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  • MCC will require partner countries to incorporate the views of broad elements of their societies as they determine their priorities.

  • It focuses on results and establishes outcome-based standards for success up front.

  • It establishes accountability as a key operating principle and will monitor progress on an on-going basis.

Previous development assistance has involved these concepts with varying degrees of emphasis and success. The fact that all of them are key structural components of MCC makes MCC truly different—and, I believe, capable of making a real difference in the lives of millions. Let me elaborate briefly on some of these core elements of MCC’s approach. First, policy reform. Research has shown repeatedly that development aid produces the best results when it is targeted to countries that respect political and economic rights and freedoms, respect the rule of law, and pursue effective growth policies. Thus, MCC provides incentives for countries to adopt or maintain policies for governing wisely, investing in their own people and promoting economic freedom. Policy reforms in poor nations can provide opportunities for citizens to benefit from increased international trade and private capital flows, from the growth of their domestic economics, and from greater economic and political freedom. These reforms, in turn, can have a much greater impact than whatever MCC itself achieves.

President Bush told me personally that providing incentives for policy reform to our partner nations is a critical aspect of our new approach. MCC provides incentives for countries to change their policies, reward those that do, and assist them in achieving their development goals.

Second, MCC will promote sustained economic growth. There are many legitimate purposes of development assistance, including disaster relief, food aid, and disease prevention. But over the years, the press of short-term needs has squeezed out attention onto long-term issues. Thus, MCC’s focus would include investments in agriculture, education, private sector and financial systems development, legal and regulatory reform, and enabling infrastructure. Our exclusive mission is to focus on the long-term challenge of assisting developing countries to escape their dependency status through self-sustaining economic growth.

Partnership is a critical third piece. This is a major change in the relationship between donors and recipient nations. Millennium Challenge Corporation will ask qualified nations: What are your development priorities? This positive, empowering approach gives partner nations ownership for their programs from the start, and then provides the financing they need.

Let me add that this partnership spirit should extend beyond MCC’s relationship with its partner countries. MCC has an extraordinary Board. USAID [the U.S. Agency for International Development], the State and Treasury Departments, and the U.S. Trade Representatives are each represented on MCC’s Board. All greatly contribute to MCC’s own expertise, experience, resources and country



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