A Battle the World’s Poor Can’t Afford to Lose: The Fight against Corruption

Posted on October 27, 2008 by Ambassador John Danilovich, Chief Executive Officer

Global poverty will continue to plague our world as long as corruption remains unchecked. From boardrooms to farm fields, the corrosive effects of corruption rob countries large and small of the chance for long-term economic growth and sustainable development. This issue is one of the constant themes that people around the globe raise with me as we discuss ways that the U.S. Government can help lift people out of poverty in the most effective, results-based way. Addressing the problem is at the heart of the MCC model, and we partner exclusively with those countries that are taking concrete steps to free their countries from corruption’s strangulating grip.

A prime example of this partnership is MCC’s relationship with Paraguay. We have worked with Paraguay since May 2006 in targeted sectors identified by the Paraguayans as high priorities in fighting corruption. MCC’s $34.64 million anticorruption Threshold Program in Paraguay is nearing completion, and some of the early results paint an impressive picture of what can be accomplished when a country confronts corruption in an open and aggressive manner. A new forensic laboratory will help Paraguay’s prosecutors carry out investigations with the right tools and with integrity. Discipline of judicial personnel has improved significantly now that complaints can be filed and processed in an open and transparent way. Internal controls and ethics awareness are helping thousands of Paraguay’s public servants serve with greater accountability, quality, and integrity. Paraguay’s tax authority is aggressively pursuing noncompliant businesses and contraband, and illegal merchandise totaling over $6 million has been seized thanks to enhanced systems in Paraguay’s customs service.

These actions are tangible steps toward rooting out corruption. In recognition of these concrete efforts-and of the commitment of Paraguay’s new President Fernando Lugo and his historic government to sustain reforms and further control corruption-MCC invited Paraguay to submit a second, ““Stage II”” Threshold Program proposal, which is currently under review. Partners like Paraguay understand why MCC considers corruption as one of the ““hard hurdles”” that must be overcome in order to be eligible for a large-scale grant, or MCC compact. It makes sense that U.S. taxpayer investments go to countries that are tackling these problems on their soil. It makes sense for our partners to join with the U.S. in fighting a common enemy like corruption, the negative effects of which infect our global economy and hurt all of us in the long-run. A less corrupt world is a better place to do business, a more nurturing environment for democracy, and a better home for all of us. The fight against poverty requires the fight against corruption. It’s as true in countries like Paraguay as it is in places like our own country and our own hometowns, and it requires our combined efforts as partners.

Building Blocks for Prosperity

Posted on October 20, 2008 by Ambassador John Danilovich, Chief Executive Officer

Last week, MCC signed threshold agreements with Rwanda and Albania to support their efforts to become eligible for U.S. Government assistance under the Millennium Challenge Account. While these two countries have little in common in terms of geography, cultural heritage, or history, they share a fundamental aspiration: to give their citizens the building blocks to construct economic self-reliance in a meaningful and prosperous way. At a standing-room only ceremony on Capitol Hill to celebrate the threshold program with Rwanda, and at a similar ceremony in Tirana for the threshold program with Albania, there was much discussion about the importance of these building blocks. It is something that the United States is successfully addressing through innovations like MCC.

Systemic poverty robs people of basic freedoms and choices. The sound economic, political, and social policies that MCC expects from its partners are helping create societies where entrepreneurship can flourish. The roads, land titles, schools, water and sanitation improvements, and agricultural programs that MCC supports are allowing men and women to choose their economic path, instead of being constrained by poverty. Rather than fleeing to urban areas or crossing borders, these people are building a solid economic, political, and social future right at home. This builds stability; and greater economic stability for the worlds poor means a healthier global economy and world community for all of us.

Innovations in assistance, such as MCC, are the subject of a historic White House Summit on International Development that will take place in Washington this Tuesday. I am pleased that MCC has been asked to convene a panel discussion on economic growth as part of this meeting. The conversation about how to best deliver U.S. Government assistance continues to underline the need for results-based programs that measure not just the dollars disbursed, but tangible, positive impacts in the lives of the poor. A recent report by Oxfam International discusses this concept and points to MCC as one way it is being addressed. This principle is part of our work in Africa just as much as it is in Eurasia and Latin America. Countries such as Denmark, with whom MCC signed a Memorandum of Understanding earlier this month, are also looking at how to maximize their poverty reduction investments abroad, and MCC is proud to be working with them to make that goal a reality. In a month when the world commemorates the International Day for the Eradication of Poverty and World Food Day, concerted, positive actions like these are among the best things we can do to ensure that the fight against poverty results in tangible, positive impacts for the poor.

These essential building blocks for economic success are something that Americans take seriously. At MCC, by asking recipients of U.S. assistance to enact policies that foster good governance, investments in their people, and greater economic freedom, we are helping strengthen the building blocks for global prosperity that benefit us all. Thank you for your continued comments and feedback at info@mcc.gov.