Remarks from the Compact Signing Ceremony with Vanuatu

Honorable Prime Minister Lini, Chief Tahi, assembled ministers and ambassadors, ladies and gentlemen, it is truly an honor and a pleasure to be here with you in Port Vila today and to celebrate a new and important partnership between the Republic of Vanuatu and the Millennium Challenge Corporation of the United States.

We are proud to be signing this Compact for a grant of $65.69 million dollars over five-years from the Millennium Challenge Corporation to the Republic of Vanuatu. On behalf of MCC, I extend our sincere and heartfelt congratulations the people and the government of Vanuatu for this tremendous achievement.

The Millennium Challenge Corporation is a key part of President Bush’s strategy to provide increased development assistance to countries that are taking responsibility for their path to development. MCC was founded on the principle that assistance is most effective when focused on countries,  like Vanuatu, that have demonstrated their commitment to poverty reduction and economic growth by ruling justly, investing in their people, and promoting economic freedom.

We believe that the Compact program that Vanuatu has developed with the help of MCC, will have a truly transformational impact on one of Vanuatu’s key priorities in reducing poverty through economic growth—that is, the rehabilitation of vital transportation infrastructure, especially in rural areas.

Infrastructure is critical to the continued and sustainable growth of the two mainstays of Vanuatu’s economy: tourism and agriculture. These two sectors together employ more than 70% of Vanuatu’s working population.

Through its eleven infrastructure projects – including roads, wharves, an airstrip, and warehouses – spread over eight islands, Vanuatu’s Compact program will benefit rural agricultural producers and providers of tourist-related goods and services by reducing transportation costs and improving the reliability of access to transportation services.

We expect this program to have a broad impact. In fact, we estimate that more than 65,000 rural inhabitants who live nearby will use the roads and other infrastructure to access markets and social services.

Of course, the success of Vanuatu’s Compact program will depend on the sustainability of these assets over the long term. That is why the Compact includes an institutional strengthening component that will provide benefits beyond what is built with Millennium Challenge funds. This component includes the provision of assistance to the Vanuatu Public Works department, and a commitment by the Government of Vanuatu to ensure that the budget allocates enough funds for road maintenance. These policy changes, together with the introduction of community-based maintenance schemes and the provision of new plant and equipment that will be part of the Compact, will help Vanuatu maintain all existing and new transport infrastructure.

Our Compact can’t be successful without the participation of a broad spectrum of ni-Vanuatu society in monitoring and maintaining the program. We know that Vanuatu organized a comprehensive consultative process while developing its proposal for Millennium Challenge assistance. Among the groups that participated in the local-level consultations that led to the selection of these projects were Vanuatu’s council of chiefs, women’s group leaders, the private sector,  NGOs, church leaders, and government officials from Vanuatu’s provinces. It is important that these groups continue to have input as the program moves forward, and we are pleased that Compact oversight will be the responsibility of a steering committee comprised of both government and non-governmental stakeholders. All must remain vigilant to ensure that this funding goes to the Projects that MCA Vanuatu designed, and the benefits go to the people they are designed to help.

Finally,  I would like to note with appreciation the high degree of support that Vanuatu’s Compact with MCC has received from other donors. The program’s focus on transport infrastructure presents a number of opportunities for coordination with ongoing and planned donor programs,  including Australia’s Agency for International Development, New Zealand’s Agency for International Development, Agence Francais de Development and the European Union, who – among other activities – are funding surveys that will be used to monitor the impact and results of Vanuatu’s MCC program.

Again, our most sincere congratulations to President Kelekele, Prime Minister Lini, Minister of Finance Willie Jimmy and the other ministers present; to the members of MCA Steering Committee; to the MCA Unit Staff; to the donor community —and most of all to the people of Vanuatu—for putting together a comprehensive, integrated, and results-oriented program that will help transform Vanuatu’s economy and give ni-Vanuatu new avenues for success, and new opportunities to pursue their dreams.