Remarks by MCC CEO Ambassador John Danilovich at the Signing Ceremony of the Lesotho Compact

Monday, July 23, 2007
Washington, DC

(As prepared.)

Good afternoon. I invite you to please take your seats.

The Right Honorable the Prime Minister Mr. Pakaliithe Mosisili ,
Secretary Rice,
Congressman Payne, Chairman of the Africa Subcommittee, thank you for coming today,
Minister Tsekoa , Minister Thahane , honored ministers, and members of the delegation from Lesotho,
Under Secretary Jeffery, the State Department’s new Under Secretary for Economy, Energy, and Agriculture,
Ambassador Rapolaki,
Former Ambassador Perry,
Ambassador Designate Nolan,
U.S. Global Aids Coordinator Ambassador Mark Dybul,
Distinguished ambassadors,
Ken Hackett of our MCC Board,
Friends of Lesotho,

It is a pleasure to welcome you to the signing of the compact between the Kingdom of Lesotho and the Millennium Challenge Corporation.

Many thanks to the Basotho and MCC teams—led by Sophia Mohapi and Deidra Fair, respectively—who worked with diligence and determination to make this compact a reality. Deidra not only speaks Sesotho, the language of Lesotho, but she has also been snowboarding there—something you might not have imagined possible in Lesotho.

Earlier today, the Prime Minister told me that it was going to snow in Lesotho this Wednesday—so if you get on an airplane as soon as possible, you, too, can go snowboarding in Lesotho. However, this expenditure is not covered in our MCC compact.

A broadly-based consultative process carried out throughout the country created the nearly $363 million antipoverty compact we will sign today, which is MCC’s 13th overall—and our seventh in Africa.

The Millennium Challenge Corporation believes in helping people help themselves. The beneficiaries of our programs—and their governments—want a hand-up, not a hand-out, as they pursue strategies to reduce poverty through sustainable economic growth.

The MCC is fulfilling the mandate given to us by the U.S. Congress when they created us in 2004. And, only with Congress’s support for sufficient funding will MCC be able to continue to fulfill our mission throughout the world.

MCC is a bilateral, American program—our grants are rewards for countries that are doing the right things for the right reasons. MCC rewards good government, good governance, countries that invest in their people, and provide economic freedom—all of this being the foundation upon which we can build programs for the reduction of poverty and sustained economic growth and the creation of stability and security.

We believe in “aid with accountability”—accountability on MCC’s part and accountability on the part of our partner country. On our part, it’s about taking our fiduciary responsibility to the American taxpayer seriously and awarding grants only to countries with sound

political,
economic,
and social policies.

On the part of our partner country, it’s about embracing the hard work of

consulting with their people,
identifying their own priorities for development,
making reforms,
implementing their programs,
and delivering tangible results in the lives of the poor.

The Prime Minister and I discussed this morning how important it was for Lesotho to now assume responsibility—country ownership—for the effective implementation of the compact. Efficient implementation unlocks the money, and allows MCC to disburse our grants—and that’s what we all want.

Lesotho and all MCC partner countries have made a tremendous effort to become eligible for MCC funding—and to persevere with those efforts to remain eligible.

Lesotho is an outstanding example of how our MCC model and how our incentive effect are working—

working in Lesotho,
working in Africa, and
working throughout the world.

The MCC-Lesotho compact focuses on 3 main components:

water and sanitation,
health,
and private sector development.

Harnessing the country’s abundant water resources,
improving the health of the productive workforce,
and stimulating private sector development

all play important roles in reducing poverty, stimulating growth, and transforming the lives of men, women, and children in Lesotho. Let me briefly explain each project.

First, over $160 million of the compact’s total will improve the water supply for industrial and residential uses. Water is the lifeline for expanding garment and textile operations, which, in turn, will increase production and generate jobs. System upgrades will improve the reliability of water supply and sanitation, and watershed management will enhance rural livelihoods.

Second, more than $120 million will be directed to strengthening Lesotho’s health care sector. Lesotho has the third highest rate of HIV/AIDS cases in the world, and this investment will mitigate the negative economic impacts of

poor maternal health,
HIV/AIDS,
tuberculosis,
and other diseases

rehabilitating antiretroviral therapy clinics and 150 health centers,
constructing a central laboratory and blood transfusion center,
expanding health training for nurses,
and improving medical waste management.

And, third, almost $40 million will bolster private sector activity by

improving access to credit,
reducing transaction costs,
and increasing the participation of women in Lesotho’s economy.

Improving land administration,
modernizing the commercial legal system,
and providing credit bureau services

will not only foster the growth of local companies but also attract foreign investors.

Private sector development is a pillar of Lesotho’s ongoing reform agenda, and includes promoting the economic rights of women so they, too, can participate fully and actively in the commercial life of their country.

By unlocking the potential of its two greatest resources—its water and its people—and by fully engaging private enterprise, Lesotho is maximizing the impact of its compact with the Millennium Challenge Corporation to tackle poverty and make the promise of sustainable development a reality.

We appreciate the support of His Majesty King Letsie III, and, Prime Minister Mosisili, we recognize your visionary leadership and the dedication of your capable team in achieving this MCC-Lesotho compact. Your leadership is an example of “progress on the move” in Africa, and your citizens and the MCC are very proud of this.

It is now my great pleasure to yield the podium to the Chairman of MCC’s Board, Secretary of State Condoleezza Rice. Secretary Rice…