‘Building Opportunities for Investment in El Salvador’

Thursday, February 28, 2008
As prepared

Introduction

Vice Minister Escobar, Executive Director Llort and representatives of FOMILENIO, who manage the implementation of the compact between El Salvador and the Millennium Challenge Corporation, Friends of El Salvador, Welcome to the Millennium Challenge Corporation, and thank you for joining us this evening! We are extremely pleased to partner with

the El Salvador Ministry of Foreign Affairs,
the Embassy of El Salvador, and
FOMILENIO

to host this event to discuss investment opportunities in El Salvador.

The MCC compact focuses on transforming the Northern Zone, which has suffered from poverty for decades. MCC is proud to work with the people of El Salvador to contribute to the economic rejuvenation and empowerment of this strategic area. I just returned from a trip that took me to the region. It is a place of

great promise,
great potential, and
great people.

I know that you would agree with me that there are buenas noticias in the north of El Salvador, thanks to our partnership. The Salvadoran community, as stakeholders in the country’s progress, is a powerful force for change, and your ongoing support for development in El Salvador, particularly in the Northern Zone, will continue to usher in a new day of promise for a country that is of tremendous importance to MCC and to the United States.

I want you to know that your presence here tonight is, in a very direct way, a continuation of the consultative process that distinguishes MCC’s cooperation with countries like El Salvador. We believe that only through open and honest dialogue with those who are invested in that country’s future can economic growth yield real long-term, sustainable benefits.

Your questions and comments are part of an ongoing conversation that began years ago, and will continue throughout the life of MCC’s compact with El Salvador, and beyond. The consultative process engages Salvadoreños to define a new vision for El Salvador’s development, gathering feedback from

NGOs,
the private sector,
women’s advocacy groups,
international institutions,
producers,
municipal officials,
community leaders,
and Salvadoreños abroad.

Over 2,500 participants were consulted during program design in 2006, resulting in a powerful and finely-tuned compact to reduce poverty and spark new economic growth.

I had the pleasure of discussing this with Margarita Escobar, the Vice Minister of Foreign Affairs for Salvadorans Living Abroad, when I was in Chalatenango last month. Together, we reaffirmed our shared commitment to the success of the $461 million compact, and recognize the role that Salvadoreños abroad can—and should—play in that success.

Recent Trip to El Salvador

To date, MCC has committed nearly $1 billion in the Americas through our compacts and threshold programs as proof of how the hemisphere is a priority for the United States. El Salvador’s compact represents an important part of this investment in the Americas, and reflects the development priorities defined by Salvadoreños themselves, which include investing

in human development through skills training and vocational education,
in essential community infrastructure and services,
in agricultural production and rural business development, and
in transportation.

El Salvador is a model MCC country for the quality and speed with which it developed a compact, and I also want to commend El Salvador for achieving early progress on the ground.

President Saca and I presented the first of thousands of scholarships funded by MCC to students in the Northern Zone to attend vocational training. What a pleasure that was to see!

I was also presented with a copy of El Salvador’s first-ever Strategic Environmental Assessment. El Salvador’s assessment reflects our shared goal of protecting the environment as we pursue sustainable development.

Private Sector Role

Moving forward, we welcome and encourage private-sector engagement as the best way to leverage MCC’s development assistance in El Salvador to deliver sustainable results in the lives of the poor. And, we contribute to this in three main ways.

First, MCC creates the right policy conditions for the private sector. By insisting on sound

fiscal,
monetary, and
regulatory policies,

MCC creates a pro-investment environment. For example, motivated by its desire to qualify and remain eligible for MCC funding, El Salvador slashed the time it takes to start a business, leading to a spike in business registrations. Entrepreneurship is thriving in El Salvador, and MCC can help further that spirit by motivating pro-business policy reforms.

Second, MCC promotes a trade agenda. MCC compacts in the Americas contain “aid-for-trade” activities to build each country’s capacity to maximize regional and international trade opportunities. MCC funding is constructing and improving transportation links between El Salvador and Honduras and between Honduras and Nicaragua. These linked routes will help farmers more easily move their products to markets

in the region,
in the U.S., and
beyond.

And, third, MCC generates further investment opportunities. MCC investments provide the private sector with a point of entry to initiate or expand their own commercial and corporate social responsibility activities. We want the private sector to take advantage of MCC’s significant investments to

build infrastructure,
increase agricultural productivity, and
improve the business climate.

These investments are specifically designed to create ways for the private sector to grow.

And, MCC is combining its efforts with those of other U.S. government agencies, like OPIC and the U.S. Trade and Development Agency, to create even stronger incentives for investment in the north.

Conclusion

I invite members of the business community—many here in this room—to look closely at MCC investment possibilities in El Salvador and to explore opportunities of your own. I encourage you to

meet with the experts who are assembled here and in El Salvador,
make business connections, and
think of how we can, together, make strategic investments in El Salvador’s future…investments that combine our concerns and bright hopes with serious resources and positive action.

Together with the private sector, the Millennium Challenge Corporation is proud to partner with El Salvador. Through this partnership—based on

mutual respect,
teamwork, and
results—

MCC will continue to help El Salvador achieve its goals for stimulating growth and reducing poverty for the benefit of Salvadoreños committed to a more prosperous life for themselves and their children.

Thank you again for being here and for you interest in MCC’s work in El Salvador. I’d now like to invite Vice Minister of Foreign Affairs for Salvadorans Living Abroad Margarita Escobar to the podium. Ambassador Escobar has served in her capacity since 2003, working to support the Salvadoran diaspora and deepening their close relations with El Salvador. Previously, she served as El Salvador’s ambassador to the Organization of American States as well as to Venezuela. Please join me in welcoming Vice Minister Margarita Escobar…