September 29, 2011
MCC Board of Directors Selects Tunisia As Eligible for Threshold Program, Provides Conditional Approval of Indonesia Compact, Strengthens MCC Selection Criteria
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. At the meeting, the MCC Board selected Tunisia as eligible for a Threshold Program, provided conditional approval of a compact with Indonesia, and enhanced MCC’s partner country selection criteria.
Tunisia Eligible for Threshold Program
Upon Board selection of Tunisia as eligible for Threshold Program funding, MCC Chief Executive Officer Daniel Yohannes noted, “Tunisia is at the heart of the Arab Spring. We congratulate the people of Tunisia on their burgeoning democracy. We recognize, however, that Tunisia’s ability to sustain its democratic transition is linked to the progress it makes on its economic transition. MCC is looking forward to partnering with the Tunisians on a policy reform-based program to identify and address binding constraints to economic growth.”
Indonesia Compact Conditionally Approved
The Board conditionally approved a $600 million compact with the Republic of Indonesia to support poverty reduction through economic growth. Final compact approval will be subject to the completion of technical negotiations with the Government of Indonesia.
Indonesia is the fourth most populous country in the world, and over 140 million Indonesians live on less than $2 per day. The proposed compact supports Government of Indonesia development priorities and complements other donor activities.
The Government of Indonesia developed the compact’s three projects in close consultation with local governments, civil society, and the private sector:
- The Green Prosperity Project is designed to raise household incomes in some of Indonesia’s poorest provinces by supporting low-carbon economic development and protecting the country’s natural capital
- The Community-Based Nutrition to Prevent Stunting Project is designed to reduce and prevent low birth weight, childhood stunting, and malnourishment of children in project areas, which is expected to increase incomes through cost savings, greater productivity and higher lifetime earnings.
- The Procurement Modernization Project is designed to achieve significant savings in government procurements, reduce the incidence of corruption and waste, and improve the delivery of public goods and services.
Mr. Yohannes said, “We look forward to partnering with Indonesia’s people and government to create a future of hope and opportunity. The proposed compact is expected to deliver results that will make a lasting difference in the lives of the poorest Indonesians.”
MCC Scorecard Updated and Strengthened
Finally, the Board also approved updates to MCC’s selection criteria and methodology. These updates reaffirm and strengthen MCC’s unique approach to allocating aid by maintaining a hard line on corruption; highlighting policy performance across the scorecard’s three hallmark categories of Ruling Justly, Investment in People, and Economic Freedom; and ensuring that the best available data is used.
MCC has always been a leader in the use of third-party data to drive evidence-based decision making. Based on lessons learned over the last seven years, MCC has updated its scorecard to include new indicators, which measure Freedom of Information, Gender in the Economy, and Access to Credit, and has modified the selection methodology. These changes are the result of extensive research, data analysis, and consultation, and they improve the scorecard’s reflection of countries’ policy performance.
Mr. Yohannes explained, “MCC is committed to maintaining its track record of partnering only with countries that demonstrate sound economic and democratic governance. The changes we made to the scorecard today allow us to update and strengthen MCC’s selection system. This reinforces MCC’s core values of focusing on growth, demanding results, promoting transparency, highlighting policy performance and being disciplined and selective in our partnership decisions.”
At the next MCC Board of Directors meeting in December 2011, the Board will consider countries’ performance on both the existing and updated selection criteria and methodology. More information is available at www.mcc.gov/selection.
MCC will hold a public Town Hall Meeting at its headquarters on Tuesday, October 4 to provide additional details on the outcomes of the Board meeting. To register to attend, visit https://www.mcc.gov/rsvp/oct04.
The Millennium Challenge Corporation, a U.S. government agency 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. Learn more at www.mcc.gov.