Remarks by MCC CEO Ambassador John Danilovich at the USAID Mission Directors Conference

Washington, DC
10:00 a.m.
Wednesday, October 24, 2007

As prepared.

Introducing key messages

Thank you so much for that kind introduction.

It’s a pleasure to be among USAID Mission Directors from around the world.

Your service is commendable and creates a future of hope and opportunity in countries struggling to

recover from disaster,
escape poverty,
and tackle the challenges of democratic and economic reforms.

I value the meaningful difference USAID’s foreign service officers and employees are making each and every day, including in MCC partner countries worldwide. MCC has viewed and will continue to view USAID as a partner in development.

Just as I imagine is the case for each of you, what is most gratifying in my work at the Millennium Challenge Corporation is to see with my own eyes the tangible results our assistance is making possible.

In travels to partner countries, I’ve seen

land titles issued,
farmers increasing their crop production,
infrastructure improvements underway,
and children—particularly girls—being educated.

In fact, MCC threshold funding is making “girl-friendly” schools possible in Burkina Faso, one of our most successful programs…and USAID administers it.

MCC has approved compacts in 16 partner countries in

Africa,
Central America,
Eurasia,
and the Pacific

for a total of nearly $5.5 billion. We signed our most recent compact just two days ago with Mongolia for $285 million; and we anticipate signing our 16th compact with Tanzania for $698 million in coming months.

Results are also underway in another 17 countries with threshold programs totaling over $360 million, with USAID as the primary administrator of these programs. Thank you for your work and your partnership as we engage jointly in these countries.

As a member of MCC’s Board, Acting Administrator Henrietta Fore helps ensure that MCC works in synergy with—and as a helpful catalyst to—USAID’s core development work. Under Secretary Fore votes on what compacts and threshold programs we pursue and lends considerable leadership, together with other MCC Board members, in determining MCC’s future.

And, Jim Kunder and I meet every Monday, Wednesday, and Friday at the Secretary’s meeting and almost always have something to follow-up on with each other.
And, many of my MCC colleagues are in touch on a daily basis with many of you here in this room today.

By supporting each other, we are lifting the development field as a whole and reaffirming the networks that can bring sustainable change to the lives of the poor.

I’d like to take a few moments

to talk about the MCC model
and, then, discuss our work with USAID.

The MCC Model

Your field experience and technical expertise have provided “best practices” and “lessons learned,” which we have incorporated into our model to reduce poverty through economic growth.

What I’d underscore is that our MCC model works with only a few of the world’s poorest countries.

It is a model that allows us to select countries through a

competitive,
transparent,
and depoliticized process

based on sound policy performance.

Awarding assistance because of policy performancemotivates governments to

improve governance,
fight corruption,
increase their investments in health and education,
and promote economic freedom.

Even before a dollar of our aid is invested—even before the first shovel is turned—countries are improving their own policy performance to qualify—or remain eligible—for our assistance.

It is a model that expects countries to lead their own development, including creating and implementing their own funding proposal, with systematic input from all segments of their society.

As you have seen on the ground, placing countries in charge of their own development

builds capacity,
strengthens institutions,
and jumpstarts critical thinking about what policies are necessary to ensure sustainability well beyond our period of investment.

And, it is a model that holds not only MCC accountable for the assistance awarded but also partner countries accountable for the aid received, all of which leads to sustainable results.

Delivering results is the impetus behind recent measures we have taken at MCC to reorient our organization from a compact development to a compact implementation agency, and to fully utilize the expertise and experience of our professionals to focus, at this stage of our evolution, on the implementation of our programs.

Cooperation with USAID

There’s been much discussion about the USAID-MCC relationship, and I would like to make just three points on this topic, as I know you are planning to discuss this further during the remaining time.

First, MCC is a relatively new organization. We often build on successful USAID projects.

Furthermore, many of our countries would not be eligible for MCC assistance had USAID not laid the essential groundwork for necessary policy reforms.

Second, while we share a similar end goal, MCC has a narrower mandate than USAID and was never designed to be a substitute to the core development programs USAID supports. USAIDremains this country’s primary bilateral development agency.We are not equipped—as USAID is—to provide humanitarian assistance or disaster relief or to work with countries emerging from conflict.

Third, in countries where MCC and USAID are both active, MCC and USAID-funded programs augment and complement each other.

For example, Mali’s $460 million MCC compact builds on current USAID activities and includes

the Alatona irrigated agriculture project,
upgrades to the Bamako airport,
and an industrial park project located near that airport.

In Ghana, a key component of its $547 million MCC compact enhances the profitability of commercial agriculture among small farmers. Compact activities in this field are based on a USAID program.

In Georgia, MCC’s $295 million compact includes regional infrastructure rehabilitation and enterprise development. USAID’s Business Climate Reform Project is critical to maximizing the impact of these compact activities.

In Indonesia, MCC’s $55 million anticorruption and immunization threshold program builds on and complements USAID programs. Immunization efforts will not be successful unless decentralization succeeds, an area where USAID is doing much work.

In all but one of MCC’s 17 threshold programs, USAID is the lead administrator, working directly with the country to execute the specific projects outlined in these two-year agreements. MCC’s threshold program benefits from USAID’s

technical and development expertise,
field presence,
and administrative infrastructure.

If there are partner countries where you feel our staff is not coordinating to ensure that MCC and USAID investments are synergistic to maximize development impacts, I would ask that you let me know. And, I will do something about it.

Conclusion

We are each designed and staffed to work differently.

We recognize this.

We also recognize that we can accomplish more through cooperation than through competition or duplicative efforts that might detract from our collective, beneficial impact on the lives of the poor.

We remain committed to a strong USAID-MCC relationship as we work toward a shared vision for a world where poverty is reduced.

I wish us all continued success in this critical endeavor.

While my time, unfortunately, is limited here this morning, I am pleased that USAID Mission Director Sharon Cromer and MCC’s Vice President for Policy and International Relations Maureen Harrington will facilitate a discussion on the way forward for our continuing cooperation.

Thank you for your interest in and support for the Millennium Challenge Corporation. USAID’s support has been and will continue to be vital to our work at MCC, and we look forwarding to furthering our cooperation.

Thanks again, and, I’d be happy now to take some questions.