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11:23 am | June 15, 2009 | Politics
MCC Board of Directors Meets to Address U.S. Government Global
Development Priorities
Partial termination of assistance to Nicaragua announced
Hold on funding for Armenia to remain in force
Washington D.C – The U.S. Government’s Millennium Challenge Corporation
(MCC) Board of Directors, chaired by U.S. Secretary of State Hillary
Rodham Clinton, today held its quarterly meeting to discuss the
progress of its poverty reduction programs worldwide.
The Board received updates on engagement with those countries
seeking MCC funding, including Moldova, Senegal, Jordan, Malawi,
and the Philippines. Board discussions also included the compact
development process for Colombia, Indonesia, and Zambia – three new
countries selected by the Board last December as eligible for MCC
compact assistance.
The Board reviewed how MCC investments and programs around the
world are helping address priority issues such as long-term economic
growth, global food security, maternal and child health and safety,
transportation infrastructure improvements, secure land tenure,
and environmental protection.
"MCC’s commitment to performance-based foreign assistance is at the
forefront of the U.S. Government’s ‘smart power’ approach to create
economic growth. Today’s Board meeting makes it clear that these
programs are having a significant, positive impact on the lives of
the world’s poor," said Acting MCC Chief Executive Officer Rodney Bent.
The Board approved action to partially terminate MCC’s compact
assistance to Nicaragua for activities previously suspended in December
2008. These activities include a property regularization project and
a major road. The Board reiterated that its commitment to helping
the people of Nicaragua reduce poverty through economic growth will
continue through MCC assistance for a rural business development
project benefiting small and medium agriculture-related enterprises,
including some 30,000 people in rural areas. MCC also will complete
three roads already under construction in the departments of Leon and
Chinandega. The termination will result in a reduction of approximately
$62 million from Nicaragua’s original $175 million compact with MCC.
"Although the Board would like to continue in full MCC’s support for
Nicaragua’s economic development, we remain committed to upholding
MCC’s founding principles of working with those countries whose
governments actively demonstrate a commitment to democracy and the
rule of law, as well as economic freedom and social investment,"
said Mr. Bent. "Given the lack of meaningful reforms or progress in
these areas by the government of Nicaragua, the Board has agreed to
terminate these projects."
"This decision is made with deep disappointment, as our partnership
with Nicaragua has yielded tremendous progress over the past years
in reducing poverty through innovative economic growth projects.
MCC regrets that the government of Nicaragua has not taken steps to
respond to concerns expressed by its people and the international
community surrounding the recent municipal elections. This has made
it impossible for us to fully continue our collaboration with the
government of Nicaragua," stated Mr. Bent.
The Board also addressed the future of MCC engagement with Armenia.
As a result of the meeting, MCC will not resume funding for any further
road construction and rehabilitation. This hold on funding is a result
of actions by the government of Armenia that are inconsistent with MCC
principles promoting democratic governance. MCC’s Board unanimously
expressed regret that this action means that MCC will not be able to
fully fund this project during the compact term.
"MCC regrets that it cannot move forward with funding road construction
in Armenia," Mr. Bent said. "The responsibility for this outcome
remains with the government of Armenia, whose actions have been
inconsistent with the eligibility criteria that are at the heart
of the MCC program. It is particularly disappointing that MCC will
not be able to partner with Armenia on completing the roads that
will benefit Armenia’s rural poor who are our friends and partners
in creating growth for the future," continued Mr. Bent. "I do not
anticipate that the Board will revisit this issue in the future."