Global poverty will continue to plague our world as long as corruption remains unchecked.  From boardrooms to farm fields, the corrosive effects of corruption rob countries large and small of the chance for long-term economic growth and sustainable development.  This issue is one of the constant themes that people around the globe raise with me as we discuss ways that the U.S. Government can help lift people out of poverty in the most effective, results-based way.  Addressing the problem is at the heart of the MCC model, and we partner exclusively with those countries that are taking concrete steps to free their countries from corruption’s strangulating grip.

A prime example of this partnership is MCC’s relationship with Paraguay.  We have worked with Paraguay since May 2006 in targeted sectors identified by the Paraguayans as high priorities in fighting corruption.  MCC’s $34.64 million anticorruption Threshold Program in Paraguay is nearing completion, and some of the early results paint an impressive picture of what can be accomplished when a country confronts corruption in an open and aggressive manner.  A new forensic laboratory will help Paraguay’s prosecutors carry out investigations with the right tools and with integrity.  Discipline of judicial personnel has improved significantly now that complaints can be filed and processed in an open and transparent way.  Internal controls and ethics awareness are helping thousands of Paraguay’s public servants serve with greater accountability, quality, and integrity.  Paraguay’s tax authority is aggressively pursuing noncompliant businesses and contraband, and illegal merchandise totaling over $6 million has been seized thanks to enhanced systems in Paraguay’s customs service.

These actions are tangible steps toward rooting out corruption.  In recognition of these concrete efforts-and of the commitment of Paraguay’s new President Fernando Lugo and his historic government to sustain reforms and further control corruption-MCC invited Paraguay to submit a second, “Stage II” Threshold Program proposal, which is currently under review.  Partners like Paraguay understand why MCC considers corruption as one of the “hard hurdles” that must be overcome in order to be eligible for a large-scale grant, or MCC compact.  It makes sense that U.S. taxpayer investments go to countries that are tackling these problems on their soil.  It makes sense for our partners to join with the U.S. in fighting a common enemy like corruption, the negative effects of which infect our global economy and hurt all of us in the long-run.  A less corrupt world is a better place to do business, a more nurturing environment for democracy, and a better home for all of us.  The fight against poverty requires the fight against corruption.  It’s as true in countries like Paraguay as it is in places like our own country and our own hometowns, and it requires our combined efforts as partners.

Last week’s MCC Board meeting added a new country to the list of countries eligible for MCC compact funding—the Philippines. This decision was actually the culmination of a discussion that began during our December meeting, when the Board asked for a deeper analysis of the data before making a final determination. The Board decided that, based on the Philippines’ continued performance on MCC’s indicators, it could now apply for funding for a large-scale poverty-reduction grant. The initial reaction to this announcement—from civil society and government partners—confirms that there is a great deal of interest and commitment from various sectors in helping the Philippines maintain its eligibility on the indicators we compile from independent, transparent, non-U.S. Government sources. A number of good ideas on this front—and some important concerns—were raised during our public outreach meeting following the Board meeting. It underscored for me that the best way to ensure that the Philippines’ policy-reform agenda continues is to keep it in the public eye. MCC compact eligibility certainly spotlights these efforts. Impediments to economic growth are issues that MCC takes seriously with all our partner countries, particularly corruption which receives special consideration as part of our model. The ball is now in the Philippines’ court to develop a proposal that involves broad consultation with its people and to continue tackling those problems that stand in the way of long-term economic growth.

People from diverse sectors of society continue to talk about MCC’s different model as conversations about foreign assistance increase, in communities both inside and outside the beltway. It is clear from these conversations that poverty reduction abroad is not just a “Washington issue.” It affects all Americans and was clearly on the minds of the business leaders who I met with at a recent event in Indianapolis organized by the Initiative for Global Development (IGD). An increasing number of companies, large and small, have asked MCC to explain how they can get involved to maximize the positive impact of MCC investments for the people of our partner countries. We view involvement from the private sector as key to our success.

MCC has a great deal to learn from companies who are operating internationally, and we continue to invite development experts, the NGO community, and the private sector to share best practices and discuss concerns with us. While grants from the U.S. Government can help address areas of critical need, they simply cannot provide the full range of technology and long-term market-driven investments that the private sector can. MCC offers the helpful push to spark the interest of the private sector that millions of people—living on less than $2 a day—desperately need. The responsible, long-term cooperation of the private sector is what will help these people through the “finish line” to experience an end to systemic poverty. (Read a recent Washington Post article that touches on these themes.)

With compacts in 16 countries and threshold programs in 17 countries, MCC’s work covers a broad spectrum of technical and policy areas. We are working to improve the way we communicate the nature of our work and have made recent changes to our quarterly status reports, including a new project timeline and other features. Our hope is that this report can offer a more detailed “snapshot” of where we are in our work with partner countries. We are also proud of our groundbreaking use of economic rates of return in our analysis. We’ve put this data on the web with interactive features for you to explore. We welcome your feedback, and I invite you to e-mail us at info@mcc.gov with your ideas for how we can improve the way we communicate with you as we work together to reduce poverty through economic growth .

Last Friday, I met with a number of groups in Miami who have taken an active interest in MCC’s work in Latin America and throughout the world. There is an obvious connection between our work in the Western Hemisphere and the communities of South Florida, but what impressed me about these groups, and the questions they posed, was their level of engagement on issues related to poverty reduction worldwide. During a meeting with students and development experts at Florida International University’s Summit of the America’s Center, my fellow panelists and members of the audience delved deeply into the issue of civil society participation in our MCC compacts. It was clear from their comments that a part of our model for development assistance that resonates deeply is that of meaningful, broad-based consultations with the public. I hope that people realize that the consultative process does not end when we sign a compact. It is present during the creation, continues throughout the life of a compact and, in many ways, is directly related to the steadfast policy of transparency that distinguishes MCC. I push my staff—in Washington and abroad—to put as much information as possible about our dealings with countries (including our indicators, scorecards, reports) on the internet and to share our data about how we do business in our partner countries and in Washington. When people want to talk about MCC, we want to engage with them. We owe it to the people in the partner countries where we work —and to the taxpayers whose dollars are working hard to build the bridges, roads, irrigation systems, and schools overseas—to be transparent in our actions undertaken on their behalf.

Another interest repeatedly expressed during the day’s events (which included a meeting sponsored by the Global Leadership Campaign and Center for Hemispheric Policy at the University of Miami) was corruption. There were many questions about MCC’s corruption indicator, a measure a country must pass to be eligible for MCC assistance. Corruption is a killer of long-term economic development. I raised this point during other meetings this week (with CSIS as part of their “Smart Power” series and with the Inter-American Dialogue). We’ve got to open our eyes when we talk about how this problem affects burgeoning economies. We can’t simply think of corruption as something that happens when a public official takes a bribe or skews his balance sheets. There is a lot that goes into corruption—which is why it deserves a hard look. MCC has put together some ideas on the issue which you can read on our web site’s anticorruption page. Corruption is a complex issue, and not always easy to measure, but it has to be a part of our equation when we are investing US assistance funds. At the end of the day, we in America pay for corrupt practices abroad because it limits our ability to do business honestly and efficiently and jeopardizes our opportunities here at home.

I got an earful regarding corruption this past week—which tells me that we are on the right path by helping to fight it through the MCC process. It’s just one of the reasons why what we do in places like Malawi or Madagascar matters to people in Miami or Maryland. As well it should. (Let me know what you think at info@mcc.gov).