Overview

The Millennium Challenge Corporation is committed to development, poverty reduction, and economic growth in the Americas. In this region, MCC has 5-year compacts with El Salvador, Honduras, and Nicaragua, totaling more than $850 million. MCC also has 2-year threshold programs with Paraguay, Guyana, and Peru, totaling an additional $107 million.

MCC investments are having a broad impact by:

• Promoting trade and private enterprise investment.
• Deepening democracy by requiring countries to demonstrate performace in policy areas including political rights, civil liberties, and voice and accountability.
• Promoting a productive discussion between civil society, the private sector, NGOs and government entities in the overall design and monitoring of MCC projects.
  

Fast Facts

• MCC is currently working with countries in both Central and South America.
• MCC has signed 3 compacts with Latin American countries: El Salvador, Honduras, and Nicaragua totaling $850 million.
• MCC has signed threshold agreements with Guyana, Paraguay, and Peru totaling over $107 million.
• Columbia was selected as Compact-eligible in 2008.

Compacts

El Salvador

El Salvador’s five-year, $461 million compact seeks to improve the lives of Salvadorans living in the poverty stricken northern region through strategic investments in transportation, education, enterprise development, and community services. The compact is highlighted by a human development project designed to increase employment opportunities for the region’s poorest inhabitants and provide greater access to safe water and sanitation services.

Honduras

The five-year Compact with Honduras aims to reduce poverty by alleviating the two key impediments to economic growth: low agricultural productivity and high transportation costs. The $215 million compact, will place a high emphasis on increasing the productivity and business skills of farmers who operate small and medium size farms and reduce transportation costs to targeted production centers and national, regional and global markets.

Nicaragua

In Nicaragua, the five-year compact will support those living in the Leon and Chinandega region by significantly increasing incomes of rural farmers and entrepreneurs. The compact will provide $175 million to reduce transportation costs, improve access to markets, strengthen property rights, increase investment, and raise incomes for farms and rural businesses.

Threshold Programs

Guyana

The two-year, $6.7 million Guyana Threshold Program seeks to improve Guyana’s performance on MCC’s Fiscal Policy indicator. Specifically, the program will help the Government of Guyana implement its new value-added tax system and develop ways to assist and educate taxpayers, while at the same time helping the government better plan and control spending. Additionally, the program will help reduce the number of days and costs associated with starting a business by modernizing and streamlining the business registration process.

Paraguay

The principal objective of the two-year, $34.6 million Paraguay Threshold Program is to reduce corruption. MCC funds will be used to strengthen the rule of law by increasing penalties for corruption and build a transparent business environment by confronting informal business transactions. Additionally, the program includes a business development component aimed at reducing the number of days necessary to start a business.

On April 13, 2009, MCC and Paraguay signed a second threshold program to help the government of Paraguay improve its performance on it’s Control of Corruption and Rule of Law indicators. The two-year, $30.3 million program will build upon the substantial successes of Paraguay’s initial threshold program and will focus on anti-corruption efforts in law enforcement, customs, and the healthcare and judicial sectors.

Peru

The two-year $35.6 million Peru Threshold Program seeks to increase immunization rates of rural children against diseases such as measles, diphtheria, pertussis and tetanus in eight targeted regions and assist Peru’s Ministry of Health in strengthening information and vaccination management systems. The program will also help Peru combat corruption by working with the judicial branch, law enforcement, the ombudsman and controller’s offices and civil society organizations to improve internal controls, as well as analyze and simplify administrative processes to reduce opportunities for corruption.