US Signs Five-Year $65m Vanuatu Infrastructure Grant

by Mary Swire, Tax-News.com, Hong Kong

06 March 2006

The Millennium Challenge Corporation has signed a five-year $65.69 million Compact grant agreement with Vanuatu, an aid package that is expected to increase average income per capita by 15% over five years.

The grant, approved by the MCC in January, is expected to directly impact the lives of more than 65,000 of the rural poor in Vanuatu. Presently, approximately half of Vanuatu's citizens live in poverty.

First proposed by President George W. Bush in 2003, the Millennium Challenge Corporation (MCC) was established on January 23, 2004 to administer the Millennium Challenge Account (MCA), a mechanism in which development assistance is provided to those countries that rule justly, invest in their people, and encourage economic freedom.

Charles O. Sethness, MCC Vice President for Accountability, led an MCC delegation to Vanuatu to participate in a signing ceremony at the Parliament House in Port-Vila.

“MCC congratulates the ni-Vanuatu for a well designed, comprehensive Compact and reaching this important milestone,” commented Mr. Sethness.

“The Compact is a testament to Vanuatu's commitment to reduce poverty and provide hope and opportunity to their people. MCC applauds Prime Minister Lini for his leadership and the hard work of his team," he added.

The Compact consists of up to eleven infrastructure projects — including roads, wharfs, an airstrip and warehouses — that will help poor, rural agricultural producers and providers of tourist-related goods and services reduce transportation costs and improve access to transportation services.

The Compact also includes institutional strengthening efforts and policy reform initiatives in Vanuatu's Public Works Department, including: provision of plant and equipment for maintenance; introduction of service performance contracts; establishment of local community maintenance schemes; and introduction of user fees.

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