MCC to Remain Independent of USAID, Nominee Indicates

The Millennium Challenge Corp. should remain separate of the U.S. Agency for International Development, President Barack Obama's nominee to lead MCC indicated at his confirmation hearing, providing what may be a glimpse into the administration's thinking on aid reform.

Daniel W. Yohannes told Senate Foreign Relations Committee members Wednesday (Nov. 4) that MCC has a "very narrow focus, reducing global poverty through economic growth," and that "to be very innovative," the government corporation needed to remain "a viable entity."

He told Ranking Member, Richard G. Lugar that MCC has a "very narrow focus, reducing global poverty through economic growth". Yohannes said that the agency needs "to be very innovative" for the agency to remain "a viable entity".

Richard G. Lugar, the panel's ranking Republican, noted that several MCC compacts had been terminated lately, and that there had been "problems in terms of funding." Congress is eager "to economize" and "started to think that we should do it the old-fashioned way" by channeling international assistance mainly through USAID instead of a public-private hybrid established only in 2004, Lugar noted.

"Should MCC remain a separate agency or should it be part of a larger way of providing aid and assistance to other countries?" he asked Yohannes.

The MCC CEO-nominee's answer: "I understand that there have been some budget issues but also believe that agencies like MCC alone cannot bring about long-term sustainability. I believe that if we partner with the private sector and other agencies, we can have a very effective development product in those countries."

Lugar noted that MCC compacts take years to develop because it takes partner governments years to determine their priorities. Congress is "impatient," he stressed, and wants to see "results every couple of years" to determine appropriations.

MCC's "results haven't been apparent," the lawmaker from Indiana argued.

He added: "I think that without that there will be continuing pressure to wind this situation down, maybe not out. And that will cramp your style in a way that was not the case with your predecessor, who started with hopes and monies that were substantially greater. Meaning, the results need to be highlighted."

Yohannes said he plans to show "the American people that the programs are having a tremendous impact" and promised to provide results "shortly."

Sen. Robert Menendez, a New Jersey Democrat, asked how Yohannes planned to "ensure MCC assistance is in addition instead of supplanting" existing foreign aid.

"If I'm confirmed, I promise to work with USAID and other agencies in a coordinated effort to make sure we are using the talent on the ground and also the Hill," Yohannes responded.

Mendes asked how Yohannes would ensure that countries "carry out consultations with a diverse group of civil society organizations," especially women's groups.

The nominee said he would make sure that "a broad cross-section" of society was involved in the drafting of compacts. He added: "I will make sure that we have sufficient resources on the ground and all consultation processes are complete and included in the design and consultation processes."

The committee will pose additional questions to Yohannes in writing before voting on his nomination. The full Senate would then have to confirm Yohannes.

Other nominees questioned at this week's Senate hearing include Jide J. Zeitlin for U.S. representative to the United Nations for management and reform, Gustavo Aravat for U.S. executive director of the Inter-American Development Bank, Frederick D. Barton for Economic and Social Council of the United Nations, and Carmen Lomellin for U.S. representative to the Organization of American States.

About the author

  • Moria Byrne

    Moria joined Devex's Washington bureau in September 2009 as an international development correspondent fellow. She is a communications specialist with a background in international development public relations, publishing, education and journalism. Moria has worked for Catholic Relief Services and, as a Peace Corps volunteer, lived in the Philippines for two years.