New MCC CEO Hosts Public Outreach Meeting
November 14 , 2005
Transcript
MCNAUGHT: Good afternoon. I'm Fran McNaught, vice president for domestic relations, and your opener today. I want to welcome you to the MCC's ninth outreach meeting this year.
It is, of course, the first meeting we've had in our new quarters. As you know, we've moved from Rossyln over the Memorial Day weekend. Our first few months were spent in construction but now we're ready and happy to show off our new place.
Since our last meeting, which was on the occasion of signing the Georgia compact, much has happened. Our second threshold agreement, the one with Malawi, was signed for $21 million, and then we've made great progress on our compact with Armenia, Vanuatu and Benin and of course we've selected our eight threshold countries.
Shortly Sherri Kraham, our director of Development Policy, Kevin Saba, our Managing director of threshold, and John Hewko, our vice president of operations, will talk more about the selection process, our threshold program, and give you an update on implementing and developing our new compacts.
But first, it's my great pleasure to introduce our new CEO. He started one week ago today; put President Bush on a plane in Brasilia and 10 minutes later got on a red-eye himself to Washington and started in. With that, I'd like to introduce Ambassador Danilovich.
(APPLAUSE)
DANILOVICH: Thank you all very much for coming around on a Monday afternoon and taking time out of your busy schedules, not just to check out the new CEO, but also to express what I hope is a continued faith in this organization, because I very much believe it deserves your continued faith.
I'm very happy to have this first opportunity to keep you informed on some of the things that we've been doing here, and as you know, every public outreach meeting is a vital source to us. Your feedback is very important to us, and I look forward to meeting with all of you on a regular schedule.
I'd like to tell you a little bit about myself. I'm from San Francisco, from California. I was born and raised there. I went to Stanford. After Stanford -- I got a degree at Stanford in International Relations, and I went immediately after graduation to London, where I was in the maritime industry for two decades.
I had a shipping company which transported primarily crude oil but also other cargoes around the world. We were involved in a lot of other activities aside from simply transferring cargo and shipping. We were very much involved with the financial institutions in a number of European and Asian and Middle Eastern countries as well. So it wasn't simply a transportation business but also involved in a number of cross national, political and economic matters also.
I sold that business and was involved in other activities and along the way got involved in Americans Abroad both for President Bush 41 and also for the present president. I served on a Panama Canal commission for a number of years in the mid-'90s and was chairman of the Transition between our government and Panamanian government before the handover of the canal to the Panamanians.
And in 2001 I was the ambassador in Costa Rica until 2004 and most recently ambassador in Brazil for a year and a half, up until last weekend as Fran said. So I literally put the president and the secretary of state on an airplane and took one here.
It's been a very busy week -- not just this morning. Not only was it my first day in the office on Monday, but on Tuesday as you probably know we had our FY '06 Selectors' Board meeting, and there were a number of other firsts last week and as I mentioned, this was my first, and I look forward to that.
I must tell you that I didn't expect to be in this position. I had thought I, as a political appointee, would see out my time in Brazil. I very much enjoyed my time there. It's a complicated position given the relationship with the United States and Brazil. And in retrospect, I can't tell you how very honored and privileged I feel to have been given this opportunity.
I very much believe in the Millennium Challenge Corp. I believe in the people that are here. I believe in my colleagues. I believe in their commitment.
And I can assure you that this organization and its goals are in place. It came as a surprise that I was asked to do this and I intend to work very hard to make sure that any shortcomings that the organization may have had in the first 21 months of operation are put behind it and that we can look forward not only to a rapid rollout of further compacts but also a substantial creation of transformative compacts in the not-too-distant future.
As you well know, this is somewhat constrained by our resources, but nevertheless I think it's important that the initiatives that this organization was founded on be fulfilled. It seems to me there have been very few presidential initiatives and congressionally mandated organizations that have such broad support brought before us, at least on a conceptual level, as this one has.
And time and again, you know, where I took part in the Senate Foreign Relations Committee, not only in the meetings I had on the Hill but also other people in Washington, they expressed again and again how enthusiastic they were about the initial concept and how much they believe in the organization and how they felt that they were somewhat disenchanted and somewhat I think disillusioned by the ways things have progressed how difficult a startup organization can be. It's enormously complicated, and I'm sure many of you appreciate that.
Prior compacts are nothing really to scoff at. Neither is the immediate problem we have with Armenia and Vanuatu. But I'll get into that a little bit further on. I'd like to introduce some other new faces around here but in addition to myself, there is Matt McLean who's my chief of staff; Rodney Bent who's taking over as vice president for policy and international relations; Gary Peel, who was in the film business to help out in admin and finance, and I'm very happy they're a part of our team and happy they joined us to keep things moving around here.
As I mentioned, we had our third selection board meeting on November 8th, last Tuesday. The board selected 20 low-income countries, 16 of which have been selected in prior years. The new lower income countries selected were Burkina Faso, East Timor, The Gambia and Tanzania -- the three newly selected lower income countries for FY '06 awarded countries, El Salvador and Namibia, and the third country, Cape Verde, has moved up from the lower category for lower income category.
We also chose five new threshold countries Ukraine, Moldova, Indonesia, the Kyrgyz Republic, and the Republic of Jordan. And just by way of an update, I spoke to the President of Moldova this morning and was very happy to hear from him of course he was very happy to be apart of the program.
But I was very pleased with his responses with regard to what they had already started to do in preparation for their eligibility, which was to appoint a point person one of their first deputy prime ministers in that role which is critical for us to have a contact person in the country so we can move things forward, and secondly, that they had already worked fairly thoroughly on their concept paper and hope to get a proposal to us in the not too distant future…that's the kind of story. It's always good to see good on the other side.
As you know, these eligible countries are presented with the opportunity to develop and propose a program for the MCA Assistance. The proposals have the potential to be truly transformational, accelerating growth and lifting a great number of people in these countries out of poverty.
This opportunity is also a great challenge. Not every country will reach a compact with the MCC. It requires commitment, leadership and action on the part of all eligible countries. It also requires that on our part as well.
As you know, we put great emphasis on this being a country-sourced program. That being said I'm sure you're all aware that many of these countries wouldn't be in the position that they're in if they had the ability to produce these proposals. These countries become aware of how they produce these proposals almost too positive and too (inaudible) from El Salvador and their engagement on this program program. But it's a good thing to see. It's better to have that than not to have it.
Where do we go from here? What we've done in the selection meeting I have undertaken a few administrative changes in the organization, none of which are particularly revolutionary those which I hope will streamline the process with regards to our developmental process and maximize the efficiency in the organization.
We have merged development, policy, threshold programs and international relations into one department of policy and international relations; PIR Rodney Bent is the head of that. And secondly, we've merged inner-functions of the NSA into coalition and country of the (inaudible) analysis department into programs evaluations program.
We've made a tremendous effort within the organization to publish more detailed guidance on our Web site to help countries identify the steps that need to be taken to develop proposals and to work within the MCC process.
During the panel, John Hewko, here on my right, will tell you more about some of the ways we improved initial guidance to eligible countries and how we plan to work with countries to move forward from our third selection process.
As I mentioned, we have five compacts signed to date. We have committed over $900 million to eligible countries that are in the final stages, nearing the first stage with Benin Vanuatu and Armenia. Those will be literally rolling out in the next week, certainly before Christmas in the case of all three of them.
It's my intention to keep this organization completely the initiatives and focused focus on fewer countries with enough money, given our limited resources, so that we have a transformational impact on these countries. I think that's what it was set out to be rather than having a lot of countries with a little bit of money where you can't have an impact.
I'd like to again thank you for your willingness to join us today, and I'd be very happy to talk to you further and take any questions you may have. And if you'll allow me a bit of berth after a week and a day in the job to answer your questions, and what I can't answer I'll turn over to my vice president.
But I look forward to hearing from you and look forward to meeting with you again not only in a group but individually, and I look forward to your questions at this time. Any questions?
Yes please. Thank you.
UNKNOWN: My name is Nicole Christiansen and I represent Jefferson consulting group and I want to (inaudible) and (inaudible) Cape Verde (inaudible) but since then (inaudible)
DANILOVICH: Listen, there is certainly a commitment small, medium and large company and I'd like to discus that in further detail with you but certainly that's not the case but I hope you are successful
O'CONNELL : Hi. My name is Laura O'Connell and I'm with the Women's Edge Coalition and I want to welcome you to your new role.
DANILOVICH: Thank you very much. Thank you for your nice letter, by the way I read it about a month ago. Thank you.
O'CONNELL : Oh, good. I'm glad to hear that. I'm glad we share the enthusiasm that you mentioned earlier that many people have at the MCA. Our organization is specifically focused on how gender integration can be a key principle of effective development, because we know that when development reaches women it has a transformational effect on poverty issues as well as on economic growth and where women are not it constrains economic growth.
And I appreciate what you're saying that the MCA is a startup, and I think that while the MCA has a strong commitment to the best practices in development, there has also been a learning curve in the development of their organization on these issues. It hasn't been able to reach the level of being institutionalized in the MCA in terms of how it really does business from a consultative processes to the complicated the monetary analysis and evaluation.
And I'd like to hear some of your thoughts about how that might happen. Thank you.
DANILOVICH: To cut to the bottom line immediately, we will be hiring someone in the immediate future to specifically concentrate on (inaudible) all the way through to the end of (inaudible) to the end of the program. So that's something we will institutionalize immediately.
Secondly, the organization, as you pointed out and as I would like to point out myself are completely incorporated this entire process of gender involvement, gender rationalization into in our world, the problem (inaudible) on any level, on almost any subject. And it certainly hasn't been easy in this process from the very early stages but we intend to actually have someone here that will be specifically devoted to accomplishing that.
MIGUEL : Thank you very much and welcome. I'm Sophia Miguel from Constituency for Africa and my question is I really appreciate these public outreach meetings and these are many different faces in Washington, DC and the US and how do you see in the future are you willing to provide that transparency using the connections that you already have, close contacts in terms of NGOs, how do you see the transparency in terms of the future?
DANILOVICH: Sure. I'll tell you, coming from the private sector, certainly my experience in the private sector, whether it be in shipping or banking or publishing in my general experience in business and in my experience in government whether it's been with Panama or Costa Rica or Brazil, I have never seen an organization which is as transparent as this one is. I almost found it shocking in the beginning and thought to have such outreach.
Now I think it's great. I think it's terrific. I think it's valuable to this organization that we get as much feedback as we possibly can. I will look closely at what we've done in the past which from what I've seen is very positive and very successful and see if we can continue that and see if we can improve upon it but I actually, from what I know of the organization, am very impressed by how transparent it is.
Yes?
UNKNOWN: I'm Dianna Gregor reporting from BNA Publications. To the issue of including these lower middle income countries, are you required by law regarding to do that?
DANILOVICH: Sure. Sure. Sure. No, no, I'm very aware of it and understand it and quite frankly we were required by Congress in FY '06 to consider lower middle income countries and the World Bank per capita income so therefore we did so and as I mentioned there are three countries that are in that category El Salvador, Namibia and Cape Verde.
We had a very healthy debate prior to the board meeting as to where we should go there and also realizing that our budget has been cut but we don't have the resources and if we're to have any impact, we have to be transformational, we have to have a large comprehensive, well thought out, well constructed projects and proposal in these countries or we will not be able to implement wouldn't be doing good things with the money we have we want to be able to kick start these economies and to generate capital and to create a system which generates more capital and start the wheels of capital, and the wheels of poverty reduction and get the economic growth turning and that's the whole thrust of this organization.
So it's a little bit complicated going into LMIC category and my thought is that we should probably go slowly we could probably just focus on the lower middle income countries can have a greater impact in the countries that we have chosen that we have chosen, however in the LMIC category for FY '06 I think we can have a transformational.
UNKNOWN: (inaudible)
DANILOVICH: The board could have chosen not to select any country although we were correct in considering countries in that category, not to choose them.
UNKNOWN: Steve Shipper from the Services Group. "Can you discuss your detailed relationship with USAID?
DANILOVICH: Well, I'll answer the question generally, if you don't mind, Steve, and then have our) panel answer greater detail. Our relationship with USAID is very healthy. I've had a relationship with Andrew Natasios. I've had an opportunity to meet with them at the last board meeting and we have met with them a number of times prior to the board meeting since I've been back in Washington.
Once people, I think -- I hope that USAID understand I hope for a long period of time to fulfill its goal. I think that now that Millennium Challenge Corp is not a threat, is not a hindrance or inconvenience to USAID and those sensitivities that perhaps are invalid. We pride on our ability to work in the field with USAID, the Department of Homeland Security.
It's hard to combine a number of things. It's hard to work together when people have never had to do that before in the security field and also the agency field but I think our particular mandate is so restrictive what we are doing is really very limited and the scope of what USAID is doing is so large and so important that there's room for both organizations to function and really bask in different direction and different ways.
We do have some conceptual relationships with USAID what I am aware of but I'll leave the panel to flesh out these programs in a bit more detail.
BOUDREAU : Good afternoon. My name is Carol Boudreau and I'm from the University George Mason. We would like to take this opportunity to welcome you to MCC I have one question, which is that we would like to know what you intend to do differently from you predecessor in order to, A, help the organization keep its initial promise which you mentioned earlier, and also and also homes your legislative-mandated mission
DANILOVICH: Could you repeat B?
BOUDREAU : How do you plan to honor your legislative mandate mission? Thank you.
DANILOVICH: Thank you. I'm certain that I don't know Paul Applegarth by the way but I'm certain that he worked very hard for this organization and as I mentioned I envy anybody that have to get involved and start an organization. It's not an easy thing to do and I'm really in no position whatsoever to assess any confusion that was made at the organization or at my predecessors every organization (inaudible) and to make sure that the message we convey today is understood by your community, by the NGOs, by the Congress.
And by all concerned that we intend to very much focus on what we consider (inaudible) to be our congressional mandate and the whole (inaudible) Lugar, or Hyde, or (inaudible), or Feingold or anybody else I've spoken to by the way, drop back into the fold again "We've strayed a little bit, put us back in the loop" because we want to be committed to this because the MCC is an outstanding program itself and we want the MCC to succeed.
I don't think it will be that difficult if we harness our energies if we focus our energies, if we have the enthusiasm and work very strongly together as a team to achieve those objectives and I actually I was interviewed by a couple of newspapers last week and asked what are the chances that this might not work very complicated they were contemplating failure. I don't think this organization going to fail. I think we have the ingredients for success we have an enormous storehouse of in-house talent that I think should be focused and energized, and I think that's happening so I think this organization will go after perhaps having tweaking things as a startup organization.
Twenty-one months is not a long time, but I now think we're ready to put that behind us, stop the startup phase and go into full force.
UNKNOWN: I'm Sloan Berkman from Texas A&M University. Will there be room for the universities to get more involved?
DANILOVICH: Thanks very much. Thank you very much. Thank you.
(APPLAUSE)
MCNAUGHT: Let me just now turn it over to our panel and our first speaker is going to be Sherri, Kevin, and finally John, and then after they have made a couple of presentations each we'll open it up again for your questions.
And I'm going to do a little furniture moving right now right now and say those of you on this side of the room can actually see the panel.
KRAHAM: Good afternoon. First, to address your question about (inaudible) I'm not sure is an acronym everybody understood, but I forgot the first couple of words, but it's Land Grant University Consortium, and we have been talking to academic institutions and policy institutes and organizations like that association that actually do implementation in countries there are quite a few reasons before we establish ourselves.
But I'll let my colleague, John Hewko, who's the vice president of country programs, talk about how we are very different than typical bilateral donor programs in that we are not doing the implementation of the actual program.
So that really is a strong distinction. I'll let them address that more fully. I just wanted to make sure everybody understood your acronym.
I won't cover what Ambassador Danilovich covered, which is the countries that were selected, but I did want to emphasize one point, which is this really -- the program is about rewarding countries that have put in place a sound policy framework. Rewarding them with substantial funds and the flexibility to design their own program and, you know just to implement their own program.
We also want to create incentives for other countries to adopt good policies that would help their economies grow and also help them to qualify for NCO assistance.
So in addition to the threshold program, which is designed to assist countries that are committed to undertaking the political, economic and social reforms necessary in order to qualify, an improve policy performance for its own sake, we also have decided in one case to suspend a country whose policy has deteriorated.
We suspended Yemen from the threshold program due to significant deterioration over the past year. In order for Yemen to reinstate its eligibility or for MPC-4 to reinstate eligibility to participate in this policy reform program, the threshold program, the board would need to see that Yemen is moving in the right direction.
We are serious about evaluating countries' performance on an annual basis and in between selection processes. In addition to working with threshold countries, MCC throughout the year works with countries that are interested in qualifying for MCA and committed to making these reforms, and we believe that's an incredibly important part of the NCO program.
And we want to create those incentives for countries to adopt policies. So we engage in this policy dialog with countries that are interested in learning more about the indicators and how policies are evaluated and to measure their own progress and we look forward to continuing and strengthening that dialog.
And we would welcome input from any of you that are working with countries out in the field and your experiences.
I'm here to answer questions about the selection process, but I will turn it over to my colleague, Kevin Saba, who is the managing director of the threshold program, for more about this year's program.
SABA : Thank you, Sherri.
I just had a few points to make about the threshold program in general, and hopefully I'll get to the question that was asked about USAID in my presentation. But I have probably three items to cover. First, the selection process very briefly which is something that's already been started.
We are very pleased with the selection of the five brand new threshold countries and we're also pleased that they joined our thirteen other countries in our program three of those countries that have already been mentioned Tanzania and Burkina Faso have graduated to what we call eligibility. I think that speaks very well to the significant work that those countries have done to prepare themselves.
Secondly, an overview of the threshold program which may be redundant for many of you, but very quickly, the single focus of the threshold program continues to be on policy reform. This is fundamental to the MCC mission that we -- what we believe is a prerequisite for sustained economic growth and poverty reduction.
And our current countries selected by the board for eligibility are invited to engage in a two-step process, the first step being a concept paper, the second step being threshold component. The concept paper is really just a simple outline on the part of the government, a very short outline, of what they intend to -- the ideas they have in terms of reform or reforms that they intend to achieve.
Once that is approved the country then graduates to the second phase which is the threshold plan itself, which is really just putting the flesh on the bones of the threshold program which the concept paper what are the results, go to the benchmarks that will measure the success and look at the budget that's involved, the actions explained and outlined et cetera.
It's similar to a business at stages of the development, the concept paper stage and the so-called threshold clearance stage those items are submitted to USAID in the field (inaudible). USAID in the field then provides an integrated process but at the end of that process provides recommendation to USAID in Washington.
Washington then goes through a broad, interagency consultative process usually involving Treasury, Justice, State, USTR and sometimes others, and ultimately a recommendation is then promulgated and forwarded to MCC for consideration. So we try to keep it as simple and streamlined as possible preferring a simple two-step process.
The third point I wanted to talk about is where are we and how can we improve. We've just come up on our first year anniversary if you will of the threshold program, given that the initial countries were selected in September of '04, and I can say unequivocally that the greatest amount of satisfaction for me personally threshold program so far is to see the level of commitment that's been exhibited by the countries towards the program.
It wasn't that long ago that we first rolled out the program there was concern about how countries would be able to take on difficult reforms and challenge the status quo take on a high risk in return for little reward. The little reward is immediate dollars that might be available for the threshold program budget that we set up for MCC funds.
What we found is that countries are extremely committed, and we have 15 probably 13 concept papers have been approved. The thirteenth is currently at USAID, so 13 out of 13 countries have forwarded their concept papers.
Two of the countries have already approved threshold plans, and we have five additional threshold plans that are in the pipeline at USAID under review. They include Tanzania East Timor, Sao Tome and Principe Zambia and Paraguay. And Albania, I'm told, is shortly right around the corner.
Having said that, what do we need to do to improve? I think, as we talked about already, it's natural for a startup, if you will, to focus on core business which is the compact. Now that we're where we are, I think it's also natural that we look at other elements of the operation and realize how they bring as a whole of MCC.
And I think there's a recognition that we could do a lot more to shorten the time that it takes the threshold plan to actually be submitted and approved. We feel that threshold should be a primary source of business flow eligible countries.
And they also should be a primary source of information to the board as it deliberates who should be eligible and who should not be eligible
Threshold countries should be in a position present what they grasp
To be able to present a very positive case.
We also think secondly that threshold countries can do more in terms of separation for if they do become eligible that process can be done more quickly. We're thinking of putting together a consultative team that's ready to go essentially move that process (inaudible) putting together a program that's ready to go addressing fiduciary matters.
So we think we can do more in the area of threshold transitions to eligibility. I think with the assistance of USAID we can do more to decrease what I call bureaucracy creep. Sort of bureaucracy both and slow down the process a little bit. We have to be attuned to that, and we have to, where we can, eliminate that.
And I think USAID and MCC to move as rapidly as practically possible (inaudible) to identify those and to empower and to recognize and encourage the country the characteristics of being pushy, we feel is country ownership. And we welcome that.
And on a positive note, I learned this morning that Moldova. I think that things will move quicker in the threshold program.
With that, I'd like to turn it over to John Hewko, Director of Country Relations.
HEWKO: Thank you, Kevin, and thank you to all for joining us for this our vice president for operations, and I'd like to take a few moments and give you a sense as to and where we are with these countries and what we will do with the six eligible countries that were chosen last week.
As the Ambassador mentioning in his opening remarks, we now have twenty-three eligible countries. Three are lower middle income countries. We've signed five compacts -- Georgia, Honduras, Nicaragua, Cape Verde, and Madagascar worth over $900 million dollars in total. Three more countries are in the pipeline Benin Vanuatu and Armenia, and then several others following behind them.
We have now received proposals from 16 of our 17'04 and'05 eligible countries the concept paper from the 17th we hoped to get in very shortly (inaudible) so in terms of our 17 '04 and '05 countries they're all very much in play obviously in different stages in terms of their compacts process.
Now, with respect to the six new countries that we have just chosen how will we handle these countries? How will we be moving forward with them? I've very much knew our NCO and folks on the ground negotiations in the package the organization accumulated involved on the ground as we've interacted with 04,-05 countries and very much believe that as important partners along with the countries at MCC to develop these proposals.
So what is it that we will be doing (inaudible)? We held a meeting last week with the ambassadors of all 23 countries and provided them with an A-Z briefly on how MCC operates and will operate. We walked them through the four stages of our process that of course is the development stage, the due diligence stage, compact negotiations stage, and the implementation stage.
We will be shortly providing to each of these countries a very detailed guidance package
Big, fat binder that we have accumulated a number of lessons learned over the past year as we've interacted with 04,-05 countries and want to make that -- the lessons learned and that guidance available to the new countries.
So what are the specific lessons that we're building on? We will be articulating these things to the eligible countries first it's absolutely critical that they, as soon as possible, appoint a full-time point of contact. Those countries that we're moved fast with the ones that have really appointed a full-time point of contact as the authority to speak on behalf of the country to MCC.
Second, we find it very helpful when a country puts together a finance core team. A full-time team to work with us. First, that full-time team that manages and consults in the process (inaudible) results of the process with the private sector (inaudible) non-governmental organizations and as the priority (inaudible) from that consultative process (inaudible).
Third, high-level political involvement we found it extremely helpful that core team direct pipeline to the political leadership of that country so that when they raise issues with us we know that these issues are truly important to that country and found that having that direct pipeline and actively engaged in the highest level of political involvement concurrently facilitate the process.
Fourth, as I mentioned, they will be asked a timely program and a participating consultative process we take this seriously. Do not come to us with a proposal that has not gone through a full consultative process. Some of the countries we've worked with in '04 and '05 are told to go back because we felt the proposal was not thorough and complete enough. We do take this process seriously.
Next, it's very helpful to have an engaged ambassador in Washington. We've found that an actively engaged ambassador extremely helpful in keeping the process forward.
We'll be asking the countries to think early about the implementation mechanisms in terms of how we're going to implement this compact (inaudible) that are going to be responsible for implementing the compacts.
What is it that we're trying to achieve not only in terms of the output (inaudible) but the outcome, not what they will exploit but what (inaudible) that investment (inaudible) how much (inaudible) poverty be reduced how much sustainable growth will (inaudible) rather than wait later.
And finally, by the number of people that come up as we put together a number of / the implementation records urge the countries to think very early about these issues now rather than later. So these are some of the lessons learned that have been incorporated into the guidance that we are preparing for the countries.
In addition to that outliner will be updated guidance on development proposals, will be detailed guidance on consultative processes what we mean by timely meaningful and participatory policies which will be the MCC's, will be the interim environmental guidelines, will be fiscal accountability elements guidelines in other words clear indication and clear guidance to the country of what we mean by fiscal accountability and how we're going to ensure the money spent is how it is supposed to be spent.
There will be guidelines for economic analysis, what we mean by economic-related return and how the MCC is going to analyze results from an economic growth perspectives and poverty reduction perspectives. There will be a template that we will provide to the country of what our investment memorandum. This is the memorandum that has been prepared by our investment committee for final approval so we can go forward and enter into compact with the country.
We are, up front, telling the country this is the end game, this is the product that our technical experts will be shooting for let you know now what it is that there isn't going to be a mistreatment this is a document template to which our team will be working.
We're going to give them guidance on 609 G funding that we have available for countries pre- compact to help them flush out parts of their proposal to help them with banking data problems. Some of the design element, and we also will have -- we're developing guidelines for our immediate plans.
Finally, we've been discussing a possible policy to give priority to those countries that meet target dates. Again, we'll be shortly providing them a very detailed guidance packet which it can build on the lessons learned and hopefully now make the compact much clearer the new countries than it was perhaps for '04-'05 countries.
We are getting ready to make trips out to countries to explain to those countries how we're going to be operating. We will be engaging earlier than we have in the past with the new countries for longer periods of time on the ground, early on in the process.
We will also try to have the countries that have already signed compacts share their knowledge, what they've learned, their own lessons learned with our new countries and hope to organize a sort of MCC summit that would put us in contact with all of our countries, all 23 of them to meet you Washington and some centrally located point where they can sit down and interchange ideas and discuss how they can move the process more efficient way.
And then finally the consolidation that the Ambassador was referring can help us make the process smoother. So that, in a nutshell, is what we're doing going) forward now with our new countries.
Finally, I'd like to open the floor for questions pertaining to implementation because we are now entering into the implementation phase with five countries that we've signed compacts with. Compact signing is obviously an important step. We need to have the compacts signed.
But really, the bulk of the work is now beginning with those 5 countries. We need to start disbursing money so we can start alleviating poverty and leading sustainable economic growth. Now, that implementation will also have (inaudible) we need to have our resources on the ground to with the country.
We now have in place resident country directors in all five of our compact countries in addition to that we have the resident, deputy, and country director an administrative assistant and other support persons available, so right now we're looking at four people, all full time. As you can see, this is a very lean staff to manage large projects in several of our countries (inaudible).
Again that's in complete nutshell information about our new country (inaudible) and I think the panel would be more than happy to take your questions.
LONG : Thank you my name is Shelly Long. I'm (inaudible) I realize you have -- you said you had guidelines (inaudible) guidelines, but I was -- my question is whether after the Millennium Challenge Corporation has incorporated environmental or ecological monitoring into these projects which promote economic development and increase agricultural production.
KRAHAM: Thank you. The interim environmental guidelines that are currently in place are on the Web and we would encourage you to review them. We are in the process of adopting a final draft and are currently doing consultations with those entities that provided comments during our public comment period.
But the answer to your question is yes. We have a tremendous environmental and social impact team called the Office of Environmental and Social Impact. Right now we have a staff of six. They have, as Ambassador Danilovich said, recently joined the Office of Monitoring and Evaluation, and that's very consistent with our approach to these compacts to compact development anyway.
Monitoring and evaluation specialists, economists, and people that understand the data go into these countries from the very early stages of the process and work with countries to develop those baseline figures and benchmarks for monitoring success. And so that new alignment, I think, makes a lot of sense for many reasons.
But the answer to your question is yes, and I would definitely encourage you to connect with Margaret Kuhlow, the director there, or any member of her team, and I will be happy to give you her information.
We also have a new site on our -- page on our Web site with greater emphasis on actual resources, and it's got information about additional information regarding selection as well as the environmental guidelines, so I'd encourage you to look at that.
MICHAEL : Thank you. My name is Jim Michael. I'm a consultant with International Development Corporation. I wanted to ask if you could explain just a little bit more about the selection process for the threshold countries. I think I understand the MCA eligibility process.
And I appreciate very much, Kevin's explanation of how the threshold process works once a country is eligible for that program, but I'm a little less clear about the group of countries that are not quite eligible but almost.
KRAHAM: Well, this process has also evolved over time based on our lessons from the early trials. The selection of threshold countries has been done on an annual basis, at the same time for FY '05 and FY '06, at the same time that we select eligible countries so as the board considers policy performance against the NCO criteria, which is on our Web site.
We use three broad policy categories ruling justly, which is government, fighting corruption, investing in people, the government's investments and policies on health and education, and encouraging economic freedom, and micro economic policies.
The board looks at countries to determine whether or not they qualify and, at the same time, looks at whether countries are close. And so the criterion for that program is the same as for the real program or for the compact program.
Countries that are close and have demonstrated a commitment to reform in the areas where there are weaknesses -- and we look at whether or not the threshold program can actually help accelerate or promote the reform efforts that are ongoing already.
So that the crux of it. The board selected threshold countries this time as they did last time. And that will happen presumably in the future
DIAMOND : My name is Jack Diamond from the Academy for Educational development. 21 months ago people around the area were very supportive of the MCC and its success. You were very straight forward with government, helped with the compacts with some of us involved (inaudible) countries (inaudible) support the development of civil society institutions in these countries others of us have worked over indicators development over the years.
Now, as you pointed out in addition to -- are there certain areas that you would challenge us to give you more support As you move forward in the next year I think it's a fair statement to say that within the next few years the extent to which you show demonstrable results and show the clear links between your investment and achieving results on the ground we all would be better off for that. What would be your challenge to us?
HEWKO: Well that's a very good question. I would throw the challenge out on two levels. The first challenge would be consisting our new countries they will now be engaged in the consulting process. We very much encourage and hope that you and your counterparts will get very actively engaged in this process.
It should be our eyes and ears on the ground and if you feel the process is not going well, where it's not being as inclusive and participatory as it should be, you should let us know, and that if you think there are vital parts of society or the private sector element, they need to be engaged in society.
Going forward with the countries that have signed the compacts, again, it is the countries that will be implementing and I think here as just sort of my own personal observation, I think one of the neatest things, for lack of a better word, that we've put in place for now five countries that have signed compacts is that responsibility for implementing and making things happen in most of the countries is with a board.
And that board will have an overwhelming majority of government ministers authority and representative but they will also have voting members with the civil society and the private sector and most of them will have an advisory board often a side made up of civil society and the private sector to advise the two voting non-governmental representatives.
That lets you see firsthand how the fact that this process requires active engagement, transparent engagement, with the representatives the board members and others it's incredible. I mean, I had a meeting with a couple of ministers why do we need these folks on our board, we're the government, we're democratically elected, and we're ultimately responsible.
MCC is about their participation. Now, their participation doesn't mean that they win. We will have a majority government that will ultimately control but they will have equal access to information.
In the countries that we've signed with please re-engage because those countries have a broad spectrum of society and there will be voting members on the board. Implementing it itself each of the countries will now be running procurements for those who have signed compacts procurement's set tender to implement the various activities from international set tender there's no bar from participating we need to be clear and transparent.
So on that level, I would encourage you to obviously get involved and continue to be our eyes and ears on the ground. Ultimately, we will be able to control the situation if we're hearing from your people that, wait a minute, under their program there was supposed to have been something done in this village, and nothing has happened. We need to know about that. You need to be our eyes and ears on the ground.
KRAHAM: Thank you. Stepping back from implementation, I want to applaud AED and all of the other members, the interaction working group that has played a very active and constructive role in helping us develop our lessons learned and to make sure that we engage women in the consultative process and a variety of other things that we've already hit on.
And I think our success depends on us appropriating those lessons learned on a regular basis, and so we would encourage you to stay engaged and tell you our door is open, so we'd love for you to come directly to us and provide us any insights you might have on what's working and what's not working. (inaudible)
HOGAN : I'm Nadine Hogan and I'm a consultant on, international development my question is as many of the people in this room and the organizations and institutions that they represent, if they're helping the countries to develop an informal base plan does that make them ineligible, then, to get on the compacts for implementation that come out.
HEWKO: (inaudible) there's no hard and fast tract that you even need to look at each circumstance. I need the facts but we clearly want the process. We are trying to be transparent, open and put all the cards on the table. This process will be rigorous.
HOGAN : If they assist a country in developing their agricultural program, would it be a disincentive for them to do that where later they were told that they would be ineligible for the compact?
KRAHAM: I would point out that when John was talking about engaging in the domestic consultative process that he was really encouraging you to get your counterparts in country engaged that we want this process not to be externally driven, this consultative process, but to be internally driven based on what the people in the country say they need.
And as many of you have extensions or parts of your organizations active in these countries, it makes sense for them to get engaged. But what we would be looking for us a situation where they were driving the process. We want the countries to drive the process, and we want the citizens of that country to drive the process, so just make that distinction.
MCNAUGHT: Let me thank you all for coming and tell you that we will, of course, be continuing to have public meetings around all activities. I also urge you to go to our Web site, which is full of information. And if you aren't sure whom to contact, use the e-mail address on the Web site, and we're very efficient at getting them around to the right folks.
Again, thank you for coming.
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