Letter to the MCC and GoG

09 March, 2011

Dear Sir/Madam,

The NGO coalition Transparent Foreign Aid to Georgia (TFAG) welcomes the recent decision of the Millennium Challenge Corporation reached at the Board of Directors Meeting of January 5th, 2011 on the eligibility of Georgia to develop a proposal for a second MCC compact.

Two members of the coalition, the Economic Policy Research Center and Open Society Georgia Foundation, have monitored the Millennium Challenge Georgia Program since 2006. During the monitoring process a number of shortcomings have been revealed, e.g. a lack of civil society engagement in drafting the proposal for the first compact, a lack of transparency and mismanagement -- especially during the period 2006-2008- and considerable gaps between financial plans and actual spending. (Detailed information on these shortcomings is available in our annual monitoring reports.)

We believe that an obligatory precondition for future success of the Millennium Challenge Georgia Program
is transparency and engagement of civil society in the process of developing a second compact.

Due to recent reports in the Georgian mainstream media, the public perceives that the priorities and concrete projects for the 2nd MCC compact are a fait accompli. We understand that over the next several months the Georgian government must elaborate a second compact document for approval by MCC and the US congress, thus there is still opportunity for the public to be engaged in the priority-setting process.
We therefore urge MCC and the Georgian government to fulfill the obligations set out by MCC rules for development of the compact proposal (MCC Guidelines for the Consultative Process-www.mcc.gov [1]).

Specifically, we would like the parties to:

Maintain ongoing and open communication with the public and civil society regarding developments in the elaboration of priorities, proposal and final compact;

Share a timetable for the steps to elaborate the proposal of the second compact, including steps that the Georgian government and MCC will undertake;

Establish a formal group of interested and relevant civil society representatives in order to engage them in the process of developing the proposal and seeking their feedback on drafts of the
document;

Ensure that a draft of the main priorities of the 2 nd compact are publicly available early in the process, to allow the public and civil society an opportunity to understand the main directions;

Provide justifications of the priorities to the public and create a space for discussion of these issues before the final proposal is submitted to MCC and with time for revision if necessary.

The NGO Coalition Transparent Foreign Aid to Georgia, which is made up of six leading Georgian non-governmental organizations, undertakes to:

Ensure that our participation does not create additional hurdles or unnecessarily prolong the development of the proposal or signing of the compact;

Share information with wider civil society groups to ensure that they are informed.

Keep MCC informed about the extent to which civil society is involved in the process and the Georgian government engages the public in the elaboration of the plan (MCC Guidelines for the Consultative Process).

We recognize that the real planning on the compact may not start immediately and look forward to notification of the process as soon as it is about to begin.

Signatories to the letter:

Economic Policy Research Centre