MCC to Invest $28 million in Guatemala Threshold Program
For Immediate Release
April 8, 2015
GUATEMALA CITY — The U.S. Government’s Millennium Challenge Corporation and the Government of Guatemala have signed a $28 million Threshold Program Agreement to support efforts to increase revenues and reduce opportunities for corruption in tax and customs administration, catalyze more private funding for infrastructure and help give Guatemalan youth the skills they need to get jobs. The signing comes two days before the opening of the Summit of the Americas in Panama.
MCC is a U.S. Government agency with a mission to reduce global poverty by stimulating economic growth. Created in 2004, MCC makes large-scale investments, or compacts, in poor but relatively well-governed countries. MCC’s threshold programs help countries that do not qualify for a compact to implement key policy and institutional reforms that will help reduce barriers to stronger economic growth.
With the new investment in Guatemala and ongoing investments in El Salvador and Honduras, MCC is playing a critical role in the U.S. Government’s strategy to promote regional prosperity and improve governance. Across Central America, MCC seeks to create the environment for faster economic growth by improving the climate for private sector investment, strengthening human capital to create jobs and opportunities in the region, and supporting better governance and more transparent financial management.
The Guatemala Threshold Program includes two projects:
- Resource Mobilization Project: The project aims to increase the availability of revenues by improving the efficiency of tax and customs administration. It also will provide support for the efforts of the Government of Guatemala to design and implement public-private partnerships which attract more private funding for important infrastructure projects and free up more public resources for investing in people.
- Education Project: This project aims to support the Government of Guatemala in improving the quality and relevance of secondary education to prepare its youth to succeed in the labor market. The threshold program will support efforts by the Ministry of Education to develop programs that improve teacher skills, the quality of teaching, and the effectiveness of technical and vocational education and training.
The Guatemala Threshold Program represents an important opportunity for Guatemala to demonstrate its commitment to MCC’s core principles for compact eligibility and the U.S. Government’s continued engagement with the people of Central America. To become eligible for a larger MCC compact, the Government of Guatemala will also need to continue to improve its policy performance on the MCC scorecard indicators. MCC’s investment in human capital must be accompanied by government efforts to provide security and uphold its laws so that better educated youth can find fairly remunerated work and good working conditions.
The Government of Guatemala designated the National Competitiveness Program (PRONACOM) to manage the implementation of the program in coordination with the Ministry of Education, the Superintendence of Tax Administration, and the National Agency for the Development of Economic Infrastructure Partnerships. MCC will oversee the implementation, monitoring and evaluation of the program.