Posted on April 25, 2013 by Daniel W. Yohannes, Chief Executive Officer
I had the privilege of appearing before the House Foreign Affairs Committee today with USAID administrator Raj Shah to answer questions about our agencies’ respective budgets and plans for the upcoming fiscal year.
Appearing before the committee provided a chance to highlight MCC’s model, mission and results, and our place in the U.S. Government’s wider foreign assistance efforts not only to Congress, but also to the American people.
There’s a lot of good news to share.
Nine years after its founding, MCC has produced real results, and remains a cost-effective approach to delivering foreign assistance. We play a crucial role in the U.S. Government’s foreign policy by strengthening the United States’ economy at home and standing abroad.
MCC’s evidence-based approach is at the core of its success. Our partners are rigorously selected countries that have a measurable track record of sound democratic and economic governance. After their selection, we ask our partner countries to prioritize and then develop and implement cost-effective solutions that make a real difference at reducing poverty by stimulating economic growth.
During these tough economic times, Americans deserve to see their tax dollars deliver a high rate of return and the greatest impact. That’s why we select projects with high returns, monitor progress during implementation and require that programs be completed in five years. We cut off funding if governments turn their back on principles of democratic governance. And we evaluate program effectiveness to see what did and did not work—and then make those findings public.
Almost 174 million people from across the world are expected to directly benefit from MCC’s investments. Beyond this benefit for individuals, the policy reforms and targeted investments that result from MCC’s programs foster an enabling environment for businesses to succeed.
With new markets, U.S. companies enjoy greater opportunities to trade, profit and create American jobs.
Many other countries benefit by the “MCC Effect,” when they take concrete steps to improve governance in order to become eligible for MCC assistance. That means more girls are in school, the time to start a business has fallen, more women have equal access to economic opportunities and more children are receiving vaccines because their governments hope to become eligible for a compact—before the American taxpayer ever spends a dime.
MCC is helping millions of poor people across the world pull themselves out of poverty while making the United States stronger, safer and more prosperous. I consider that a win for the American taxpayer. And that’s why I welcomed the opportunity to discuss our model and results with Congress.
Posted on April 19, 2013 by Jonathan Saiger, Senior Director, Infrastructure
The Millennium Challenge Corporation has its country-led development assistance model to work with Benin reduce poverty since its selection as a compact-eligible country. The Government of Benin quickly identified the Port of Cotonou as one key area to reducing poverty, and MCC worked with the Beninese government to develop an effective program towards address that.
The port was highly inefficient. The challenge of making significant improvements in a busy port was just one aspect of a complex investment covering a new wharf, safety and security measures, sedimentation protection, rezoning, and surface transportation improvements. MCC and the Government of Benin consulted with the numerous port users—such as customs officials, port-security entities, shipping lines, public and private stevedores, customers, and fish processors—to minimize the impact of the extensive construction activities. But a key factor to expanding the port’s capacity and reducing transportation costs (an important economic driver to poverty reduction) was creating the environment to attract the needed follow-on investment from a private operator. That could only be accomplished through a transparent concessioning process.
The International Finance Corporation and Infrastructure Journal recently recognized the port’s South Wharf public-private partnership as a “top-40 PPP” and with a “Bronze” award (among sub-Saharan African projects). Gold, silver and bronze projects will be recognized at an awards ceremony this month during the IMF-World Bank spring meetings in Washington, D.C.
MCC invested more than $180 million to improve the Port of Cotonou as part of Benin’s five-year, $307 million compact. To ensure sustainable results and impact, MCC and the Government of Benin agreed the latter should engage a transaction advisor to develop and lead an open and competitive bidding process to select a private container terminal operator for a long-term concession to operate the new South Wharf.
The Government of Benin selected the International Finance Corporation, which brought additional technical resources and acted as the government’s lead advisor. The prospect of a more efficient and modern port attracted the private sector, and the resulting PPP leverages MCC’s investment with an additional $256 million in customized improvements by the operator and more than $200 million of future port fees to Benin.
“The Emerging Partnerships report [which includes the top-40 list] has chosen the most innovative and exciting PPP infrastructure projects from around the world,” said John Kjorstad, editor of Infrastructure Journal. “These projects have improved the daily lives of tens of millions of people by providing new infrastructure services. Increasingly governments are turning to PPPs as an affordable funding method. This comprehensive study of partnerships in emerging markets highlights best practice and will be an inspirational and invaluable tool for decision makers in both governments and the private sector.”
Posted on April 10, 2013 by Daniel W. Yohannes , Chief Executive Officer
I participated in a joyous celebration in Zanzibar today. More than 15,000 people gathered in Amani Stadium to mark the installation of the submarine cable that is bringing reliable electricity to Zanzibar. In 2010, there was a power outage that impacted tourism, investments and livelihoods. Through MCC's compact, electricity will be transmitted to Zanzibar from the mainland. And through effective coordination with other donors and partners, that transmission will reach households too.
"We can say goodbye to blackouts,” said Toufiq Turky from Turky's Group of Companies, who owns several hotels and investments in Zanzibar. “I invite you to come back in a couple of years to find a new Zanzibar."
President of Zanzibar Mohammed Shein summarized the day best with a Swahili saying, Hayawi; Hayawi; leo yamekuwa. This means, "It is not going to be; it is not going to be; today it has happened."
This captures the pride of reaching this compact milestone, a feat that seemed at times unachievable.
This was a wonderful day celebrated among beneficiaries, investors, donors—all partners in this project. Such cooperation signaled and reinforced the importance of partnerships and sustainability.
Posted on April 10, 2013 by Daniel W. Yohannes, Chief Executive Officer
President Barack Obama released his fiscal year 2014 budget proposal to Congress today, which includes $898.2 million for the Millennium Challenge Corporation. At a time when the administration, Congress and the American people are rightly asking tough questions about how tax dollars are spent, President Obama’s request for MCC demonstrates the administration’s continued commitment to our approach of fighting poverty through economic growth using an evidence-based model of development.
We will continue to build on our successes in the upcoming fiscal year. MCC compact investments will remain focused on a rigorous cost-benefit approach that seeks to reduce poverty by attacking constraints to economic growth.
The fiscal year 2014 request will support new compacts from among the five countries selected by MCC’s Board in December 2012 as eligible to submit proposals: Liberia, Morocco, Niger, Sierra Leone, and Tanzania. These countries, together home to over 100 million people, are among the world’s poorest, yet they have each taken concrete steps to improve governance and reach compact eligibility.
The fiscal year 2014 funding request will not be able to fully support compacts in all five countries. Countries that do not obtain fiscal year 2014 funding will need to compete for funds that Congress may provide in future years.
I encourage you to read MCC’s fiscal year 2014 Congressional Budget Justification, which explains our ongoing work to reduce global poverty, maintain a focus on results and promote accountability at home and in our partner countries.
Posted on April 5, 2013 by Cassandra Butts, Senior Advisor
Last week’s visit to Washington, D.C. by the leaders of Sierra Leone, Senegal, Malawi, and Cape Verde provided another opportunity for MCC to engage these partner countries and host a panel discussion with other U.S. Government agencies on furthering economic growth. As the dialogue focused on the ingredients for such growth, the need to identify and mitigate corruption was raised as essential for attracting private sector investors and creating a sustainable investment climate. These four leaders demonstrate a commitment to combating corruption, and their respective countries each pass the control of corruption policy indicator on MCC’s scorecard. My recent experience in Sierra Leone provided some insight into how the issue is being addressed on the ground.
During an initial visit to Sierra Leone this past February after our Board of Directors selected the country as eligible to develop a compact, I met with Morlai Buya-Kamara, the deputy commissioner of the Anti-Corruption Commission (ACC). We discussed the ACC’s approach to attacking corruption, which includes a mix of education, systems of prevention, investigations, and prosecutions. Deputy Commissioner Kamara shared that the recent strengthening of the Anti-Corruption Act to give the ACC the power to prosecute cases has been a significant step forward in removing corruption probes from the political process. And that step appears to be paying important dividends, given the ACC’s increased caseload and recent prosecutions of government officials.
In fact, the ACC recently indicted 29 state employees for corruption linked to the misuse of funds from a Gates Foundation-backed vaccine provider. The country’s top health official was among those prosecuted. Overall in 2012, the ACC recovered $4.2 million and had 22 major convictions, double the number of prosecutions in 2011.
Such progress does not happen in a vacuum: It requires a commitment to policy reform at the highest levels of government. Such political support from the top extends out to ministries that are implementing integrity programs, civil society groups that are becoming assertive watchdogs and Sierra Leoneans who demand a society free from graft and bribery. And such progress also comes at a cost: As the ACC succeeds, there is greater demand for its engagement that requires additional budget resources to sustain its effectiveness.
While fighting corruption does not have the breathtaking visual impact of the major MCC-funded infrastructure projects that I’ve seen in such places as Mali, Burkina Faso or El Salvador, it can help to create an environment for promoting healthy democratic and economic governance, which can have equally breathtaking effects. My hope is that Sierra Leone’s momentum in the fight against corruption will continue and that MCC’s engagement will leverage further progress.
Posted on April 2, 2013 by Daniel W. Yohannes, Chief Executive Officer
After a 30-year career in the private sector, I have seen my share of annual reports. They are important vehicles for publicly conveying financial information and reaffirming an organization’s commitment to transparency and accountability to its stakeholders. MCC’s 2012 annual report, which we are releasing this week, does more than fit that standard description. It also showcases our results-driven partnerships around the world focused on improving the lives of the poor in ways that maximize impact and sustainability.
This year’s report, MCC: A New Standard for Aid Effectiveness, features the MCC model, discusses our contributions to learning and advancing the discipline of development, and highlights our role in promoting U.S. economic interests in our interdependent global marketplace.
The details are in the report, which covers MCC’s work from October 1, 2011 to September 30, 2012, when former U.S. Secretary of State Hillary Rodham Clinton served as chair of our Board of Directors. I invite you to discover how we continue to challenge ourselves and our partners to fight poverty in the most effective ways possible.