MCC Willing to Say No (Or At Least, No More)

Less publicized than the November MCC Board country selections is the important adoption of a policy on suspension and termination of MCC assistance and/or eligibility. The Board approved and then immediately applied its new policy to suspend Yemen from threshold program eligibility (received in 2004). Adoption and actual use of this policysends a strong signal that the MCC will not tolerate substantial policy and performance slippages. But Yemen was, in some ways, an easy decision -- since its selection in 2004, Yemen experienced slippages in 9 indicators, so that by 2006 it had failed almost every single indicator. There will undoubtedly be some more difficult decisions to take in the future when other countries experience slippage -- the carrot vs. the stick dilemna that has plagued development assistance programs forever. Will the MCC's performance-based structure allow it to be any different? It ought to -- MCC resources are supposed to be dedicated to those countries demonstrating, through measurable indicators, serious commitment to development and poverty reduction. Yemen was a good call and we'll be keeping a watchful eye on the consistent use of this important new policy.