International

Millennium Challenge Corporation

Issue
The Millennium Challenge Account (MCA) is an international aid initiative that was authorized in January 2004, signaling a major shift in the priorities and procedures that the U.S. government will employ in distributing foreign assistance, including funding for infrastructure projects. The MCA is a foreign aid fund to be managed by the Millennium Challenge Corporation (MCC), a governmental corporation charged with distributing the funds based upon a country’s commitment to specific political, economic and social policies as demonstrated through quantifiable performance indicators. The incentive structure created by the MCA program provides for more effective leveraging of U.S. foreign aid to reduce poverty and stimulate economic growth. MCA funds are in addition to other established foreign assistance programs.

Since its inception, MCC’s impressive body of work continued to grow with as many as 24 countries now having MCC Compacts, totaling nearly $6 billion. A Compact is a multi-year agreement between the Millennium Challenge Corporation and an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth. An additional 21 countries are participating in the Threshold Program with agreements that provide financial assistance to help their policy “indicators” and make them eligible to enter a Compact.

ACEC Position
ACEC supports increased funding for MCC in 2010 to at least the $1.5 billion level contained in 2008 appropriations (the 2009 appropriations contains only $875 million in funding for the agency, $625 million below 2008 funding), enhanced speed of program implementation, and the appointment of Board members who appreciate the importance of infrastructure development on reducing poverty and stimulating economic growth. Further, ACEC advocates that the MCC promote Qualifications Based Selection (QBS) for the selection of engineering services for MCC-funded infrastructure projects.