MCC set for closure under DOGE-led foreign aid cuts
KATHMANDU: A federal agency dedicated to fostering economic growth in developing countries is being effectively shut down as part of efforts by Elon Musk’s Department of Government Efficiency (DOGE) to reduce federal expenditure, according to a CNN report.
Agency staff were informed via email on Tuesday that there would soon be a “significant reduction” in both personnel and programmes, just a week after DOGE’s arrival at the Millennium Challenge Corporation (MCC), a source familiar with the matter told CNN. The source also noted that some employees could be placed on administrative leave as early as May 5.
The planned workforce reduction aims to eliminate all positions except that of the acting CEO, as federal law mandates the agency must retain a leader.
The CNN report described this as the Trump administration’s latest move against US foreign aid, alongside DOGE. Other targets have included the US Agency for International Development, the US Institute of Peace, and the African Development Foundation, among others, though some of these efforts have faced legal challenges.
Established by Congress in 2004, the MCC provides “time-limited grants” to various developing nations, including Ukraine, El Salvador, and Nepal, to support infrastructure projects and policy reforms.
As with other federal agencies undergoing cost-cutting, MCC employees have reportedly been offered an early retirement package or a deferred resignation programme, which includes administrative leave with pay until 30th September. Employees have until Tuesday to decide whether to participate, according to two sources.
One source expressed the profound disappointment among staff, saying they felt “gutted” and described the notification email as “a slap in the face.”
The MCC has been viewed as a US countermeasure to China’s Belt and Road initiative, which also funds infrastructure in developing countries. The United States has consistently opposed the Chinese initiative, encouraging nations to avoid participating.
Charles Kenny, senior fellow at the Centre for Global Development, commented that “the Millennium Challenge Corporation is practically the sole US government agency funding public sector infrastructure in developing countries – comparable to China’s Belt and Road initiative, but through grants rather than loans.”
Nevertheless, with significant cuts to foreign aid, including the MCC and USAID, critics argue that the United States risks losing influence to countries like China.
