May 8, 2006
Millennium Challenge Corporation Signs Threshold Program to Fight Corruption in Paraguay
Asuncion, Paraguay — Today, Millennium Challenge Corporation (MCC) Board Member Kenneth Hackett officiated at a signing ceremony at the Government of Paraguay’s National Palace. USAID’s Assistant Administrator Adolfo Franco and Paraguayan President Nicanor Duarte Frutos signed a $34.65 million Threshold program focused on improving the country’s performance on the Ruling Justly and Economic Freedom indicators. The program’s goal is to reduce corruption by funding initiatives that strengthen the rule of law and create conditions conducive to economic growth and poverty reduction. The Paraguayan Economic Advisor, Minister Carlos Walde, and U.S. Ambassador to Paraguay James Cason observed the signing.
“Congratulations to the people and government of Paraguay for being the first nation in Latin America to be awarded a Threshold program,” said MCC Board Member Kenneth Hackett. “Corruption is an obstacle to an open democracy and inhibits equitable growth and access to opportunity. I commend President Duarte’s leadership in tackling this difficult issue. The Government of Paraguay has developed a comprehensive results- oriented program to root out corruption and level the development playing field, leading to a reduction in poverty and greater prosperity for the people of Paraguay. I thank our colleagues at USAID and the U.S. Embassy in Paraguay led by Ambassador Cason for their work in making this program possible.”
MCC’s Threshold Program is designed to assist countries that are on the “threshold” of eligibility for Millennium Challenge Account (MCA) Compacts. Threshold Program assistance is used to help countries address the specific policy weaknesses indicated by the country’s scores on 16 policy indicators in three categories—Ruling Justly, Investing in People, and Encouraging Economic Freedom. These policy indicators are central to the criteria and methodology for MCA eligibility and are products of respected international institutions and national data. Each indicator 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.
MCC’s Threshold Program assistance approved to date totals approximately $116 million in six countries: Burkina Faso, Malawi, Tanzania, Albania, Paraguay, and Zambia.
MCC has signed Compacts totaling over $1.5 billion with eight countries: Madagascar, Cape Verde, Honduras, Nicaragua, Georgia, Benin, Vanuatu, and Armenia. MCC is also actively engaging with other eligible countries to assist them in Compact development.
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 sound political, economic, and social policies that promote poverty reduction through economic growth.