Agri-Food Expo Highlights How MCC Investments Are Creating Jobs in Georgia

Posted on December 17, 2010 by Jim McNicholas, Resident Country Director, Georgia

On November 29, 2010, Millennium Challenge Georgia (MCG) hosted a closing ceremony and exhibition for its agribusiness development program.  To celebrate this milestone, 60 of the program’s 283 agribusiness projects showcased their products at an Agri-Food Expo, with Georgian government officials as well as bankers and supermarket chains in attendance.

Since 2006, MCG and its implementing partner, CNFA, a U.S. non-profit, have co-financed 182 primary producers, 43 businesses projects that provide services to farmers, and 58 businesses that enable value-added and value-chain production.  MCG has invested $15.9 million in this program and, according to CNFA, Georgian citizens have invested $20 million more.  As of early autumn 2010, MCG reported that 2,613 jobs had been created as a result of agribusiness development program activities. 

At the Agri-Food Expo, Mamuka Tskioridze and Malkhaz Gabunia displayed their orange persimmons neatly packed in wooden boxes, alongside fresh salad greens and herbs.  With their company’s 1:1 matching investment and MCG’s $149,000 co-financing, these entrepreneurs have expanded their greens export business both in terms of volume and the types of products being offered to Belarus, Moldova and Ukraine.  “In the past, every product we bought from farmers we had to pack and ship that day because if not we would lose the product,” said Mr. Tskioridze.  “With the cold storage warehouse [which was also co-financed by MCG] we now have time to collect more products from our farmers and export using fewer trips.” 

One of the most successful projects to emerge from MCG’s agribusiness program was the establishment of 33 for-profit, privately owned, Farm Service Centers throughout Georgia.  Before the centers were opened, farmers had to get their supplies from stalls in various local markets.  These decentralized transactions made it difficult for farmers and their suppliers to build relationships and communicate with each other.  Now, one-stop Farm Service Centers have been established in every region in Georgia and have generated 100,000 transactions.  In addition to serving as a commercial exchange, the centers also provide opportunities for the exchange of information — knowledge warehouses where the Ministry of Agriculture, various Community Based Organizations, and individual farmers can showcase new farming techniques and relay important announcements.

Georgia’s Prime Minister, Nika Gilauri, closed the Agri-Food Expo by noting several program results, “More than 2,600 jobs have been created and these jobs are not just short-term jobs; they have long-term perspectives and provide long term opportunities…  Millennium Challenge Georgia proved that investments can be made in this sector and be successful.”

High Notes in the Highlands

Posted on December 15, 2010 by Patrick Fine, Vice President, Department of Compact Operations

I returned to Lesotho last month for the first time since I worked on a USAID project at the National University 23 years ago.  After more than two decades, I was struck by the impressive progress that Lesotho has made in reducing poverty through a combination of private investment, foreign aid, and the country’s own resources.

I was in-country to assess progress on MCC’s Lesotho Compact, which focuses on improving the nation’s institutional capacities: Projects range from water and sanitation systems, to healthcare facility construction, to financial-sector reform.

MCC and the Government of Lesotho are building a large water system to serve five cities (Maseru, Roma, Teyateyaneng, Masenod and Morija); the new system will supply hundreds of thousands of liters of water and alleviate the need for women to haul water long distances. Improved healthcare delivery projects include the reconstruction of 138 health clinics, outpatient departments in the country’s 14 district hospitals, and a state-of-the-art reference laboratory, blood collection and processing center, and a dormitory at a local health training college. The Compact also funds a number of initiatives to improve the policy environment to extend financial services and formalize land tenure.

I’ve noticed significant changes since I lived in Lesotho during the mid-1980s.  The road network is significantly expanded and seemed to be in better repair.  In the capital, I got disoriented by a new four-lane bypass road that allowed us to zoom across town in a fraction of the time it used to take.  New office buildings, residential areas and businesses have transformed Maseru, and instead of people routinely trekking across the border to South Africa for supplies (border passes that allowed one to skip the passport queues used to be a status symbol), South Africans along the border now come to Maseru to do their shopping. 

Perhaps nowhere is Lesotho’s transformation more evident than in the health sector, where MCC is playing a large part in development efforts.  Under the dynamic leadership of Minister Dr. Mphu Ramatlapeng, the Government of Lesotho is developing one of Maseru’s close suburbs, Botsebelo, into a health enclave with a spectacular new public national referral hospital that is being financed and will be run by an innovative public-private partnership with South Africa’s largest private health provider, NetCare. 

Also in Botsebelo, the old leprosy camp has been converted into a hospital to treat patients suffering from multi-drug-resistant tuberculosis (MDR TB).  There is also a new pediatric clinic, and MCC is financing a state of the art medical lab.  This will without a doubt be the most advanced medical hub for hundreds of kilometers and, like Maseru’s growing business district, is likely to attract South Africans from across the border. 

Along with upgrades to 138 clinics and 14 district hospitals, the Government of Lesotho is implementing independent projects to transform its health sector.  In addition to the new national referral hospital, I visited a prototype clinic in Maseru that provides a level of care—including primary services such as antenatal consultations and HIV/AIDS outreach, testing, counseling, and treatment—that was previously not available.  As a result, daily patient rates have more than tripled since clinic reconstruction and a second doctor has been added to handle the load.

My visit to the Metalong dam site, and my travel along one of the water distribution routes, provided a good “before” snapshot of the project.  The Government of Lesotho (GOL) has completed a number of advance infrastructure projects, extending and tarring the road, installing an electrical substation and compensating (and, where necessary, resettling) affected residents in accordance with MCC’s strict environmental and social assessment guidelines.

It was exciting to see project development finished after years of MCC and MCA-Lesotho’s hard work.  All feasibility studies are now complete, the GOL has its independent engineers and project management team on site, contracts have been awarded and the contractors are expected to begin construction of the water treatment plant in December.  One feature of this project is a testament to the GOL’s sophistication in planning ambitious projects:  The entire Metolong dam project is jointly supported by 10 financing partners, including the GOL, the Kuwait Fund, OPEC Fund, Saudi Fund, BADEA Fund, the European Union, the World Bank and the Development Bank of South Africa.  Involvement of multiple funding partners makes the project more sustainable and more likely to succeed in the long run.

Many times during my visit, my Lesotho counterparts commented on the ambitious nature of the Lesotho Compact.  The many policy initiatives—including laws to regularize land tenure, to give women full economic rights under the law, and operational regulations to ensure maintenance of new facilities—make this not only ambitious but an example of the Government of Lesotho’s genuine commitment to building both the infrastructure and the policy environment necessary to attract investment, stimulate enterprise formation, and drive sustainable development to reduce poverty. 

I came away from this visit optimistic about the long-term prospects for MCC’s investments in Lesotho.  Project targeting and development appear to be far enough along to be accomplished within MCC’s five-year time frame, and the GOL has appointed a top notch team to work with MCA-Lesotho to implement the Compact.  Finance Minister Thahane, Health Minister Ramatlapeng, and Natural Resources Minister Moleleki are all three development MVPs with international reputations for competence and delivering results. 

Mrs. Mohapi, the CEO of MCA-Lesotho, is one of those indomitable leaders whose experience and wisdom inspire confidence.  Finally, Prime Minister Mosisili was unequivocal about the Government of Lesotho’s commitment not just to financing new facilities, but to instituting the policies necessary to ensure they become and remain productive assets that support broad based economic growth.

On the front lines of development, where we deal with day-to-day challenges, frustrations, and setbacks, it can be easy to lose sight of the broader sweep of progress.  My visit to Lesotho showed me how far the country has come in the last 20 years.  This progress is living proof that foreign assistance, when combined with a genuine commitment to good policies, really can change lives.

 

Fighting Corruption:  Practices, Process and Progress

Posted on December 9, 2010 by Jolyne Sanjak, Managing Director, Technical Support

In 2010, MCC made significant progress in implementing its Fraud and Anti-Corruption Policy and procedures to prevent, detect and remediate fraud and corruption in MCC-funded activities. Today, International Anti-Corruption Day, is a time to review progress made in 2010 and determine where MCC is headed in 2011.

In 2010, MCC rolled out a new training course to assist Millennium Challenge Account entities (MCAs) in effectively understanding MCC’s policy and their role as our partners in fighting fraud and corruption. The course trains MCAs in methods for recognizing corrupt acts, protecting the Compact against risks of fraud, and reporting wrongdoing. The training is mandatory for all MCAs and MCA staff. MCAs in Lesotho, Namibia, Tanzania and Senegal have already received this training; Mali, Mongolia and Morocco are slated for January and February 2011.

As part of a comprehensive, consistent and explicit approach to preventing, detecting and remediating fraud and corruption, MCC’s policy requires that the MCAs put in place project-specific Action Plans to reduce risk. The Action Plans detail project-appropriate methods and mechanisms by which the MCA will manage risks of corruption; each plan includes a detailed timetable and monitoring strategy. These Action Plans are also made public in accordance with MCC’s policy of transparency and accountability. An example of an Action Plan can be found on the MCA Burkina Faso web site. Others will be posted as the Action Plans are finalized and approved.

Corruption is difficult to eradicate. With commitment and perseverance, however, MCC and its partner countries can control and reduce the threat of corruption to achieving Compact goals of sustainable development, poverty reduction and economic growth. International Anti-Corruption Day reminds us that we can achieve this goal by working together with renewed resolve.

American investments in agricultural productivity and airport renovation lead to growth in Mali

Posted on December 8, 2010 by Jon Anderson , Resident Country Director, Mali

Many people have heard of Timbuktu as a legendary place that symbolizes the end of the world. While it may no longer be the greatest university city of its time, Timbuktu still thrives as a major town in northern Mali.

The country of Mali in West Africa may seem like a long way from the United States. In some senses, it is. Mali is one of the poorest countries in the world and is located on a distant continent in an unstable region, far from any seacoast. But there are good moral, economic, social, and cultural reasons to be interested in Mali.

Like Americans, Malians are proud of their history and proud of their rights and liberties. Through its $461 million MCC Compact, Malians are taking ownership and responsibility to develop their economy and reduce poverty in a manner that is sustainable and that reflects local priorities.

MCC Compact activities are increasing agricultural production and productivity, the backbone of the Malian economy, through two projects that will stimulate long-term economic growth.

The first consists of a large-scale integrated agriculture project that is providing not only road and irrigation canal construction to improve production and access to markets but also agricultural and financial services, community development, and social services and land rights. Through MCA-Mali, the Malian-run agency implementing the MCC Compact, the area is undergoing a physical, social and economical transformation. About 5,200 hectares of low productivity arid farming and grazing areas are being transformed into highly productive irrigated farms. Schools, clinics and wells for potable water are being constructed, and the foundation is being built for more and better farming through physical and policy improvements. Land titles will be provided to small farmers for the first time, providing incentives to invest and opportunities to get credit. People have accounts at micro-finance institutions for the first time.

The second major Compact project focuses on Mali’s airport. Because Mali is landlocked and its one major airport has one of the shortest and oldest runways in West Africa, the volume of goods that can be safely transported in and out of the country is severely limited. The project is rehabilitating and extending the runway as well as building a new terminal and associated infrastructure. These improvements, together with management system improvements and private-sector partnerships, will improve airport security and efficiency while allowing for new small-business airport concessions that will create jobs and increase revenue. It will also allow thousands of small farmers greater access to lucrative markets. The airport-based MCC-funded projects are expected to result in increased economic growth through greater trade and tourism.

These activities, based upon the sound principles of effective and results-focused development, are helping the people of Mali transition out of poverty. America’s security and prosperity are inextricably linked to the security and prosperity of other nations, including the world’s poorest. Mali may be far from the United States, but U.S. investments in there will ultimately benefit Americans through increased trade and enhanced prosperity in Mali and West Africa.

Timbuktu may sound mythical but U.S. investments are having real impact and achieving real progress.