Posted on August 25, 2009 by Chelsea Coakley, Program Analyst, Department of Compact Implementation
Millennium Challenge Georgia Fund
Upon landing in Tbilisi, Georgia, I had over an hour to prepare for our teams departure for the opening of a new greenhouse complex, so far the largest grantee of MCC’s Agribusiness Development Activity (ADA) in Georgia, which provides grants for small- to medium-sized farmers to access modern farming supplies and increase agricultural productivity. We drove four hours into west-central Georgia to participate in the opening ceremony with Georgian government representatives, municipal authorities, and staff from Millennium Challenge Georgia Fund (MCG). The event was as welcoming as the project was innovative, and I felt honored to be part of this much-anticipated day.
Mr. Zurab Janelidze, who invested more than $450,000 to match $299,736 in MCG grant funding, developed his vision for Herbia LLC, a comprehensive system for greenhouse production and distribution of fresh herbs and vegetables. Herbia was established on two hectares of land in the rural Georgian town of Tskaltubo and is linked to an existing cold storage facility one of the few in rural Georgia - that also has the capacity to pack, store, export, and cater to local demand. Mr. Janelidzes strategy will serve as an example for high-value agricultural production in Georgia, while earning substantial revenues from the export of fresh culinary herbs and greenhouse tomato production, which will be sold domestically. The enterprise will also purchase fresh herbs from small farmers in the area to augment its own production, packing, and exporting. Upon touring Herbia LLC, its potential to make a positive impact in the Imereti region was evident as I walked through several greenhouses and saw many local workers picking produce.
I also visited multiple phases of the MCC-funded Energy Infrastructure Rehabilitation Project in the Mtskheta Tianeti region. This project is rehabilitating an essential source of energy for the people of Georgia, which, at over 2,200 meters at times, is one of the worlds top three highest-elevation pipelines, making rehabilitation efforts not only challenging but also absolutely critical due to the remote nature of these repairs.
The Energy Infrastructure Rehabilitation Project is an exemplary case of true country-led development, as all phases of this project have been implemented by a Georgian company. The Georgian Oil and Gas Company currently operates the pipeline on the governments behalf and has been responsible for the design and supervision of the entire project. Improved management of the pipeline, together with MCC investments for repairs, have already resulted in a decline in gas leakage, which means increasingly reliable access to natural gas for Georgian citizens and their enterprises.
Distance creates a clearer perspective on experiences. Now back in Washington, I am able to reflect on my recent trip to the field and can say I feel privileged to have observed these transformative projects in person. It was truly exciting to witness the focused energy and enthusiasm of the Georgians at work on a daily basis. It is clear that MCCs partnership with the Government of Georgia is highly valued and will continue generating positive results.
Posted on August 13, 2009 by Jeri Jensen, Managing Director, Private Sector Initiatives
Last week, the United States Government joined African small business leaders, NGOs, civil society stakeholders, and representatives of the Kenyan government for the 8th annual African Growth and Opportunity Act (AGOA) forum in Nairobi, Kenya.
The three-day forum, including parallel private sector and civil society meetings, featured participation by two MCC Board members, Secretary of State Hilary Rodham Clinton and United States Trade Representative Ambassador Ron Kirk. Accompanying the Secretary on the trip were Members of Congress—Jim McDermott, Donald Payne, Nita Lowey—as well as Agriculture Secretary Tom Vilsack. AGOA, for those less familiar with the trade policy world, represents bipartisan legislation enacted in the late 1990s and signed by President Clinton to help address the fact that the recently-enacted Uruguay Round of multilateral trade negotiations did little to benefit developing countries. The idea behind the act was to stimulate trade with Africa by giving most African countries duty-free treatment, with the ultimate purpose of stimulating U.S. investment in Africa and helping include Africa in the global economy.
MCC partners with countries that identify the greatest constraints to their development and establish their priorities to create sustainable economic growth. While each country’s grant is unique, most MCC partners place a high priority on increasing competiveness and facilitating regional and international trade. In fact, trade capacity building is a critical part of the U.S. Governments AGOA contribution. This promotes economic growth through trade and improves the linkage between trade and development by assisting countries to develop physical, human, and institutional capacity necessary to take full advantage of trade opportunities and, most important, to increase growth and reduce poverty. In 2008, MCC was the largest U.S. Government source of trade-related funding for sub-Saharan Africa, obligating nearly $1 billion.
MCC with 70 percent of its portfolio in Africa, almost half dedicated to infrastructure is already undertaking a number of projects that support AGOA’s objectives in various ways.
- MCC is now working with 19 countries in Africa, developing or implementing compacts or threshold programs;
- MCC partner countries are a natural focus to take advantage of AGOA because they are already undertaking reforms to attract investment;
- MCC could be the other half of the equation to go hand-and-glove with AGOA preferences because MCC resources are already dedicated in that direction, with $2 billion in roads or ports to connect producers to markets; a half a billion in credit facilities to stimulate business enterprises; energy investments to facilitate greater production and exporting opportunities; an investment in hydroelectricity to support textile production in Lesotho;
- Sixty-four percent of MCC’s portfolio is related in some way to agriculture productivity, and agriculture is the area where AGOA’s trade preferences have the greatest potential;
- MCC is one of the few donors that invests in both agriculture and infrastructure in a major way
- MCC is placing greater focus on demand-driven strategies that connect beneficiaries to global markets, in product areas that could potentially also benefit from AGOA.
Ultimately, MCC is realizing the full potential of AGOA by not only expanding trade and investment opportunities but also promoting sustainable development and good governance.
Posted on August 6, 2009 by Darius Mans, Acting Chief Executive Officer
As I near the end of my first week as Acting CEO, I have not yet amassed enough new experience to justify a long posting today. One of the things I have learned is that I am grateful to Rodney Bent and Ambassador John Danilovich, the outgoing Acting and former CEOs respectively, for leaving the organization in such good shape. I think most observers, both internal and external, recognize that MCC is now functioning better than ever, and the previous management team deserves much credit for their contributions over the years.
This view that MCC is functioning well is validated by analysis and data. A new working paper, written by two MCC economists and available here on our public website, assesses MCC institutional practices using a rating system developed by William Easterly and Tobias Pfutze of NYU and Georgetown University, respectively. This new analysis ranks MCC 8th among 40 foreign assistance agencies, and suggests that MCCs ranking will rise as our portfolio of programs matures.
Of course, after more than 18 months of service as Vice President for Compact Implementation, I am perhaps more aware than anyone of the challenges this institution faces. In the coming months, MCC should continue to accelerate disbursements, even as we maintain our focus on the measurable results delivered to beneficiaries in partner countries. We also need to continue our engagement with the eight countries that are currently developing programs to ensure that the quality of programs improves over time. MCC is now five years old, but it is still a young and vibrant institution that needs to be given the opportunity to learn and grow.
At this point, for however long my tenure as Acting CEO lasts, I want to assure those of you who closely monitor MCC and our practices that I will preserve the atmosphere of open engagement that was fostered by those who have occupied the CEO office before me. I will be encouraging MCC management to continue our ongoing substantive dialogue with external audiences and to explore ideas on how we can make MCC as effective as possible at delivering on its mandate to reduce poverty through economic growth.
Posted on August 3, 2009 by Kateri Clement, Resident Country Director
Today, Burkina Faso took a great step forward. Its $480.9 million, five-year Compact with the Millennium Challenge Corporation (MCC) to reduce poverty through economic growth has entered into force (EIF), meaning that the five-year clock to implement the grant has officially begun. For over a year, the Government of Burkina Faso has been tremendously busy preparing for this moment. The entity in charge of implementing the Compact—Millennium Challenge Account-Burkina Faso (MCA-Burkina Faso—has already created a strong foundation for achieving Compact success.
The four Compact-funded projects continue to progress at an impressive rate. For the Rural Land Governance Project, project analysts are working on baseline data collection on land conflict and land tenure security, to enable monitoring of project performance. The Parliament of Burkina Faso also has passed a new rural land tenure law (Loi Portant Régime Foncier Rural), which is a critical step in Burkina’s land tenure reform process. For the Roads Project, contracts are being signed this week for project management, technical assistance, and environmental and social assessments for the longest road segment funded by the Compact. For the Agriculture Development Project, the management audit of the Sourou Valley Development Authority is complete, and the Ministry of Agriculture is now developing an action plan to address the findings of the audit. The action plan will then be implemented by the development authority. Burkina Faso also has completed Phase One of the BRIGHT 2 Project, a girls education program designed as a 3-year continuation of the highly successful Bright Threshold Program.
The EIF event culminates a week of activities, including a televised roundtable panel with other MCA CEOs from Mali and Benin, who were visiting Burkina Faso. These CEOs discussed their experiences and shared best practices and lessons learned in implementing MCC poverty reduction grants in their countries. It was fascinating to hear examples of the good work MCC partner countries are doing, and the people we are affecting in meaningful ways around the world. It was also heartening to receive advice from the CEOs of Mali and Benin, who are both several years ahead of Burkina Faso on Compact implementation.
On July 30th, MCA-Burkina Faso also unveiled its new logowith symbols representing all four Compact projects as well as the important partnership between Burkina Faso and the United States. This partnership was emphasized by the American Embassys Charg_ dAffaires, Mr. Samuel C. Laeuchli, at a dinner at my house on July 30th. At the dinner, Mr. Laeuchli toasted MCAs success and highlighted that the staff of MCA are the ones who are truly implementing these important projects to reduce poverty in their country, with Americas support and funding. On Thursday, MCC and MCA also signed an Implementing Entity Agreement with the Ministry of Environment, one of eight important agreements with Government of Burkina Faso ministries which spells out the terms of collaboration. On Friday, there was an event at the Ministry of Finance, where the Charg_ dAffaires, MCC Deputy Vice President Jonathan Bloom, and the Ministry of Finance exchanged letters signifying that both countries had met all of the requirements in the Compact and were now ready to enter into force.
Finally, a highlight of the week was a televised meeting with the Prime Minister of Burkina Faso on July 31st. The Prime Minister is very enthusiastic about the Burkina Faso Compact and is confident that it will make a significant difference in the lives of the poor here in Burkina. I am proud to be working alongside my Burkinabe colleagues and friends, whose commitment to the fight against poverty is an inspiration. The partnership between MCC and Burkina Faso reflects a shared commitment to winning the fight against poverty and creating sustainable opportunities for economic growth that will improve the lives of Burkinabe. Now, the clock is ticking as we chart further progress ahead.