mortality has been almost halved, giving more chil-
dren a chance to live.’’. 
(5) Development is neither an easy process nor 
a linear one. There are successes and there are fail-
ures. Today, too many people are still living in pov-
erty, disease has eroded many of the economic and so-
cial gains of previous decades, and many countries 
have not adopted policies, for a variety of reasons, 
that would enable them to compete in an open and 
equitable international economic system. 
(6) More countries and more people will be able 
to participate in and benefit from the opportunities 
afforded by the global economy if the following condi-
tions for sound and sustainable economic development 
are met: 
(A) SECURITY.—Security is necessary for 
economic development. Persistent poverty and 
oppression can lead to hopelessness, despair, and 
to failed states that become havens for terrorists. 
(B) POLICIES THAT SUPPORT BROAD-BASED 
ECONOMIC GROWTH.—Successful long-term devel-
opment can only occur through broad-based eco-
nomic growth that enables the poor to increase 
their incomes and have access to productive re-
sources and services so that they can lead lives 
of decency, dignity, and hope. 
(C) DEMOCRACY AND THE RULE OF LAW.—
Democratic development, political pluralism, 
and 
respect 
for 
internationally 
recognized 
human rights are intrinsically linked to eco-
nomic and social progress. The ability of people 
to participate in the economic and political 
processes affecting their lives is essential to sus-
tained growth. The rule of law and a commit-
ment to fight corruption is also critical to the de-
velopment of a prosperous society. 
(D) INVESTMENTS
IN
PEOPLE.—Economic 
growth and democracy can be sustained only if 
both men and women have the basic tools and 
capabilities that foster the opportunity for par-
ticipation in the economic, social, and political 
life of their countries. Successful development of 
countries requires citizens who are literate, 
healthy, and prepared and able to work. 
(7) Economic assistance programs authorized 
under part I of the Foreign Assistance Act of 1961, 
as administered by the United States Agency for 
International Development and other Federal agen-
cies, are of critical importance in assisting countries
to be in a position to maximize the effectiveness of as-
sistance authorized by this title. 
(8) It is in the national interest of the United 
States to help those countries that are implementing 
the economic and political reforms necessary for de-
velopment to occur. 
(9) On March 14, 2002, the President stated that 
the ‘‘growing divide between wealth and poverty, be-
tween opportunity and misery, is both a challenge to 
our compassion and a source of instability . . . [w]e 
must confront it . . . [w]e must include every Afri-
can, every Asian, every Latin American, every Mus-
lim, in an expanding circle of development.’’.
(10) The President has pledged that funds re-
quested for the Millennium Challenge Account shall be 
in addition to, and not a substitute for, existing de-
velopment and humanitarian programs. 
(11) Development assistance alone is not suffi-
cient to stimulate economic growth and development. 
Assistance has been shown to have a positive impact 
on growth and development in developing countries 
with sound policies and institutions. If countries have 
poor policies and institutions, however, it is highly 
unlikely that assistance will have a net positive effect.
(12) Economic development, and the achievement 
of the Millennium Development Goals, must be a 
shared responsibility between donor and recipient 
countries. 
(b) STATEMENT OF POLICY REGARDING A NEW COM-
PACT FOR GLOBAL DEVELOPMENT.—It is, therefore, the pol-
icy of the United States to support a new compact for global 
development that—
(1) increases support by donor countries to those 
developing countries that are fostering democracy and 
the rule of law, investing in their people, and pro-
moting economic freedom for all their people; 
(2) recognizes, however, that it is the developing 
countries themselves that are primarily responsible 
for the achievement of those goals; 
(3) seeks to coordinate the disparate development 
assistance policies of donor countries, and to har-
monize the trade and finance policies of donor coun-
tries with their respective development assistance pro-
grams; and 
(4) aims to reduce poverty by significantly in-
creasing the economic growth trajectory of beneficiary 
countries through investing in the productive poten-
tial of the people of such countries.
SEC. 202. AUTHORIZATION OF ASSISTANCE. 
(a) ASSISTANCE.—The President, acting through the 
Chief Executive Officer of the Millennium Challenge Cor-
poration, is authorized to provide assistance to eligible 
countries to support policies and programs that advance 
the progress of such countries in achieving lasting economic 
growth and poverty reduction and are in furtherance of the 
purposes of this title. 
(b) PRINCIPAL
OBJECTIVES.—Assistance provided 
under subsection (a) should advance a country’s progress 
toward promoting the following principal objectives: 
(1) FOSTERING DEMOCRATIC SOCIETIES, HUMAN 
RIGHTS, AND
THE
RULE
OF
LAW.—The assistance 
should promote—
(A) political, social, and economic plu-
ralism; 
(B) respect for the rule of law; 
(C) anti-corruption initiatives and law en-
forcement; 
(D) development of institutions of demo-
cratic governance, including electoral and legis-
lative processes; 
(E) transparent and accountable public ad-
ministration at all levels of government; 
(F) a fair, competent, and independent ju-
diciary; and
(G) a free and independent media. 
(2) FOSTERING INVESTMENT IN EDUCATION AND 
HEALTH
INFRASTRUCTURE
AND
SYSTEMS.—The as-
sistance should foster improved educational opportu-
nities and health conditions, particularly for women 
and children, including through—
(A) support for programs and personnel 
that promote broad-based primary education, in-
cluding through the development of academic 
curricula, by making available textbooks and 
other educational materials, and through appro-
priate use of technology; 
(B) support for programs to strengthen and 
build institutions, including primary health care 
systems, infrastructure, facilities, and personnel 
that provide quality health care; 
(C) support for improved systems for the de-
livery of healthy water and sanitation services; 
and 
(D) support for programs that reduce child 
mortality (including those programs that combat 
HIV/AIDS, malaria, tuberculosis, and other in-
fectious diseases, consistent with sections 104(c), 
104A, 104B, and 104C of the Foreign Assistance 
Act of 1961).
(3) PROMOTING
ECONOMIC
FREEDOM, BROAD-
BASED
ECONOMIC
GROWTH, AND
FOSTERING
FREE 
MARKET SYSTEMS.—The assistance should foster the 
institutions and conditions needed to promote free 
market systems, trade, and investment, including—
(A) the reform and restructuring of banking 
and financial systems, including by allowing for-
eign competition in the banking and financial 
sectors, where appropriate; 
(B) the development of transparent and effi-
cient commercial codes and reduction in the reg-
ulatory burden on business; 
(C) the protection of property rights, in-
cluding private property and intellectual prop-
erty rights, including through the adoption and 
effective enforcement of intellectual property 
treaties or international agreements; 
(D) support for market-based policies that 
support increased agricultural production; 
(E) a strong commitment to sound mone-
tary and budgetary policies; 
(F) the development of small businesses, pri-
vate cooperatives, credit unions, and trade and 
labor unions;
(G) the protection of internationally recog-
nized workers’ rights; and 
(H) the capacity of eligible countries to 
ameliorate damage to the environment and re-
spect other environmental standards. 
SEC. 203. ELIGIBILITY AND RELATED REQUIREMENTS. 
(a) ASSISTANCE FOR LOW INCOME COUNTRIES.—
(1) FISCAL YEAR 2004.—A country shall be eligi-
ble to receive assistance under section 202 for fiscal 
year 2004 if—
(A) the country is eligible for assistance 
from the International Development Association, 
and the per capita income of the country is 
equal to or less than the historical ceiling of the 
International Development Association for that 
year, as defined by the International Bank for 
Reconstruction and Development; 
(B) subject to paragraph (3), the country is 
not ineligible to receive United States economic 
assistance by reason of the application of section 
116, 490, or 620A of the Foreign Assistance Act 
of 1961, or by reason of the application of any 
other provision of law; and
(C) the Chief Executive Officer of the Cor-
poration determines that the country has dem-
onstrated a commitment to—
(i) bolster democracy, human rights, 
good governance and the rule of law; 
(ii) invest in the health and education 
of its citizens; and 
(iii) promote sound economic policies 
that promote economic freedom and oppor-
tunity. 
(2) FISCAL YEARS 2005 AND 2006.—A country 
shall be eligible to receive assistance under section 202 
for fiscal years 2005 and 2006 if—
(A) the per capita income of the country is 
equal to or less than the historical ceiling of the 
International Development Association for the 
fiscal year involved, as defined by the Inter-
national Bank for Reconstruction and Develop-
ment; 
(B) the country meets the requirements of 
paragraph (1)(B); and 
(C) the country meets the requirements of 
clauses (i) through (iii) of paragraph (1)(C), as 
determined by the Chief Executive Officer.
(3) RULE OF CONSTRUCTION.—For the purposes 
of determining whether a country is eligible for re-
ceiving assistance under section 202 pursuant to 
paragraph (1)(B), the exercise by the President, the 
Secretary of State, or any other officer or employee of 
the United States of any waiver or suspension of any 
provision of law referred to in such paragraph shall 
not be construed as satisfying the requirement of such 
paragraph. 
(b) ASSISTANCE FOR LOWER MIDDLE INCOME COUN-
TRIES.—
(1) IN GENERAL.—In addition to countries de-
scribed in subsection (a), a country shall be eligible 
to receive assistance under section 202 for fiscal year 
2006 if the country—
(A) is classified as a lower middle income 
country in the then most recent edition of the 
World Development Report for Reconstruction 
and Development published by the International 
Bank for Reconstruction and Development; 
(B) meets the requirements of subsection 
(a)(1)(B); and 
(C) meets the requirements of clauses (i) 
through (iii) of subsection (a)(1)(C), as deter-
mined by the Chief Executive Officer.
(2) LIMITATION.—The total amount of assistance 
provided to countries under this subsection for fiscal 
year 2006 may not exceed 20 percent of the total 
amount of assistance provided to all countries under 
section 202 for fiscal year 2006. 
(c) ASSISTANCE FOR SELECTED LOW INCOME COUN-
TRIES.—
(1) IN GENERAL.—A country shall be eligible to 
receive assistance for any of fiscal years 2004 through 
2006 solely for the purpose of becoming eligible to re-
ceive assistance under subsection (a) if the country—
(A) meets the requirements of paragraphs 
(1)(B) and (2)(A) of subsection (a); 
(B) demonstrates a commitment to meeting 
the requirements of clauses (i) through (iii) of 
subsection (a)(1)(C), as determined by the Chief 
Executive Officer; but 
(C) fails to meet the eligibility criteria nec-
essary to receive assistance under section 202, as 
established under subsection (e). 
(2) ADMINISTRATION.—Assistance for countries 
eligible by reason of the application of this subsection 
shall be provided through the United States Agency 
for International Development.
(3) ALLOCATION OF FUNDS.—Of the amount au-
thorized to be appropriated under section 208(a) for 
a fiscal year, not more than 15 percent of such 
amount is authorized to be appropriated to the Presi-
dent for the fiscal year to carry out this subsection. 
(d) GENERAL AUTHORITY TO DETERMINE ELIGI-
BILITY.—
(1) GENERAL AUTHORITY.—The Chief Executive 
Officer shall determine whether or not a country is el-
igible to receive assistance under section 202. 
(2) CONGRESSIONAL
NOTIFICATION.—Not later 
than 7 days after making a determination of eligi-
bility for a country under paragraph (1), the Chief 
Executive Officer shall provide notice thereof to the 
appropriate congressional committees. Such notice 
shall include a certification of the determination of 
the Chief Executive Officer that the country meets the 
requirements of clauses (i) through (iii) of subsection 
(a)(1)(C) in accordance with such subsection, sub-
section (a)(2)(C), subsection (b)(1)(C), or subsection 
(c)(1)(B), as the case may be. 
(e) ELIGIBILITY CRITERIA.—
(1) INITIAL CRITERIA AND METHODOLOGY.—As 
soon as practicable after the date of the enactment of 
this Act, but not later than 30 days prior to making