Ukraine Receives Millennium Challenge Funds To Fight Corruption

WASHINGTON, DC -- The Millennium Challenge Corporation (MCC) has approved a two-year, $45 million initiative to help Ukraine combat corruption.

MCC chief, Ambassador John Danilovich

Currently, Ukraine’s persistent problems with public corruption make it ineligible to receive broader MCC compact assistance, according to a June 16 MCC press release.

The anti-corruption funding is available under the MCC Threshold Program, which assists countries that are very close to meeting the requirements for an MCC compact -- a broad agreement with MCC that includes a multiyear plan for achieving the country’s development objectives.

"Ukraine is undertaking bold reform programs to tackle corruption and attract more international investment, including possible future MCC Compact assistance that is designed to reduce poverty through economic growth," said Ambassador John Danilovich, chief executive officer of MCC.

Established by President Bush in January 2004, MCC is a U.S. government corporation that administers the Millennium Challenge Account, which provides supplemental aid to help some of the poorest countries in the world achieve sustainable economic development.

It is based on the principle that aid is most effective when it reinforces sound political, economic and social policies.

To receive compact assistance, a country must score above the median in 16 independently measured indices. These indicators measure the extent to which a country is ruling justly, such as through the protection of civil liberties and efforts to fight corruption; investing in people, such as through immunization and education programs; and providing economic freedom.

In November 2005, the MCC named 23 countries eligible to apply for funding during the fiscal year that began October 1, 2005 (FY 2006). Twenty are from the "low income" category and three are from the new "lower middle income:" category. An additional 13 countries were selected for the Threshold Program, and Albania continued from the previous year.

According to the MCC press release, Ukraine’s high level of corruption 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."

An MCC fact sheet indicates that Ukraine will attack many of these problems directly. The program aims to strengthen the monitoring and exposure of public corruption by Ukrainian civil society and the media.

It also aims to increase transparency in the judiciary, strengthen accountability among government officials by enforcing ethical and administrative standards, simplify and enforce regulations and increase fairness in testing for higher education.

The Ukraine initiative will be administered by the U.S. Agency for International Development (USAID), with the help of the departments of Justice and State and the U.S. Embassy in Kiev.

USAID recently signed a strategic objective agreement with the Ukrainian government that aims to strengthen the rule of law in Ukraine through reforming laws, procedures and practices to increase transparency and impartiality throughout the Ukrainian government.

In addition to Ukraine, other threshold countries that received special MCC anti-corruption assistance this year are Albania, Paraguay, the Philippines, Tanzania and Zambia.

MCC has signed compacts totaling more than $1.5 billion with eight nations: Madagascar, Honduras, Cape Verde, Nicaragua, Georgia, Benin, Vanuatu and Armenia.

In addition to the chief executive officer, the MCC is managed by a board of directors comprising the secretaries of State and Treasury, the U.S. trade representative, the administrator of the U.S. Agency for International Development and four representatives from the private sector.

Source: US Department of State