Thank you for your kind welcome! It is great to be in the company of so many incredibly passionate individuals from across government and business who are shining the spotlight on the crucial role the private sector can and should play in supporting the growth and prosperity of developing countries.
Development alone can only do so much. Yet, development resources leveraged by active private sector engagement are key to sustainability and impact that can make all the difference in the lives of the world’s poor.
The Executive Council on Development here at CSIS understands this dynamic link, and I applaud your tremendous work and congratulate you on the release of your report.
It is also a link that defines the Millennium Challenge Corporation’s leadership in promoting development through one key ingredient: economic growth.
Like many of you here today, I come from the private sector. I was drawn to MCC precisely because of our unique approach to global development where we work to reduce poverty by promoting economic growth. And, we know that economic growth depends on the driving force of the private sector. That is why I have made partnering with the private sector a personal priority as well as a priority for MCC.
Given the current economic climate that has us all focused on budgets and bottom lines, the role of economic growth in U.S. development policy—and the importance of leveraging the private sector to generate such growth—have never been more crucial. So, we need to invest in getting this right to deliver the sustainable impact the world’s poor deserve and American taxpayers expect of their development investments. Make no mistake about this: Getting this right means embracing the private sector as a partner in development.
That is precisely why we have a dedicated team at MCC charged with engaging the private sector. MCC’s Finance, Investment and Trade team—what we call FIT—is coordinating with companies and exploring partnership opportunities to attract regional and international private sector interest in our partner countries. The team also supports local businesses and promotes homegrown entrepreneurship. We look for ways to include the private sector in designing and implementing our development investments.
Often, business is the first to recognize and understand the constraints to economic growth. So, we want to have a conversation with them right from the beginning.
They can help us direct our funds toward projects that will advance economic growth and raise the incomes of the poor. As it is done in the private sector, we calculate an economic rate of return for each MCC investment to make sure our investments have the most impact.
That is also why MCC continues to inform U.S. companies of business opportunities in our partner countries around the world. We reach out to American companies through various ways to inform them of MCC-funded procurements. These are transparent and competitively bid. Through competition, we have seen both the private sector and development effectiveness win by generating business opportunities, fostering local entrepreneurship, creating jobs, supporting competitive pricing, and sustaining impact.
And as we publicize these procurement opportunities, MCC will continue to cooperate with other U.S. Government agencies in a whole-of-government effort to help U.S. businesses gain footholds in emerging markets. Earlier today, you heard from my good friend, Elizabeth Littlefield, the President and CEO of OPIC. OPIC plays an outstanding role in mobilizing private sector solutions for development’s greatest challenges. Their efforts are incredible and making a difference for American businesses and the world’s poor. MCC welcomes more and more opportunities to work with OPIC to promote private sector activity and investment.
And, that is also why we demand that our partner countries create—and sustain—enabling environments for business and trade. We do this by insisting on pro-business policy reforms as we select partner countries. We look at inflation, fiscal policy, ease of starting and registering a business, regulatory quality, and land rights.
We specifically look at a country’s commitment to controlling corruption and advancing democratic rights.
I am happy to note that our focus on policy reforms to create pro-growth, business-friendly environments is working. In a survey conducted by a team of researchers from the College of William and Mary, government officials in developing countries around the world ranked the influence of MCC’s policy performance scorecards greater than any other external measurement system.
Our focus on policy reforms does not end just in creating the right environment for business to succeed. We also see enormous value in integrating policy reforms within actual development projects. That’s because specific sector and institutional reforms promote the sustainability of our investments.
Like all of you here, the U.S. Government increasingly understands that our development dollars go further and do more when we partner with the private sector. MCC is no exception.
Take, for example, Pike Electric of North Carolina, which won a $14 million contract to improve access to electricity as part of MCC’s investment in Tanzania. Pike never worked internationally before and now has a foothold in Africa. And, as a result, Pike is seeking to expand its business in the continent.
Or consider how a private-public partnership through MCC’s investment in Jordan is expanding a wastewater treatment plant that will help that country tackle its major constraint to economic growth—access to clean water.
Working closely with Feed the Future, which serves as the President’s global food security initiative, consider also how MCC seeks to partner with U.S. agribusinesses and leverage their innovative spirit to promote international trade and investment opportunities. This benefits the U.S. agriculture sector and creates prosperity among smallholder farmers and their families in developing countries.
Through these examples and others, we know development can do a world of good when we include the private sector in program design and implementation, focus on economic returns, create an enabling environment for private sector investment, and foster competition.
President Obama said it best in his State of the Union address: “Progress in the most impoverished parts of our world enriches us all, not only because it creates new markets, more stable order in certain regions of the world, but also because it’s the right thing to do.”
MCC is committed to this course moving ahead—to deepening our engagement with the private sector to do the right thing. As companies grow their bottom lines in emerging markets, more and more families will experience the economic growth that will move them above the poverty line.
Ultimately, this is how we can achieve our shared vision for sustainable global prosperity that benefits all of us. Thank you very much.