Speech

February 4, 2005

As Prepared by Paul V. Applegarth, Chief Executive Officer

Corporate Council on Africa

MCC CEO Paul Applegarth’s Remarks To A Joint MCC/Corporate Council On Africa Honoring His Excellency, Marc Ravalomanana President of Madagascar

Thank you very much, Steve, for the kind introduction.

Some of you here this morning may not know much about MCC, and I will speak more about us later, but our first anniversary is this week, in fact.  Looking around this room, I see more MCC employees at this breakfast than we had in total a year ago today [laughter].

Before I begin my remarks, Mr. President, I would like to express my condolences to you and to the people of Madagascar for the tragic losses suffered as a result of the Cyclone Ernest and the tropical storm last week.  I understand that aid agencies are bringing in food and supplies to all those who were critically affected, and I wish them the best.

I have quite fond memories of my trip to Madagascar less than three months ago in November.  It was a pleasure and an honor to see you again, Marc.  We had a great trip to the East of the country- and for those of you who have never been to Madagascar, I really encourage you to do so.  We visited Andasibe National Park, saw the lemurs, which will become more famous here in the United States once the movie “ Madagascar”—which was previewed last night—gets released in May.  (You know- it’s rare to have this kind of opportunity to be in front of the cultural wave, ahead of your kids.) [laughter] We also toured a number of the rural areas, and it was helpful to see the steps that Madagascar is taking to stimulate agricultural production, in many cases, with the assistance of USAID.  And we met a number of cabinet ministers and with members of the Malagasy business community.

Madagascar is progressing rapidly in developing and refining its proposal for a Millennium Challenge Compact.  It has made so much progress that it is among four countries—including Nicaragua, Georgia, and Honduras—that are in the final stages of a Compact negotiation with MCC, and we hope to be completing a Compact in a matter of weeks for Madagascar, in late March or early April, if all goes well.

We at MCC, and I personally, were very impressed by what we have heard and seen around your country, Mr. President.  You have a group of quite talented people to draw upon, and your Compact proposal itself contains some concrete steps that will bring Madagascar closer to achieving long-term economic growth – growth that will create jobs, that will sustain communities, and that will bring Madagascar into the community of stable, democratic, and prosperous nations.

That is what is so unique about Millennium Challenge.  At its heart, it is about reducing poverty, through economic growth.  There are many important assistance programs that are designed to mitigate the consequences of natural disasters and disease, and that address the critical needs of people who are suffering in extreme poverty.  These programs include the President Bush’s $15 billion HIV/AIDS program, the World Food Program- which is currently bringing assistance to Madagascar, and in-country assistance provided by USAID

But how do you meet the long-term needs of a country?  How do you help to end the cycle of poverty and dependency that amplifies the tragic consequences of natural disasters?  The answer is through sustainable economic growth. 

Growth occurs fastest in countries—like Madagascar—that adopt, and adhere to, good policies.  This is one of the core lessons of development.  Countries must take ownership of their own path to development, and the way you do it is to put good policies in place that will promote poverty reduction and growth.

Just to give those of you unfamiliar with the MCC process some background—countries compete for our assistance.  We run a competition every year.  We compare the policies of the poorest countries of the world.  Countries that are actively fighting corruption, that are providing an environment for a free and open exchange of ideas, that are creating a just and equitable legal system, that are investing in health and education, and promoting economic freedom—are putting themselves on the fastest track to poverty reduction.  The countries that win this competition—and this year we chose 16 from a pool of 82—those countries ranked highest among their peers according to objective, third-party measurements—we don’t do the rankings—inputting into place the kinds of policies that lead to poverty reduction and growth.  Those countries selected are invited to submit a proposal to us for Millennium Challenge Account assistance.

After our Board selects eligible countries, we ask the countries to reach out to a broad spectrum of their own society (including NGOs, academia, the private sector, and parliamentarians) and from this consultative process we ask them to identify their barriers to growth and put together a well-prioritized proposal that includes detailed a implementation plan for development- a plan that includes defined results- what they are trying to achieve—rather than just inputs, and that ensures financial accountability for this investment of US taxpayer funds.

After carefully reviewing all proposals, MCC decides whether or not to sign Compacts with eligible countries.  Thus, there are essentially two stages to the competition, get selected to give us a proposal, and then give us the best, or among the better, proposals.  The Compact commits our partner country to meeting the development objectives that they themselves have set, and MCC provides assistance for a three to five year program that will help them do this.

We are very optimistic about Madagascar in this process.  First of all, it has this president.  President Marc Ravalomanana is a self-made man.  He was educated in a missionary school in Madagascar, completed his secondary education in Sweden, and, in his early 20s, started what I used to call a small business, but now in Washington speak it’s a micro-enterprise. [laughter] Marc- did you know you had been running a micro-enterprise? [laughter]  His micro-enterprise was to sell yogurt off the back of his bicycle, helped by his wife Lalao.

Less than two years later, he secured a loan from the World Bank to purchase his first factory and quickly built up a successful company- a macro-enterprise, I guess.

From 1998 until 2002, The President served as Mayor of the capital, Tana— where he had a reputation for getting things done.

Since coming to office President Ravalomanana has moved forward with his program to increase employment.  He has brought his entrepreneurial skills to benefit his country.  He has been the guiding force behind the implementation of sweeping economic reforms- including increasing Madagascar’s transparency and actively fighting corruption – and his program has been so successful that, of all countries, Madagascar has had the greatest increase in economic freedom in the past year,  according The Wall Street Journal/Heritage Foundation’s 2005 Index of Economic Freedom.  The President has also tripled the number of Madagascar’s protected sites to halt an alarming decline in its unique environment.

President Ravalomanana has proven himself willing to take the positive – and sometimes difficult—steps toward reducing poverty in his country.  And I will say that, from personal experience, he brings a unique style and energy to running his country.  It is a great honor to introduce to you His Excellency, President Marc Ravalomanana. [Applause]