In December, 1,000 students in El Salvador were assigned scholarships for the 2010 school year.   The scholarships will provide money for students who attend technical schools for books, uniforms, room and board, and transportation. These scholarships are designed to keep teenagers in school when they can’t afford it on their own.  This program is especially important for students in the Northern Zone of El Salvador since the average level of schooling is only 4.3 years, which is more than 1.5 years lower than the rest of the country. Plus, a technical education is estimated to increase students’ employability and raise their incomes by more than 30 percent.

FOMILENIO (the entity managing El Salvador’s $460.9 million MCC compact) started publicizing the scholarships and recruiting students months ago.  Almost 1,900 applications were received. Of those, 1,500 applicants met the minimum requirements, but FOMILENIO could not provide all of them with scholarships. Therefore, it was decided that the scholarship recipients would be selected randomly at a public event. By selecting students to receive scholarships randomly, every student had the same chance of being selected through this fair process. By conducting the selection publicly and providing an internet link for remote viewers, FOMILENIO’s process was both open and transparent. The final list of selected scholarship recipients was handed out to school directors and published on FOMILENIO’s web site.

In addition to the benefits of fairness and transparency, a random selection of scholarship recipients allowed for a rigorous evaluation of the program’s impact. The students who were not selected will be tracked and compared with the students who were selected. Because the students were selected at random, the two groups should be the same on average now and any change in their future income can likely be attributed to the scholarship. This type of evaluation methodology is considered a best practice and one that MCC is using in a variety of programs and countries around the world to assess the impact made to promote sustainable poverty reduction and economic growth.

Investments in agricultural development are integral to MCC’s commitment to sustainable poverty reduction in rural Georgia.  The Millennium Challenge Georgia Fund (MCG), implementing Georgia’s $395 million MCC compact, is nearing completion of the Agribusiness Development Activity (ADA), a $20 million program designed to strengthen commercial linkages among agricultural service providers, producers, processors, wholesalers/distributors, and markets.  The 287 targeted matching grants already awarded to Georgian agribusinesses and farmers are supporting sustainable, long-term growth.

In addition to providing grants focused on enterprise and value chain development, MCG responded to a request from the Georgian Ministry of Agriculture to support the introduction of new agricultural machinery into the country by developing a new ADA component.  The inability of small farmers to access machinery has been cited as a major constraint to agricultural development in Georgia.  To meet the needs of Georgian farmers for increased mechanization of their agricultural techniques, MCG is providing grants up to $150,000 to a number of farm service centers.   Over the past 4.5 years, ADA has focused, in part, on the creation of a privately-owned retail network of farm service centers to provide a complete range of agricultural goods and services for Georgian farmers.

USAID has also responded to the need for new agricultural machinery in Georgia.  In early December 2009, USAID launched the Access to Mechanization Program, a $5.1 million program that will provide similar grants, in combination with a number of other funding mechanisms, to establish 25 to 30 machinery service centers throughout the country.  The MCC and USAID programs complement each other and maximize impact by promoting a commercially-sustainable model of agribusiness that benefits farmers as well as the owners and employees of farm service centers and machinery service centers throughout Georgia.

As a result of MCC-funded farm machinery grants and USAID’s newly-launched Access to Mechanization Program, beneficiary farmers will now be able to plant, cultivate, and harvest their crops far more efficiently.  Georgian farmers are motivated to move toward greater mechanization, as they expect the effect to be transformative.  By increasing productivity and improving the quality of their existing crops, farmers will be able to generate greater income and secure necessary capital for upcoming seasons.

Almost nine months ago, MCC released a comprehensive policy and procedures to prevent, detect, and remediate fraud and corruption in MCC-funded activities. As we mark International Anti-Corruption Day, MCC is proud of the many steps we have taken toward the effective implementation of this policy.

Effective implementation begins with an effective understanding of the policy. As soon as the policy was released, we turned our attention to communicating the details of MCC’s policy and the next steps toward its implementation. Particular emphasis was placed on ensuring that prevention, detection and remediation of fraud and corruption in MCC-funded activities is understood to be everyone’s responsibility at MCC. MCC has also made it a point to brief MCA partner country staff and external stakeholders.

MCC has also made progress on a number of actions outlined in the policy including:

• A resource guide with tools and techniques for MCC and MCA;
• A methodology for conducting risk assessments is being developed;
• Development of a training course and technical support for our country counterparts;
• Coordination with the Office of Inspector General on all allegations of fraud and corruption.

MCC will continue to actively pursue the more comprehensive, consistent, and explicit approach to the prevention, detection, and remediation of fraud and corruption in every facet of our operations as the principles-based policy sets forth. This policy complements MCC’s overarching emphasis on good governance, with a particular focus on the control of corruption. These good governance elements of MCC’s contribution to reducing corruption are implemented through our selection indicators and through our programs.

International Anti-Corruption Day serves as a firm reminder that corruption is an obstacle to sustainable development, poverty reduction, and economic growth, and that is why MCC will continue to stand up against corruption.

Tomorrow, we mark the 21st commemoration of World AIDS Day . In 1988, the World Health Organization designated December 1st to raise awareness about and focus attention on the global HIV/AIDS epidemic. There is a link between HIV/AIDS and the work of MCC, particularly in southern Africa where high HIV/AIDS rates constrain economic growth and compound human misery through early deaths, illness, and orphaned children.

Lesotho’s MCC compact signed in 2007, for example, recognizes the economic and human toll of HIV/AIDS. Thirty-four percent of the compact is dedicated to assisting Lesotho’s Ministry of Health and Social Work and the non-governmental sector expand access to HIV/AIDS prevention, treatment, and response. The compact provides financing to improve health infrastructure and to strengthen health systems nationwide.

The compact is renovating clinics and staff housing at up to 139 primary health centers throughout the country in an effort to improve the working and living conditions of health staff. The program is also reconfiguring the out-patient departments of 14 of the 19 secondary hospitals in order to provide needed space for integrating HIV/AIDS activities into these departments. Particular attention is being paid during these renovations to reducing the potential spread of tuberculosis in waiting rooms and clinical spaces, providing greater occupational safety for health workers, and decreasing the level of deadly tuberculosis co-infection of HIV positive patients.

In addition to infrastructure improvements, the compact is working to strengthen health systems by funding efforts to improve health care waste management.  This reduces the level of infectious medical wastes at health facilities and in communities. It is also improving management systems and capacities for community health, district health management, and hospital out-patient departments.  On-the-ground coordination between MCC, MCA—the local entity implementing Lesotho’s MCC compact– USAID, and the Centers for Diseases Control (both implementing agencies for the President’s Emergency Plan for AIDS Relief, or PEPFAR, funds) has been exceptionally strong, including the co-location of U.S. Government health-related staff and regular coordination of programming and implementation issues.

Moreover, MCC is looking at issues related to HIV/AIDS issues beyond the health sector. Construction activities in all high prevalence countries require HIV/AIDS mitigation efforts, including HIV/AIDS awareness and education for workers and communities to prevent the spread of HIV, especially as a result of labor migration. MCC compacts in Tanzania and Namibia, and compact development activities in Malawi, pay special attention to HIV/AIDS prevention and mitigation in non-health sector activities.

December 1st is an important reminder of global HIV/AIDS prevention efforts, and MCC is committed to working with partner countries to help provide better access to health services and treatment to ensure a better future for those affected.

Last week, MCC hosted a discussion in partnership with the White House Council on Environmental Quality (CEQ) to solicit views from private sector stakeholders on international climate change adaptation and resilience. The discussion at MCC was part of a series of “listening sessions” organized by an inter-agency working group developing recommendations for coordinating the U.S. Government response to critical global climate issues.  The working group is co-chaired by the CEQ and State Department and includes representatives from over 15 government agencies involved in foreign aid, humanitarian assistance, environmental protection, and national security.

MCC has a keen interest in the outcomes of the inter-agency process. We recognize that alleviating global poverty requires urgent attention to climate change.  That’s why we continue to examine ways to more explicitly integrate climate considerations into our development assistance model, including better coordination with other government agencies and donors. The efforts of this working group are important to understanding the strategic implications of global climate impacts, identifying the most critical needs, and developing an effective and coordinated response within the U.S. Government and among international donors.

Government and donors cannot address these challenges alone. Private sector resources are vital, and U.S. foreign assistance plays an important role in helping developing countries establish an enabling environment to attract private sector investments and facilitate the transfer of knowledge and technology. At MCC, we have a number of initiatives designed to enhance the sustainability and impact of our poverty reduction programs through greater private sector collaboration.  We are exploring ways in which these types of programs can be used to help partner countries adapt to climate change and pursue lower carbon growth strategies.

Last week’s roundtable discussion was attended by a range of private sector stakeholders, including, among others, engineering and consulting firms, financial service providers, and agribusinesses.  Participants talked about the types of services and technologies being deployed to help developing countries cope with climate change and provided ideas for enhancing private sector participation and public-private partnerships.  Much of the discussion focused on the vulnerability of smallholder farmers, as well as infrastructure, education, and information technology. Better data, additional research and development (especially agricultural research), and greater understanding of what climate change adaptation means were highlighted as important needs. Several participants discussed the importance of addressing climate change in an integrated manner and stressed the need to look across sectors, value chains, and other development priorities such as food security and disaster relief.  Competitive challenge grants and demonstration projects were suggested to spur innovation and attract entrepreneurs.  USAID’s Global Development Alliance was identified as a good model for creating effective public-private sector partnerships.

As this and other listening sessions have demonstrated, there is a tremendous amount of interest and knowledge about climate change and a clear desire among the private sector, NGOs, and other stakeholders to help respond to its effects. This initial listening session was designed to help frame the types of issues and questions the international adaptation working group must address as it develops its policy recommendations in the coming months. There will be additional opportunities in the future for input from the private sector and other stakeholders.

International Education Week 2009 (Nov 16-20) is an occasion to celebrate the benefits of worldwide learning and exchange.  International cooperation prepares citizens in every country to live, work and compete in the global economy. MCC is working with partner  nations to improve their education and training systems so that students learn the skills to get good jobs and boost economic growth in their countries and communities.

Youth development is central to a healthy, skilled and productive workforce. Investing in human capital through education and training is critical for improving productivity and economic growth and for reducing poverty and unemployment. About 36 percent of MCC’s $358 million direct investment in education is focused on youth development through technical and vocational education and training (TVET).

In El Salvador, working through FOMILENIO (which is the government entity accountable for compact implementation), MCC is helping to renovate 20 middle technical schools, revise curricula, train instructors, and  provide scholarships to deserving students, who will get jobs in agronomy, tourism and information technology — all areas crucial to the development of the country’s northern zone.

In Mongolia, MCC’s investment is helping to reform the TVET legal and policy framework so that schools are financially sustainable and can respond effectively to labor market demand. Competency-based curricula are being developed in key sectors like mining and construction. Selected schools are being renovated and equipped with modern technology and teachers trained in its use.

In Namibia, MCC supports community-based resource and study centers to provide basic job skills and information services for unemployed youth and low-skilled adults.  Also, the MCC investment is helping the National Training Authority develop demand-led programs, and a National Training Fund will ensure that the TVET system is financially viable.

In Morocco, TVET focuses on key artisan trades (leather, wood, metal, pottery, and textiles) whose products are in demand in the home, export and tourist markets. About 15 schools will be renovated and equipped with facilities to teach students the skills needed by employers and the market.

International Education Week is a great moment for MCC,  partner countries and agencies to highlight the strategic importance of youth development. The links between education and economic growth, income distribution and poverty reduction are well established.  Income, productivity and growth are closely linked to educational opportunity.  Strengthened TVET programs are particularly valuable for developing countries with large youth populations in need of the skills that lead to decent jobs, which in turn drive growth and reduce poverty.

Last week, more than two dozen communications professionals from around the world gathered at MCC headquarters for this year’s Communications College, a unique hands-on conference among peers to exchange best practices and lessons learned in development communications. These professionals carry out the public outreach, media relations, and overall communications duties at the organizations—often referred to as Millennium Challenge Accounts (MCAs)—responsible for implementing the poverty reduction programs in each of their countries. Their productive exchanges deepened our collective understanding about the issues we face every day as communicators: building the capacity of a press corps, managing media relationships, speech writing, managing strategic—and sometimes crisis—communications planning, expanding press freedom, organizing press conferences and outreach events, leveraging new social media, and coordinating with civil society, NGOs, and donors. Equipped with fresh insights and useful practices, our hope is that our communications colleagues have returned home with new perspectives on how best to tell the important stories of how their countries’ compacts are improving the lives of the poor.

Our colleague Elene Aladashvili from Georgia stated that MCC’s Communications College is “a chance to meet other colleagues from all around the world, exchange ideas and best practices, tackle the problems together and enhance communications skills, but it also serves as a great opportunity to touch the very core of what MCC is all about. Every time I come back from Communications College, my head is full of new ideas and opportunities. That helps me a lot in my everyday work at MCA Georgia.”

Communications College is not just about the local MCA professionals learning from us in Washington; it is also about us learning from them. Passion is the word I would use to sum up what I learned from the MCA communicators. They come face to face with the harsh realities of poverty and have the daunting task of managing the expectations of beneficiaries on a daily basis. Communicating results, especially long-term results, is not an easy task. It requires innovation, creativity, diplomacy, and patience. The MCA communicators each have a passion for communicating the results of their poverty reduction programs because they are personally vested in ensuring the success of their respective compacts.

Transparency and accountability demand the freedom of vibrant, honest, informed communications. The more our communications colleagues worldwide can shine light on what is unfolding during every stage of compact implementation—on the reforms underway and the results unfolding—the better informed citizens will become to hold their governments responsible to deliver fully on the promise of each MCC investment.

What we all know is this: Strategic, effective communications is how we can inspire action and affect change that will create an opportunity for the poor to lift themselves out of poverty. Listening to and learning from one another during this year’s Communications College reaffirmed and reenergized our shared commitment to win the fight against global poverty.

As I complete my service on the MCC Board of Directors, many thoughts go through my mind.  I think of the early days when, with personnel numbering in the dozens, MCC was bubbling with the energy and enthusiasm of a start-up enterprise. I think of the initial commitment of Secretary of State Powell and senior administration officials in launching this grand experiment, and the solemn responsibility to which I, and my fellow private sector board member, Christine Todd Whitman, took in ensuring that the voice of civil society and beneficiaries were represented. I think of how MCC matured under the steady leadership of Ambassador John Danilovich  and how the Board really came into its own under Secretary Rice, providing guidance to MCC management and upholding the MCC model through country selection, compact approval, and in the rare but unfortunate cases, suspension.

I think of the camaraderie that I have built with my fellow private sector board members, Mssrs. Craner, Patricof, and Frist, and am especially pleased that our work during the transition to a new administration has paid off with the full support of Secretary Clinton and the incoming Cabinet members. In a few short months, the Obama Administration has developed an appreciation for the value of an independent Board that serves as a model for inter-agency cooperation, drawing upon the experience and perspective of external stakeholders.  I wish CEO nominee Daniel Yohannes all the best in maintaining this model while placing his and the administration’s personal stamp on the agency, should the Senate confirm him.

When I see how far the MCC has come, particularly in beginning to realize its vision as an ambitious initiative emphasizing the principles of country ownership, the host country government’s accountability to its own people through democratic reforms, a commitment to fight corruption, and investments in the social well being of its citizens, I think further back—to the time when I first started in development over thirty years ago.  When I was stationed overseas on the front lines of this work, my colleagues and I used to gather after a day’s work—around a fire in some small village or back at the hotel bar in a bigger town—and talk about what development should look like, imagining beneficiaries deciding what assistance they would need to earn a livelihood and then playing an active role in developing and delivering that assistance. Little did I realize that three decades later, the U.S. Government would embrace these basic development principles: local ownership and community participation. And furthermore, that I would be asked to take an advisory role in the development of this concept.

MCC has come far in its five years.  While it pursued an ambitious path, it also responded to the concerns of many in the development community to incorporate much of the valuable knowledge and best practices already present.   MCC has taken great strides in working with USAID, collaborating through the Threshold program, communicating with the field missions, and heeding the counsel of the USAID Administrator, who plays an active role on the MCC Board.   From my personal visits to MCC programs and the reports I’m hearing from the field, MCC is achieving progress.  Projects are moving forward and the “MCC Effect” is having a continued and sustained impact, not only within MCC’s current partners, but also in countries striving to undertake valuable reforms to obtain eligibility. On the Board, we’ve come to realize that for many countries, demonstrating accountability to one’s people serves as a valuable signal to donors, investors, and the community at large, increasingly viewed as a form of currency that extends beyond simple eligibility for one form of U.S. foreign assistance.

One thing is clear—and this is reflected in the important dynamics of the public-private makeup of MCC’s Board—is that civil society has an indispensible role to play in development. No matter how dedicated governments are to uplifting the poor, their actions will never succeed unless businessmen, church leaders, community organizers and the like are active participants in the planning, design, and implementation of programs.  MCC has succeeded admirably in incorporating the views of civil society through initial consultation and project monitoring.  As the civil society Board member, I was able to draw upon an extensive field network of development practitioners, who combined technical expertise with a strong understanding of community needs and the cultural context so critical to successful development.  I hope that my successor on the Board shares this perspective.   I have great confidence that my colleagues on the Board will uphold MCC’s tradition of ensuring that the needs of the beneficiaries are addressed through the robust participation of civil society.

I am going to miss MCC, but I leave knowing that it is in good hands and headed in the right direction, which is confirmed by the positive results we are already starting to see.

It’s been an exciting few days for MCC. Resident Country Directors (RCDs) and Deputy Resident Country Directors (DRCDs) gathered from around the world for their annual conference last week to share best practices in poverty reduction. This gave us an opportunity to hear firsthand about how the U.S. Government is helping stimulate economic growth through MCC programs.

• Read the transcript from the public forum when RCDs talked about developments underway in Ghana, El Salvador, and Georgia.
• Listen to Vince Ruddy, RCD in El Salvador, explain progress underway during his interview with El Mundo al Dia (in Spanish).
• Listen to RCD Jim McNicholas’ interview on Voice of America Georgia about the status of MCC’s compact (.mp3 download, in Georgian).
• Listen to RCD Alex Russin’s interview about the status of Armenia’s MCC compact (in Armenian).
• Read a news report featuring Morocco’s RCD Muneera Salem-Murdock.
• Read the perspective of Gautam Ramnath about some of the key findings from the meetings.

These voices from the field provide important insights that highlight how America’s investments in development, when they focus on country-owned solutions, are bearing tangible results that matter to the world’s poor.

This week, MCC has been hosting all 19 compact country field personnel in Washington, D.C. for our annual Resident/Deputy Resident Country Directors Conference.  As we turn the corner into another fiscal year, preparations are well underway for setting priorities and objectives for the next year and for a 10 year horizon.  This year’s conference is an essential part of this process, as it not only provides our Resident Country Directors (RCDs) and Deputy Resident Country Directors (DRCD) with the opportunity to offer input into the process, but also provides them a chance for face-to-face exchanges with their DC colleagues, the Hill, the donor community, and the traditional and innovative media. (For example, we just completed an interesting “bloggers breakfast.”

Who are these people?

What we have seen underlined, commended and replicated by others is our country-led approach.  It is for this reason that our field presence is small, but efficient—usually just the RCD, DRCD and a couple of locally employed staff. Though limited in size, the duties of the resident country missions are substantial and diverse.  And this is what distinguishes our field staff.  They are, in one, finance and procurement directors, agricultural, education, health and infrastructure managers, PR and communications specialists, policy developers, investment promotion programmers, economists and auditors—all wrapped up in one diplomatic package. This list is not exhaustive, but gives a sense of the myriad issues that our “frontline” faces confront at any given moment of their day.

Learning is not a spectator sport

What I have appreciated, as both a participant in previous years and now as the conference’s organizer, is the emphasis on MCC as a learning and living unit.  Coming back to Washington after three years in the field representing MCC, I appreciate the fact that a majority of the messages being sent from the field are truly acknowledged and implemented so as to make field operations more efficient.  Taking such action to feedback is an integral reason why MCC has successfully met its targets for disbursements, commitments and performance during this past fiscal year.   This is how MCC continues to refine operations to deliver on our mission to reduce poverty through economic growth. But, learning this is not enough.

What is this conference doing about it?

This year’s conference has been 100 percent field driven.  The agenda was prioritized by the field and includes such main programmatic topics, among others, as second compacts, compact closure, compact development, procurement, contract management, the fraud and corruption policy, managing targets and milestones, and improving internal sector efficiencies.  It also includes in-depth discussions into other subjects, such as innovation in investment promotion, impact evaluation, donor coordination, and private sector partnerships.

But there’s room for more.

Interestingly, the agenda also incorporates small group working sessions on how to improve some commonly repeated concerns from the field over the last two to three years and ideas on how we can improve our effectiveness. By assessing what has been proposed before, learning from it and combining that with current realities and a pinch of creativity, each group will propose executable recommendations to MCC’s management for prioritization.

Trendy conference?

In reflecting on the conference, some interesting trends are emerging. Besides providing the traditional outlet for aligning multiple field issues and holding frank exchanges about program realities, this year’s conference has facilitated, via its iterative process, true mentorship among field staff, especially across countries just starting implementation and new employees.  We are also seeing a diversity in those who are taking leadership roles within the conference—more junior and senior staff, new employees and older ones, countries from all over the globe.  We are seeing increased participation by key MCC host country mission staff members as more mature compacts transition toward closeout. And, we are seeing a more anticipatory, collaborative and open-minded approach in combined presentations and problem solving between the field and DC staff members.

These trends are a result of our learning.

I truly hope that this year’s meeting serves as a benchmark for future evolutions of the RCD/DRCD conference as we continue to develop newer ways to learn and better accomplish our mission to reduce poverty through growth.

Gautam Ramnath served as the Deputy Resident Country Director in Mali for three years and is currently Associate Director for Business Development in Compact Development.