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Indonesia Signs MCC

An Acehnese man unloads fish from fishing boats in Banda Aceh on the Indonesian island of Sumatra. (file photo)

The United States Millennium Challenge Corporation announced a grant for $600 million to support Indonesia's efforts to reduce poverty.

During the recent visit to Indonesia by President Barack Obama, the United States Millennium Challenge Corporation, or MCC, announced a grant for $600 million to support Indonesia's efforts to reduce poverty through economic growth. The grant will fund three projects designed to expand the use of renewable energy and improve natural resource management, reduce low birth weight and childhood stunting, and modernize public procurements to lower costs and root out waste, fraud, and abuse.

Under the terms of the MCC compact, over half of the $600 million is devoted to the Green Prosperity project. This will help provide viable renewable energy alternatives and help improve land use practices and natural resource management. "We think that rural people will be able to raise their incomes while reducing their reliance on fossil fuels and on logging," said U.S. Secretary of State Hillary Clinton.

Indonesia will also have the first-ever MCC compact with a focus on early childhood nutrition. Ensuring nutrition during the one-thousand day window from a woman's pregnancy to a child's second birthday is the single most effective investment in a child's physical and cognitive development. Ultimately, an early focus on nutrition can reduce poverty, promote prosperity, and improve the security and stability of communities and countries. This program is expected to benefit up to 2.9 million children in up to 7,000 villages across the country.

The third project, the Procurement Modernization Project, will support Indonesian initiatives to improve the government's system for making purchases on behalf of the people. The project should help ensure significant government expenditure savings with no loss - or an increase - in the quality of procured goods and services. "The proposal," said Secretary Clinton, "has the potential to save as much as fifteen billion dollars annually for the government and people of Indonesia." Open government practices save money, reduce corruption, and improve efficiency and accountability.

Each of these projects represents a significant step forward in the U.S.-Indonesia relationship and reflects the broadening and deepening of ties under our bilateral Comprehensive Partnership, launched in 2010 by both presidents.