MCC Board Meeting: Georgia and Ghana Eligible for Second Compacts; Threshold Decision Delayed

(By Casey Dunning in MCA/MCCRethinking U.S. Foreign Assistance

Source: Center for Global Development)

The Millennium Challenge Corporation (MCC) board finally held its winter quarterly meeting on January 5th to select countries eligible to apply for FY2011 compact funding.  As predicted in the MCA Monitor’s annual selection paper, the board did not select any new countries but chose Georgia and Ghana as eligible to apply for second compacts.  Neither country has completed its first compact yet, and MCC CEO Daniel Yohannes emphasized that second compacts are contingent on successful completion of first compacts and continued good policy performance.

In addition to Georgia and Ghana, the MCC board reselected Cape Verde, Indonesia, Malawi, and Zambia as eligible to continue developing their compacts.  These selections align with the MCA Monitor’s predictions, but we continue to caution the MCC on Indonesia.  Indonesia failed the FY2011 indicators test but is still eligible for a huge ($700-800 million) compact.  The board needs to be clear on why Indonesia was selected and its policy performance outside of the indicators.  The board also approved a $350.7 million compact with Malawi that focuses exclusively on the power sector.

The MCC board punted decisions on new threshold-eligible countries.  It would be interesting to know why the board postponed the decision – whether there isn’t yet agreement on the new model, if the MCC should still do the threshold program, what criteria to use to select threshold countries, or debate over which countries to choose. Likewise the board discussed the completion of the MCC compact in Honduras but made no decisions about the future of the MCC-Honduras relationship, noting that the MCC looks forward to “future consideration of the country for a second compact.”

The MCC also welcomed Ambassador Mark Green as its newest public board member. At the MCC public outreach meeting, Ambassador Green spoke about his first-hand experience with the MCC, first as a member of Congress when the MCC legislation was drafted and approved and later as the U.S. ambassador to Tanzania when Tanzania developed and signed a compact with the MCC. Like the public board members who preceded him, Ambassador Green will be a huge asset in helping ensure the MCC sticks to its mission and mandate and in explaining the MCC model to policymakers on Capitol Hill and in the diplomatic community.

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