Posted on March 6, 2014 by Cassandra Q. Butts, senior advisor
Gender is one of MCC’s top priorities and for good reason. Creating better opportunities for women and girls is not only the right thing to do—a core value we share with our partner countries across the globe—but also because inequality can stifle a country’s fight to lift its people out of poverty.
My role at MCC is in part to prioritize MCC's gender work to ensure that women and men are equal beneficiaries at the forefront of our approach to development.
On March 8—International Women’s Day—MCC is partnering with Devex and other development leaders on a month-long campaign called She Builds that highlights the role women play in building communities, economies, innovations, and the future.
Together, we will unveil a series of stories and videos of women who have seen their lives change through gender inclusion projects, as well as profiles and interviews of female Millennium Challenge Account CEOs who are leading the charge in implementing MCC-funded programs. From Burkina Faso and Cabo Verde to the Philippines and beyond, these stories will describe how our partnerships are making a positive impact across the world.
We’re also excited about our participation in the White House Council on Women and Girls’ celebration of Women’s History Month, which will highlight some of our achievements in ensuring women and girls benefit from our projects.
But that’s not all. Today, MCC is presenting the latest issue of Milestones, which focuses on our approach to gender. And later this month, I will be sharing my experiences from a recent trip to Malawi.
MCC’s gender investments are paying off, and I am proud of the strides we have made toward greater gender equality. Together with our partner countries, we are helping ensure a better future for all by standing up for women and girls.
Keep checking mcc.gov throughout March to read more about MCC’s progress on advancing gender equality.
Posted on March 4, 2014 by John Underwood, MCC chief economist
MCC watchers pay a lot of attention to how our Board of Directors selects countries. Performance-based selection is one of our signature features—but it’s just the first step in an exacting process that MCC and partner countries undertake before taxpayer money is ever spent in the country. The process isn’t easy, and money doesn’t always flow at the end of it. But as MCC’s chief economist, I see it as a real strength of the institution.
This is what happens after MCC’s Board selects a country as eligible for assistance—based on a commitment to good governance and investing in sound economic and social policies—but before we fund projects:
1. Undertake a joint search for the most likely binding constraints to private investment and economic growth. I lead our team of MCC economists who, together with our partner country colleagues, undertake a constraints analysis. The results, informed by and tested through broad in-country consultations, enable us to jointly select activities that are most likely to promote sustainable poverty-reducing economic growth. The binding constraint in many MCC countries is in infrastructure, particularly transportation and energy. Governance issues are also common. Education comes up in several cases, notably in countries in the lower middle income category, representing situations in which countries will at best only slowly move further up the income scale and create what people want—jobs—without addressing education quantity and quality. The table below shows MCC’s country-by-country constraints analysis findings to date:
Along with the constraints analysis, countries conduct a social and gender analysis and look for private sector investment opportunities. Both contribute to the constraints analysis findings. In addition, the social and gender analysis looks for barriers that may inhibit groups from benefiting from the proposed investments. The investment opportunities analysis explores possibilities to directly or indirectly leverage private sector investment. Both provide valuable data for the next step.
Identify a program to address one or more binding constraints. The partner country, with MCC collaboration and further in-country consultation, undertakes further work to get at root causes behind the binding constraints to growth. The aim is a coherent program logic that explains how policy and institutional reform and investments will help address the constraint. MCC uses cost-benefit analysis to measure the likely impact of proposed projects. It’s a straightforward comparison of costs and benefits; the costs are the MCC-funded grants and related costs funded by the country or other donors, and the benefits are increases in incomes of the country’s targeted households and firms. MCC analyzes proposals as investments, with payoffs going to households and firms. We only include benefits when there is evidence to support the logic and look at who benefits across the income spectrum.
The cost-benefit tool allows a back and forth between country project teams and MCC to improve the cost-effectiveness of projects, notably by looking for cost savings while retaining the benefits. MCC expects projects to pass a “hurdle rate” of at least a 10 percent expected economic rate of return (ERR). As part of project preparations, the country works with MCC to set out the framework for monitoring and evaluation to help keep projects on track during implementation and for careful independent evaluations after completion.
The rigorous combination of the constraints analysis, social and gender analysis, investment opportunity analysis, program logic development, project cost-benefit analysis leading to an ERR, and planning for monitoring and evaluation helps ensure that MCC will support countries doing the right things and doing them the right way.
Selection may be the most well-known way we use evidence in our decisions, but the demanding, data-driven project development process is just as much a part of MCC’s DNA. I hope it will get the attention it deserves and ultimately benefit from receiving your input on how it is working.
Thanks to Sandra Ospina and Natalie Kottke for contributing to this post.
Posted on February 28, 2014 by Cynthia Berning, program officer, agriculture
Traditionally, water-related projects have been classified as strictly irrigation, livestock or water and sanitation projects—but in reality, people use water for many uses. People use water for drinking, cooking, washing, livestock watering, agriculture, and business purposes. When development professionals fail to consider these multiple uses, overuse, asset degradation, breakage and the inability of water-management institutions to actually manage these unintended uses have threatened a project’s sustainability.
Instead, project planners should consider all the various needs and uses for water in a community and then attempt to incorporate those needs into project design right from the start. In this way, the project can mitigate risk and provide greater impact.
MCC adopted this approach in several of our irrigation and livestock projects. In Mali, for example, the irrigation project included consideration of animal crossings, drinking troughs alongside the irrigation canals and the drilling of additional watering points for livestock—all based on consultations with pastoralists. In addition, special areas were created for women to wash clothes and perform other domestic tasks so they would not have to use the irrigation canals and risk drowning or catching a water-borne infection.
In Namibia and Burkina Faso, we incorporated the water needs of wild animals; elephants and hippopotamuses in the area had the potential to cause major damage to the project’s water infrastructure. This was done through placement of elephant-only watering holes away from the project, planting hippopotamus-friendly grasses away from infrastructure and creating natural barriers with trees to protect the areas. In Mongolia and Mozambique, some newly installed water points provided separate valves for human and animal use, lowering the risk of contaminating the drinking water supply.
In other MCC projects, a lack of attention to the multiple uses of water led to challenges during implementation. In the Ghana Compact, for example, we discovered that an irrigation project would actually cut off the supply of water to five villages that were using it for drinking and other domestic uses. Though initially flagged as a critical social risk, the team was able to turn this problem into an opportunity to meet both the domestic and agricultural needs of the community by investing in small-scale water treatment plants that would supply solar-treated drinking water. At the same time, cattle watering points were incorporated into the design.
In the end, the communities benefited from improved water for all uses. However, by not incorporating multiple uses into the design from the beginning, the project missed an opportunity to integrate health and hygiene training with agricultural training and water provision.
MCC is committed to making sustainable investments that respond to beneficiaries’ needs. Considering all the various uses for water in a community while planning a project creates a bigger impact for our projects, and it is a goal for the planning of future water projects.
Have you seen water projects used for unintended purposes? Do you have experiences with multiple uses of water being incorporated into a project or being neglected during project design?
Posted on February 25, 2014 by Scott Fontaine, corporate copywriter-editor
The medina of Marrakech in Morocco is a knot of narrow streets crammed with shops selling everything from pet turtles to bright-yellow shoes, open-air merchants selling spices and freshly butchered meat, tourists looking for the perfect trip souvenir, Marrakechis running daily errands, and donkeys carrying a shop’s inventory across the cobblestones.
The streets twist, come to dead ends and bend back onto other streets. For the unaccustomed, the medina can be a maze that’s nearly impossible to navigate, which can be both frustrating and appealing. The universal allure is visiting a neighborhood that dates back to the 11th century and has served as a political, economic and cultural hub of the Muslim world for centuries.
MCC hopes to make the lives of visitors a bit easier and attract new customers to the shops in the medina, boosting the income for the shops’ workers.
As part of MCC’s $95.5 million Artisan and Fez Medina Project, MCC posted 214 signs throughout the medina. These direct visitors along one of five routes designed to showcase the neighborhood’s rich history and put potential customers in front of artisans specializing in leather, woodworking, ironworking, pottery, and textiles. A fifth route showcases the UNESCO World Heritage Site’s unique architecture.
Color-coded signs hang at major intersections to guide visitors. Larger signboards sport QR codes and explain the medina’s rich history in English, French, Spanish, and Arabic.
About 6 million people visit the medina each year, said Samira El Argouhi of the Moroccan Ministry of Artisans, and the five tourist routes take visitors past 4,400 shops.
One artisan, Mohamed Chouheir, believes the tourist routes have increased the foot traffic past his leather shop in the Fondouk El Amri. Chouheir—a bit of a local celebrity after winning an artisan’s competition show broadcast on national TV—credits the signs with attracting about 10 percent more customers to his shop.
“When I close the shop at 9 p.m., people are still walking around and reading the signs,” he said. “They’re asking questions about the area. There’s more interest."
Posted on February 24, 2014 by Brian Foster, agribusiness consultant
Farmer cooperatives, particularly in the dairy industry, form a very important and successful part of American agriculture. The model gives small farmers the benefits of professional storage facilities, processing equipment and reliable demand for their products that would be out of reach if they had to work on their own.
The cooperative model is a risky and challenging approach that requires a lot more effort than working with private enterprises. Members need to build trust and agree on roles, responsibilities, decision-making authority, and other difficult issues—but the results can be transformational for an entire community if it is done well.
MCC set out to make the same model work in El Salvador through the $71.8 million Productive Development Project, implemented from 2007 to 2012. The project worked with one new and two existing farmer co-ops in the dairy and horticulture fields as a way to contribute to rural economic development—but with mixed results.
The most challenging issue facing all three co-ops in El Salvador was obtaining loans to support ongoing operations as the end of the compact approached. Each co-op attempted to resolve the issue in a different way:
- The existing but failed dairy co-op owned a plant and equipment from a previous project, so its strategy was to approach commercial banks and attempt to secure financing using the equipment as collateral. The organization secured financing but ultimately failed for business reasons.
- The other existing dairy co-op had the advantage of being part of the Salvadoran government’s school milk program, guaranteeing a steady demand for fresh milk and timely payments. The risk, of course, was that a change in government or a significant reduction in the government’s support for the school milk program could put them out of business. Their main solution was to diversify their market for milk and look for a second large firm to buy fresh milk.
- The most perplexing challenge was with the start-up horticulture co-op, which had a lot going for it: It was well-managed, had firm supply deals with well-established retail supermarket chains and seemed to have loyal members dedicated to the “cooperative ideal.” The problem was that payment from the retailers was often delayed, causing severe cash flow problems. The co-op had very few assets to use as collateral, so bank financing was a challenge. Eventually, it managed to secure some loans, but at a high interest rate, and was attempting to raise funding internally from members.
The experiences with these three agricultural cooperatives in El Salvador presented an important lesson: The ability to access finance is paramount to sustainability and needed to be addressed at the start of the project. We must consider that once a co-op is organized (or resurrected) with a solid business model, good management, a competitive product mix, and plenty of capital at its creation, it will likely still need additional access to financing. In this project, access to working capital was the key stumbling block for steady growth among the three Salvadoran agricultural co-ops.
Have you had any experiences setting up agricultural co-ops as part of development projects? How have other projects addressed challenges around finance?