Millennium Challenge Corporation (MCC) Acting Chief Executive Officer Rodney Bent announced today that the MCC Board of Directors, chaired by U.S. Secretary of State Hillary Rodham Clinton, has voted to authorize the termination of MCC’s $110 million, five-year poverty reduction grant agreement, or compact, with Madagascar.

The grant program has been on hold since the country experienced an undemocratic change of government earlier this year.  In announcing the Board’s decision, Mr. Bent issued the following statement.

MCC deeply regrets that it will officially terminate all operations in Madagascar following the recent undemocratic change of government.  This is not a step we take lightly, as the MCC Board of Directors and staff have been extremely proud of the real improvement the MCC program has made in the lives of the poor in Madagascar.  We remain concerned about the future of the Malagasy people.   As the MCA program was conceived to help those developing countries that show the strongest commitment to the basic principles of promoting political rights, investing in people, and ensuring a free market, the Board determined that recent developments in Madagascar have fundamentally undermined the country’s basic eligibility for the program.

In order to facilitate a responsible and safe closure of its programs, MCA-Madagascar will remain in operation long enough to ensure that compact termination is orderly and does not endanger public health and safety, or the environment.  MCC is working to ensure that program assets, paid for by U.S. taxpayer funds, are properly accounted for as part of this process.

MCC is a U.S. Government agency designed to work with countries committed to good governance, the rule of law, and democratic principles.  Madagascar was the first country to sign an MCC poverty reduction and economic development compact.  MCC and Madagascar have worked collaboratively over the past four years to increase land security and investments in farms and other rural businesses, and to modernize the country’s financial sector in an effort to improve the lives of hundreds of thousands of Madagascar’s poor.

Specific results of MCA-Madagascar programs include: restoration of 149,000 disintegrating land rights documents to regional offices, construction of 29 land office buildings, strengthening the national inter-bank payment system at the Central Bank, increasing the population’s access to savings products, establishing a network of over 350 farmer leaders, and providing technical assistance training to approximately 34,450 farmers and 290 small businesses, farmers’ associations, and cooperatives.