Thank you so much! It’s great to be in Delaware, the home state of our esteemed Vice President Joe Biden.
It’s also great to be here with Senator Christopher Coons, who is an outstanding advocate for Delaware and for the American people. I want to thank him for inviting me to speak here this afternoon. The Senator’s visionary leadership as chairman of the African Affairs subcommittee is breaking new ground on how we work with Africa.
And, of course, it’s great to be in the home state of the Fightin’ Blue Hens!
I am excited to be in the first state for this first Delaware-Africa Conference—a conference that is both timely and topical.
We are all looking for ways to strengthen the American economy. This is a priority for the Obama administration.This is a priority here in Delaware. And, this is a priority across our country.
One tool to help us achieve this goal is the work of the U.S. Government’s Millennium Challenge Corporation, which pursues one mission: global poverty reduction through economic growth in poor, but well-governed, countries.
Many might find it odd to think that investing abroad is going to help us here. Yet, we are waking up to a new reality: Our own prosperity and economic strength here at home are linked to the prosperity and economic strength of countries around the world.
Think about it; history offers some important lessons on this. After the Second World War, we spent 13 billion dollars under the Marshall Plan to rebuild Europe. Today, we export 240 billion dollars in goods and services to the European Union each year.
Think about South Korea. Our country provided the Koreans 6 billion dollars in aid and loans from the end of World War II through the mid-1970s. Today, Americans export more than 40 billion dollars to Korea each year. South Korea used that help to create an enabling environment for growth and private sector-led investment and went from aid recipient to major aid donor.
Many economists would argue that if it were not for the Marshall Plan—for how we worked to rebuild Europe and Asia—we probably would not have experienced the growth and prosperity we did here at home.
That is why I am very pleased to represent MCC at this conference and discuss our role in bridging economic development in some of the world’s poorest places with our own economic well-being. By investing in the trading partners of tomorrow, we are creating opportunities for American enterprise today—supporting American families and the values of our middle class. MCC offers smart solutions for delivering U.S. foreign assistance in ways that improve the lives of the world’s poor and also create opportunities for American businesses to tap into next generation emerging markets to expand, grow, profit, and create American jobs.
And as this conference rightfully highlights, any talk of emerging markets brings us to Africa.
The numbers themselves speak to where the opportunity is.
The United States is Africa’s second largest trading partner, after China.
Last decade, six of the ten fastest-growing economies in the world were in sub-Saharan Africa.
The Economist predicts that the average African economy will outpace its Asian counterpart over the next five years.
Africa now has the fastest growing middle class, growing from 60 million to 100 million Africans in 2015 according to Standard Bank.
And, since Africa’s economically active population is expected to grow from 56 percent to 66 percent between now and 2050—which is different from other continents which are aging—the demand for goods and services will remain strong. The consumers of the future are in Africa today.
Studies also show that for every 10 percent increase in exports, U.S. jobs grow by 7 percent. With 95 percent of the world’s consumers living outside the United States, exports support more than 10 million U.S. jobs.
This is the age of win-win scenarios, when more trade and more commerce mean jobs for Americans and for Africans. American enterprise can do good around the world while making sure the bottom line grows too.
This new reality means two things:
First, American businesses are smart to set their sights on Africa.
And, second, MCC can be your gateway to opportunity in Africa.
Over 70 percent of MCC’s worldwide portfolio—more than 6 billion dollars in grants—are invested in Africa’s own solutions for economic growth and poverty reduction.
MCC is doing our part to support economic development, greater trade, commercial activity, and investment opportunities in and with Africa.
This starts with our distinctive approach to development assistance.
First, MCC awards grants to countries that are committed to ruling justly, fighting corruption, investing in the health and education of their citizens, managing their financial resources effectively, and creating business-friendly environments. We use 20 indicators, taken from independent, third party sources—the World Bank, IMF, Freedom House, the UN, Heritage Foundation—to assess how countries perform in these areas. At MCC, policy performance matters. Africans understand that the key to sustainable economic development starts with the right policies. President Obama confirmed this during his historic visit to Ghana when he said, “Development depends on good governance. Africa doesn’t need strongmen; it needs strong institutions.”
Second, MCC helps countries willing to help themselves. We emphasize the need for partnership. It is the responsibility of both sides—MCC and our partners—to work together to fight poverty. We require that our partners come up with their own homegrown solutions for poverty reduction and economic growth. At MCC, country-driven solutions matter. This approach resonates with Africans today, and our role is to help Africans help themselves to a future of greater opportunity.
And third, MCC partners with countries determined to maximize their investments to deliver tangible results. MCC is the industry leader in analyzing the impacts of our programs in systematic and transparent ways. At MCC, accountability matters. That’s why Africans are demanding results not just from donors but also from their own governments.
Ultimately, MCC’s reform-grounded, country-driven, results-focused, and accountability-centered way of delivering development assistance creates conditions for private investment, which is the engine for growth, jobs, higher incomes, and increased trade. President Obama also said that the purpose of foreign assistance is to create the conditions where aid is no longer needed.
Ladies and gentlemen, that is exactly what MCC is doing.
All the development assistance in the world is not enough to pull Africa’s poor out of poverty. What will change the equation is growth led and sustained by you, by private enterprise. It takes companies like DuPont, which I had the opportunity to visit this morning and who is leading innovative work in seed production to promote greater food security in Africa. The next chapter on sustainable economic development and trade with Africa will be written by the private sector, by your companies here in Delaware and across our great country.
And, in three concrete ways, MCC is your gateway to opportunity in Africa that will make this promise of prosperity a reality.
First, MCC is your gateway to opportunity through procurements. MCC’s partnerships in Africa mean opportunities for American businesses. Local entities in each partner country—what we call an MCA—manage a number of procurements to implement the projects we fund through a competitive, fair and professionally-administered process.
By creating a level playing field, American companies can be sure of a fair deal. Proof of this is the fact that American companies are competing and already winning a significant portion of business. Over the next 18 months, another 1.2 billion dollars in procurements are expected, which open up more opportunities for American companies to participate and compete.
Symbion Power of Washington, D.C. offers a great example of leveraging a procurement to gain a foothold in one of Africa’s frontier markets. After several failed bids, Symbion and its partners won more than 110 million dollars in MCC procurements to improve Tanzania’s energy sector. Symbion has since expanded its business there far beyond the initial contract. Last June, it purchased a 120-megawatt power plant that had been sitting idle for almost three years and put it into immediate production, adding much needed power to the national grid. The company has also contracted with the Government of Tanzania to provide another 200 megawatts of power, and the two sides are discussing other projects to provide even more electricity to feed into the national network.
Second, MCC is your gateway to opportunity through greater private sector participation. Working with the private sector is not an afterthought to how we do business. Rather, it guides our thinking right from the beginning of the planning process. Our country partnerships create formal and disciplined points of interaction and collaboration with the private sector during program design and implementation. To attract private sector interest in our partner countries—and also promote homegrown entrepreneurship—we look for ways to include the private sector in decision-making as early as possible. Often, business is the first to recognize and understand the constraints to growth and investment. Early and frequent consultations with the private sector help MCC partner countries analyze these constraints, learn best practices and discuss financing opportunities. The ultimate key to development effectiveness is linking private investments from your companies to our aid investments right from the start.
And, third, MCC is your gateway to opportunity by creating an enabling environment for follow-on investment. Our priorities in African partner countries foster sustainable pro-business conditions that allow you, in turn, to make Africa a priority for trade and investment.
We do this by insisting on pro-business policy reforms. We look at inflation, fiscal policy, ease of starting a business, regulatory quality, and land rights. We specifically look at a country’s commitment to controlling corruption and advancing democratic rights.
We also create an enabling environment by investing in infrastructure to expand trade and commerce. Many MCC partner countries—in Africa and elsewhere—place a high priority on building their trade capacity to increase competitiveness, so it’s no wonder that MCC’s assistance accounts for the majority of U.S. aid for trade. And growing that trade capacity means investing in roads, airports and ports.
For example, MCC is constructing a new terminal at the Bamako Airport in Mali, a land-locked country to help establish an independent and secure link to the regional and global economy.
MCC is rehabilitating major roads in Tanzania to connect the country to its regional trading partners.
MCC helped improve the management, security and cargo capacity of the Port of Cotonou in Benin, which has cut waiting times for bulk ships. The average customs clearance time at the port dropped from four days in 2006 to two days in 2010. And, some of these ships originate from Delaware’s Port of Wilmington. This morning, I had the pleasure of visiting Auto Port, a shipping company based nearby. This is a prime example of a Delaware business benefiting from exports to Africa’s emerging markets, and I’d like to acknowledge Dick Johnson for his leadership in exporting to West Africa through the port in Benin MCC modernized.
MCC’s actions to foster an enabling environment for investment have not gone unnoticed. When I was in California late last year, I toured the factory of Combustion Associates, Inc., a woman-owned business, which specializes in power generation systems. The company’s growth has been fueled by export sales to places such as Benin. Though the company is not working on any MCC contracts, it recognizes our role in creating opportunities for it—and other American companies—to do business in emerging markets.
And, we strengthen the enabling environment by making gender equality a priority. When a large portion of a country’s population is excluded from fully participating in the economy, growth suffers. One of MCC’s newest policy indicators, “Gender in the Economy,” reinforces our commitment to gender equality. It assesses a government’s commitment to providing women and men with the same legal rights. In Lesotho, for example, we worked to ensure that the minority legal status of women was removed in law before we moved ahead with our program. As a result of the government’s embrace of this policy reform and other efforts, Lesotho now ranks in the world’s top ten in closing its economic gender gap according to the Global Gender Gap Index.
Indeed, our partnerships throughout Africa give frontier markets a “seal of approval,” signaling to your companies—here in Delaware and beyond—that Africa is “open for business.”
Through private sector procurements, private sector participation and the promotion of a strong enabling environment for private sector growth—grounded in good policies, solid infrastructure and gender equality—we are fueling economic growth in African partner countries. That is fundamental to building next generation markets and trading partners. And these are the new markets that want to buy your products and services “made in America.”
MCC and the private sector are “fellow travelers” on the road to economic prosperity. So, I invite you—I challenge you—to walk through the gateway to opportunity MCC creates to do business in Africa.
Together, we can do a world of good—growing Delaware’s businesses, renewing our economic strength across our country and contributing to global economic prosperity that benefits all of us.
Thank you very much.