Press Release

For Immediate Release

February 8, 2006

Contact: 202-521-3880

Email: info@mcc.gov

Millennium Challenge Corporations Board of Directors Approves Paraguay’s Threshold Program to Combat

Washington, D.C. Today, the Board of Directors of the Millennium Challenge Corporation (MCC) approved a $34.65 million Threshold program for Paraguay focused on improving the country’s performance in the Ruling Justly and Economic Freedom indicators. The program’s goal is to reduce corruption through funding initiatives that strengthen the rule of law and create conditions conducive to economic growth and poverty reduction.

Congratulations to the people and government of Paraguay for their results-oriented program to root out corruption and improve the economic environment that leads to poverty reduction and private sector led growth, said MCC CEO Ambassador John Danilovich. I also thank our colleagues at USAID and the U.S. Embassy in Paraguay led by Ambassador Cason and his predecessor, Ambassador Keane, for their assistance and expertise.

MCC’s Threshold Program is designed to assist countries that are on the threshold of Millennium Challenge Account (MCA) eligibility for Compacts, meaning that they are committed to undertaking the reforms necessary to improve policy performance and eventually qualify for MCA Compact assistance. Threshold Program assistance is used to help such countries address the specific policy weaknesses indicated by the country’s scores on the 16 policy indicators that are central to the criteria and methodology for MCA eligibility.

MCC measures policies in three areasRuling Justly, Investing in People, and Encouraging Economic Freedomusing 16 policy indicators which have a demonstrated link to poverty reduction and growth. The indicators are products of respected international institutions and national data and each was selected based on its relationship to growth and poverty reduction, the number of countries it covers, its transparency and availability, its analytical rigor, and its objectivity.

To date, under its Threshold Program, MCC has committed nearly $100 million including: approximately $14 million to improve the policy environment and fight corruption in Albania, close to $35 million to tackle corruption in Paraguay, nearly $13 million to help improve girls’ primary education in Burkina Faso, almost $21 million to help Malawians fight corruption, and over $11 million to help Tanzanians fight corruption and strengthen the rule of law.

MCC has approved Compacts totaling over $1.5 billion with eight countries: Madagascar, Cape Verde, Honduras, Nicaragua, Georgia, Armenia, Vanuatu, and Benin. MCC is also actively engaging with other eligible countries to assist them in Compact development.

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Millennium Challenge Corporation (MCC), a U.S. government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.