Cape Verde eligible for second Millennium Challenge Corporation compact

10 December - The US’s Millennium Challenge Corporation (MCC) Board of Directors has reviewed the progress of its partnerships with countries to reduce poverty, and agreed to select Cape Verde as eligible to develop a proposal for a second compact grant.

“I was proud to participate in my first MCC Board meeting today with Secretary Clinton and the other distinguished directors. We took the opportunity to review the status of MCC’s compacts, review the policy performance of our partner countries, and reaffirm the US Government’s commitment to finding lasting and innovative solutions to global poverty,” said MCC new CEO Daniel W. Yohannes.

“Cape Verde is the first MCC partner country to be selected as eligible for a second compact,” Mr Yohannes said. “Cape Verde illustrates many of the characteristics of a strong partner and has consistently displayed good economic and political governance. We look forward to building on the successes of Cape Verde’s current efforts to combat poverty,” he added.

This is the first year that the MCC Board considered countries for possible eligibility for second compacts. Eligibility for a second compact is not automatic. For those countries selected, a second compact will allow for deeper investment in poverty reduction and economic growth, which is consistent with MCC’s mission. Countries must meet a higher hurdle to achieve second compact eligibility because MCC takes into account not only a country’s policy performance as measured by MCC’s indicators, but also effectiveness of implementation on its first compact as well as results achieved to date.

The Board also agreed that Jordan, Malawi, the Philippines, Indonesia, and Zambia are eligible to continue the process of developing compacts in fiscal year 2010. Since its inception in 2004, MCC has approved compacts totalling over $7 billion with 19 partner countries.

“MCC embraces President Obama’s commitment to fighting global poverty. We continue to work with Members of Congress to seek sufficient resources for MCC to fulfil our long-term economic development partnerships with some of the poorest countries in the world,” said Mr Yohannes.

The MCC Board also voted to suspend MCC’s $23 million threshold programme with Niger. The Board reviewed the recent actions by the Government of Niger, which constitute a significant policy reversal from the time the country was selected for an MCC grant, and took the action in accordance with MCC’s Policy on Suspension and Termination. MCC will proceed with an orderly wind-down of the threshold programme, which has focused on control of corruption, streamlining the process to start a business and land access procedures, and girls’ education.

“MCC makes this suspension decision with deep disappointment,” said Mr Yohannes. “The girls’ schools project had tremendous potential to promote girls’ education and create opportunities in Niger. MCC would have liked to continue the program had circumstances in Niger permitted us to move ahead,” he said.

By staff writer

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