November 9, 2007
São Tomé and PrÃncipe Launches $8.66 Million Millennium Challenge Corporation Threshold Program tupport Fiscal Reforms
São Tomé, São Tomé and Príncipe — President of São Tomé and Príncipe Fradique de Menezes and MCC Director Malik Chaka witnessed the signing of an MCC threshold program between the United States and São Tomé and Príncipe. The two-year, $8.66 million program seeks to assist the Government of São Tomé and Príncipe better its performance on MCC’s Fiscal Policy indicator through improved tax and customs administration and enforcement. The program will also improve performance on MCC’s Days to Start a Business and Cost of Starting Business indicators by streamlining business registration procedures. Sãotomean Vice Prime Minister Maria dos Santos Tebus Torres and Deputy Assistant Secretary of Treasury Larry McDonald signed the program.
“The program initiated today is a testament to the commitment by the people and government of São Tomé and Príncipe to enhance their business climate,” said MCC Director Malik Chaka. “The program with São Tomé and Príncipe will help streamline business registration and improve tax and customs administration and enforcement. We look forward to working with the people of São Tomé and Príncipe as they implement this ambitious program.”
Mr. Chaka added, “I would like to acknowledge the hard work of our colleagues at the Treasury Department’s Office of Technical Assistance and the U.S. Embassy for São Tomé and Príncipe, led by Chargé d’affaires Nathan Holt, in making this program a reality.”
MCC’s threshold program is designed to assist countries that are on the “threshold” of eligibility for Millennium Challenge Account Compacts. Threshold Program assistance is used to help countries address the specific policy weaknesses indicated by their scores on 17 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 Compact 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.
The United States Department of the Treasury Office of Technical Assistance will oversee implementation of the São Tomé and Príncipe threshold program on behalf of MCC.
MCC’s Threshold Program assistance approved to date totals approximately $360 million in seventeen countries: Albania, Burkina Faso, Guyana, Indonesia, Jordan, Kenya, Kyrgyz Republic, Malawi, Moldova, Paraguay, Philippines, São Tomé and Príncipe, Tanzania, Uganda, Ukraine, Yemen and Zambia.
Millennium Challenge Corporation, 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.