Speech

October 14, 2010

As Prepared by

Cape Verde

Remarks by MCC’s CEO Daniel Yohannes at the Cape Verde Compact Results Event

[Introduction]

I’m pleased to join you to review the results from the partnership between Cape Verde and the U.S. Government’s Millennium Challenge Corporation.  Cape Verde has been a very good MCC partner, committed to sound policies, steady growth, and strong economic management.

This commitment has not gone unnoticed. 
• In 2007, Cape Verde became the second country to graduate from the United Nations’ Least Developed Country status because of socio‐economic progress.

• In 2009, Cape Verde became the first country eligible for a second MCC compact.  Even as Cape Verde graduated into the more competitive lower-middle income category, it worked hard to improve policies and practices.  Cape Verde’s commitment to good policies must continue moving forward. 

When Secretary of State Hillary Clinton, who chairs MCC’s Board, visited here, she described Cape Verde as a “model of democracy and economic progress in Africa.”  Here in Cape Verde, I have had the great privilege of meeting citizens who are reform-minded, committed to transparency, and interested in improving the effectiveness of their government.

The progress we celebrate today reflects President Obama’s new vision for development, where countries lead programs to invest in economic growth and achieve results.  This is what the Cape Verde-MCC partnership is accomplishing.

[Programmatic Results]

We can see results on many levels.  Earlier today, I toured the progress being made at the Port of Praia through Cape Verde’s MCC compact.  I’m looking forward to visiting the post-harvest center and some of the bridges tomorrow, which MCC support made possible as well.

The experts here today have discussed more of the initial programmatic results: 
• rural roads upgraded;
• reservoirs completed to increase irrigated land; 
• farmers trained;
• micro-finance institutions extending credit to farmers and agribusinesses; and
• citizens accessing a range of services through an innovative e-government system.

[Process Results]

Yet, these milestones alone do not tell the whole story.  We also need to look at how Cape Verde achieved these results.  We cannot overlook the tremendous work Cape Verde continues to undertake to reform its policies and build its capacity to lead its development.  These are part of Cape Verde’s results story too. 

As a model of country-led development, Cape Verde is putting policies, procedures, and practices in place to promote private sector-led growth.  We see this in the commitment by Cape Verde to secure funds and contribute as much as 116 million dollars to achieve the objectives of its MCC compact.  This accomplishment deserves applause.  It demonstrates “country ownership” at work. 

Cape Verde is also making critical policy reforms to sustain MCC’s investments. 
• For example, Cape Verde created a Road Maintenance Fund, financed by a fuel levy, to maintain the country’s road network. 

• It passed a Harmonized Procurement Law to promote greater transparency and efficiency in public spending. About 400 auditors, procurement agents, and commercial agents were trained on the new law.  What a way to build homegrown capacity.

• Because of the construction of the post-harvest inspection center on Santo Antão that I will visit tomorrow, the Council of Ministers lifted the 20-year, inter-island embargo on exports of horticultural products from Santo Antão.  The government’s decree eliminates obstacles to the movement of inspected and certified agricultural exports, generating more business and trade. 

• Cape Verde also updated its national microfinance law, building the capacity of local microfinance institutions.  Technical assistance to these institutions increased their operational and financial sustainability.  It furthered their ability to deliver rural credit to farmers and agribusinesses.  And credit is key to private sector development.

In these ways, Cape Verde embraces MCC’s approach to sound policies at the national and sector levels.  We work with partners committed to ruling justly, promoting economic freedom, and investing in their people.  Countries that perform well in these areas—while leveraging domestic policy reform—promote sustainable growth, good governance, and an environment for trade and investment. 

[Conclusion]

Through program and process results—through sound policies and country-led development—Cape Verde is increasing agricultural productivity, improving the transportation network, facilitating trade, and developing the private sector.  The investments we’ve made will strengthen Cape Verde’s economic system, making it easier for the private sector—as the real engine of growth—to invest, make money, and create jobs.  This helps Cape Verdeans earn more income, which is key to long-term economic growth.  Independent evaluations will measure the broader income growth and verify the impact of the results we see. 

Ultimately, any measure of our results—our success—comes down to some simple questions: Are we raising the incomes of the poor?  Are we reducing poverty? Are we creating opportunities, especially for the young?  Are we creating an environment that encourages private sector investments? I am proud that the Cape Verde-MCC partnership is building a solid foundation to answer these tough questions—and improve the lives of individuals, families, and communities today and well into the future.  And those results make us all very proud. 

Thank you very much.  OBRIGADO.