What is Millennium Challenge Compact (MCC) & Is MCC Good for Nepal?

The Millennium Challenge Corporation (MCC) is an innovative and independent U.S. foreign assistance agency that is helping lead the fight against global poverty.

Created by the U.S. Congress in January 2004 with strong bipartisan support, MCC has changed the conversation on how best to deliver smart U.S. foreign assistance by focusing on good policies, country ownership, and results. MCC provides time-limited grants promoting economic growth, reducing poverty, and strengthening institutions. These investments not only support stability and prosperity in partner countries but also enhance American interests. With cost-effective projects, a lean staff, and an evidence-based approach, MCC is a good investment for the American people.

What is distinctive about MCC?

MCC forms partnerships with developing countries that are committed to good governance, economic freedom and investing in their citizens. MCC is a prime example of smart U.S. Government assistance in action, benefiting both developing countries and the American taxpayers through:

  • Competitive selection: MCC’s Board examines a country’s performance on 20 independent and transparent policy indicators and selects countries based on policy performance.
  • Country-led solutions: MCC requires selected countries to identify their priorities for achieving sustainable economic growth and poverty reduction. Countries develop their MCC proposals in broad consultation within their society. MCC then works in close partnership to help countries refine programs.
  • Country-led implementation: When a country is awarded an MCC compact, it sets up a local accountable entity to manage and oversee all aspects of implementation. Monitoring of funds is rigorous, transparent and often managed through independent fiscal agents.
  • Focus on results: MCC is committed to producing results and ensuring that the American people are getting a good return on their investment. MCC employs technically rigorous, systematic and transparent methods of projecting, tracking and evaluating the impacts of its programs.

MCC grants are designed to complement other U.S. and international development programs, as well as create an enabling environment for private sector investment. There are three primary types of MCC grants:

  • Compactslarge, five-year grants for selected countries that meet MCC’s eligibility criteria
  • Concurrent Compacts for Regional Investmentsgrants that promote cross-border economic integration, and increase regional trade and collaboration
  • Threshold Programs—smaller grants focused on policy and institutional reform in selected countries that come close to passing MCC’s eligibility criteria and show a firm commitment to improving their policy performance

What is MCC achieving?

MCC projects tackle some of the most pressing challenges people face in developing countries, like supplying electricity so businesses can operate and students can study after dark; providing clean drinking water so women don’t have to walk long distances—sometimes at great personal risk—to get water for their families; and building roads so farmers can get their goods to market and children can get to school. MCC has invested more than $13 billion in compact and threshold programs worldwide that support country-led projects in areas like:

Guided by its founding principles, MCC’s investments have successfully delivered projects that are improving the lives of millions of people around the world.

10 Facts about MCC By US Embassy in Nepal

Recently Nepali citizens, politicians, and members of the media have been asking questions about the Millennium Challenge Compact (MCC) in Nepal.  We welcome your questions and the Nepali public’s engagement in understanding what benefits the program would bring to Nepal because the MCC was founded as a new model for international development based on transparency and true partnership.

    1. At the request of Nepal’s leaders, the U.S. government began working with Nepal in 2012 toward development of an MCC compact.
    2. Each government and every Nepali political party, when in power, has expressed a desire to conclude an MCC Compact for economic development in Nepal.
    3. The MCC project is focused purely on economic development by helping to build power lines and improve roads.
    4. There is NO military component to the MCC.  In fact, U.S. law prohibits it.
    5. Nepal does not need to “join” or “sign up” for anything in order to participate in the MCC.
    6. The $500 million is a grant, with no strings attached, no interest rates, and no hidden clauses.  All Nepal has to do is commit to spend the money, transparently, for the projects that have been agreed upon.
    7. Nepalis proposed and decided which projects MCC will fund in Nepal based on Nepal’s own priorities.
    8. MCC’s model requires Nepal to hire Nepalis to lead implementation of the projects.
    9. MCC project tenders are open, transparent, and available to everyone.
    10. In Nepal, as in every country where MCC works, parliamentary ratification is required and provides transparency and an opportunity for Nepalis to understand the project.

MCC Compact In English

MCC Compact In Nepali

This is just for information. To make your own opinion you need to read everything yourself.

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