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 You are in: Under Secretary for Economic, Energy and Agricultural Affairs > Bureau of Economic, Energy and Business Affairs > All Remarks and Releases > Fact Sheets > 2005
Fact Sheet
U.S. Department of State
Washington, DC
June 29, 2005

Millennium Challenge Corporation

On January 23, 2004, President Bush established the Millennium Challenge Corporation (MCC), a U.S. government corporation, to administer the Millennium Challenge Account (MCA), an innovative new foreign assistance program designed to eliminate extreme poverty and promote sustainable economic growth. The MCA grew out of the U.S. commitment at the Monterrey Summit on Financing for Development, as President Bush said, "to provide greater resources for developing countries taking greater responsibility for their own development."

MCC is working with 30 countries with over 400 million people. Since its creation last year, MCC has moved quickly and accomplished much.

  • In May and November 2004, the MCC Board selected 17 countries eligible to receive MCA assistance in 2004 and 2005: Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri Lanka, and Vanuatu.
  • By June 2004, MCC teams visited each MCA eligible country to explain the MCA process and the central role each country must play in assessing barriers to growth, identifying priorities and developing a proposal through broad consultation. In August 2004, MCC began receiving proposals. By April 2005, MCC had received proposals from 16 countries and was engaged in an intensive dialogue with countries to evaluate and help them improve their proposals.
  • To provide further incentive for policy reform and to help additional countries qualify for the MCA, the MCC Board established a Threshold Program for countries that come close but fall short on one or two indicators. Threshold assistance helps address specific areas of policy weakness identified in the MCA selection indicators. The MCC Board selected thirteen countries eligible for Threshold Program assistance for fiscal year 2004 and 2005: Albania, Burkina Faso, East Timor, Guyana, Kenya, Malawi, Paraguay, Philippines, So Tom and Principe, Tanzania, Uganda, Yemen, and Zambia.

MCC will commit over $600 million through July and anticipates committing over $1 billion by the end of fiscal year 2005.

  • MCC signed its first Compact, with Madagascar, on April 18, 2005. The nearly $110 million Compact aims to raise incomes by bringing the rural population from subsistence agriculture into the market economy.
  • MCC signed a $215 million Compact with Honduras on June 13, 2005, focused on increasing incomes of agricultural producers and improving transportation links between producers and markets.
  • The MCC Board has approved a Compact with Cape Verde for approximately $110 million which will be signed July 4, 2005. The Compact will support Cape Verde in achieving its overall national development goal of transforming its economy from aid-dependency to sustainable, private-sector led growth.
  • A $175 million Compact with Nicaragua has also been approved by MCCs Board and will be signed in July. The Compact aims to increase investment by strengthening property rights; reduce transportation costs and improve access to markets for rural communities; and increase profits and wages from farming and related enterprises in the region.
  • MCC has a robust pipeline and is actively engaging other MCA-eligible countries in the Compact development and negotiation process.

What our partners are saying about the Millennium Challenge Corporation.

"We want to make decisions ourselves. It is our country, and we have to take on leadership and responsibilities. Ladies and gentlemen, if you take a look at the last two issues, our vision and country ownership, you will realize why the MCA is so important for us. Here we have a new approach which helps us to implement our vision. We have opportunities to design and implement our own programs."
--
Marc Ravalomanana, The President of Madagascar
School of Advanced International Studies, Johns Hopkins University, April 19, 2005

"To us -- the Compact signifies basically two things: One, its a recognition of some of the right steps and policies that we have implemented and reforms that will take us to be a more modern economy and a more solid democracy, which I think is fundamental. And two, it's a foundation and a bridge that will allow us to be able to deliver some specific development -- economic development, growth, job creation and especially in the poorest areas, which are the rural areas, which will allow us also to consolidate our democracy."
--Ricardo Maduro, President of the Republic of Honduras
Foreign Press Center, June 13, 2005

"We presented our proposal in August last year, and we have already, in June, the agreement of the Board. World Bank it is a minimum 18 months generally, normally it is almost two years to have this. And if we have done it, its because of the spirit of the MCC was totally different from other donors, where we are mainly a team, a joint-team, walking together for the same objective: to reduce poverty."
--Jos Brito, Cape Verde Ambassador to the U.S.
MCC Public Outreach meeting, June 16, 2005



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