US promises rewards for anti-corruption drive, greater fiscal restraint

The United States has urged Malawi to continue its anticorruption campaign and improve fiscal responsibility, so it can unlock development assistance from the US Millennium Challenge Account (MCA).

"If Malawi's performance in these areas improves, then Malawi could be considered for full participation in the MCA," US embassy spokesman Mayeso Chirwa told IRIN.

The Millennium Challenge Corporation (MCC), the administrative arm of the MCA, announced last week that it had approved Malawi's Threshold Programme Concept Paper, which was "a major milestone in the process for obtaining funding".

"The government of Malawi is now in the process of developing a Threshold Country Plan that will outline specific programmes to implement the concept paper's goals of combating corruption and strengthening fiscal accountability," Chirwa said in a statement.

Countries that are "full participants can receive substantial funding for major development projects. Madagascar [for example] just received US $110 million in funding from the MCC as a full participant country," he added.

Malawi's minister of information, Ken Lipenga, said the country had made remarkable progress in fighting corruption and controlling state expenditure, and consequently the government was optimistic about qualifying for assistance through the MCA programme.

"What it means now is that government will have to stick to its policies of fiscal discipline and zero tolerance on corruption," Lipenga noted.

In 2002 US President George Bush called for a new approach to development aid, saying "greater contributions from developed nations must be linked to greater responsibility from developing nations".

The MCA was established in response to that call, and represents a departure from traditional donor aid programmes. Bush has pledged a 50 percent increase in US developmental assistance - an annual increase of US $5 billion - channelled through the MCA.

In November 2004 Malawi became one of 12 countries eligible to apply for funding under the MCA Threshold Programme.