The U.S Government's Millennium Challenge Corporation (MCC) Board chaired by Secretary of State Hillary Clinton has suspended the Malawi Compact due to bad governance.
MCC maintains compact partnership only with countries that demonstrate a clear commitment to good governance, economic freedom and investing in their citizens.
MCC CEO Daniel Yohannes started that "An MCC compact is a partnership, and the commitment to democratic rights, accountable government and sound economic management is fundamental to that partnership.In light of our ongoing concerns about democratic governance in Malawi, MCC has formally suspended the compact."
He therefore stated that the future of this compact now rests on the actions of the Malawi government leadership from now to June, when the MCC Board is expected to meet again.
MCC planned $350 million investment in the power sector and was expected to provide close to $ 2 billion in net income benefits to nearly six million Malawians, the great majority of whom live on less than $2 per day.
However the MCC board has expressed very serious concerns about the economic and political situation in Malawi.
The board therefore called upon the government of Malawi to respect the rights of its citizens and civil society organisations to assemble and speak freely.
The board did not hide that it will continue to monitor events in Malawi closely and will decide whether to terminate the compact at its meeting in June.
The killing of 20 people during the anti-government riots of July 20, 2011 and the recent arrests of opposition and human rights leaders are some of the key issues that led to the suspension.