On September 23, 2005 Malawi signed a funding agreement with the MCC under the MCA's Threshold Program. Malawi was only the second threshold country to reach this step, and the first to reach agreement on a proposal that tackles the thorny issues of corruption and financial management.
This note draws on the MCC's selection process and newly released data to explore which countries are most likely to be selected for FY 2006. The analysis has several highlights.
It has long been understood that economic growth is the essential foundation for poverty reduction. The key to income growth is the expansion of jobs that pay sustainable remunerative wages, and the two keys areas of production in this vein have almost always been agriculture and labor-intensive manufactured exports. Rising average incomes, both personal and national, are a necessary ingredient for improved livelihoods, but they do not guarantee broad-based poverty reduction. Economic history shows that countries, and communities within countries, with similar growth rates can have very different degrees of success in connecting growth to the poor and translating it into sustained poverty reduction.