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Moldova's New MCC Compact

Moldova's New MCC Compact
Moldova's New MCC Compact

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Shortly after declaring its independence from the Soviet Union in 1991, Moldova began to move toward a market economy. Such a transition is never easy, and Moldova suffered a decade of economic crises. To promote economic growth, the Moldovan government began to enter into agreements with international financial institutions such as the World Bank and the International Monetary Fund.

In 2006, the Board of Directors of the Millennium Challenge Corporation, or MCC, a U.S. government agency, selected Moldova as eligible to pursue an MCC Compact. A Compact is a 5-year agreement between MCC and an eligible country to fund specific programs targeted at reducing poverty and stimulating economic growth. In order to qualify for a Compact, a country must meet criteria based on ruling justly, investing in its people and establishing economic freedom.

On January 22nd of this year, MCC Chief Executive Officer Daniel Yohannes and Moldovan Deputy Prime Minister Iurie Leancă signed Moldova’s Millennium Challenge Compact, which will provide $262 million in U.S. assistance over 5 years for critical improvements in Moldova’s agricultural sector and road infrastructure.

U.S. Secretary of State Hillary Rodham Clinton and Moldova’s Prime Minister, Vladimir Filat presided over the signing ceremony. This assistance will provide tangible benefits to the Moldovan people at a critical time. We commend Prime Minister Filat’s government for finalizing this agreement.

“This is the final step of a journey that began in 2005, when Moldova became part of the MCC Threshold Program. As a threshold country, it pledged to undertake a series of reforms before it could become eligible for an MCC compact,” said Secretary of State Clinton during the signing ceremony:

"Moldova made significant progress economically, socially, and politically. ... We know it was not easy. We know that it came at political cost. [T]his agreement begins a new chapter in the relationship between our two countries. It reflects our commitment to help put the people of Moldova on the road to economic progress."

"The Obama Administration is committed to building our partnership, broadening it, strengthening it, and seeing the people of Moldova reap the benefits of market reform, political reform, and all of the efforts that have been undertaken in the last years," said Secretary of State Clinton.

"We applaud the people of Moldova and their leaders for embracing a reform agenda. ... Today’s signing is a victory for governance, human rights, and economic reform."