The Millennium Challenge Corporation (MCC) is a little-known but critical part of America’s poverty-fighting apparatus. During the closing days of the Obama Administration, I spoke with the agency’s outgoing chief executive officer, Dana J. Hyde, about her time at MCC and the future of the United States’ poverty-fighting work in Africa.
The Millennium Challenge Corporation is not like any other federal department or agency. Can you explain what MCC is, what it does, and how it fits into the United States’ work overseas?
MCC is a really unique agency and program that follows some core principles. First of all, it only has one mission, which is to alleviate poverty in low-income countries through economic growth.
Economic growth can look different in different countries and contexts on the development spectrum. MCC takes a very data-driven, evidence-based approach, working closely with countries (starting with their economists) to think about what in the country can be impactful in terms of growth and poverty alleviation. Sometimes that may be supporting power and energy. It could be creating roads to get goods to markets. It could be investing in education. MCC doesn’t walk in the door with any one view of what will be catalytic to growth and poverty alleviation.
Secondly, MCC is selective. It’s a competitive program that’s working with countries that are themselves making progress. We’re only working with low-income countries, and looking at those that are relatively well-governed and investing their own resources in their people — in education, in health, in immunizations and the like.
And finally, MCC takes a very country-owned, country-led approach. The country itself is in the driver’s seat about identifying needs and then helping to execute and address them.
Right after you were confirmed by the Senate about two and a half years ago, you sat down with our late CEO, Michael Elliott, and talked about MCC’s commitment to one of those areas: energy projects, very specifically in Africa. And one of the things you said kinda stuck in my mind: You said, “Power empowers.” Why is it that electrification is so important to ending poverty?
That’s a great question, and certainly, I have a fond memory of your great CEO, Michael, and all that he did to lead this effort around the globe.
You know, you can go into any market in Africa — any market around the world — and you can see young people using innovation and entrepreneurship and their energy and skills to create businesses and opportunities. I was just in Accra, Ghana, and had the chance to walk through the market and meet with two young men who were working in a printing shop. They were putting together business plans around flyers and printed materials, and I talked to them about where their market is and how they’re using their skills. I also met with a mother and daughter who have a baking and catering shop.
All of their efforts require power — to run the printers, to run the ovens. And what they told me was that intermittent, unreliable power meant that there are often power surges that have ruined those ovens they use to bake — and there is no insurance to buy new equipment. So, you see in a very tangible, real way what electricity infrastructure brings to people, to communities who want to support their families and educate their kids. And you see how, with power and access to it, they could take their skills in many different directions.
Part of the reason you went to Ghana is because of MCC’s compact with Ghana, where you are investing about $500 million to help people access reliable energy. You were able to see the problem and opportunity of electrification. Were you able to see progress while you were there?
Absolutely. The commitment of government to transform the energy sector, starting with utilities and electrification capacity for the sector overall, is certainly there and strong. This isn’t just an aid effort — far from it. This is an investment of many private-sector actors who are working together with MCC in Ghana to transform the sector so, at the end of the day, there can be more power and reliable power in the markets and for the people I met.
Something I think is under-appreciated about the Power Africa program is that it takes years to design these projects, recruit investors, and get through the regulatory bureaucracy. What else can ONE members do to help make sure Power Africa is successful over the long term?
You’re absolutely right that development overall requires strategic patience. On power in particular, there are a number of tools that Power Africa has put out that allow everybody to track progress. I think it’s really important that your members celebrate the successes, track that progress, and help dispel the notion that there is no progress, because it is happening. It may not be apparent that switches are on in all of the countries next week, but there’s real, tangible progress. And being informed ambassadors of this effort in communities — on college campuses or with members of Congress and in the forums in which they engage — is critical.
Obviously, helping people who are less fortunate is part of who we are as Americans. It’s the right thing to do, and it makes a lot of Americans really proud — and it should. But that’s not the only reason the United States invests overseas, and you’ve been able to see the benefits of those investments during your time. How is fighting poverty overseas in the national interests of the United States?
I think this is a critical conversation for us to have to help people recognize why it’s in America’s interest to do this work. It’s certainly true that it’s in our values and who we are as a nation, and that’s critical. But it’s also in our economic interests. In 2017, in this global economy, 95% of the world’s consumers are abroad and half of U.S. exports go to developing countries. We know that six of the 13 fastest-growing economies are located in Africa. Growing these markets is a win for American businesses and our own economy. And as we know, there’s also the importance of fostering stability and security overseas. We’ve seen in parts of Africa and around the globe the consequences of instability. So there’s a security interest, there’s a moral interest, and there’s an economic interest in why fighting poverty is good for America.
ONE’s Poverty is Sexist campaign was built to convince policymakers about how poverty disproportionately affects girls and women — in education, in health, economically, politically. Can you tell us how MCC has been helping girls and women living in extreme poverty?
MCC has a staff of gender and social-inclusion professionals who work side-by-side with our country teams. So what I think is important is that we put the gender lens right next to the economic lens as we’re doing the analysis to shape what MCC’s interventions and work will be in a partner country.
So what does that look like in our programs? There are a couple of things recently that I think are really exciting. One is a number of our land management projects where we are working to formalize and register rights to land with a focus on women. In Senegal, there are new studies coming out in which communities, on their own, have decided to reserve 10% of their land for women’s groups — and then when they actually allocate the land, women ended up occupying 24% of the land. When you engage communities and create a framework for them, they address tough issues and are accountable for results. So when we talk about land tenure rights and gender equality, I think that the economic benefits can accrue for generations and have an outsized impact.
We also have some good results coming out of our education programs, specifically in Burkina Faso. We’re finding that our impact and our focus on girls boosted the rates of primary school completion and enrollment, and decreased marriage rates for young women. So, again and again, in our programs, we see what a focus on women can bring in terms of results for economic impact.
You’ve been CEO now for almost three years. What do you know about fighting extreme poverty today that you wish you knew when you started this job?
What I know today is how much energy and effort is coming together to improve the lives of some of the poorest people around the globe. I think intellectually, I might have known or heard that to be true, but three years later, I’ve seen it and I know it. And what I have seen and experienced gives me hope in fighting extreme poverty around the world. It motivates me.
Is there a piece of advice you’d give to the person who succeeds you?
I would say to focus in on leverage — and from an MCC perspective, leverage can mean many different things. It certainly means how many dollars we can crowd in from the private sector in or around our investments. But leverage also speaks to the value proposition of MCC, which is that we can help support policy reform in sectors that can be transformational.
My advice to my successor would be to think in terms of leverage across the board, and obviously of the importance of elevating MCC staff and its mission. I am very proud of the work we have done over the past couple of years in taking the tremendous expertise that resides here at MCC and lifting it up and amplifying our work. And finally, as we spoke of before, none of us can forget how important it is to speak to communities across this country about why U.S. engagement through development is critical to America’s interests.
What do you think America’s foreign development assistance looks like in ten years?
I think if we see the curve of where official development systems were 50 years ago, in terms of capital flows into the developing world – it was north of 65%, and today it’s south of 10% – then that will continue to be the case. And I say that not to imply that there will be a reduction in development assistance, but because other sources – be it domestic resource mobilization, be it domestic private investment, or foreign direct investment – will continue to enlarge the wedge of that trend.
I think it puts a premium on the U.S. on working with other actors, be it private sector or other public sector partners. I also think the U.S. will hopefully engage in more tools of economic growth and economic development. I think the data is clear on the potential that it has to improve and save lives, and that’s one area in which I hope the U.S. drives further.
What can ONE’s members in the U.S. do to fight extreme poverty in the coming years?
ONE and its members play a critical role in everything we’ve talked about. I’ve had the chance to visit a couple of college campuses and meet with some ONE representatives on the need to be organized, motivated, and informed ambassadors for this work — and why it’s important to the United States. It’s never been more critical. 2017 needs to be the year for the ONE community to take their efforts to the next level. I’m confident they will do so.