte d’Ivoire now passes the gender in the economy indicator on MCC’s scorecard.
Committing to Transparency
MCC has released unprecedented data about how it selects partner countries and makes investments, how projects are progressing and whether they achieved the expected results. This transparency has allowed MCC and its partner countries to hold each other accountable, while also allowing new ideas and best practices to be tested, adapted and disseminated in the spirit of ongoing learning and improvement.
- Publish What You Fund’s 2013 Aid Transparency Index ranked MCC the most transparent aid agency in the world out of the 67 organizations it analyzed.
- In 2012, MCC released the findings of five impact evaluations of farmer training; a 2011 World Bank study identified only three impact evaluations of this type over the last decade. This new set of evaluations prompted improvements both in the design and implementation of other MCC-funded agriculture training projects and in MCC’s evaluation practices. MCC has a robust pipeline of final evaluation reports and survey data scheduled for public release, including household data from thousands
of respondents that will be highly valuable for researchers and businesses.
Ensuring Lasting Impact
MCC investments have included rigorous measures to prevent corruption, manage finances effectively, protect the environment, improve rights for women and other marginalized groups, pursue resettlements responsibly when needed, and monitor results. A number of partner countries have adopted these measures for their own national development strategies—further enhancing and sustaining MCC’s positive impact.
- Hondurans were so impressed with MCC’s model that they decided to keep in place MCA-Honduras—the local organization that implemented the country’s compact—to manage all other development work. The organization is now successfully implementing a $427 million portfolio of projects funded by other donors.
MCC’s partnerships have strengthened the markets of the future and created opportunities for business and trade—fostering the conditions for lasting economic growth through private sector investment. MCC’s successful approach has included:
While investing in infrastructure to more effectively move goods to market and vocational training to enhance workforce skills, MCC has worked with partner countries to reform laws, policies and institutions to foster a pro-business climate and create stronger markets.
- Since MCC’s creation, Georgia has catapulted from 112th to 9th place on the International Finance Corporation’s Ease of Doing Business Index. Georgia overhauled tax and customs administration, business and property registration and its court system. Following these reforms, business registration increased by 55 percent. The World Bank hailed MCC as a catalyst for business-related reform in Georgia as well as in Burkina Faso, El Salvador and Malawi.
MCC has changed the rules for development by insisting on fair and open procurements, ensuring a level playing field for U.S. and other companies seeking a foothold in fast-growing markets overseas where they can sell their products and services, expand their customer reach and grow their bottom lines. U.S. companies have won more MCC-funded contracts than companies from any other country.
- North Carolina-based Pike Electric first expanded its business into Africa by competitively winning a $17.9 million contract to build out nearly 500 miles of distribution lines as part of MCC’s investment in Tanzania’s energy sector. With its initial taste of international project success, Pike Electric is looking at several other opportunities abroad, including through MCC projects.
MCC investments have paved the way for companies to invest their own funds.
- GE credits MCC’s support for better policies and regulations in Ghana’s power sector for its decision to move forward with plans for a 1,000-megawatt power park valued at $1.5 billion.
- MCC’s $188 million port expansion in Benin led to a follow-on 25-year operator’s concession that will attract another $256 million in private investment.
- As part of MCC’s compact with El Salvador, Virginia-based AES Corporation seized an opportunity to expand its market share. It invested $4.4 million alongside MCC’s contribution of $24.8 million to construct more than 945 miles of new rural electrification lines, extensions to existing lines and associated connections to provide electricity for more than 35,000 homes in the country’s northern zone.
- MCC’s investment in Namibia created an opportunity for Microsoft to test innovative technology that repurposes unused television transmission frequencies to deliver fast, reliable and affordable broadband Internet access in remote rural communities. The company is piloting the technology in 23 rural schools and 10 local administrative offices as part of the MCC-funded $141.5 million education project in Namibia. If the technology proves successful, Microsoft plans to work with the Namibian government to expand its use.
But the purpose of development—and what’s needed most right now—is creating the conditions where assistance is no longer needed. So we will seek partners who want to build their own capacity to provide for their people. We will seek development that is sustainable. Building in part on the lessons of the Millennium Challenge Corporation ... we will invest in the capacity of countries that are proving their commitment to development.
President Barack Obama
September 22, 2010
Reflections on MCC: Jennifer Witriol
MCC is a model of innovation in development. It’s about working hand in glove with countries to address their barriers to economic growth. It’s about good governance and accountability. It’s about greater cooperation with the private sector. It’s about demanding results and testing our assumptions against the data. Above all, it’s about understanding what works in development and why so that we get the best possible return from every dollar invested.
Secretary of State John Kerry
January 1, 2014
I’m proud of this organization and this initiative because this initiative reflects the best of American ideals and it reflects American pragmatism. The Millennium Challenge Corporation’s objectives are noble, reducing poverty in some of the poorest countries in the world. And MCC’s means are practical, working with countries that have already put in place policies that support growth and make assistance effective. MCC forges true partnerships, putting opportunity and responsibility for development where they belong with the people and the governments of the developing countries.
Former Secretary of State Colin Powell
November 10, 2004
MCC has had a transformative effect across the developing world. Responsible, reform-minded governments have set their sights on the MCC benchmarks, and this has accelerated the pace of reform while empowering governments to make decisions on their own path of development and the direction of their future.
President of Liberia Ellen Johnson Sirleaf
October 20, 2008
This new approach to development is embodied by a revolutionary initiative called the Millennium Challenge Account. See, this program says that the United States will help. But we expect countries that we help to fight corruption and to govern justly … We say to those we want to help support, open markets to trade and investment, and above all, invest in your people’s health and education. You see, by tying our aid to these policies, we are encouraging developing nations to make tough economic and political and social reforms. We encourage leaders to respect their citizens, uphold human dignity, and work to earn the trust of their people
President George W. Bush
October 21, 2008
Reflections on MCC: Reuben Turner
Reflections on MCC: Chris Williams
MCC CEO Daniel W. Yohannes reflects on the agency's decade of meeting the challenges in the fight against global poverty. Read the blog
Reflections on MCC: Jonathan Bloom
I think it’s a testament to MCC that many of the reforms being pursued by USAID and the State Department are based in large part on the MCC model. I think that’s very, very good.
Representative Eliot Engel
April 25, 2013
One of the things we are very pleased with is called the Millennium Challenge Account. And, it is quite an innovative attitude to aid, linking it with the fight against corruption and linking it with business-minded approaches to aid and therefore leveraging aid to create the environment for investment.
November 12, 2012
MCC’s model showcases some of our best thinking about how to do development for the 21st century, and has helped to set the stage for the Administration’s approach for development, because at a time when we must look for the way to maximize the impact of every dollar that we spend on development, we often turn to MCC for information and inspiration.
Former Secretary of State Hillary Rodham Clinton
November 27, 2012
Reflections on MCC: Melvin Williams
I’ve always thought that American foreign policy—indeed, America—is at its best in the world when our interests and our values come together. And I can think of no better example of our interests and our values coming together than MCC.
Former Secretary of State Dr. Condoleezza Rice
April 29, 2013
I’m a big fan of MCC … if we appropriated all of our money conditionally in foreign assistance like we invest our money at MCC, we’d have much improved accountability in terms of foreign assistance and we’d have even better results. It’s a great, great program and I’m glad to work with them anywhere I can, particularly on the continent of Africa.
Senator Johnny Isakson
March 20, 2012
Reflections on MCC: Alicia Phillips Mandaville