Armenia Meets Initial Requirement for Millennium Challenge Account Funding

WASHINGTON–DC–Armenia was listed among the first 63 countries which have met the initial eligibility criteria for assistance through the US government’s newly established Millennium Challenge Account (MCA)–reported the Armenian National Committee of America (ANCA.)

The announcement came on February 2–when the Millennium Challenge Corporation–established to administer the MCA–held its first meeting. The first group of countries includes those with a per capita income of less than $1415 and who are eligible to receive loans from the World Bank’s International Development Association. The three South Caucasus states–Armenia–Azerbaijan–and Georgia–each met these initial criteria.

The Millennium Challenge Corporation will next review each of the 63 candidate countries based on their government’s sound policy performance and accountability by recipient nations. This performance is likely to be measured by sixteen quantifiable criteria in the areas of 1) ruling justly–2) investing in people–and 3) economic freedom. MCA experts project that 10-15 countries of the 63 are likely to qualify for MCA funding in the first year.

According to an initial study prepared by the ANCA in September 2003–Armenia is well positioned for consideration for the first year of MCA funding. The ANCA review notes that: Armenia is at or above the median in 14 of the 15 indicators that apply to Armenia. Armenia has the lowest inflation rate among the top qualifying countries–creating a favorable environment for business and investment–and protecting those in poverty from the erosion of their purchasing power. Armenia’s trade policy is ranked the best among the top qualifying countries–contributing directly to economic growth and job creation. Armenia’s regulatory quality is more than twice the median score and is tied for first among qualifying countries–contributing directly to the rule of law and fostering economic growth. Armenia’spends more than twice the median level on public health expenditures. Armenia’s primary education completion rate of 83% is 38% over the median level of 59%. This high score correlates directly to economic growth through the creation of a highly trained work force. With an immunization rate of 93%–Armenia is 28% over the median score of 72%.

The ANCA is working with the Administration and Congress on this matter–and has been in direct consultation with the Armenian government regarding Armenia’s eligibility for the MCA.

The concept of the MCA was announced two years ago by President Bush in Monterey–Mexico–where he called for a "new compact for global development," linking assistance to developing countries to their commitment to rule justly–invest in their people–and encourage economic freedom. Congress recently appropriated $1 billion in funds for the new assistance initiative to be dispensed in FY 2004. The Administration’s FY 2005 budget request includes a $2.5 billion allocation for MCA and the President has pledged to increase the amount to $5 billion in FY 2006.

The Board of Director of the Millennium Challenge Corporation is chaired by Secretary of State Colin L. Powell and includes Secretary of the Treasury John Snow as Vice Chairman–US Trade Representative Robert Zoellick–and USAID Administrator Andrew Natsios. Five additional members will be named later.

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