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MCC: Answering President Obama's call to end extreme poverty

January 27, 2015


During last week's State of the Union address, President Obama called for investments in “smart development” and for a renewed commitment to ending extreme poverty. With 10 years of experience as a business-minded, data-driven foreign assistance agency, we at the Millennium Challenge Corporation are ready to answer the President’s call.

At MCC, our mission is to reduce poverty through economic growth, and one of the most important ways we do that is by focusing our work with developing countries on enabling trade and attracting private investment. The logic is simple: foreign assistance can be a critical tool in addressing extreme poverty, but it cannot drive widespread economic growth on its own. For that you need the private sector. As we seek to provide a stable environment for trade and investment, we focus on partnering with countries committed to good governance, maintaining sustainability of our projects through local ownership and accountability, and remaining transparent about the results of our work.

Good governance is key to attracting the trade and investment needed to lift developing countries out of poverty. The rule of law is fundamental to investor confidence--companies do not want to take on the risks associated with governments that extort or mishandle funds or disregard contracts. That is why MCC works with partner countries that show a strong commitment to sound political, economic and social governance. As countries work to pass our performance criteria, they make serious reforms that improve both governance and the lives of their citizens. The effect is so powerful and pronounced that a 2013 College of William and Mary global survey ranked MCC's scorecard as the most influential tool to incentivize policy reform around the world.

We value our partner countries as drivers of their own development and emphasize mutual responsibility between them and us as a foundation for long-term sustainability for MCC’s investments. We require our partners to consult broadly with their citizens and identify their own priorities for breaking through barriers to investment and achieving sustainable economic growth and poverty reduction. Countries design their own projects, and MCC works with them to refine their proposed programs. When a country is awarded a compact, it sets up its own local entity to manage all aspects of implementation, which must meet MCC's high standards for results, accountability and transparency.

With each partnership, MCC makes the results of our investments publicly available, reflecting our commitment to transparency. Potential investors and trade partners know exactly what kind of improvements have been made because of MCC’s partnership, which often entice them to give a developing country a second look as an investment destination. In addition, with the expertise we continue to gain through our partnerships and our emphasis on sharing learning, we help the U.S. Government and the larger development community work more effectively. This commitment to data transparency and “smart development” has earned MCC a place among the top three most-transparent international aid organizations on Publish What You Fund’s most recent Aid Transparency Index.

With every new partnership we undertake, and with every investment opportunity we help create, we are working to make the President’s vision of ending extreme poverty a reality, so we can put ourselves out of business. We hope you will follow our progress at