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Millennium Challenge Account

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Congressional rept.

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In a speech on March 14, 2002, President Bush outlined a proposal for a major new U.S. foreign aid initiative. The Millennium Challenge Account MCA provides assistance through a competitive selection process to developing nations that are pursing political and economic reforms in three areas ruling justly, investing in people, and fostering economic freedom. The MCC differs in several respects from past and current U.S. aid practices 1 the competitive process that rewards countries for past and current actions measured by 17 objective performance indicators, 2 the pledge to segregate the funds from U.S. strategic foreign policy objectives that often strongly influence where U.S. aid is spent, and 3 the requirement to solicit program proposals developed solely by qualifying countries with broad-based civil society involvement. As announced by the President in March 2002, the initial plan had been to fund the MCC annually at 5 billion by FY2006, but this figure has not yet been reached. The Administration has sought a combined 12.8 billion for the MCA program, FY2004-FY2008, while Congress appropriated 7.5 billion, or less than two-thirds of the total sought. FY2009 funding is currently provided under the terms of a continuing resolution that provides foreign aid spending at the level in the FY2008 Consolidated Act 1.54 billion. The resolution expires on March 6, 2009. Congress authorized the MCC in P.L. 108-199 Jan 23, 2004. Since that time, the MCCs Board of Directors has selected 27 eligible countries during the period from FY2004 through FY2008 and approved 18 Compacts with Madagascar Apr 2005, Honduras Jun 2005, Cape Verde and Nicaragua Jul 2005, Georgia Sep 2005, Benin Feb 2006, Vanuatu and Armenia Mar 2006, Ghana Aug 2006, Mali and El Salvador Nov 2006, Mozambique and Lesotho Jul 2007, Morocco Aug 2007, Mongolia and Tanzania Sep 2007, Burkina Faso Jun 2008, and Namibia Jul 2008.

Subject Categories:

  • Economics and Cost Analysis
  • Government and Political Science
  • Sociology and Law

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