Curt
Tarnoff
Specialist in Foreign Affairs
The
Millennium Challenge Corporation (MCC) provides economic assistance through a competitive
selection process to developing nations that demonstrate positive performance
in three areas: ruling justly, investing in people, and fostering economic
freedom.
Established in 2004, the MCC differs in several respects from past and current
U.S. aid practices:
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the competitive process that rewards countries for past actions measured by objective
performance indicators;
-
the pledge to segregate the funds from U.S. strategic foreign policy
objectives that often strongly influence where U.S. aid is spent;
-
its mandate to seek poverty reduction through economic growth, not encumbered with
multiple sector objectives;
-
the requirement to solicit program proposals developed solely by qualifying countries
with broad-based civil society involvement;
-
the responsibility of recipient countries to implement their own MCC-funded programs,
known as compacts;
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a compact duration limited to five years, with funding committed up front;
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the expectation that compact projects will have measurable impact; and
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an emphasis on public transparency in every aspect of agency operations.
On February 13, 2012, the Administration issued its FY2013 State, Foreign
Operations budget, requesting $898.2 million for the MCC, the same amount
it received in FY2012 and FY2011. In September 2012, the Continuing
Appropriations Resolution, 2013 (H.J.Res. 117, P.L. 112-175), was approved
by Congress, providing FY2013 funding for the MCC at the level in the FY2012 Consolidated
Appropriations Act (P.L. 112-74) plus 0.612%—$904 million. The resolution expires
on March 27, 2013.
Congress authorized the MCC in P.L. 108-199 (January 23, 2004). Since that
time, the MCC’s Board of Directors has approved 26 grant agreements, known
as compacts: with Madagascar (calendar year 2005), Honduras (2005), Cape
Verde (2005), Nicaragua (2005), Georgia (2005), Benin (2006), Vanuatu
(2006), Armenia (2006), Ghana (2006), Mali (2006), El Salvador (2006), Mozambique
(2007), Lesotho (2007), Morocco (2007), Mongolia (2007), Tanzania (2007), Burkina
Faso (2008), Namibia (2008), Senegal (2009), Moldova (2009), Philippines
(2010), Jordan (2010), Malawi (2011), Indonesia (2011), Cape Verde II
(2011), and Zambia (2012).
MCC issues include the level of funding to support MCC programs, the impact of
budget reductions on MCC programs, the rate of program implementation, the
results of MCC compacts, and procurement and corruption concerns.
Date of Report: October 16, 2012
Number of Pages: 44
Order Number: RL32427
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