June 22, 2011
MCC Board of Directors Discusses MCC’s Focus on Results and Policy Reform
Board also votes to reinstate Niger Threshold Program.
Washington, DC— The U.S. Government’s Millennium Challenge Corporation (MCC) Board of Directors today held its quarterly meeting at the U.S. State Department, where it voted to lift the suspension of MCC’s threshold program with Niger. The Board also discussed the results of MCC’s completed compact programs, including its successful gender integration programs, and MCC’s approach to policy reform in partner countries.
Niger’s threshold program assistance was originally suspended in December 2009 after a pattern of actions by Niger’s government that was inconsistent with MCC’s eligibility criteria. Mr. Yohannes stated, “MCC’s decision to reinstate Niger’s Threshold partner status is not only an affirmation of Niger’s return to democratic and constitutional rule, but it demonstrates the importance MCC places on working with countries whose leaders promote democratic principles to advance the well-being, development, and security of their people.”
Since its creation in 2004, MCC has completed compacts with five countries and is on track to complete two more compacts—with Armenia and Benin—before the end of the year. MCC is using the early results of these compacts as lessons learned in the development and implementation of future compacts.
The Board also discussed MCC’s greater focus on promoting policy reforms in its partner countries to encourage greater development outcomes generally, and to increase the impact sustainability of its investments. MCC is increasingly focusing on critical reforms that emerge from diagnostic work, leveraging the significant incentives of compact and threshold investments, and applying new and revised tools to strengthen its approach.
MCC briefed the board on four instruments to promote reform: First, MCC is working to use its eligibility criteria to go beyond country selection to foster an “MCC effect,” that promotes good governance. Second, MCC is engaging compact partners in a robust dialogue, targeting those countries and policies where the opportunity for reforms is greatest, leveraging the work of partners across the US government and other donors. Third, MCC’s restructured Threshold Program will support countries’ reform programs in a targeted approach, drawing in lessons learned from the first generation of programs including more diagnostic and due diligence work to inform program design, increased oversight during implementation, and monitoring and evaluation best practices. Finally, MCC is deepening its focus on policy reform by addressing critical sector reforms as integrated elements of compact investments.
“MCC recognizes that our work has greater impact and is more sustainable in countries that rule justly, invest in their people, and provide economic freedom,” said Yohannes. “The credibility and the goodwill generated though successful country ownership of our programs has generated a keen desire for countries to partner with MCC. As a result, we are seeing countries across the developing world make reforms in an effort to meet our strict eligibility criteria and to receive MCC funding.”
A public outreach event will be held at MCC on Friday to provide additional details from the Board meeting.
Millennium Challenge Corporation, a U.S. Government agency designed to work with developing countries, is based on the principle that aid is most effective when it reinforces sound political, economic, and social policies that promote poverty reduction through economic growth. For more information, please visit www.mcc.gov.
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