Yesterday the Millennium Challenge Corporation (MCC) signed a $540 million, five-year compact with Senegal. This is the 11th compact with a sub-Saharan African country and the 19th compact globally. The signing, which took place on Wednesday morning at the U.S. Department of State, was presided over by Republic of Senegal President Abdoulaye Wade and U.S. Secretary of State Hillary Clinton. The compact itself was signed by Senegal’s Minister of Finance and Economy Abdoulaye Diop and Acting MCC CEO Darius Mans.

At an afternoon event hosted by Congressman Donald Payne (D-NJ), a packed room on the Hill heard from Representative Payne, Darius Mans, Representative Sheila Jackson-Lee (D-TX), and President Wade, among others. It was evident that each speaker was proud of this new compact, the partnership it reflects, and the potential it has to further development in Senegal. Rep. Payne lauded President Wade for his commitment to democracy, and Rep. Jackson-Lee said that the Senegal compact was an “…affirmation of President Wade’s commitment to democracy, tolerance, and the future of his young people.”

In his address, President Wade said “I am proud to be the president of a country that the American people believe deserves support for our development.” He praised the U.S. for recognizing the critical role infrastructure plays in development, a factor that Wade himself has made a priority for Senegal.

Darius Mans welcomed this new partnership, and said that the compact reflects Senegal’s own development priorities, emphasizing long-term growth through infrastructure and agriculture. This compact, he said, signals that Senegal is “open for business” with the private sector, and that the next step will be to deliver on these promises. Mans expressed his hope that the MCC compact with Senegal will provide frameworks for lasting growth in the country.

The compact, which is one of the largest signed to-date, focuses on road rehabilitation and irrigation, with an eye towards bolstering agricultural productivity and food security in Senegal, and boosting rural markets and trade. The plan will involve rehabilitating crucial roads in northern and southern Senegal, which is intended to help agricultural communities get their goods to local and international markets and improve access to services like schools and hospitals for rural communities.

The compact will also fund a water and irrigation management project in the Senegal River Valley to increase crop yields. Senegal currently imports 70 percent of its rice, which makes it vulnerable to the dramatic increases in food and rice prices that took place as recently as last year. The irrigation program is designed to increase crop production as a way of improving Senegal’s food security.

One is excited about the Senegal compact, as you can see in the press statement we released today; we look forward to following its implementation and results.

-Beth Adler

Today the Millennium Challenge Corporation (MCC) approved a five-year, $540 million compact with Senegal—the 11th compact to be signed with a sub-Saharan African country. Senegal was declared eligible for an MCC compact in May 2004, and has spent the time since developing their proposal. The compact aims to reduce poverty and spur economic growth by investing in projects in the transportation, irrigation, and agriculture sectors.

In the MCC’s press statement released today, acting MCC CEO Darius Mans said, “On behalf of MCC, I want to congratulate the people and Government of Senegal for developing an innovative compact that will make a tremendous difference in reducing poverty through economic growth by bolstering food security and transportation connectivity. The Senegalese have laid out a clear vision of improving the quality of their lives through a results-oriented plan. MCC welcomes the opportunity to work together to achieve these compact goals.”

The compact intends to invest in rehabilitating crucial roads in northern and southern Senegal, which, the MCC believes, will enable agricultural communities to get their goods to local and international markets and could mean improved access to services like schools and hospitals for rural communities. Senegal’s compact will also fund a water and irrigation management project that will develop up to 10,500 hectares of land in the Senegal River Valley. Senegal and the MCC hope that the new irrigation scheme will also help prevent the abandonment of 26,000 hectares of land by revamping drainage canals and ensuring secure land-tenure for farmers. The irrigation project is intended to increase crop yields, an essential step towards food security for Senegal, which, as the MCC notes, currently imports 70% of rice consumed in the country.

The compact is expected to be signed on September 16th; be sure to check back here as we will post additional details on the blog.

-Beth Adler

Today we attended a “Bloggers Brunch” hosted by our friends at the Millennium Challenge Corporation (MCC). Acting CEO Rodney G. Bent talked with us a bit about how the MCC operates and interacts with other government agencies like USAID and DfID. You can read about the MCC’s relatively short history here.

Of particular interest in our conversation was the pursuit and prioritization of transparency within the MCC’s various programs. Mr. Bent walked us through a new web feature on the MCC’s website on “Monitoring and Evaluation”. Here, users can track and follow the MCC’s progress and efforts at both the sector- and country-level. While still a work in progress, this feature is part of a larger desire of Mr. Bent’s for greater transparency in foreign assistance efforts amongst governments and organizations. While obviously a risk in part, foreign assistance can be greatly enhanced and improved with our willingness to admit what doesn’t work and share what does.

We really appreciated the candid conversation and are excited about the MCC’s work both offline and online.

-Virginia Simmons and Chris Scott (pictured below, left and center respectively)

New Hampshire native, Jim Bednar, the Millennium Challenge Corporation’s resident Ghana director, has a great op-ed in today’s New Hampshire Union Leader – the only state wide newspaper in New Hampshire.

In addition to the progress that is being made in Ghana, Jim notes former NH Senator Sununu’s recent trip to Ghana with ONE. Mr. Bednar speaks of his interest in international development as the same “pragmatism [that] defines why Americans should remain engaged in making the world better.” As you know, President Obama will be visiting Ghana later this week. Check back on the ONE Blog for further coverage of the trip.

Excerpts below, full op-ed here

The interconnected global community means that the prosperity of others is closely tied to our own. The severe economic crisis and the recent threat of a health pandemic are stark reminders that borders cannot insulate us. That’s why smart U.S. engagement in the fight against global poverty and disease matters as much to the poor in Ghana as it does to Americans in New Hampshire and the other 49 states.

Ghanaians strive for a better tomorrow. Here in West Africa, their commitment to stability and growth means greater development and trade. The country’s poverty rate dropped from 52 percent in 1992 to 28.5 percent in 2006. Yet there’s still more to do. Ghana’s poor live a reality of poverty few Americans can fully fathom. In a country where agriculture is the economy’s backbone, employing 60 to 70 percent of workers, a typical farmer knows the burden of extreme poverty.

…..

I think many Granite Staters would agree with MCC’s approach: We expect partner countries to lead their development through homegrown ideas and local implementation. This creates sustainable solutions of their own making. We demand practical results that deliver change in the lives of the poor. Such transparency and results-driven accountability ensure the responsible stewardship of U.S. tax dollars.

I can see how the Ghana-MCC partnership is beginning to make a difference for the poor. Road repairs will help farmers reach markets. The first of 60,000 farmers to be trained through MCC programs have learned to think more as business men and women, and banks are giving them credit. Seventy-five schools have been renovated, with hundreds more to be built.

-Matthew Bartlett

Chairman Nita Lowey (D-NY) and Ranking Member Kay Granger (R-TX) exemplified bipartisan leadership in navigating the $48.8 billion State-Foreign Operations bill though the House Appropriations Committee yesterday afternoon. After a few amendments, the bill passed by a near unanimous voice vote demonstrating solid support for live-saving, effective programs.

Over the past few months ONE members across the country contacted Members of Congress on the importance of fighting poverty, and it is clear that ONE has been heard. But no resting on our laurels, there is much, much more to do. The full House will take up the bill after the July 4th holiday, and the Senate Appropriations Committee will begin its work around the same time.

On our key programs, some funding levels are very good, and on others, we need to do more. For global health programs, the House Appropriations Committee provides $7.7 billion, which includes fully funding PEPFAR at $5.259 billion. The global health amount also includes $750 million for the Global Fund to Fight AIDS, Tuberculosis and Malaria, and there is an additional $300 million in the Labor-Health and Human Services bill for a total of $1.05 billion, but the need is $2 billion, so we have some work to do in boosting the funding for this critical, proven program. Good news is that the bill fully funds the President’s Malaria Initiative at $585 million and the Millennium Challenge Account at $1.4 billion, both huge increases from last year’s levels. There is also positive funding for basic education, child and maternal health, and other development programs.

However, in addition to the Global Fund, there is another area of significant concern, and that is the funding of the President’s Food Security initiative. The President’s request was approximately $1.4 billion, but the bill provides about $1 billion, and we believe most of this cut will be felt by African and Latin American countries. This is a key initiative that will help the world’s poorest countries increase their agricultural productivity, reduce poverty, and provide economic prosperity.

Yesterday’s action marks an important step in the funding process, and also provides us with the opportunity to make a difference going forward.

-Arjun Mody

An on-the-ground post from Tony Fratto, who is among the delegation traveling through Ethiopia and Ghana this week. Learn more about the trip here.

Today we visited a first-class Ghanaian pineapple-exporting farm and processing facility about 2 hours west of Accra.

It’s an 1800-acre farm, Fair Trade certified, exporting to Europe.

The Millennium Challenge Corporation (MCC), a U.S. Government corporation designed to work with some of the poorest countries in the world, is helping to provide capital and trade credits.  The farmers act in a cooperative, and we had the opportunity to talk to farmers from five of the largest pineapple farms.  The farmers explained that the capital supports the investment in the processing facility, which helps the farmers to increase production and add value for exports.

An important part of smart, effective development — which ONE is encouraging — is to have well-integrated projects.  In this case, the MCC’s support for expansion of the N1 highway (a critical road that connects farmers to airports, markets and sea ports) is coordinated with efforts to expand agriculture production outside of Accra.  The expanded highway will significantly reduce the time and cost of bringing ag products like these pineapples to market, which will increase productivity and competitiveness, and in turn, returns to farmers.

-Tony Fratto

Writing in the Charlotte Observer, former Senator Bill Frist offers his take on the state of global health and President Obama’s recently announced global health strategy. Praising the Millennium Challenge Corporation’s holistic approach to global health, Frist explains how the MCC can help lay “the groundwork for poverty reduction and economic development.”

Excerpts below, full piece here:

Economists would argue that one of the surest ways out of poverty is for people to increase their incomes to take care of themselves and their families. For incomes to rise, developing economies must work to generate growth opportunities through trade and commerce, reliable infrastructure, and sound policies that create and sustain jobs for the poor.

When the poor are stricken by disease and weak health, they are unable to take advantage of these opportunities. Rather than climbing out of poverty, they fall deeper into it. It’s clear that economic development and human development are intertwined. Growth needs a healthy workforce. The productivity and development of communities – and their ability to participate in the global economy – rely on the physical well-being of citizens to innovate, build, harvest, and work. Sustaining such productivity requires children to learn in school, not fall behind because they are too sick to concentrate. By building healthier, hopeful, and productive communities, we build safer and more secure societies that can alleviate global poverty and contribute to global prosperity. When communities are productive and thriving they don’t become breeding grounds for dangerous extremism.

We need to rethink America’s global health diplomacy within this context […]

-Chris Scott

Lunch hour at ONE tends to vary. Sometimes we go out for sandwiches, sometimes we stay in and heat up frozen and pre-cooked meals, and sometimes we sit down with partners and talk about innovative ways to combat extreme poverty. Today was the latter, as ONE staff shared a lunch hour with staffers from the Millennium Challenge Corporation (MCC).

The MCC is a government agency created to be unlike any other foreign assistance program. By focusing on country ownership and sustainable long-term economic growth, the MCC represents a new, transparent, accountable, and results oriented approach to development aid. So what is it that makes MCC different?

MCC uses a series of 17 economic indicators to determine which countries meet a minimum standard to receive funding, known as the “threshold.” From this, eligible countries create program “compacts” based on what they see as their needs. It is true country ownership. The MCC then picks the best programs and funds them for a multi-year period while monitoring progress.

What this adds up to is the funding of the commonly overlooked, but incredibly necessary, long-term growth mechanisms that are developed by the recipient country and accountable to show results. In addition, the threshold that countries must meet provides clearly laid out goals for non-eligible countries to strive for. The Millennium Challenge Corporation is a functioning example of foreign assistance done in a smart and successful way.

For some success stories, check out some of the progress reports on our issues pages, including a report on the MCC program in Tanzania.

ONE would like to thank Aaron Sherinian, Neneh Diallo, Sherri Kraham, Jonathan Bloom, and Jim Mazzarella for a wonderful lunch session!

-Ian McGroarty, US Field Intern

It was inspiring to be part of such an impressive group during last week’s ceremony honoring the ONE Campaign. The 2008 Commitment to Development “Ideas in Action” Award, sponsored by the Center for Global Development and Foreign Policy magazine, brought together a core group of people whose collective voice demonstrates that Americans care deeply about poverty. ONE’s tireless commitment to raise awareness about global poverty through a grassroots campaign is certainly worthy of this recognition.

It is a commitment we too share at the Millennium Challenge Corporation (MCC). Some may not know about initiatives like this one in which the United States is working to combat global poverty through results-driven creativity and innovation. I enjoy hearing people’s reactions when they learn about MCC – a U.S. Government agency with the sole mission of reducing global poverty through sustainable economic growth. Without exception, they feel satisfied knowing that there is an approach that matches U.S. generosity with accountability and results.

Private citizens from all backgrounds and professional sectors know that poverty requires action and attention. Just ask MCC’s four private sector Board of Director members, who came together in a video to discuss how MCC generates real results in the fight against global poverty by marrying capacity-building engagement with partner countries and a smart, fiscally-responsible use of resources. In times like these, as Americans everywhere are watching every penny, they can be confident that their government’s MCC, together with our partner countries, are delivering returns and results from every investment made. The world’s poor and American taxpayers deserve no less.

One way this approach to foreign assistance builds accountability is by asking countries to identify their development needs. It is country responsibility—country ownership—at work. Ambassador Ombeni Sefue of Tanzania, which is implementing a $698 million MCC grant, says: “Ownership and partnership have to prepare us to stand on our own feet…We determine needs. We set priorities.” As partners in development, MCC countries are championing their programs from the outset and investing in their success until the end. ONE staff member Chandler Smith witnessed this when she recently visited a pineapple farm in Ghana, where MCC is partnering on a $547 million grant. Through MCC-funded technical training, Ghanaian pineapple farmers are growing their operations in sustainable ways.

For our part, MCC takes the time to study where our investments would make the most sense. After careful due diligence, we invest in those countries where our grants can have the deepest impact for the greatest number of people—in countries that support good governance, fight corruption, invest in their people, and encourage economic freedom. Practicing fiscal accountability, MCC funding is released in tranches as benchmarks are reached. MCC’s focus on the international best practice of “aid predictability,” where we set aside the entire grant amount from the start, gives partner countries the confidence of knowing that they will be able to complete their projects. It’s an effective, respectful, smart way to tackle these urgent problems.

Through country ownership and fiscal accountability, MCC is delivering on America’s commitment to end global poverty. With a strong budget, and partners like ONE and others in the development community, MCC can move even closer to making this shared commitment a reality. As MCC’s Acting CEO Rodney Bent said about the 2010 budget, “I think it will be reflective of the Obama administration’s support for MCC and of our work going forward, since MCC is about partnership and about finding good quality projects with partners. I’m confident that partnership, transparency, accountability, and working with other countries, in what I call a smart power way, is going to be a hallmark of the Obama administration, just as it has been a hallmark of MCC.”

-Aaron Sherinian Managing Director, Public Affairs, Millennium Challenge Corporation

Today the New York Times ran an op-ed advocating for the incoming administration to adopt the Millennium Challenge Corporation (MCC) as a central tool for development. The article explains that “The long-term engagement with the United States that is required for any country to earn a Millennium Challenge Corporation compact provides a platform for the kind of robust diplomacy that President-elect Obama has embraced. As he seeks to adapt American foreign assistance to a transformed world, one decisive step he can take is to signal his strong support of the corporation’s approach to global development.”

The piece, authored by the four non-government board members of the MCC (Lorne Craner, Bill Frist, Kenneth Hackett, and Alan Patricof), posits that the kind of aid MCC delivers – long-term aid given based on a clear set of indicators for projects defined by the recipient country, in which the recipient country takes responsibility for their development – works best. It also cites examples of the ‘MCC effect’; the idea that countries who are not yet compact-eligible will work independently to better their indicators due to the incentive of becoming eligible for large-scale support and funding.

We’ll continue to keep you updated about the position of the MCC within the new administration.

-Beth Adler, ONE Policy Analyst