Washington, D.C.—At its quarterly meeting today, the Millennium Challenge Corporation’s Board of Directors approved a five-year, $277 million compact with El Salvador to improve its competitiveness and productivity in international markets, and was briefed on MCC’s latest efforts in open data and transparency.
“I am very pleased that the Board of Directors took this step in approving the compact with El Salvador,” MCC Chief Executive Officer Daniel W. Yohannes said today. “This compact represents a tremendous opportunity to help reduce poverty in El Salvador by spurring investment and increasing economic growth.”
A thorough analysis concluded that low productivity in internationally traded goods and services is a primary constraint to economic growth in El Salvador. The Government of El Salvador has committed to contribute $88.2 million on top of MCC’s investment, constituting a combined total of $365.2 million targeted toward three interrelated projects:
- investing in the institutional capital of El Salvador to streamline regulations and enhance the investment climate;
- investing in human capital to improve the quality of education and better match students’ skills with the demands of firms engaged in international trade; and
- investing in physical capital to reduce transportation and logistics costs along a critical coastal highway and at the border with Honduras.
The Board discussed the need for the Government of El Salvador to maintain a strong commitment to good governance and the rule of law.
Mr. Yohannes said, “We expect the Government of El Salvador to make continued progress on strengthening the investment climate and rule of law, including respect for judicial independence. We also expect the government to make progress in combating money laundering and effectively implementing its trade agreements. Efforts by the current government and the next government to demonstrate tangible, sustained progress on these issues will be critical to our partnership.”
El Salvador is part of the U.S. Government’s Partnership for Growth; as part of the initiative, MCC and the Government of El Salvador worked closely with other U.S. Government agencies to develop the compact.
MCC’s Board named El Salvador as eligible to develop this compact in December of 2011. In 2012, MCC and El Salvador successfully completed a $461 million compact to strengthen the transportation and agricultural sectors and improve the education system in the country’s Northern Zone.
The Board also received an update on agency-wide efforts in transparency and open data. Transparency is a core part of MCC’s mission, and the agency practices transparency at each stage of the development program lifecycle by:
- publishing the criteria and indicators used for country selection;
- using an evidence-based, disciplined and consultative process for selection of investments;
- practicing open, transparent procurements;
- disclosing compact agreements and quarterly status reports; and
- releasing the findings from independent evaluations and the data behind them.
Reflecting MCC’s deepening commitment to transparency, the agency has been a leader in reporting to the U.S. Foreign Assistance Dashboard. MCC released its first set of independent evaluations, highlighting lessons learned and engaging stakeholders on the findings. It launched an evaluations data catalog to house data from evaluations as it becomes available. MCC also launched data.mcc.gov, a website that centralizes agency data in machine-readable formats.
The Board also approved MCC’s fiscal year 2014 Selection Criteria and Methodology Report. There were no changes proposed to the selection methodology from that used in fiscal year 2013.