08/27/2009

News / Grants from Millennium Challenge Corporation Spur Development

Secretary Clinton touts focus on good governance in Africa, elsewhere

By Jim Fisher-Thompson
Staff Writer

Washington — When Secretary of State Hillary Rodham Clinton identified lack of good governance as a major obstacle to development during her recent trip to Africa, she also highlighted a global solution in use throughout the continent and South America, Asia and Europe: the compacts of the U.S. Millennium Challenge Corporation (MCC).

In Cape Verde, the last stop in her August 4–14, seven-nation trip to sub-Saharan Africa, Clinton pointed to progress the island nation’s government was making toward greater accountability and transparency, saying it was “music to my ears.”

She said the country’s economic progress is due, in part, to “its successful implementation of the Millennium Challenge Corporation compact.”

Created by Congress in 2004, the MCC is an independent U.S. development agency that is helping lead the fight against global poverty with innovative infrastructure projects through five-year grants called “compacts.” The MCC partners only with countries that can show measureable support for a free and open political system with access to open markets. Only countries with proven track records in anti-corruption, civil liberties and the rule of law may partner with the MCC in crafting a development program unique to their local conditions.

In March 2006, the MCC signed a five-year, $235 million compact with the government of Armenia to improve its agricultural sector by repairing and expanding roads and irrigation while providing technical and financial assistance to farmers and agribusinesses.

The agency is also making an impact in Central America, where in 2006 it signed a compact with El Salvador — a model of democracy in the region — worth $461 million. The program funded construction of the Northern Transnational Highway and provided assistance to 3,000 local farmers, including 430 scholarships to technical and vocational schools.

Work has also begun on construction of 1,500 kilometers of new electric power lines and the installation of 450 solar panels in rural areas of the nation.

Secretary Clinton, who attended the May 31 signing of the electrification project pact in San Salvador, said the MCC partnership is “a real-world example of what we hope to achieve throughout El Salvador and everywhere that the United States works in partnership, not only with governments, but with businesses.”

For countries that do not yet meet the MCC’s criteria for open political systems and markets, MCC works through its “threshold” process to partner on good governance programs emphasizing civil society, judicial reform and anti-corruption efforts.

Since 2005, the MCC has signed threshold agreements worth $117 million to combat corruption and strengthen government institutions in Albania, Malawi, Moldova, Paraguay and the Philippines.

The development agency has a threshold agreement with Kyrgyzstan designed to help its government fight corruption and improve the rule of law through judicial, criminal justice and law enforcement reforms.

The $16 million program focuses on the important role civil society plays in government’s reform efforts and includes funding for a civilian oversight board of the police and a public education program on corruption.

Indonesia has a similar threshold partnership with the MCC and is the recipient of a two-year, $55 million grant aimed at reducing public corruption through education programs for judges and court officers. Money laundering is also targeted through funding to improve the functioning of the nation’s Financial Transaction Reports and Analysis Center.

Recovering from years of civil war, Liberia is also not in a position to be a full MCC compact partner, but it has become eligible for threshold assistance aimed at improving its civil and governing institutions.

Some critics claim that the MCC’s good-governance requirements are too stringent, slowing down the grant process. Liberian President Ellen Johnson Sirleaf disagrees.

Africa’s first woman head of state recently said, “MCC has had a transformative effect across the developing world. Responsible, reform-minded governments have set their sights on the MCC benchmarks, and this has accelerated the pace of reform while empowering governments to make decisions on their own path of development and the direction of their future.”

http://www.america.gov/st/develop-english/2009/August/200908261808261ejrehsiF0.4681055.html?CP.rss=true

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