The Road to Better Aid: An Emerging Bipartisan Consensus
MCC CEO delivers keynote address at event hosted by American Enterprise Institute and Center for American Progress
Washington, D.C.—Daniel W. Yohannes, Chief Executive Officer of the U.S. Government’s Millennium Challenge Corporation (MCC), spoke today at an event co-sponsored by the American Enterprise Institute (AEI) and the Center for American Progress about the emerging bipartisan consensus on aid effectiveness, MCC’s investment strategy, and the current development environment.
At the event, Mr. Yohannes was joined by a panel of experts, including Mauro De Lorenzo from AEI and John Norris from the Center for American Progress.
As the new Congress considers the future of development assistance, Mr. Yohannes and the panel addressed whether a bipartisan consensus is emerging on aid effectiveness and assessed MCC’s experience in putting these best principles into practice.
“Like so many of you, I have witnessed the changing face of American assistance. We have a broad consensus that is moving us forward. President Obama’s new Global Development Policy is building on the best ideas of the Bush Administration and calling on American development agencies to build the next set of emerging market economies to partner with us in building a better, more stable, more prosperous world,” Mr. Yohannes said.
“MCC’s focused mandate and transparent selection process allow MCC to say ‘no’ to those countries that are not accountable to their people and not pursuing policies that promote free markets and economic growth,” said Mr. Yohannes. He continued, “That leaves us saying ‘yes’ to a smaller set of poor, but well-governed countries, and investing scarce U.S. development dollars in programs that show an economic return by raising beneficiary incomes – the only way to reduce poverty.”
The President of Georgia, Mikheil Saakashvili, introduced Mr. Yohannes. In the remarks President Saakashvili prepared for the event, he explained his strong support for the MCC model, “Let me be clear: responsible leadership and transparent governance are needed if you want your aid to be effective and change people’s lives…The MCC method reinforces and encourages responsible governance by requiring governments to meet certain standards before they can qualify. Meanwhile, requiring governments to develop their own proposals for the compacts encourages them to build their management capacity.”
Mr. Yohannes outlined five development principles that enjoy broad agreement in Washington and throughout the country:
• First, America’s global leadership position should include leadership on the development challenges faced by the world’s poor countries.
• Second, we should focus our development efforts on economic growth.
• Third, we need more accountability, which includes being more selective in how U.S. foreign assistance is allocated.
• Fourth, countries are our partners, not our clients. This means engaging them on equal footing in the planning and implementation of our foreign assistance activities.
• Fifth, we must focus more attention on what we actually achieve in development - - real results - - rather than on how much money we spend on development programs.
“I am happy to report that these principles are already being put into action. They are reflected in the President’s new Global Development Policy and, of course, we have been practicing them at MCC for the last seven years,” said Mr. Yohannes.
During the expert panel following Mr. Yohannes’ remarks, panelists discussed the importance of results-based international development. “There has been something of a revolution in aid effectiveness thinking… MCC is one of the best examples of this,” said AEI panelist Mauro De Lorenzo. “MCC… is a real pioneer in understanding the use of [results-based] information… in creating competitive environments to stimulate and promote change.”
Center for American Progress panelist John Norris said, “The great abiding and powerfully simple lesson of development over the last 50 years has been that it is far more likely to work where we have a partner government that is committed to reform, that is committed to its own people, that is willing to take on corruption, and that is willing to do the right thing. I think that’s why the language that we heard from Daniel is so effective. I think that is why there has been a great deal of support for the MCC approach. And I think that is why the MCC approach really works very well in trying to promote economic development with a certain strata of countries.”
“There is an emerging bipartisan consensus on aid effectiveness,” Mr. Yohannes stated. He added, “We are building on the best ideas of Democratic and Republican administrations, and Democrats and Republicans in Congress. We are looking for ways to break new ground, to innovate, and to continue to improve our results, particularly during these tough budgetary times, when we all must do more with less.” In closing Mr. Yohannes stated, “MCC’s commitment to global poverty reduction through economic growth is more than the right thing to do; it is how we can expand opportunities and support security, stability, prosperity, and progress to benefit us all.”
To read a full transcript of the speech, please click here.
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Millennium Challenge Corporation, a U.S. Government agency designed to work with developing countries, is based on the principle that aid is most effective when it reinforces sound political, economic, and social policies that promote poverty reduction through sustainable economic growth. For more information, please visit www.mcc.gov.
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