Millennium Challenge Corporation

The Millennium Challenge Corporation (MCC) "is a United States Government corporation designed to work with some of the poorest countries in the world. Established in January 2004, MCC is based on the principle that aid is most effective when it reinforces good governance, economic freedom and investments in people. MCC’s mission is to reduce global poverty through the promotion of sustainable economic growth.

"Before a country can become eligible to receive assistance, MCC looks at their performance on independent and transparent policy indicators. MCC selects eligible countries for Compact Assistance."

Background
On March 14, 2002, President George W. Bush announced the creation of the MCC. "The Bush Administration sees the new development program as a partnership with business, and is continuing to solicit ideas from the business community on its operation, including procurement management, an aspect of the MCA that has yet to be fully developed." January 2003.

Also see White House web page Millenium Challenge Account, MCC/MCA Documents, and MCC web page "Overview".

Millennium Challenge Account
"The MCA concept, unveiled at the United Nations Conference on Financing for Development (FfD) in Monterrey, Mexico in March 2002, is designed to promote economic growth and sustainable, market-oriented practices in poor countries, in order to attract long term investment.

"The MCA will be a new account in the FY 2004 budget, which will be released on February 3, 2003. Funding is anticipated to reach $5 Billion annually by 2006." The program will be administered by a new government corporation (the Millenium Challenge Corporation), with the Secretary of State serving as Chairman of the Board of Directors. 

The MCA will increase "the total of the American assistance abroad" by 50%. 

See Millennium Challenge Acount Update "Fact Sheet," June 3, 2002.

According to a February 13, 2002, Department of State press release (French), the following institutions will be involved


 * "To control with justice


 * public freedoms and right policies: Freedom House
 * a say and rendering of accounts, effectiveness of the government, state of right, and fight against corruption: Institute of the World Bank


 * "To encourage freedom in the economic field:


 * notation of the country: "Institutional Investor Magazine"
 * inflation: International Monetary Fund
 * marketing policy: Heritage Foundation
 * quality of the regulation and number of days necessary to create a company: Institute of the World Bank

In 2004, Thomas O. Melia noted in the Daily Star that:
 * "Bush's Millennium Challenge Account makes political reform a key criterion that poor countries need to meet to qualify for $1 billion in new foreign assistance. Under his administration, the State Department and the US Agency for International Development now manage more than $1 billion in democratic reform programs."

This support of "democratic reform" is similar to the "democracy promotion" activities undertaken by the US government funded National Endowment for Democracy.

Millennium Challenge Account (MCA) goals
"The goal of the Millenium Challenge Account (MCA) is 'to reward sound policy decisions that support economic growth and reduce poverty.' What's controversial and difficult in that is how the Millenium Challenge Corporation (MCC), which administers the Account, should determine the sound-ness of candidate countries' policies.

"It turns out the focusing on progress towards economic freedom would be a great way to meet the MCA's goal. Using rankings from The Heritage Foundation's annual 2004 Index of Economic Freedom, Sara Fitzgerald and Anthony Kim show (see below) that the countries that have most improved their economic freedom over the past decade have had the highest rates of economic growth over the same period.

"The difference between the top and bottom-scorers is striking. On average, countries in the top quartile grew six times faster than counties in the bottom quartile.

"The recipients that the MCC chooses this year, the MCA's first, will set the standard for years to come. If the MCA is to be effective, that standard should be economic freedom." Source: Heritage Foundation, February 27, 2004.

MCA appropriations and funding
25 November 2003: U.S. House of Representatives, Committee on Appropriations, "Highlights of the FY04 Consolidated Appropriations": "The bill provides $650 million for the Millennium Challenge Corporation and includes a comprehensive authorization for this new initiative."

"The money would be used for such things as improving education for students, helping businesses find new markets for their goods, developing new ways to grow more food, and fighting AIDS. This assistance would go only to poor countries that adopt sound economic policies and root out corruption in their countries." 

MCA candidate countries
"Armenia is among the 63 countries eligible to compete for funds from the new U.S. Millennium Challenge Corporation (MCC). The first candidate countries for the Millennium Challenge Account (MCA) funding are those that have a maximum average per capita income of $1,415 and are eligible for assistance from the World Bank's no-interest lending arm, the International Development Association. Next, the MCC will evaluate the countries based on their commitment to development. The MCA will be used to support projects 'that encourage long-run, sustained economic growth' necessary for achieving 'lasting poverty reduction,' said Under Secretary of State, MCC's interim chief executive officer Alan P. Larson. As reported by the Armenian Assembly of America, the corporation, initiated by President George W. Bush, is chaired by Secretary of State Colin L. Powell. It should be noted that out of the former countries of the USSR Azerbaijan, Georgia, Kyrgyzstan, Moldova and Tajikistan are among the countries, pretending to the assistance." February 5, 2004.

Board of Directors
The first meeting of the Board of Directors was held on February 2, 2004. 

"Board of Directors, the Secretary of State [Colin L. Powell] as the Chairman of the Board; the Secretary of the Treasury [ John Snow ] as the Vice Chairman; the United States Trade Representative, Robert B. Zoellick, as a Member of the Board; Andrew S. Natsios, the Administrator of USAID, as a Member of the Board, and it will in the future include the permanent CEO, someone that will be nominated soon by the President and confirmed by the Senate, as well as some representatives of the private sector who can bring their expertise to this important task." Also see MCC web page.

February 20, 2004: President George W. Bush announced his intention "to nominate Paul V. Applegarth, of Connecticut, to be Chief Executive Officer of the Millennium Challenge Corporation."

Board of Directors, 2008:
 * Condoleezza Rice, Chair, U.S. Secretary of State
 * Henry M. Paulson, Jr., Vice-Chair, U.S. Secretary of Treasury
 * Susan C. Schwab, U.S. Trade Representative
 * Henrietta Holsman Fore, Administrator, U.S. Agency for International Development
 * John J. Danilovich, MCC Chief Executive Officer
 * Lorne W. Craner, President, International Republican Institute
 * William H. Frist, Former U.S. Senator (R-TN)
 * Ken Hackett, President, Catholic Relief Services
 * Alan J. Patricof, Founder and Managing Director, Greycroft, LLC

Former:
 * Christine Todd Whitman

Executives, 2008:
 * Rodney G. Bent, Deputy Chief Executive Officer
 * William G. Anderson, Jr., Vice President and General Counsel
 * Maureen Harrington, Vice President, Department of Policy and International Relations
 * John Hewko, Vice President, Department of Compact Development
 * Darius Mans, Vice President, Department of Compact Implementation
 * Matthew K. McLean, Vice President, Department of Congressional and Public Affairs
 * Michael Casella, Acting Vice President, Department of Administration and Finance
 * Charles O. Sethness, Senior Investment Counselor
 * Matthew L. Bohn, Chief of Staff

Contact details
875 Fifteenth Street NW Washington, DC 20005-2221 Phone: (202) 521-3600 Web: http://www.mcc.gov

Quote
"We must bind a greater part of the assistance to the reforms in the policy fields, legal and economic. While insisting on the need for undertaking reforms, we show compassion. The United States will give the example. I proposed an increase of 50 % of our development aid during three next financial years, which will represent finally an increase of 5 billion dollars per annum compared to the current assistance.

"These new appropriations will be assigned to a new Account of the millenium, intended to finance projects in countries which control with justice, which invests in the social field and which encourages freedom in the economic field." -- President George Bush, Monterrey (Mexico), March 22, 2002 Translated from original French.

SourceWatch resources

 * banking
 * Bush administration
 * corporate welfare
 * foreign aid
 * G8
 * globalization
 * National Endowment for Democracy
 * New World Order
 * Paris Club
 * Pax Americana
 * Pax Americana, Africa
 * privatization
 * Private Federal Corporation
 * U.S. Agency for International Development
 * U.S. budget deficit
 * U.S. economy
 * Mauro De Lorenzo

Millennium Challenge Account
 * Lorne Craner
 * Nicole Bibbins Sedaca
 * Stephen D. Krasner
 * Ricardo Maduro Joest
 * Jamie Drummond
 * Ambassador John Simon

Undated material

 * The Millennium Challenge Account: Opportunities and Challenges for the Future of Foreign Aid, Catholic Relief Services.
 * Colin L. Powell, Welcome Message from The Honorable Colin L. Powell, Chairman of the Board of The Millennium Challenge Corporation, USAID, no date.
 * Alexey Semyonov, The Millennium Challenge Account: A New Way to Conceive of Foreign Aid?, The National Interest, no date.
 * Millenium Challenge Account: Africa, Americans & the World.

Articles & commentary

 * Daniel Kaufmann and Aart Kraay, Governance Indicators, Aid Allocation, and the Millenium Challenge Account: A Summary, World Bank, December 2002.
 * Colin L. Powell, Millennium Challenge Account: A New Compact for Global Development, Department of State, March 2003.
 * Alan P. Larson, U.S. Department of State Press Conference: The Launching of the Millenium Challenge Account, February 3, 2004. Document provides a comprehensive overview of the Corporation and its activities to date.
 * Sara Fitzgerald and Anthony Kim, MCA: Rewarding Open Markets, Heritage Foundation, February 25, 2004.
 * Mark Engler, "Calling Bad Business Good", TomPaine.com, October 30, 2006.
 * Celia W. Dugger, "U.S. Agency’s Slow Pace Endangers Foreign Aid", New York Times, December 7, 2007.