President Mutharika posses for a photo with MCC's Hewko his team, embassy & govt. officials

MCC’s John Hewko Calls for Broad-Based Consultations     

By Alison Liwanda

Millennium Challenge Corporation (MCC) Vice President for Compact Development John Hewko visited Malawi in mid January to meet with a range of senior government officials, civil society leaders, private sector representatives and journalists to discuss steps in the development of an MCC Compact Agreement.

An MCC Compact is an innovative U.S. Government foreign aid program that emphasizes partnership with the recipient country, local leadership involvement, and measurable results.   Malawi was selected by the MCC as eligible for this program in December 2007. 

Briefing the media in Blantyre, Hewko said the MCC Board of Directors selected Malawi to participate in a compact program after considering the country’s policy performance using 17 indicators to measure the country's progress in three broad areas critical to development: ruling justly, investing in people and encouraging economic freedom.  He said these indicators measure the country’s demonstrated commitment to policies that promote, among other things, political and economic freedom, investments in education and health care, control of corruption, and respect for civil liberties and rule of law. 

To ensure the process remains apolitical, Hewko said “these indicators are maintained by independent third parties and not by the United States Government.” 

He indicated that MCC aims to reduce poverty through the vehicle of sustainable economic growth.  As such, the institution promotes the principle of country ownership of proposals that it funds.  He said MCC believes that development can only be sustainable if there is broad ownership of the development process.  “We encourage countries to propose projects that they need for economic development. In other words we are not coming here to tell Malawi what it needs.  This is a program that will be designed and implemented by the Malawian people,” he said.  

The MCC envoy said qualifying for compact is just a first step, adding that the most critical factor is for the eligible countries to continue performing well and passing on the indicators throughout the compact agreement.  Each year, the MCC Board of Directors meets to assess the performance of eligible members and to determine what action is appropriate where slippages are observed.   

He said for a proposal to be satisfactory, it needs to be developed from the bottom up, after a broad consultative process that includes government, civil society, and private sector, and it must include clear benchmarks for what the country wants to achieve with the program. 

He added that MCC does not have any preferences with regard to sectors to fund. “It can be health, education, infrastructural development, rural development, water sanitation and many others.  We have no minimum or maximum amount of money allocated for eligible countries.  We evaluate each country’s proposal based on quality and the country’s ability to implement the program.”   
Hewko said the whole process of consultations, proposal designing, technical evaluation by the MCC, to the signing of a compact agreement normally takes more than a year. 

The Millennium Challenge Corporation is a US government agency funded by Congress.  It was established in 2004 as a direct result of a commitment that President George Bush made in 2002 to significantly increase US foreign assistance to a select group of developing countries that are ruling justly, investing in their people and promoting good economic policies.  MCC has chosen to work with 24 countries throughout the world, of which 13 are in Africa. 
 
Malawi was first selected as eligible for economic assistance under the MCC’s “Threshold Program” in November 2004.  This program is designed to assist countries that are committed to undertaking the reforms necessary to improve policy performance and eventually qualify for MCC Compact assistance.  Malawi’s $20.95 million Threshold Program is in its second year of implementation and is focused on helping Malawi fight corruption and improve fiscal policy in the country.