Millennium Challenge Corporation

FY2017 Funding Recommendation:  
$1 billion

 

Funding History

       Enacted   

       President's FY2017 Request   

       InterAction's FY2017 Recommendation


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Justification

 Key Facts

  • The MCC has signed 29 compacts with 25 countries worth more than $11 billion. These compacts are expected to benefit more than 174 million people with investments in infrastructure, food security, education, and health.

  • The MCC enables private sector investment. For example, MCC investments in Benin, Ghana, and Jordan totaled nearly $1.1 billion. These investments laid groundwork that helped mobilize an additional $5 billion in private investments.

  • The high standards required by MCC have created the MCC Effect as countries strive to meet MCC standards as a goal for their own reform and development actions.

The Millennium Challenge Corporation (MCC) was created by Congress in 2004 with bipartisan support; it was designed as an innovative, international assistance agency charged with reducing global poverty by enhancing economic growth. The MCC provides program-oriented partnerships with developing countries committed to the principles of good governance, economic freedom, and investments in their citizens.

The MCC works with the poorest countries in the world striving for positive development. The MCC signs agreements – known as compacts – with countries that are competitively selected based on independent, transparent policy indicators. The development agendas are country-led and country-driven; the selected countries identify their priorities for achieving sustainable economic growth and implement their own programs. The MCC also partners with countries that are showing signs of positive development by providing threshold programming that helps those countries take the steps necessary to be fully eligible for a compact. Partner countries value the effects of MCC assistance and the potential for partnership provides incentive for reform. Countries work proactively to increase their levels of transparency, efficiency, and governance capability so that they may become eligible for MCC funding.

With all partners, the MCC sets a high standard for commitment to both sound economic and social policies aimed at reducing domestic poverty levels. Current compacts include projects on:

  • Water, sanitation, and hygiene improvement in Cape Verde;

  • Community-based nutrition and prevention of stunting in Indonesia;

  • Science and technology in higher education and workforce development in Georgia;

  • Agriculture productivity and infrastructure improvements to expand access to markets and services in Senegal; and

  • Water supply, sanitation, and drainage infrastructure in Zambia.

The MCC’s work has produced constructive, sustainable policy changes in both countries implementing compacts and in those seeking to qualify for MCC candidacy. InterAction supports legislative authority for the MCC to create concurrent, multi-country compacts to further leverage U.S. and international private sector investments in regional infrastructure projects. The regional projects would provide development opportunities where, despite national divides, markets and communities are economically and socially integrated. Using rigorous data analysis as the basis for its investment decisions, the MCC is a leader in pioneering many best practices in international development, including transparency, gender integration, and country ownership.

In 2015, the Millennium Challenge Corporation approved Côte d’Ivoire, Kosovo, and Senegal as eligible partners for the development of compacts, and Sri Lanka and Togo as eligible to develop threshold programs. These countries join previously selected Niger, Nepal, and the Philippines as countries MCC is working with to develop new compacts and programs. The MCC will need additional congressional support to help these countries finalize agreements; if current funding trends continue, the MCC may not have the funds necessary to approve future compacts.

Success Story

Creating New Economic Opportunity in El Salvador

Since the 2012 opening of the MCC-funded Northern Transnational Highway, along with three large bridges and 20 smaller bridges, people who live and work in this region of El Salvador say their lives have changed. The Northern Transnational Highway is a 138-mile road that links the Honduras border in the east with the Guatemala border in the west – roughly the distance between Washington and Philadelphia. The project was part of MCC’s $461 million first compact with El Salvador. Before the highway, residents say it seemed progress would never come. The region’s roads were battered by years of war and neglect. Public transportation was practically nonexistent, getting to school was hard, and merchants navigated rugged terrain on time-consuming journeys just to restock their shelves. Shopkeeper Ana Gladis Lemus de Serrano says the highway has turned everything around for her and her family. They are seeing more traffic – and customers – than they ever dreamed possible at their variety store in the country’s northwest.

Photo: MCC

 

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