A great achievement in Georgia

It is no secret that Georgians, and particularly Georgia’s poor, have confronted considerable conflict and economic uncertainty during the past few months.  Yet, even in the face of this, the country’s resolve to address systemic poverty has not been deterred or diminished.  Progress continues on Georgia’s MCC compact, which is primarily focused on rehabilitating infrastructure for transportation, energy, and municipal water services.  These infrastructure improvements are creating jobs, facilitating access to markets, boosting trade links, improving travel time, reducing vehicle operating costs, providing communities with a constant supply of potable water, and delivering heat to homes and businesses. 

I traveled to Georgia last week and heard from Georgians firsthand about their daunting situation.  Despite the difficult times, I also sensed the strong resolve of our Georgian partners to replace poverty with prosperity, and uncertainty with economic stability.

While in Tbilisi, I joined Prime Minister Grigol Mgaloblishvili to sign an amendment to Georgia’s MCC compact that increases MCC’s development assistance under the compact by $100 million, bringing the total to $395 million.  This additional funding will be used to complete projects relating to roads, regional infrastructure development, and energy activities.  The majority of these projects were part of Georgia’s original concept for its compact, which can now be included and realized with this additional funding.  Georgians, who themselves outlined and advocated for these projects as important in reducing poverty and stimulating growth, will build on the compact progress already evident and will use these funds to pave additional roads, build wastewater networks, and make more headway on their country’s national energy strategy.  Projects like these will go a long way toward boosting investor confidence in Georgia, contributing to economic stability, and promoting economic growth that will improve the lives of millions of Georgians living in poverty.  I invite the public to learn more about this amendment to the U.S. Government’s poverty reduction compact with Georgia through MCC’s web site, where the full set of documentation (including Congressional Notifications, Fact Sheets, Country Status Reports, and other information) is available.

In Paris with Agence Française de Développement

The fight against global poverty requires as many partners as possible. No nation, or donor organization, can shoulder or effectively tackle this problem alone. That’s why en route to Tbilisi, I met in Paris with my counterpart in the French government to sign a memorandum of understanding (MOU) with Agence Française de Développement (AFD).  The French share America’s commitment to eradicating global poverty, and this MOU memorializes the intent to deepen in-country cooperation between our two development agencies in sectors such as microfinance, land tenure, legal and judicial reform, transportation infrastructure, and agriculture in countries where we are both working.  Especially in places such as Africa, this enhanced cooperation will make our poverty reduction efforts more effective.  We had an early example of this cooperation last month when MCC and AFD co-sponsored a workshop for African countries to share lessons learned regarding land policy.    

Results-oriented partnerships between MCC and partner countries like Georgia and between MCC and other donors like AFD will lead to improvements in the lives of the world’s poor in ways that matter for their long-term prosperity.

This has been an exciting few days for MCC. President Bush signed our largest compact to date, with Tanzania, in Dar es Salaam this past weekend, bringing unprecedented attention to what MCC is achieving with partner countries—poverty reduction through sustained growth. The comments made by both President Bush and President Kikwete during the signing ceremony capture what I believe is already clear through our work: People expect and demand results and accountability for these funds, for reforms that will bring about prosperity and stability. Poverty reduction is so much more complex than a single program or a single effort. It requires solid policy reforms to establish the institutional foundation upon which these investments can be based. I am currently in London en route from Africa back to the United States and have had the chance to speak with the international press regarding the MCC. One thing that clearly struck a chord with journalists ranging from the BBC to major media outlets in the pan-Arab press was that MCC’s work is a clear manifestation that the U.S. isn’t “imposing” anything on these countries. The poverty reduction proposals come from the countries themselves. We cannot force a country to adopt a project or a policy reform that does not come from the partners. Only this way will they have the backing and wherewithal to flourish. I told the press that MCC, together with the historic investments in programs on the African continent, are a clear statement that the President, the U.S. Congress, and the American people understand the urgency for poverty reduction in Africa. America grasps the extent of the problem and we are working to address it.

While in London, I met with UK Secretary of State for International Development, Douglas Alexander MP, to sign a memorandum of understanding to solidify cooperation between our two organizations. Our work together has been extremely positive to date, and this new agreement will help the two organizations—whether in the field, in places like Africa, or at headquarters, in London or Washington—better share data, and work through coordinated programs. The agreement demonstrates a willingness at the highest levels in our governments to deepen our already positive collaboration. The agreement strengthens practical cooperation in Africa where concrete cooperation is already underway. It also addresses sector and technical cooperation issues ranging from infrastructure to growth diagnostics to impact analyses. It makes sense that our two organizations should look for ways to work together. We owe it to our respective taxpayers whose funds we administer. Poverty reduction is a bigger problem than any one country—or any single donor—can handle on its own. I am pleased that the agreement I signed with DFID does more than more than just talk about coordination. It is a tangible example of donor coordination.

I am returning to Washington from my trip to Morocco having witnessed firsthand the potential of one very unique aspect of our compact there—the support for artisans, tourism development, and the environment in Fez Medina. This innovative component of the compact will enable artisans to increase the quality of their goods by supporting access to training and support in much-needed areas such as: modern production techniques, business management, access to bank and microcredit loans, the construction of modern, environmentally friendly kilns, and pottery workshops. While only a portion of the $698 million MCC compact with Morocco, it speaks volumes about how integrated strategies in poverty reduction affect multiple sectors, groups of people, and have great potential for growth. I was struck by the historical beauty of these crafts. Even more impressive, however, was the desire of the Moroccan artisans to transform something of beauty into something that will transform their long-term well-being. Helping craftsmen conserve their traditions while prospering from the process is a scenario where not just the Moroccans, but all of us, win.

I came to Morocco to review first-hand the progress on its $697.5 million MCC compact. It has been a fantastic, productive trip thus far, both in terms of the people I have met, their message of enthusiasm and gratitude for the work we will achieve together, and the clear commitment from our partners to make this compact a success.

MCC’s compact with Morocco is diverse and spans a wide geographic area. Beginning in Marrakech, I first traveled west through Chichaoua and Essaouria provinces, two of the poorest in the country. I was also able to visit areas where we will implement the innovative, $300 million Fruit Tree component of the compact. Talking with the potential beneficiaries of our programs, the hard-working local farmers, I learned first-hand about how MCC’s work will improve irrigation techniques in Morocco. The irrigation systems in these targeted areas have been used by local populations for centuries. These systems are built by the communities and demonstrate great ingenuity, including the capture of water from springs and the construction of clever zigzagging networks of earthen canals. In an effort to build on the wisdom of the past and help render it sustainable — and environmentally-friendly — for the future, MCC assistance will be used to rehabilitate these irrigation systems — covering an area of over 50,000 hectares — to allow for more efficient use of scarce water and increase revenues through higher yields and improved quality of crops like dates, olives, almonds and figs.

In the coastal town of Essaouria (which people were quick to tell me was the setting of Orson Welles’ 1950’s classic Othello) I met with Morocco’s first and only woman serving as mayor, Asma Chaabi, and the Director of the National Office of Fishing (ONP). Together, they presented an overview of the challenges small-scale Moroccan fisherman are facing and the anticipated benefits MCC investments in the sector will have in the very near future. These fishermen were themselves involved in the development of this project and are confident that it will result in benefits for their households and their community. Working with ONP, MCC will invest $116 million to improve the competitiveness of thousands of small-scale fisherman across the country through improved landing sites and port facilities. MCC assistance will facilitate the development of wholesale fish markets in support of hundreds of mobile fish vendors.

So far, I have been tremendously satisfied that the MCC program is off to a fantastic start. It is clear that this compact is a successful, tangible partnership between the people of Morocco and the United States. Countless Moroccans, ranging from local farmers to government leaders at all levels, have expressed gratitude to the American people for investing in their future. It is clear that the talented team in place so far, led by Moroccans themselves, has the professional skills and deep determination to successfully and fully implement this program. I have also been touched by the candor and friendship of the many hardworking farmers and fishermen I have met along the way who are looking for a better life, one that will be a reality thanks to MCC’s work.

Last Friday, I met with a number of groups in Miami who have taken an active interest in MCC’s work in Latin America and throughout the world. There is an obvious connection between our work in the Western Hemisphere and the communities of South Florida, but what impressed me about these groups, and the questions they posed, was their level of engagement on issues related to poverty reduction worldwide. During a meeting with students and development experts at Florida International University’s Summit of the America’s Center, my fellow panelists and members of the audience delved deeply into the issue of civil society participation in our MCC compacts. It was clear from their comments that a part of our model for development assistance that resonates deeply is that of meaningful, broad-based consultations with the public. I hope that people realize that the consultative process does not end when we sign a compact. It is present during the creation, continues throughout the life of a compact and, in many ways, is directly related to the steadfast policy of transparency that distinguishes MCC. I push my staff—in Washington and abroad—to put as much information as possible about our dealings with countries (including our indicators, scorecards, reports) on the internet and to share our data about how we do business in our partner countries and in Washington. When people want to talk about MCC, we want to engage with them. We owe it to the people in the partner countries where we work —and to the taxpayers whose dollars are working hard to build the bridges, roads, irrigation systems, and schools overseas—to be transparent in our actions undertaken on their behalf.

Another interest repeatedly expressed during the day’s events (which included a meeting sponsored by the Global Leadership Campaign and Center for Hemispheric Policy at the University of Miami) was corruption. There were many questions about MCC’s corruption indicator, a measure a country must pass to be eligible for MCC assistance. Corruption is a killer of long-term economic development. I raised this point during other meetings this week (with CSIS as part of their “Smart Power” series and with the Inter-American Dialogue). We’ve got to open our eyes when we talk about how this problem affects burgeoning economies. We can’t simply think of corruption as something that happens when a public official takes a bribe or skews his balance sheets. There is a lot that goes into corruption—which is why it deserves a hard look. MCC has put together some ideas on the issue which you can read on our web site’s anticorruption page. Corruption is a complex issue, and not always easy to measure, but it has to be a part of our equation when we are investing US assistance funds. At the end of the day, we in America pay for corrupt practices abroad because it limits our ability to do business honestly and efficiently and jeopardizes our opportunities here at home.

I got an earful regarding corruption this past week—which tells me that we are on the right path by helping to fight it through the MCC process. It’s just one of the reasons why what we do in places like Malawi or Madagascar matters to people in Miami or Maryland. As well it should. (Let me know what you think at info@mcc.gov).

“I can now give it my best and reach the goals I set for myself.” These were the words of Jennifer, one of the students who today received a scholarship for technical and vocational education in El Salvador. I was pleased to be part of this ceremony and watch as these teenagers were recipients of something more than money for school – today they received a chance to succeed. This pilot scholarship program for youth in the impoverished Northern Region is just one aspect of a broad initiative on education that MCC is proud to fund as part of our $461 million compact with El Salvador.There is a clear link between education and economic development in El Salvador, where human capital is one of the country’s more promising – and precious – resources. Infrastructure improvements are greatly enhanced by our sustained investment in the Salvadoran girls and boys that will be shaping the economic and social future of their country. The scholarships that we awarded today underscored this link and pointed to a visible commitment by the government of El Salvador to invest in the education of its people. President Saca and I discussed this issue at length during our trip to and from the events today in Chalatenango.Another issue at the forefront of my meetings in El Salvador was the environment. Working in developing countries, MCC recognizes our responsibility to help partners prioritize social and environmental considerations within their compact design and implementation process. Many people are aware of the environmental indicators that are already part of our selection process. Fewer people know, however, of the environmental impact assessments and other considerations that are an integral step in our ongoing work with MCC partner countries.In the case of El Salvador, the environment is the subject of the country’s first-ever strategic environmental assessment. I was presented with a copy of the report this morning as part of what has been a very public discussion of the issue here in the country. A product of MCC’s collaborative relationship with the World Bank, the report takes a hard look at both the individual and cumulative environmental impacts of development projects in the Northern Region where MCC and other donors work. This has enabled identification of key opportunities for strengthening the framework for social and environmental sustainability, and filling gaps in the institutional structure at both the local and national levels.This is the sort of cooperation that makes MCC a sound investment in these partner countries, and a good investment of U.S. taxpayer dollars. Our assistance is helping make our neighborhood – in this case the Western Hemisphere – a more democratic, more prosperous, and more stable place.

My schedule today began in Nicaragua and ended in El Salvador – two very different countries that nonetheless brought to the forefront one common concept: “country ownership” of MCC projects. Those who follow the MCC and our compacts in 16 countries worldwide know that we talk a lot about this principle. Today in El Salvador, meeting with the men and women of FOMILENIO (the Salvadoran entity charged with the implementation and monitoring of our $461 million compact with the country), I re-emphasized the important role this concept plays in our efforts to fight poverty.

“Country ownership” is a fundamental part of the MCC process from beginning to end. It is not a solely academic concept or intangible idea – it is one of the driving forces behind MCC programs. When creating a compact, negotiating it, and implementing it, the country’s government, civil society, and ultimately those who benefit from our assistance, must be fully invested in the programs. They need to be the ones participating in oversight of activities to ensure results are achieved. This is definitely the case in El Salvador. During the in-depth conversation this afternoon at FOMILENIO headquarters about the status of the El Salvador compact, it was clear that the Salvadorans are aware of the challenges – and tangible benefits – of carefully designing projects that will benefit the country in the long term, projects that will reduce poverty and sustain economic growth.

El Salvador’s MCC compact, four months since entering into force, is in the early phases of implementation. I want people to understand, as I have come to appreciate, what exactly goes on in our partner countries during this phase. The Salvadorans who are implementing this program are setting up the structure that will make the roads, water, rural business development, education, and rural electricity programs planned for the next five years work effectively. They are working with a firm to manage procurements efficiently and transparently. Over the next six months, they are purchasing over $150 million worth of goods, works, and services that will make these MCC projects a reality. They are putting out advertisements (locally and internationally) for the very best experts who can design and carry out these projects. As is required with any solid business plan, they are mapping out – in a detailed and professional way – the sequence of events that will maximize the investment that comes from MCC, which is the investment of precious American taxpayer resources.

The more I talk to the people on the ground who are designing and implementing MCC projects in our partner countries, and specifically today here in El Salvador, the more I am struck by the professionalism of the teams implementing these programs. They are experts in their field, and are people whose backgrounds match the task at hand – implementing the largest MCC compact in this region. I told my friends at FOMILENIO that I was encouraged by their attention to detail and their focus on efficiency. Finding the right balance between responding rapidly, yet responsibly, to poverty reduction is the only way to ensure that the results will stick and the benefits will last.

Speaking of details, the MCC is currently looking at ways to better present and communicate details of the implementation of our projects, to the U.S. taxpayer. Transparency is our responsibility at MCC as much as it is the responsibility of the entities working in our partner countries. I welcome feedback on how we can better communicate the progress and successes in our compact countries, many of which I have seen first-hand in my travels. (Feel free to contact MCC at info@mcc.gov at any time.)

FOMILENIO shared some powerful images with me, of a few of the projects underway in the northern region of the country that so desperately needs infrastructure improvements to stimulate its economy. I am attaching a few of them here so that you can see the current appalling condition of a sampling of the roads that will be rebuilt and the river crossings that are in desperate need of bridges.

While the day ended with a discussion of progress on the ground in El Salvador, it began with an exciting, momentous day in the history of U.S.-Nicaragua relations. I was honored to be able to preside at the opening of the new U.S. Embassy in Managua. Together with Ambassador Paul Trivelli and an impressive array of representatives from the full spectrum of Nicaraguan society, I was pleased to participate in the official opening of an impressive, efficient, and beautiful new structure that is a worthy symbol of the U.S. government’s constructive engagement in that country.

The scene tonight in the plaza of Chinandega was truly remarkable. Thousands of people packed the town square to celebrate the positive cooperation that takes place when two countries work together to combat a common enemy—poverty. President Daniel Ortega, the directors of MCA-Nicaragua, local mayors, and government ministers joined me in awarding land titles to over 700 Nicaraguan families in the northwestern region of the country. These households now have full land titles, can tap into much-needed credit, and fully enjoy the security that comes with property ownership.

Property rights are a key element to reducing poverty, especially in regions that depend on agriculture for their economic livelihood. I am proud that MCC, working with the people of Nicaragua, local NGOs, donor organizations, and the private sector, have already helped provide legal and secure land titles to nearly a thousand people in this country, and in other countries where we are implementing compacts globally. Thousands more titles will be distributed this year alone.

Today I was able to officially launch the rehabilitation of the Villanueva-Guasaule road that connects Nicaragua with neighboring Honduras. This 17-kilometer stretch of the Pan-American Highway network has long been neglected and its poor state has impeded access to markets, basic social services, and the untapped economic potential of international commerce. By reconstructing this important paved artery, Nicaraguans and Central Americans will be able to take full advantage of free trade by getting their goods to market in an efficient and cost-effective manner. Increased exports will mean increased income for Nicaraguans, and these roads are a critical part of that effort.

This evening in the city of Chinandega, President Ortega and I toured an agricultural fair where local farmers talked to us about how improved roads, irrigation systems, and innovative methods for commercializing their products are increasing their crop yields and incomes. It is always reassuring to hear—repeatedly—“thank you, MCC” from grateful beneficiaries. What was even more rewarding tonight, however, was to hear of their big plans for expansion. These farmers want to pull themselves out of poverty, and they are doing it with the help of MCC. They prove the old adage that “there is no such thing as a small entrepreneur, but rather an entrepreneur with a small business.” MCC wants to help these rural entrepreneurs take full advantage of their resources and talents to work in a smarter, more profitable, and environmentally friendly way for Nicaragua’s future.

These are the results that MCC is seeing on the ground in places such as Nicaragua. We are helping people help themselves. We are facilitating a dialogue between rural populations and their local leaders. We are creating a space in which we can collaborate in a constructive way with governments despite political differences. We must look forward to the 21st century in places such as Nicaragua to fight a common enemy—poverty. President Ortega ended his speech this evening in the plaza of Chinandega thanking the United States government and American people, proclaiming “Viva los Estados Unidos!”. Quite a milestone. These are the results of the careful investment of taxpayer funds in programs like the MCC. Stability in this region is a tangible benefit for the people of the U.S. and I am proud that MCC is leading this effort in the Western Hemisphere and around the world.

See photos of January 23, 2008 activities.

(Note: Ambassador Danilovich will preside at the inauguration of the U.S. Embassy in Managua on January 24. He travels to El Salvador to review implementation of MCC’s $461 million compact. Check back for new blog entries.)

I want to take advantage of my current trip to Central America to launch the MCC’s latest initiative to better communicate with our stakeholders in the U.S. and abroad – the “CEO Blog.” This is intended as a direct channel of communication to offer my first-hand perspective of our programs and the results that our assistance to partner countries is producing on the ground for the benefit of the world’s poor.

Today’s itinerary in Nicaragua has achieved significant milestones. I was pleased to meet with the MCA-Nicaragua government board members and discuss how to best support the $175 million compact currently in its second year of implementation. We talked frankly about ways to maximize the resources that are part of the compact, even in a world where the dollar’s rate has dropped sharply and where the rising costs of oil are making large-scale infrastructure projects more expensive than ever. Our conversation confirmed what I already knew – the MCA-Nicaragua board and foundation staff are professionals who are dedicated to this process and who are committed to implementing the best possible project that will benefit Nicaraguans in the northwestern region and the country as a whole.

My meeting with President Daniel Ortega was cordial and productive. His comments to the press following the meeting underscored his appreciation for the impact the MCC is having on the people of this country and their long-term prospects for real economic growth. I was pleased to hear him state to the national press that, even though he had first expressed doubts about the program, he was now more engaged with the program and aware of the time and complexities involved in the construction of durable, high-quality roads and other infrastructure improvements. I pressed the president to continue to advance the reform agenda that will ensure Nicaragua’s continued eligibility for MCC assistance. He and the ministers who were in attendance demonstrated an active engagement with the MCC program. This sort of “country ownership” of the implementation process is needed at all levels of government and civil society in all of our partner countries, and I am happy to report that there is strong evidence of it in Nicaragua.

I impressed upon President Ortega that, despite our occasional political differences, the Millennium Challenge-Nicaragua program represented a way our two countries are cooperating in a constructive and beneficial way. The compact with Nicaragua offers a vehicle by which the U.S. government, through the generosity of the American taxpayer, can engage constructively with Nicaragua on an issue that matters to all of us: the reduction of poverty through economic growth in an environment of political stability.

Ambassador Trivelli graciously opened his home to our delegation from Washington this evening so that we could meet with government, business, civil society, and political leaders (representing all parts of Nicaragua’s political spectrum). These events always offer a casual atmosphere where we can have a discussion about the compact, the local political situation, and the progress of our poverty reduction programs. One thing was clear from my conversations with Ambassador Trivelli’s guests: There is a deep commitment to the success of the MCC-Nicaragua program within all parts of society. As I stated to one journalist this evening, I believe firmly that poverty anywhere is a threat to prosperity everywhere. Together we are facing, and countering, that threat.

Tomorrow I will help distribute land titles and inaugurate the rehabilitation of the Villanueva-Guasale road in the north of the country. Read about the events here tomorrow.