During its quarterly meeting held on September 29, the Millennium Corporation Challenge (MCC) announced a number of new developments. As blogged by Casey Dunning, from the CGD, the organization has made revisions to its threshold program and procurement guidelines, completed a successful compact in Hoduras, launched a new project in Jordan, and welcomed new members to the board.
Revised Threshold Program – The purpose of the current threshold program is to help countries meet MCC compact requirements. Considering that a small minority of these countries have actually graduated to a compact grant, the threshold program has fallen under some scrutiny. Sarah Jane Staats, from CGD, delves into the criticisms and the changes to the program in her recent blog. In short, the threshold program will be longer, focus on broad policy improvements, and increase the country’s collaboration with USAID in program design and implementation. The idea is to decrease the program’s focus on improving MCC indicator scores in order to obtain compact eligibility, but focus on “broad policy reform” instead. A valid adjustment, considering that little evidence shows that the threshold programs actually help countries reach higher scores.
Revised Procurement Guidelines – Initially, state-operated enterprises (SOEs) were able to bid on MCC contracts and receive funding to establish industries and infrastructures outside of their countries of origin. But SOEs have been found to undermine development by 15-30% by decreasing the “recipient governments’ freedom to shop for the best deals” and thus hindering competition. Senator Webb’s Letter to CEO Daniel Yohannes claims that China’s SOEs have established factories and companies in Burma, dominating Burmese economy. The new procurement guidelines, which will be effective starting October 22nd, will prevent SOEs from bidding, ensure competition, and level the playing field. According to Dunning, “the revision is, in part, a response to Senator Jim Webb’s prior concerns about U.S. funds going to Chinese SOEs in numerous compact countries.”
Compact in Honduras – The quarterly meeting marked the last day of the five-year compact in Honduras. The compact was geared toward rural development through training farmers, restoring facilities, maintaining roads, and establishing community irrigation systems. Even though Honduras underwent massive political instability, Vice President of the Compact in Honduras Patrick Fine exclaimed that the compact was “on-time, on-budget, and with all targets met.”
Compact in Jordan – As the Honduras Compact came to an end, the Compact in Jordan made its debut with a $275.1 million for Jordan’s Water Project. The Compact focuses on reconstructing Jordan’s current water system to increase access. MCC Chief Executive Officer Daniel Yohannes noted that “safe and reliable water systems are vital components for sustainable development. The Jordanians have demonstrated their commitment to improving the quality of their lives through this innovative program.” Hopefully, this will result in another successful story for the MCC!
MCC Public Board – President Obama recently appointed former US Ambassador to Tanzania and the current Director of the Malaria No More Policy Center, Mark Green, as a new member of the of the MCC Board of Directors.
These are big, bold steps for the MCC, the future of which will interesting to follow under the Obama Administration.