Curt Tarnoff
Specialist in Foreign Affairs
The Millennium Challenge Corporation (MCC) provides economic assistance through a competitive selection process to developing nations that are pursuing political and economic reforms 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:
Specialist in Foreign Affairs
The Millennium Challenge Corporation (MCC) provides economic assistance through a competitive selection process to developing nations that are pursuing political and economic reforms 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:
- the competitive process that rewards countries for past and current actions measured by 17 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;
- the requirement to solicit program proposals developed solely by qualifying countries with broad-based civil society involvement; and
- the responsibility of recipient countries to implement their own MCC-funded programs.
As announced by President Bush in March 2002, the initial plan had been to fund the MCC annually at $5 billion by FY2006, but this figure has never been reached.
On February 1, 2010, the Obama Administration issued its FY2011 budget request, providing $1.280 billion for the MCC, a 16% increase over the FY2010-appropriated level. FY2011 funding for the MCC is currently provided under the terms of the Continuing Appropriations Act 2011 (P.L. 111-242, H.R. 3081), approved September 30, 2010, which provides foreign aid spending at the level in the FY2010 Consolidated Appropriations Act (P.L. 111-117).
Congress authorized the MCC in P.L. 108-199 (January 23, 2004). Since that time, the MCC’s Board of Directors has approved 22 compacts: with Madagascar (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), and Jordan (2010). In June 2009, the Madagascar compact was terminated early, as were uncontracted components of the Nicaragua compact. A hold on the roads portion of the Armenia compact has been continued. In September 2009, uncontracted portions of the Honduras compact were terminated as a result of an undemocratic change in government.
MCC implementation concerns include the relationship of MCC and USAID, the level of funding to support MCC programs, the impact of budget reductions on MCC programs, the rate of program implementation, and the results of MCC compact and threshold programs.
Date of Report: November 16, 2010
Number of Pages: 37
Order Number: RL32427
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
On February 1, 2010, the Obama Administration issued its FY2011 budget request, providing $1.280 billion for the MCC, a 16% increase over the FY2010-appropriated level. FY2011 funding for the MCC is currently provided under the terms of the Continuing Appropriations Act 2011 (P.L. 111-242, H.R. 3081), approved September 30, 2010, which provides foreign aid spending at the level in the FY2010 Consolidated Appropriations Act (P.L. 111-117).
Congress authorized the MCC in P.L. 108-199 (January 23, 2004). Since that time, the MCC’s Board of Directors has approved 22 compacts: with Madagascar (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), and Jordan (2010). In June 2009, the Madagascar compact was terminated early, as were uncontracted components of the Nicaragua compact. A hold on the roads portion of the Armenia compact has been continued. In September 2009, uncontracted portions of the Honduras compact were terminated as a result of an undemocratic change in government.
MCC implementation concerns include the relationship of MCC and USAID, the level of funding to support MCC programs, the impact of budget reductions on MCC programs, the rate of program implementation, and the results of MCC compact and threshold programs.
Date of Report: November 16, 2010
Number of Pages: 37
Order Number: RL32427
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
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