Rethinking U.S. Foreign Assistance Blog

Moldova Becomes 20th Country to Sign MCC Compact

January 26, 2010

On Friday January 22^nd, MCC CEO Daniel Yohannes signed his first Compact – a five-year, $262 million agreement with the Republic of Moldova. With US Secretary of State Hillary Clinton and Moldovan Prime Minister Vladimir Filat presiding, Yohannes remarked, “I commend Moldova’s commitment to poverty reduction and economic development opportunities. Moldova’s MCC threshold program has already created an environment where innovative technologies, productivity, and increased access to markets can flourish. Now, with this Compact, MCC looks forward to deepening our partnership with the people of Moldova to foster long-term economic growth.”

Indeed, Moldova’s Compact is a testament to careful planning and an impressive level of project integration. Investments in Moldova will focus on irrigation infrastructure, high-value agricultural production, and road rehabilitation. These projects will all work together to increase local rural incomes and promote economic growth. Rural producers will now be able to successfully produce profitable fruits and vegetables, appropriately market them, and reliably transport them to market.

Added to this is an additional layer of improved access to credit and technical assistance. While prior compacts in Madagascar, Benin, and Morocco included financial access projects, Moldova’s innovative financing facility appears to be a step-up in terms of integrated value-added to the program. It will support related investments by farmers and entrepreneurs in the shift to higher value agriculture production, post-harvest processing, storage, and marketing. This package is co-financed by USAID. We look forward to keeping an eye on this as a model for future compacts.

Moldova’s previous $24.7 million Threshold program focused on anti-corruption by strengthening the capacity of the judiciary, increasing the monitoring capacity of civil society and the media, and curbing corruption in the tax, customs and police services. It succeeded in reducing the number of bribes connected with getting favorable judicial decisions and improved public reporting of corruption cases by the Moldovan media.