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2005

2004

Nicaragua Compact Signing Ceremony

July 14, 2005

Transcript

MR. APPLEGARTH: Buenas tardes, good afternoon. Thank you all for joining us on this joyful occasion. Today, the Millennium Challenge Corporation is signing a five-year, $175 million compact with the Republic of Nicaragua . We are pleased that the President of Nicaragua, His Excellency Enrique Bolaños and his distinguished delegation could be with us here today.

I also want to recognize and welcome to the ceremony the country representatives who are in Washington for the Summit Implementation Review Group meetings being held today and tomorrow at the Organization of American States in preparation for the November Summit of the Americas meeting. And finally, I want to welcome our MCC Board Members, the President of Catholic Relief Services Ken Hackett and the U.S. Trade Representative Rob Portman, and other distinguished guests and friends. We're especially honored, of course, that Secretary Rice is here to officiate this ceremony.

And we' d like to thank all of those who helped to work to bring this compact to completion, including President Bolaños and Foreign Administrator Caldera. Secretary Rice and the other members of the board and their staffs, Ambassador Moore, Ambassador Stadthagen and in particular, the dedicated MCC Nicaragua team and the MCC-MCC team who worked tirelessly to bring us to the signing ceremony today.

The Millennium Challenge Compact with Nicaragua aims to reduce poverty, targeted in two areas León and Chinandega by transforming these regions into engines of economic growth. By increasing (inaudible) poor, rural families who work, operate or own farms and rural enterprises. These two regions, while still suffering from the devastating impact of Hurricane Mitch and among the poorest in the Western Hemisphere, are important areas in Nicaragua that could become, again, a bread basket for the country and are a source of tremendous potential growth because of their fertile soil, their proximity to ports and connection to other markets in Central America and the United States.

Despite this potential, many of the poor people in this region produce mainly low-value agricultural products and lack secure, uncontested titles to land. As a result, they remain isolated from markets and lack the knowledge and inputs necessary to make the transition to activities that would bring them higher incomes.

Compact funds will be invested in a rural development program to help improve high-value agricultural production and a transportation program to reduce the cost of reaching markets and in reaching social services like schools and medical centers. The MCC Compact will also help small and medium producers get secured titles to the land, receive training and better farming techniques and business practices, and provide them with access to markets and social services to better roads.

So this Compact is really about helping people families in rural communities benefit from the region' s resources and market opportunities. More concretely, this program is at least in part about creating an environment where children can stop working in the fields and can go to school. And where parents are able to buy clothes, and schools and books for their children.

We are proud to stand with the people of Nicaragua in the fight to eradicate extreme poverty and to provide hope and opportunity. Despite a challenging political environment in Nicaragua, the Bolaños Administration has demonstrated its commitment to putting the right policy framework in place, to use aid effectively and to assume the responsibility to continue along the path of good governance.

This program is Nicaragua' s program. The people of Nicaragua have developed a transformative program targeted at improving the lives of the poor and bringing Nicaragua closer to achieving sustainable economic growth. This program epitomizes what MCC is all about, creating conditions in local capacity within a country to improve the lives of its people and to help countries help themselves. Indeed, independent observers are already reporting what they call an MCC effect on good governance as countries implement significant policy reforms to improve their chances of qualifying for the Millennium Challenge Account. By rooting out corruption, upholding human rights, investing in health and education and the rule of law, and supporting individual entrepreneurship, MCA-eligible countries are putting themselves on the fastest track to poverty reduction and sustainable growth. MCC was designed to reward and reinforce these efforts. And with today' s signing, I' m pleased to say that we' ve -- our total approved signing by MCC since we began receiving Compact proposals ten months ago, is nearly $640 million in Compact funding -- pre-Compact funding in our first structural program in nine different countries.

President Bush launched the MCA as the articulation of his commitment to bringing hope and opportunity to the world' s poorest people. We firmly believe that all governments should allow their citizens to pursue economic opportunities and enjoy civil liberties. Through the MCA, the United States is supporting countries that are striving to provide these freedoms and opportunities for their own people.

As many of you know, the Senate has recently approved CAFTA. The House will vote on it before the summer recess. Before I introduce the next speaker, someone who is intimately familiar with the details of the CAFTA process, I want to point out that this Compact goes a long way to developing the people of both Nicaragua, providing the people of Nicaragua with trade capacity building and the ability to prosper in the competitive trade environment that CAFTA will create.

And with that, I would like to turn it over to my fellow board member, U.S. Trade Representative Rob Portman.

(Applause.)

AMBASSADOR PORTMAN: Paul, thank you very much and I' m delighted to be here with a group of people who are responsible for this wonderful Millennium Challenge Corporation grant to Nicaragua . I want to congratulate President Bolaños, also Secretary Caldera and, of course, Secretary Rice and Mr. Applegarth.

This is an extremely important couple of weeks in Washington because we are just about to pass the Central American Dominican Republic Free Trade Agreement. Do you like my optimism?

(Laughter.)

Thank you.

(Applause.)

The agreement is really pretty simple in terms of what it does for the countries of Central America and the United States . It expands our economic ties in ways that modernizes our economies, provides more economic freedom, which will lead to more prosperity. And this is something that President Bolaños has bravely and courageously stood for, as have the other four Presidents of the Central American countries involved, and I want to commend that for that. And I want to tell them that I do believe that we can make good on the promises we have made to take this through our Congress and thank President Bolaños personally for his efforts with members of Congress to explain why this trade agreement can be very helpful in terms of modernizing his economy, expanding the middle class and developing economic and political freedom in Central America.

I will also say that this Compact is a very important part of that trade agreement. As Secretary Rice often says, we need to be sure that aid and trade go hand in hand. And the reason the U.S. Trade Representative is on the board of the Millennium Challenge Corporate is because the United States Government is committed to that. I am absolutely committed to being sure that in the Central American countries, as we' ve done already with Honduras and now with Nicaragua, that we do provide the trade that goes hand in hand with the aid, which will help us to adjust to the new trade agreement.

I am delighted today to introduce to you the Chairwoman of the Millennium Challenge Corporation, Professor Rice, who has done a superb job, in my view, of representing our great country all around the world in her tenure as Secretary of State. And, in particular, has a personal commitment to the goals of the Millennium Challenge Corporation that are exemplified, I think, perfectly by this new agreement that Paul has just explained with Nicaragua .

Why? Because again, it expands economic and political freedom in a way that brings prosperity to the developing world. That' s what MCC is all about. That' s what Secretary Rice is absolutely committed to. So ladies and gentlemen, please join me in welcoming the Chair of the Board, Secretary Rice.

(Applause.)

SECRETARY RICE: Thank you. Thank you very much. And I want to thank Ambassador Portman for everything that he is doing to promote free trade. First, in his time in Congress, when he was a stalwart in that direction and, especially now as U.S. Trade Representative around the world, and particularly as we try and pass this important CAFTA agreement. And I believe that we will because I believe that people understand the importance of trade to the countries of Central America .

I want to welcome you to this historic signing of a five-year, $175 Millennium Challenge Account Compact with the Republic of Nicaragua . A special welcome to you, Mr. President, President Bolaños for the hard work that you have done on behalf of the people of Nicaragua to bring us to this important day. I also want to thank Minister Caldera who will later on sign the document for his hard work.

Above all, our congratulations, though, to the people of Nicaragua who have demonstrated their resolve to lift themselves out of poverty and to create the conditions needed for sustained development.

Development aid works best when it goes to countries that govern justly, open up their economies, and invest in their people. The awarding of Millennium Challenge Development Funds to Nicaragua testifies to Nicaragua' s strong commitment to advance in all of these key areas. We' re grateful for the commitment of all involved here, to good governance and to growth-spurring development and to free trade.

There are some members of Congress here, Congressman McCall, Congressman Rothman, and others, thank you very much for your strong bipartisan support for the Millennium Challenge Account and for you active interest in the well being of the people of this hemisphere.

We are really fortunate to have here with us today the coordinators and representatives from the countries participating in the Summit of the Americas process. Thank you for taking time out of your preparations for the November summit in Argentina to be with us. Your presence here is especially fitting because the President' s Millennium Challenge Account Initiative is to further the collective goals that we have for the summit, where we look to pro-growth strategies that will focus on job creation and the betterment of the peoples of the region.

As President Bush put it when he last spoke at the OAS Summit in Fort Lauderdale, the United States shares a commitment with you to build an Americas that lives in liberty, trades in freedom and grows in prosperity. All of us recognize the importance of showing the people of this hemisphere that democracy and free markets deliver more than promises. The Millennium Challenge Account Initiative does exactly that.

I want to thank the management and the professional staff of the Millennium Challenge Corporation and, particularly to Paul Applegarth for his leadership and to the partners that are a part of the outstanding MCA Nicaraguan team. Together, they have turned farsighted ideas into results-oriented programs, which reflects Nicaragua' s priorities of poverty reduction and growth.

The Compact that we' re signing today is the product of a broad consultative process with many segments of Nicaraguan society. The funds to be awarded under the Compact will go to improving rural roads. Better roads will reduce transportation costs and improve access to markets and social services for rural populations, thus increasing the incomes of farmers and rural business people and generating growth.

The Millennium Challenge Funds also will be used to help small and medium-sized farms produce higher value crops and to increase much needed investments by strengthening property rights.

Nicaragua' s commitment to political and economic reform has not only brought Nicaraguans Millennium Challenge Development Assistance, it has brought a strong growth rate -- 5.1 percent in 2004. Nicaragua' s progress on reform has also qualified it for $4.5 billion in debt relief under the Heavily Indebted Poor Countries Initiative.

We applaud Nicaragua' s stated intention to use the funds freed up from debt payments to help establish a solid foundation for lasting prosperity for its citizens. And, of course, as an additional strong stimulus to growth, much needed foreign investment and job creation will come from Nicaragua' s participation as Ambassador Portman described in the U.S.-Central America Free Trade Agreement.

This is a winning combination, democratic and economic reform, growth-oriented development and free trade. And those together will make the blessings of freedom real for the Nicaraguan people.

And now it is my honor to present a courageous leader, who has taken determined steps to root out corruption, to improve government transparency and to institute economic reforms. I give you our valued partner in democracy and development, His Excellency, the President of Nicaragua, Mr. Bolaños, if you will join me here at the podium.

(Applause.)

PRESIDENT BOLANOS: (Via Interpreter). Thank you very much, Honorable Ms. Condoleezza Rice, Secretary of State of the United States, Ambassador Portman, Mr. Applegarth, the Foreign Minister of the Republic of Nicaragua, members of the Nicaraguan delegation that are with us this afternoon, special guests, ladies and gentlemen. In the name of God and of Nicaragua, I have come to Washington to thank the noble people and the Government of the United States for the generous solidarity, which they have always afforded the people of Nicaragua .

On this occasion, our thanks go for new assistance in fighting poverty through a special investment of $175 million, a grant through the program of the Millennium Challenge Account. This visionary program will play a pivotal role within the context of democracy, freedom, national security and trade. This new kind of assistance makes it clear that there is a shared commitment in the task of reducing poverty and creating prosperity and we are committed to this.

President Bush put it this way: "By taking the side of liberty and good government, we will liberate millions from poverty prison. We will help defeat despair and resentment. We will draw whole nations into an expanding circle of opportunity and enterprise. We will gain, through partners in development and add a hopeful new chapter to the history of our times."

For a country to be eligible to the Millennium Challenge, it must show progress in the fight against corruption, reducing poverty, investing in its people, fiscal discipline and strengthening of its democratic values. The achievements attained in Nicaragua, in all of these spheres, are due to the will of its people to live in peace and in democracy.

Corruption, without a doubt, is one of the main problems faced by Latin America and today we can say proudly that Nicaragua has become a standard bearer in the fight against that scourge. Over the last three years, Nicaragua has attained significant progress economically. In 2004, we became the country with the greatest economic growth in Central America . Foreign reserves in bank deposits reached the highest levels in our history and our country was able to record the highest increase in direct foreign investment in the area. Moreover, it is the safest country of Central America and it is seen as a country of opportunities.

Our future and our hopes, nevertheless, are today threatened by the appearance of a new rising dictatorship, born of a harmful agreement between two politicians of the archaic Latin American system of political bosses, who have not kept up with the times. The people themselves, in massive demonstrations, have told them that their days of power are now over. And I' m sure that this dictatorship will not be able to sustain itself for much longer.

The Millennium Challenge Account Initiative is a new system based on citizen participation and good development practices. Our recently completed national development plan, which strengthens citizen participation, precisely matches the principles presented by the Millennium Challenge Account. Through a participative process, which is mature and offers a vision for our country, we concluded that in the western part of the country, we had the optimum conditions to launch this program with the funds of the Millennium Challenge Account, which will convert this fertile region in what it once was, the engine of development of the Nicaraguan economy.

The resources will be devoted to meeting the most pressing demands in the country and in the western part of the country, such as the insecurity of land holding, the lack of infrastructure, difficulties in production and environmental degradation. Improving the situation of land holding will improve access to credit for producers and business people. Roads will generate jobs and they will reduce the time and the cost of transporting production. The program will support thousands of producers so that they can have access to technology, sell at better prices and increase their added value. We will increase the use of irrigation for production and for environmental improvement. Exports will increase dramatically. This program will be enhanced by the opportunities that we hope will be open by CAFTA, since it will allow our producers to have access to the largest market in the world and to be able to strengthen Central America as an area of prosperity, of employment and of representative democracy.

By improving the quality of life of millions of people in the region, both CAFTA and the Millennium Challenge Account will contribute to improving the national security situation of the entire region, with favorable effects in turn for the United States . Those who are against CAFTA, like Daniel Ortega, do so because they see it as an instrument of prosperity, security and the rule of law. Let us not give them that satisfaction by not passing CAFTA.

Ladies and gentlemen, the Millennium Challenge Account was not designed to work by itself. It must be combined with other measures that stimulate trade, investment and democratic practices. For our region, CAFTA is paramount. CAFTA is far more than an economic issue. It' s also a security issue. CAFTA will consolidate the gains made by our region during the past 15 years in stabilizing democracy, the market economy and a safe neighborhood for the U.S. If Congress were not to send a message that the U.S. is now turning its back on the Central American region by rejecting CAFTA, the negative economic, political and security implications of such a message will be difficult to assess.

By sowing the seeds of development all around the world, you will reap democracy, good governance and a safer America .

Secretary Rice, Mr. Applegarth, Ambassador Portman, again on behalf of my country, I thank the American people for the traditional generosity and assistance given to the Nicaraguan people.

Thank you and God Bless Nicaragua and God Bless America . Thank you.

(Applause).

MR. APPLEGARTH: Thank you, Mr. President, for those stirring words. You know, one of the great things about Millennium Challenge is that we get to work with very good partners and you' ve just seen an example of what good leadership and the quality of our partners are, so thank you again very much.

At this point, I' d like to invite you, sir, and Secretary Rice, Ambassador Portman, Mr. Hackett and others to witness the signing and of course, Mr. Caldera and I have got some work to do, so thank you.(Compact is signed).

(Applause.)

With that, I would like to thank you all for coming and to enjoy, I think we have a little bit to eat and drink around here and I hope you' ll enjoy yourselves. We have to do a little bit more work in the side room, but we' ll be back shortly.

So, thank you all very much for coming.

(Applause).

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