December 12, 2007
Millennium Challenge Corporation Reinforces Support for Africa: Malawi and Mauritania Selected to Participate
Washington, DC The Board of Directors of the Millennium Challenge Corporation (MCC) today selected countries eligible for funding from the Millennium Challenge Account, naming the southern African nation of Malawi as a new country in this group. Malawi may now begin the process of applying for a large-scale grant, or compact, under this innovative foreign aid program to reduce poverty through economic growth. Since its inception in 2004, MCC has approved compacts totaling over $5.5 billion with 16 partner countries.
The Board also selected Mauritania to participate in MCCs Threshold Program, a program designed to assist countries that do not yet qualify for the compact grants but that are close to qualifying and have demonstrated a commitment to enact the reforms necessary to improve policy performance that may eventually help them qualify for compact assistance.
Congratulations to Malawi for being named as a new compact-eligible country and to Mauritania for its selection into our Threshold program this year, said MCC CEO Ambassador John Danilovich. Their selection deepens MCCs already clear commitment to support our African partners in the fight against poverty.
The Board welcomed MCCs intention to invite Albania, Paraguay, and Zambia to submit a Stage II Threshold proposal to build upon their current Threshold programs that expire in 2008. The move is designed to continue MCC support to ongoing reform efforts in these countries.
In making its decision for selection, the Board considers policy performance of candidate countries using 17 indicators in three areasruling justly, investing in people, and encouraging economic freedom. These indicators measure countries demonstrated commitment to policies that promote, among other things, political and economic freedom, investments in education and health care, control of corruption, and respect for civil liberties and the rule of law. In addition to evaluating whether countries perform above the median in relation to their peers on at least half of the indicators in each of these three policy categories and on corruption, the Board may exercise discretion in adjusting for gaps or lags in the data.
Ambassador Danilovich added, While selection is an essential first step towards achieving compact assistance from the MCC, it does not guarantee funding. Countries must undergo a broad-based consultative process to develop proposals that address barriers to poverty reduction and economic growth. MCC looks forward to working in partnership with countries as they chart their own course to help lift their citizens out of poverty.
The Board considered Colombia for compact eligibility as a lower middle income country (LMIC) and acknowledged its significant reform efforts to promote stability in an environment conducive to economic progress. Because of legislative limitations for funding LMIC countries, however, the Board decided not to select any new countries in the LMIC category at this time.
Similarly, the Board also considered Liberia for eligibility for its Threshold program and recognized the progress achieved under President Johnson Sirleaf and her government. Though the Board did not include Liberia in the Threshold Program at this time, the Board supported USAIDs engagement with Liberia on the countrys reform effort, so that it may become eligible to participate in the MCC program in future years.
The following countries are already participating in the MCC program and were reselected by the Board as eligible for FY 2008 compact funding: Armenia, Benin, Bolivia, Burkina Faso, El Salvador, Georgia, Ghana, Honduras, Jordan, Lesotho, Madagascar, Mali, Moldova, Mongolia, Morocco, Mozambique, Namibia, Nicaragua, Senegal, Tanzania, Timor-Leste, Ukraine, and Vanuatu.
The Millennium Challenge Corporation, a U.S. government corporation 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.