New MCC operations could grind to a halt without congressional action

The Millennium Challenge Corporation’s board will not be legally allowed to make any decisions — from approving new countries to addressing challenges with existing large-scale grants — after September if the U.S. Congress doesn’t approve new private sector board members. The U.S. aid agency’s board has just one of its four private sector members remaining — Ander Crenshaw — and his term is up in September. The other three had their terms expire in 2022. By law, the board, which has both government officials and those private sector representatives, won’t have the quorum necessary for decision-making once he leaves. Come the December board meeting, MCC will be unable to approve new countries for its compact agreements, or large-scale grants, to support infrastructure projects and economic development in the well-governed low-income countries, unless a new private sector board member is approved. It would also mean the board cannot cancel projects when things go wrong — for example, its individual and regional compacts with Niger, where there has just been a coup. “At a time when there is an inadequate response on the part of Western institutions to help the poorest countries invest in infrastructure, the last thing you’d want to do is hobble an agency that has a demonstrated track record in being able to do exactly that,” said Nancy Lee, a senior policy fellow and director for sustainable development finance at the Center for Global Development. This is a time when you want to expand authorities and give more resources to an agency like MCC, rather than weaken it, she said, adding that if this stalled process prevents MCC from moving forward, it doesn’t make sense or align with rhetoric from the administration or Congress about the importance of better funding global infrastructure projects. While one nominee was announced by the White House in May — Steven Swig — he has not yet been approved by Congress. ​​Traditionally those private sector board members are approved by the U.S. Senate in pairs — with one nominated by Republicans and one by Democrats. The four members are suggested by the minority and majority leader in both chambers of Congress, officially nominated by the president and then approved by the Senate. MCC is hopeful there will be another nomination when Congress returns from its August break, and that vetting and votes will happen quickly to avoid lacking a quorum at December’s board meeting, an MCC official told Devex. That meeting is particularly important because the board typically selects new countries for the agency to work with in December. If the board lacks a quorum it would not be able to do so, but any of the MCC compacts, or grant agreements, already underway could continue to operate, and others already approved could move forward. There is “no real factor blocking progress here,” and it shouldn’t be a partisan issue, Lee said, adding that there should also be little question about MCC’s performance. “I can’t justify a lack of progress on putting board members in place on any criticism of the agency,” she said. So perhaps it comes down to the small agency not being prioritized among other issues facing political leaders. “I think the development community should raise the alarm. This is potentially very consequential,” Lee said. Update, Aug. 10, 2023: This article has been updated to clarify that MCC provides large-scale grants.