The Millennium Challenge Corporation
The United States has many agencies of humanitarian assistance and the Millennium Challenge Corporation (MCC) stands as one of them. The MCC is “an innovative and independent U.S. foreign assistance agency that is helping lead the fight against global poverty.” Founded by the United States Congress in 2004, the agency focuses on a country’s policies and results. This agency aims to strengthen the institutions and economies of developing nations that already show signs of good governance. The MCC is uniquely selective in delivering aid by choosing to aid nations that have existing yet fragile institutions to promote democracy and competent governance.


The agency measures a nation’s eligibility to receive aid from the Millennium Challenge Corporation through 20 different indicators based on different political freedoms, civil liberties, economic freedoms and economic conditions. A nation is eligible to receive aid if it passes 10 out of 20 of the indicators, passes the “Control of Corruption Indicator” and/or passes either the “Political Rights Indicator” or the “Civil Liberties Indicator.” A nation passes an indicator if it performs better than the median score in the nation’s income group, a score that a particular third party will measure.

The MCC is diverse in its approach to stabilizing developing nations. It generally delivers three types of aid packages: Compacts, Concurrent Compacts for Regional Investments and Threshold Programs. Compacts are large five-year grants to specific grassroots projects targeted at poverty reduction or economic growth that meet MCC’s eligibility standards.

Concurrent Compacts for Regional Investments are grants designed to promote trade, economic integration and collaboration between nations.

Threshold Programs help nations that are not quite eligible to receive MCC Compact packages by allowing countries a chance to show their dedication to “democratic governance, economic freedom and investments in their people.”

Comparing USAID and MCC

One of the key differences between the U.S. Agency for International Development (USAID) and the Millennium Challenge Corporation is that USAID grants aid exclusively on the merits of a proposed project toward some form of a democratic goal. USAID also has programs that have “unrestricted ineligibility” where any nation may receive aid for a particular project.

On the other hand, the Millennium Challenge Corporation has strict standards on different aspects of a nation’s governance to determine whether a program receives a grant. It requires that nations meet certain political and economic standards determined by reputable third-party sources in order to receive aid. The Millennium Challenge Corporation grants are also restricted to five years whereas USAID programs can extend the period of a grant or contract.

While USAID and the Millennium Challenge Corporation have various differences, both collaborate closely in delivering and developing aid programs. For example, the USAID administrator holds a role as a permanent member of the Millennium Challenge Corporations Board of Directors.

The Millennium Challenge Corporation learns from USAID’s decades of technical expertise while USAID also benefits from the Millennium Challenge Corporation’s rigorous economic and political analysis to improve the outcomes of aid programs.

USAID and the Millennium Challenge Corporation both serve important roles in delivering aid to struggling nations. USAID has an emphasis on building up new institutions whereas the Millennium Challenge Corporation has more of an emphasis on strengthening already existing institutions in struggling nations. The goals of these agencies often overlap, leading to large amounts of interagency collaboration.

– Alexander Richter
Photo: Flickr

Foreign Aid to Afghanistan
Some definitions of foreign aid provide a distorted vision of its purpose. This in turn drives citizens, government officials and donors away from supporting it. An accurate definition of foreign aid is one country helping to improve a recipient country’s standard of living through economic, military and various other services. Donors provide this type of support after war or natural disaster. The recent withdrawal of U.S. forces from Afghanistan is slowly concluding more than 40 years of conflict. However, foreign aid to Afghanistan remains necessary.

Afghanistan’s Violent Past

More than half of the population in Afghanistan lives on $1.90 a day. In headlines, history books and news stories, many do not see Afghanistan beyond the label of an economically developing country. This label often comes from a place of unfair judgment.

The longevity of the Afghan crisis is why aid is vital in transforming the country to work toward a better quality of life and future for the younger generations. The detrimental relationship between the state and citizens has damaged every part of what is necessary for a society to flourish. For example, the top-down monopoly with profiteers and warlords on top formed to control economic markets producing bottom-up violence is a significant barrier in the country flourishing. Understanding the nature of the conflict that has created a dystopian climate throughout the country is vital in producing foreign aid to Afghanistan because planning for the long term is what will produce change.

Antony Blinken’s Push for Reform

The U.S. is the world’s largest provider of foreign aid, but reform is necessary for providing quality aid for the future. During secretary of state Antony Blinken’s visit to Afghanistan on April 15, 2021, he spoke on several areas of reform to ensure the foreign aid sector continues to progress and attend to the needs of Afghanistan.

The U.S. is studying previous aid distribution models and methods to ensure that country receives the maximum amount of help. This also promotes other governments to continue the change. The U.S. plans on holding the Afghanistan government accountable to the pledge of acknowledging the basic human rights of their citizens. For example, traveling outside of the country has been nearly impossible for Afghan citizens. The U.S. will also hold the Taliban accountable for using Afghanistan as a base for formulating attacks on other countries. Neutralizing any form of threat prevents damage to other countries that would ultimately produce the need for more foreign aid and will push away allies.

The U.S. will ensure even aid distribution throughout the country. It will have clear communication with the Taliban in the coming years. The Taliban must allow aid groups to work on uninterrupted terms. Overall, the U.S. is enforcing long-term change through rectifying the relationship between the state and citizens that has been upholding the unlivable climate.

The Future of Foreign Aid to Afghanistan

The narrative of putting a stop to the current war or any war in the future is an unreachable goal. Foreign aid will not go towards a single issue. Instead, it will focus on changing the systemic problems that continue to produce wars. The U.S. often uses a militant approach, however, with the updated forms of foreign aid, it will not be using violence to overcome it. This includes $64 million in new humanitarian assistance which the United Nations High Commissioner for Refugees (UNHCR) and the World Health Organization (WHO) will distribute. This new surge of funding will provide a large range of assistance including shelter, essential health care, sanitation, food aid, hygiene services and more. These are forms of aid that will contribute to the overall building of a better livelihood for Afghan citizens.

The Millennium Challenge Corporation (MCC)

The Millennium Challenge Corporation (MCC), which U.S. Congress introduced in 2004 is an agency separate from the State Department and USAID. It continues to abide by its mission statement of reducing poverty through economic growth by providing aid to countries like Afghanistan. The U.S. has also developed a range of grants and programs to assist Afghan women who the civil upheaval greatly impacted. USAID continues to provide grants in helping Afghan women gain access to universities through the Women’s Scholarship Endowment.

The US State Department’s Bureau of Population, Refugees and Migration (PRM)

The U.S. State Department’s Bureau of Population, Refugees and Migration (PRM) funds several programs for Afghan women refugees and internally displaced persons. The programs include literacy training, gender-based violence prevention and mother-child health care. PRM works with various partners to ensure change including the U.N. High Commissioner for Refugees (UNHCR), the International Committee of the Red Cross (ICRC) and the International Organization for Migration (IOM).

In large groups, varying interests can prevent the proper allocation of funds to aid. However, the government and donors continue to work closely together. The impact that aid has extends beyond providing food and emergency medical assistance. It has the potential to provide a hopeful future for those who have only known living in a war zone. It reconciles individual relationships within the society. As aid strategies are revised to adhere to current needs the long-term quality of life for Afghan citizens will improve.

– Maggie Forte
Photo: Flickr

COVID-19's Impact on Sierra Leone
Sierra Leone is a nation in recovery. As with many countries throughout the globe, COVID-19 has left a lasting mark on the West African nation. In a June to October 2020 survey that Innovations for Poverty Action in Sierra Leone implemented, nearly 50% of respondents reported income reductions and about 60% of respondents reported depleting their savings to secure food for the household. However, in the wake of COVID-19’s impact on Sierra Leone, some sectors are regaining strength.

The After-Effects of COVID-19

Sierra Leone went into lockdown quickly in response to the initial outbreak of the novel coronavirus within its borders in March 2020, declaring a state of emergency prior to any confirmation of infection. Rapid policy changes followed, restricting travel and putting into place extensive testing programs which, coupled with a high level of social compliance, brought the infection and death rates to an early plateau. This impressive effort in containment came at a great economic cost, however, with the nation’s GDP contracting around 3.1% in 2020.

Revitalizing the Economy

Forecasts predict that Sierra Leone’s GDP will grow roughly 4% by the end of 2021, eclipsing the contraction of 2020, with further acceleration predictions in 2022. This projected growth links to a renewed demand for exports, particularly in the country’s mining sector.

World Bank experts state that sustaining this growth will require structural reform, strong monetary policy and a robust vaccination program, allowing businesses and employees alike to return to full-capacity operations both quickly and safely.

To that end, “the World Bank approved an $8.5 million grant” in June 2021 to further vaccination efforts in Sierra Leone, building upon an earlier $7.5 million monetary injection provided by the International Development Association in 2020 to shore up economic deficits resulting from COVID-19’s impact on Sierra Leone. Additionally, The Sierra Leone Central Bank announced a redenomination of the national currency in an effort to combat inflation. However, not all efforts for economic regrowth fall within the confines of the financial sector.

US Assistance

Sierra Leone saw a marked increase in poverty as a result of wage depression and job loss stemming from the pandemic, particularly in urban areas. The remediation of economic damages in these areas is an important step in breathing new life into the Sierra Leonean economy.

The Millennium Challenge Corporation (MCC), a U.S. government-funded agency dedicating efforts to international growth and development, is working to do just that. The MCC completed a $44.4 million project “to improve the water and electrical services in and around Freetown,” Sierra Leone’s capital and largest urban center, in March 2021. The MCC has recently begun talks with government representatives and the private sector to make further, larger investments in the nation’s growth in the form of an economic compact.

Further Help for Citizens in Need

In August 2021, the United Nations Development Programme (UNDP) announced a new program specifically focusing on aiding women and youth affected by COVID’s impact on Sierra Leone. The program will provide grants of $60,000 to $140,000 for distribution by NGOs to women and youth-operated businesses in both rural and urban areas that were forced to scale down or cease operations during the pandemic. The aim is to bring these businesses back into the marketplace and stimulate the local economy. These efforts work in concert with Sierra Leone’s internal efforts to help the nation get back onto its feet in the post-pandemic environment.

Mining Sector Leads Growth

With a return to pre-pandemic GDP levels in sight, Sierra Leone hopes to continue growth in 2022. Forecasts predict the nation’s GDP to grow by as much as 5% by 2022, outpacing its sub-Saharan neighbors, which could grow to 1% to 2% less over the same period. The country’s mining sector is a strong driver of the national economy accounting for 3% of national employment in 2018 as well as “65% of export earnings.” The mining sector is on track for a 34% overall increase, led by a predicted 850% increase in demand for iron ore over 2020.

With such a major market component leading the way, other economic areas may expect revitalization as well. In the agricultural sector, employing about two-thirds of Sierra Leone’s workforce, the government encourages mining companies’ investment in communities local to their operations, furthering citizens’ access to food as well as gainful employment. Predictions estimate that the domestic construction and energy industries, both with close links to mining infrastructure, may see growth as well. This combined push for economic renewal assures better days to come for the sub-Saharan nation.

A Bright Future Ahead

Through ongoing foreign support and careful economic measures, Sierra Leone hopes to breathe new life into industries ravaged by COVID-19. With a renewed encouragement of domestic business, the nation looks to bring its citizens forward into a thriving economy and a safer, healthier society. The culmination of these efforts is proving clear less than two years after the nation’s first lockdown with a strong reemergence from the trials of COVID-19’s impact on Sierra Leone, promising a brighter tomorrow for the Sierra Leonean people.

– Alexander Diaz
Photo: Wikipedia Commons

Burkina Faso Compact II to Lift 8 Million Out of Poverty
Despite having one of the fastest-growing economies in Africa, the nation of Burkina Faso struggles with significant developmental challenges. One such challenge is a lack of adequate access to affordable electricity across the country, which the Burkina Faso Compact II will combat.

Electricity and the Economy

A lack of access to electricity ties to a lack of economic opportunity. When a country or area receives proper access to electrical grids and services, new businesses can open, existing businesses can operate on a higher level and jobs can emerge.

The Millennium Challenge Corporation’s (MCC) Burkina Faso Compact II is a program intended to address the nation’s electricity challenges to promote a healthy economy and lift 8 million people out of poverty.

Burkina Faso Compact II

Burkina Faso is one of the most impoverished nations in the world. In 2017, the Gross National Income per capita was $610. The majority of the impoverished also live in rural areas, with approximately 90% of impoverished households in Burkina Faso in rural parts of the country.

Although the nation has a high rate of poverty, it is home to one of Africa’s fastest-growing economies. In 2019, Burkina Faso’s GDP was growing at a rate of 6%. Experts believe the high concentration of poverty in rural areas is due to low rates of agricultural productivity, social isolation, underemployment and inadequate access to electricity. The recent improvement in the GDP growth rate is a result of the positive performances of the agricultural and mining sectors.

The Millenium Change Corporation’s Burkina Faso Compact II was signed on August 13, 2020. The Burkina Faso Compact II dedicates itself to connecting more of the country to electrical grids. The MCC has dedicated $450 million in grants and funding to the goal of widespread electricity.

MCC’s Compact Projects

In addition to MCC’s contribution, the Burkinabe government agreed to contribute $50 million to the compact projects. The program focuses on three smaller electricity projects: The Strengthening Electricity Sector Effectiveness Project, the Cost-Effective and Reliable Energy Supply Project and the Grid Development and Access Project. These projects will work together in order to help Burkina Faso increase access to electrical grids for all citizens.

Of the $450 million that will go toward improving addressing the issue of electricity, $210.7 million is for the Grid Development and Access Project alone. This project is particularly important to reaching the goal of widespread and accessible electricity nationwide. In the Grid Development and Access Project, the MCC hopes to aid in reducing power outages and increasing access to electrical services.

The Strengthening Electricity Sector Effectiveness Project and The Cost-Effective and Reliable Energy Supply Project received $46.9 million and $99.5 million respectively. The goal of the Strengthening Electricity Sector Effectiveness Project is to strengthen the electricity sector through important reforms, including building up the capacity of national utilities, the Ministry of Energy and regulators. The Cost-Effective Energy Supply Project aims to implement lower energy costs by introducing solar power, battery storage and improving electricity dispatch centers.

Burkina Faso Compact II Long-Term

This compact is the second project MCC has taken on in Burkina Faso. The first Burkina Faso Compact included $480 million to improve infrastructure, agriculture, girls’ education and water management. Since the completion of the project in 2014, Burkinabe government ministries have been maintaining what the project implemented. This shows great promise for the Burkina Faso Compact II.

In the long term, the Burkina Faso Compact II will ultimately improve living conditions and economic stability for more than 8 million people across Burkina Faso, leading to lower rates of poverty. Improving access and affordability of electricity is a positive step toward improving Burkina Faso’s economy.

– Maddi Miller
Photo: Flickr


Former Secretary of State Condoleezza Rice will speak at the Millennium Challenge Corporation’s second annual Forum on Global Development on April 29th, 2013.  Rice is expected to discuss the importance of foreign aid and its role in U.S. national security and diplomacy.  The Forum on Global Development comes at a key time as budget talks are going on and the world is facing 1000 days until the expiration of the Millennium Development Goals.

The Millennium Challenge Corportation was founded by the U.S. Government with the goal to work with some of the poorest countries in the world. MCC believes that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty. 

In addition to Condoleezza Rice, the Forum on Global Development will also honor four award recipients at the event.  The Millennium Challenge Corporation will recognize Green Mountain Coffee Roasters of Vermont with its Corporate Award. Green Mountain has worked hard to partner with local NGOs to promote sustainable community development, to diversify incomes of coffee roasters, and to advance food security.

The MCC will recognize Sophia Mohapi, CEO of the Millennium Challenge Account in Lesotho, with their Country Commitment Award. Mohapi facilitated a commitment by Lesotho’s government of $150 million to poverty-reduction programs.

The last award, the MCC’s Next Generation Award, will go to Jessica O. Matthews and Julia Silverman, founders of Uncharted Play. Matthews and Silverman are working hard to advance youth innovation and leadership through international development. Their flagship product is SOCCKET, a soccer ball that stores kinetic energy to provide light for those living without electricity.

– Amanda Kloeppel
Source: The Sacramento Bee
Photo: Veteran’s Today

Research-Aid-EffectivenessWhen people hear of research and the scientific method, international aid may not be the first thing that comes to mind. For The Millennium Challenge Corporation, however, it is the first and only thing on their mind.

It is a common misconception that aid to foreign countries is a waste; money falls into the wrong hands and volunteer efforts prove fruitless. Over the past decade, studies and research have been conducted to shine a light on the truths of this myth and assess the effectiveness of aid initiatives no matter what the verdict may be. The outcomes of these experiments may help guide policy, as some analysts hope.

One of the biggest studies conducted thus far has been from the US foreign-aid agency, The Millennium Challenge Corporation. One of MCC’s larger projects focuses on farmer training in countries such as Armenia, El Salvador, and Ghana. After much observation, the MCC published that in fact the skills and education taught to the farmers did help them sell more products but did little to actually reduce their poverty levels for reasons they cannot explain as of yet but are now at least aware of.

How exactly do organizations such as the MCC and universities use the scientific method to study the effectiveness of aid? Think back to elementary science. The most basic of an experiment had two groups, the experimental group and the control group, both chosen at random. In development research, these ‘groups’ are actually groups of people: communities, villages, families. The experimental group is enrolled in the aid project (for example, testing the effectiveness of bed nets in preventing the spread of malaria). One group is given the nets while another is not. This part of the process has created some uproar within the clinical research community. Jeffrey Sachs, a sustainable-development economist at Columbia University finds them to be unethical, preventing much-needed assistance to a group of people for the sole purpose of data collection. There are also scientists who see the entire concept of analyzing aid programs as destructive because it may prematurely cut a new program without giving it the chance to grow. Rachel Glennerster, a director of the Abdul Latif Jameel Poverty Action Lab at MIT, sees it differently. For her, the randomized controlled trials are in fact underused and prove to be the most effective out of other options in weeding out failing programs.

So what is to be done? Using such research methods gives organizations and donors a better look at what works and what doesn’t,  a necessity for any entity to survive and grow. But should researchers be able to ‘randomly’ control the very survival of other human beings just to ensure an effective policy? When a perfected and efficient policy could ensure the survival of hundreds of thousands of people, then perhaps the answer is yes.

Even when data is concluded and theories published, how will the policymakers and researchers become aware of them? The International Initiative for Impact Evaluation (3ie), an NPO based out of Washington D.C. has plans to launch a database that aims to remove the possibility of bias when conducting reviews of projects. Reports, both positive and negative, will be listed through the organization and available to registered members seeking data to improve or analyze foreign aid policies.

Such efforts are vital for any humanitarian efforts if they wish to legitimize their ideas and goals. Without the money of the donors, projects will go nowhere. Without a guarantee of success, there will be no donors. While the randomized-type research conducted by the MCC and similar groups may be resting on unstable grounds, it provides them the sort of evaluations they need to improve their tactics and guarantee successful initiatives. Even in terms of basic science, “negative results are integral to the research process…it is important for researchers and donors to become more tolerant of them” despite the instinctual fear of losing funding.”

– Deena Dulgerian

Source: Nature