Newsletter
MCA Monitor Update: Winter 2008Happy New Year! The MCA Monitor Update is a quarterly newsletter summarizing key events and issues related to the Millennium Challenge Account examined through CGD's MCA Monitor. To receive our Update by email: Sign up for the MCA Monitor Update Contents
1. Final FY08 Omnibus Puts MCA at $1.54 Billion The FY08 Omnibus spending bill approved on December 18 provided $1.54 billion for the MCA. Although a major reduction from the $3 billion requested by the administration for FY08, the final figure is a compromise between the original House and Senate figures of $1.8 billion and $1.2 billion respectively. Importantly, the Lugar Amendment which would have mandated the MCC to obligate only 50% of compact funding at signing was withdrawn. In CGD's analysis, the $1.54 billion will allow for signing of the Tanzania, Namibia, and Burkina Faso compacts, all of which are in final stages of negotiation. The amount leaves little room for the threshold programs, however, further supporting the MCA Monitor's calls for a clear elaboration of the objective of the threshold program. Read more about the implications of the FY08 budget for the MCA in the CGD paper, The Impact of FY2008 Funding Options on the MCA: from Saving Face to Saving the Program. 2. Round Five of the MCA: FY2008 Selection Process On December 12 the MCC Board of Directors selected countries eligible for FY08 funding. Malawi was selected as eligible for compact funding and Mauritania was selected as eligible for the threshold program. CGD's analysis in a pre-selection paper, Round Five of the MCA: Which Countries Are Most Likely To Be Selected For FY2008? highlighted Malawi as a good candidate for eligibility, and recommended that no new lower middle income countries (LMICs) should be selected. CGD thus applauds the Board's decision to not select new LMICs, and further reviews the implications of Round Five in a blog, MCC Board Selects (and Quietly De-Selects) FY08 Countries. The selections appear to have been guided by concerns over low budget allocations, scrutiny of democracy indicators, and questions regarding performance on existing compacts. The decision to not re-select The Gambia, Cape Verde, and Sri Lanka--all of which were eligible in Round Four and one of which (Cape Verde) is in its second year of compact implementation--is a new step for the MCC which will likely inform policy toward countries that do not meet the indicators going forward. The FY08 selection process also marks the formal incorporation of the two new natural resources indicators--a Natural Resource Management Index (NRMI) and a Land Rights and Access Index. 3. $325 Million Compact with Mongolia Signed MCC approved a new compact for Mongolia, bringing the total number of compacts to 15 (which combined are worth over $5.5 billion). Mongolia's compact, at $325 million, is the fourth largest per capita. As Sarah Rose blogged, the Mongolia program includes two notable components: an innovative health program focused on non-communicable diseases which, as CGD expert Rachel Nugent has noted, have not been addressed by donors; and a property rights program to address exclusively urban concerns. 4. MCC Approves Three New Threshold Programs In September, after the Senate Foreign Relations Committee removed its hold, the MCC Board approved a $21 million Threshold Program for Yemen designed to decrease corruption in the public sector, build capacity in the judiciary, strengthen elections, and improve investment prospects in order to pass the four related indicators. In November, a $35.6 million program was approved to help Peru target the Control of Corruption and Immunization indicators, both of which, interestingly, Peru passed in FY2008. São Tome and Príncipe also signed a Threshold Agreement on November 9 -- $8.66 million to streamline tax, customs, and business administration systems to improve performance on the Fiscal Policy and Business Start-Up indicators. In total, the MCC has now approved 18 threshold programs for a total of $396 million. 5. Senator Bill Frist and Kenneth Hackett Appointed to MCC Board of Directors In October, Senator Bill Frist was approved for his first term on the MCC Board of Directors, while Ken Hackett, the President of Catholic Relief Services, was appointed for his second term. These private sector representatives were selected from a list submitted by the minority and majority leaders of both houses of Congress and confirmed by the Senate. Their assumption of duties marks the first full nine-member Board in MCC's existence, fulfilling the original institutional mandate of 4 non-governmental representatives. 6. MCC Reorganization Announced to Shift Focus to Compact Implementation On October 1, the MCC announced a reorganization aimed at increasing the focus on and pace of compact implementation. The second reshuffle in as many years, this change comes at a time when the slow rate of disbursement has been used by Congress as a worrisome justification for reduced FY08 appropriations. Although the MCC's refocus on compact implementation is important, public education on the legitimate reasons for the slow disbursement rates--namely accountability and building country capacity--ought to be just as prioritized, and successes and failures to date ought to be shared publicly. The MCA Monitor weighed in on this issue in a blog with suggestions to increase public awareness of measures that are better indicators of progress--contract completions, funding commitments, and policy reforms brought about through engagement with the MCC. The MCC has made a good first start. 7. Welcome New MCA Monitor Research Assistant Amy Crone The MCA Monitor team is delighted to announce that Amy Crone has joined our team, replacing Sarah Rose who accepted a position in the MCC's Development Policy Office last October. |