Press Release

For Immediate Release

April 29, 2011

Contact: 202-521-3880

Email: info@mcc.gov

MCC Completes Successful $65 Million Compact with the Republic of Vanuatu

Washington, DC—The United States Government’s Millennium Challenge Corporation (MCC) CEO Daniel W. Yohannes today announced the official completion of MCC’s Compact with the Republic of Vanuatu.

In March of 2006, MCC signed a five-year, $65.69 million compact with the Government of Vanuatu to reduce poverty and stimulate economic growth by targeting the country’s poor transportation infrastructure. The MCC Compact strengthened the two most important pillars of development in Vanuatu, road infrastructure and government operations. The compact helped to rehabilitate the two main national roads, the Efate Ring Road and the Santo East Coast Road, and improved the capacity of the Public Works Department to better maintain and manage the country’s transportation infrastructure.

The Republic of Vanuatu is comprised of 83 separate islands in the South Pacific. Agriculture and tourism are central to the country’s economy, employing more than 70 percent of the working population and representing approximately 34 percent of Vanuatu’s GDP.
“The United States and the Republic of Vanuatu have a special history of collaboration,” stated Mr. Yohannes. “During World War II, American soldiers built roads in Vanuatu as part of the war effort. We are proud that together with the government of Vanuatu, we have rehabilitated many of these same roads. The work of MCC, Vanuatu and our partners will have a lasting impact on the incomes and lives of the people of Vanuatu.”

Last week, MCC Senior Investment & Risk Officer and Deputy Vice President for Europe, Asia, Pacific, and Latin America (EAPLA), Frances Reid, joined U.S. Ambassador for Vanuatu, Papua New Guinea, and the Solomon Islands, Teddy Taylor; former Republic of Vanuatu Prime Minister, Sato Kilman; and thousands of beneficiaries and stakeholders at events marking the completion of the compact.

Speaking at an event in Efate, Ambassador Taylor said, “The Millennium Challenge Corporation was set up to select countries which are firmly heading down the road to grow the economy and alleviate poverty. I am pleased to see that the goal and objectives of this compact have been delivered on time and on budget by the government and people of Vanuatu, and the contractors and officers who have done the work.”
The construction and sealing of the two national roads is benefitting 62 percent of the population in Santo and 49 percent of the population in Efate by reducing travel time and providing reliable year-round access. Already, the compact is increasing incomes in rural and urban areas by stimulating substantial economic activity in tourism and agriculture.

Over 39,000 people will benefit from MCC’s investments, with a $73.8 million estimated income gain over the 20 year life of the investment. Preliminary economic analysis estimates that vehicle operating costs have also been reduced, generating an annual estimated $6 million in savings. The compact also provided an opportunity for the United States to cooperate with other donors in the completion of the project, including the Governments of New Zealand and Australia.

The core of the two rehabilitated roads were originally built by U.S. troops during World War II when Vanuatu was host to the largest U.S. military base in the South Pacific. The U.S. Navy’s Pacific Partnership is visiting the country at the end of April through the beginning of May to continue the valued partnership between the U.S. and Vanuatu. Together with the Vanuatu Police Force, Mobile Force and Maritime Forces, and New Zealand and Australian partners, they will construct schoolhouses and clinics and undertake medical and veterinarian projects in Santo. Many of these activities have been enabled by the new Santo East Coast Road.

To view key results from the Vanuatu Compact, click here: http://www.mcc.gov/documents/factsheet-2011002056401-vanuaturesults.pdf

For more information on the MCC Compact with Vanuatu, you may also visit: http://www.mcc.gov/pages/countries/program/vanuatu-compact

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