Ukraine Signs Millennium Challenge Corporation Threshold Program to Control Corruption

Washington, D.C. – Ukraine and the United States today signed a nearly $45 million Millennium Challenge Corporation Threshold agreement aimed at reducing corruption.

Ambassador John Danilovich, CEO of the Millennium Challenge Corporation, said the two-year program is designed to strengthen civil society’s monitoring and exposure of public sector corruption in Ukraine, finance judicial reform efforts, improve government monitoring and enforcement of ethical and administrative standards, streamline enforcement of regulations, and combat corruption in higher education.

The initiative is part of MCC’s Threshold Program which assists countries that are on the “threshold” of eligibility for Millennium Challenge Account assistance, known as Compact assistance. Threshold Program assistance is used to help countries address the specific policy weaknesses indicated by the country’s scores on the 16 policy indicators.

As a result of reforms already undertaken, MCC’s Board of Directors named Ukraine in November as one of three countries newly eligible for Compact assistance. Eligibility for such assistance is reserved for countries that score above the median on independently measured indices such as political and economic freedom, investment in education, control of corruption, respect for civil liberties, health care spending, fiscal and trade policies and judicial fairness.

“The struggle against corruption is critical to Ukraine’s development,” Ambassador Danilovich said, adding, “Ukraine is among the most aggressive reformers on our ‘Ruling Justly’ indicators. While this is a tremendous achievement, it is important to underscore that there must be continued performance on Ukraine’s Threshold program while it participates in its Compact development process,” he said.

“Ukraine has been made eligible for MCC Compact assistance, but it is up to Ukraine to organize itself, consult with its civil society and develop a proposal of sufficient quality and content targeting poverty reduction through economic growth for the MCC Board to consider,” said Danilovich.

Ukraine’s poor performance on the corruption index is primarily attributable to weak conflict of interest laws, a lack of independence, efficiency, and integrity in the judiciary, inadequate whistleblower and witness protection programs, and endemic corruption in the police force, educational and medical institutions, as well as customs and tax administration. The Ukraine Threshold program targets many of these obstacles, and this initiative will be administered by the United States Agency for International Development and the U.S. Department of Justice.

To date, MCC has approved more than $286 million under the Threshold Program for 11 countries. These programs have chiefly focused on improving governance, particularly on curbing corruption, to help create a policy framework where poverty reduction and economic growth can take root.

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Millennium Challenge Corporation (MCC), a United States Government corporation designed to work with some of the poorest countries in the world, is based on the principle 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.