Press Release

MCC Reiterates U.S. Commitment to Fight Poverty Board Calls on Partners to Recommit to Democratic Principles

December 12, 2008

The Millennium Challenge Corporation (MCC) Board of Directors selected Colombia, Indonesia, and Zambia as new countries eligible for large-scale grant funding under the U.S. Government’s innovative foreign assistance program to reduce poverty through economic growth. Following today’s announcement these countries may begin the process of applying for the five-year MCC compacts. Since its inception in 2004, MCC has approved compacts totaling over $6.3 billion with 18 partner countries. Tanzania received the largest MCC Grant to date, $698.1 million over five years, during President Bush's historic visit to that country February 16-19, 2008.

Regarding the results of the MCC Board meeting, in which Tanzania was reauthorized to continue with the MCC Compact, U.S. Ambassador to Tanzania Mark Green said, "In signing the MCC Compact earlier this year, President Kikwete committed himself and his government to continue the fight against corruption. The decision by the MCC Board of Directors demonstrates our continued appreciation of that commitment to our common struggle, and our continued support to the people of Tanzania.”

MCA Tanzania Resident Country Director Karl Fickenscher added, “A quick glance at the recent newspaper headlines from the U.S. demonstrates once again what we have said repeatedly in the past: the struggle against corruption is a universal and continuing struggle. Corruption occurs in every country, developed and developing. The scourge of corruption will continue until governments are determined to control the corruption that occurs in their midst. Do they tolerate it or ignore it? Or do they seek to root it out by thorough investigation and, where appropriate, vigorous prosecution."

In making its country selection decisions, the Board considers the policy performance of candidate countries using 17 indicators in three areas—Ruling 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. The Board also takes into consideration the opportunity for MCC to reduce poverty and generate economic growth, and available budgetary resources.

“The Board agreed that the Philippines remains eligible for developing a compact proposal, but emphasized that MCC will not sign a compact until the country passes the indicator criteria on corruption. The Board also reiterated the importance of this principle with respect to all its partner countries. The Board called upon the Government of the Philippines to intensify its efforts to fight corruption and will closely monitor the country’s performance,” said MCC CEO Ambassador John Danilovich.

The Board also voted to suspend assistance for new activities under the $175 million MCC compact in Nicaragua because of actions taken by the Nicaraguan government that are inconsistent with MCC’s eligibility criteria. MCC will therefore not approve disbursements for activities not already contracted by MCA-Nicaragua. The political conditions leading up to, during, and following recent elections in Nicaragua were not consistent with MCC requirements that include a commitment to policies that promote political freedom and respect for civil liberties and the rule of law.

“The MCC model is based on aid with accountability and good governance. The Board determined that recent actions by the Nicaraguan government were inconsistent with MCC’s core principles and therefore had to take this difficult decision,” said Ambassador Danilovich. “Nicaragua’s compact with MCC benefits hundreds of thousands of poor Nicaraguans by providing better roads, property titles, and agricultural business support. For the sake of the poor of the country, we sincerely hope that the Nicaraguan government recommits to the principles of democracy and the rule of law so that MCC can reestablish what has been an effective partnership. It should be remembered that our partnership with Nicaragua is dedicated to both poverty reduction and good government policies.”