Transcripts For CSPAN Millennium Challenge Corp CEO Discusse

CSPAN Millennium Challenge Corp CEO Discusses U.S. Foreign Aid July 14, 2024

m really happy to have sean karencroft, the c. E. O. And president of the corporation. After a long wait we have a fully installed m. C. C. President. I think thats worthy of applause. Why dont we give our friend sean a round of plus and welcome. Plus plus sean, congratulations. I think you get the prize for intly patience and by poemly and diplomacy and im really, really glammed that youre in this job. I think its really important that Government Agencies set up confirmed leads leaders and i think its really important that youve been entrusted with in roam. I wanted to give you a chance to share some of your views with our friends here about how you see the future of the m. C. C. But before that, i think probably anyone in this group probably noles all about the m. C. C. But maybe just so were all on the same page, you might do the m. C. Dr. 101 from your perspective. What suspect m. C. C. Sure. And how does it work and then i have a cup of softball questions for you. And we can take it from there. Great, im pro softball questions. Before that, thank you, dan, thank you to csis for hosting the event. E appreciate it. Thank you its to our agency to be able to get out and talk about it. Its an honor to be nominated to do a job like this and i couldnt be proud tore respect an agency with such a tremendous statue, so i have only been in a couple of weeks. I can tell you will already its the best job ive ever had and im looking forward to moving forward. Nd i also say thank you to faces around the room. Tim and faces in the crowd and people quhosk very supportive and help to feel me during this whole process so thank you all. Ok, m. C. C. Well, m. C. C. Were an independent u. S. Development agency and we do development by design differently so we work on a need and meritbased model and we eiffel countries on identify countries on score coordinate bases or we look to consolidate gains, and Good Governance, economic reform. And once our Eligibility Criteria are met we work with those governments, if our board determines that we should proceed to identify constraints on their economic growth. And this is a process that we undertake in con just conjunction with the host country, our partner countries and its country led. So the idea is they come to us and they say this is what we need and we want to partnership with you. And then we go through a rigorous open process to determine what the root callses of economic constraints are and identify sustainable, measurable, achievable projects that will address those constraints and have the highest impact on the lives of our partner countries people. And during that process, we demand accountability from our partner countries, so we have conditions precedents that we meet, that we demand are met over the dours course of these sexrodgets if they are not, we have the ability towith draw funds or to narrow the scope or adam a projects and so e regard i think the agency has an excellent track record of being great stewards of the american taxpayer dollars. After all, these are grants were engaged in. This isnt a loan, something that saddles the country with dealt this is a partnership and project we enter into that says this is our grant working with you to achieve a concrete result. Its going to be accountable, measured and analyzed for years and years afterwards. By the way, this is all available online. Its very transparent. Every contracts were in all the rates of return on our projects and our staff has recently come up with evaluation briefs, which were very proud of, which may, it even more accessible for the American Public to get a grip on what were doing and put eyes on it. So the way i i dont mean to be too glib about this but ive always thought that the c. Was like the pushers Publishers Clearing House of the government. Im dating myself but ed mcmahon would come and say we have done serious rigorous analysis using opensource data over several buckets of data. I dont know if its 16 or 17 indicators to. 20 indicators within these buckets and youve met the requirements and so now weve got a significant amount of money that were prepared to provide to you if you are willing to work with us and then theres a conversation and a negotiation about what that looks like. What also i think is really great about what you guys so i think the transparency, the flexibility you all have, the ants that you do, both in terms of leveraging open source analysis youre using global different data sources, the world bank or the index of Economic Freedom or other sources and then i think the constraints to grow the analysis is a very important innovation for Global Development as well. You talk about theres an m. C. C. Model, you talked a little bit about it. Theres also the m. C. C. Effect. Can you talk a little bit about the m. C. C. Effect . I think that is really, really interesting. Sure, i think the model and the effect are related. Yep. So the model is what has made m. C. C. Such a success. Were in our 15th year of exidges. This came out of the Bush Administration and was started in 2004. And what has kept our track record so good and what leads to what well talk about, the m. C. C. Effect, is the subjective view of whos eligible and then the datadriven approach to developing these properties. So the eligibility side of it, how we select partner countries to work with, its based on these independent scorecards that are drawn from heritage foundation, world bank. Objective criteria that break down into Good Governance indicators. Economic freedom indicators and a governments investment in their people indicators and if they pass those scorecards relative to the rest of the countries in the world, which are, we can work with either lowincome countries or lower middleincome countries. Thats the needbased component. Based it before component is a scorecard and then we meet up with our panel of investigatedors. And engage with them. Thats a process that were not making a policy decision based on some other strategic concerns 16 or i woke up in the morning and said i really like malawi today. Right, its right, its design the projects perspective. Its designed to keep the agency on its laser focus and i think its led to bipartisan support on the him. I think it has great cachet in the countries where we work and the respect for the Development Model is very strong so just as c. E. O. Coming in, that model is very spornlt to me and im sure well talk about con currents contracts and regional stories coming up. But to grow the support for that model is a big goal of mine. Thin we get to the m. C. C. Effect and that suspect lining incentive. Humans are innocent active based creemp and countries want us to engage with them. This is a grant for major project infrastructure typically and opens the door to a lot of private sector coming in. Its creating a positive enabling environment. Its the u. S. Governments stamp of approval that this is a government thats doing good things and on the front end of that, countries try to put themselves in a good position to work with us. A great example is the president was elected in 2010 following a civil war. Their country memory four of 20 indicators at the present time and within five years, they knelt 14 of 20 indicators and weapon engaged in a compact with them. Thats because the president came in and said im establishing a units within my new administration specifically to meet m. C. C. s criteria. We want to work with the americans. We want them here and we want the catcha that comes with that. But just there last week also because our contact entered into force. Coast. We are five years. On budget. That is the time we have. By design. That started just last week. It was online. The president had brought in a countdown clock. It is this big digital clock. A big elephant was welded on top. They started in the room. It now sits in the mca, which is the in country entity. That is another important piece of what we do. The infrastructure and project piece is what we do. The Knowledge Transfer of how we do it, i regarded as equally important because it is such a contrast to other Development Models. It is open procurement. It is transparency. It is that analysis. Understanding how to bid projects out correctly. All of that creates an environment that is very positive for these countries. One other example, just a week or so ago, we have the Human Resource managers from the in country mcas, which are staffed by individuals from our partner countries for a workshop. A collaborative workshop on how we run Human Resources management at mcc. We are talking about things like gender equality in the workforce. Nonharassment. Meritbased hiring decisions. All of this Knowledge Transfer is being shared. It is growing within our partner countries because of what mcc is doing. I think that is a huge component of what we do. Hopefully, a legacy we are leaving behind. This word cachet is very important. There are incentives for countries. It has been proven. There have been a series of studies done that there is an mcc effect. Countries want to be labeled as an mcc partner country. It is changing behaviors and changing policy. I think that has been a very important contribution to Global Development. You have now been in business for 15 years. Historically, it has been the model has been five years. You have worked in a specific country. There has been adjustments recently. Talk about that. There have been some changes in the last the most recent past that gives you new authority. Sean sure. The whole design of the agency is to learn. Every contact with enter into, every new agreement, we are constantly self evaluating and trying to do a better. The new authority dan is talking about was last year in the african growth and millennium challenge modernization act. We were given the authority to work on a concurrent compact. Previously, we could only enter into a project that week that we collect compact with a cycle country. Now, we have the ability to do a concurrent compact with an existing partner so long as it is promoting regional investment or regional trade. For ease of conversation, i refer to them as regional compacts. That is not technically right. The idea is to help grow a regional sustainable economy and link dan cross countries. Sean cross country, crossborder. As i was saying before, with any new authority, it is new ground. We are working through how to do this. In december of last year, hoverboard selected five west african countries as eligible for a regional compact. We are in the process of working through what those projects would look like. Exact sectors they would be in. Who would participate. What is important to me and the staff at mcc is that as we engage in this, the same rigor, the same accountability, the same transparency and evaluation, the same model applies to this regional authority. We are looking to make sure our first fights out of the great out of the gate are successful. Dan lets say you had agricultural corridor that crosses a political border. Two countries in west africa. It would make sense to have a regional compact. There are good reasons to have Something Like this. Sean there are great reasons. They are transportation corridors. Dan agriculture. Sean agriculture. It makes a great deal of sense. Some of what we are doing right now has a great deal of regional impact. In malawi, we did a power sector compact. Allowing now has the ability to hook in to the south african powerful. They are engaged inn engaged in an agreement with mozambique. In cote divoire, the Port Infrastructure i cannot know of anyone here has been, but the traffic it is not really traffic. It is just concrete. Dan there is no movement. Sean right. We had two miles between the hotel and the airport. There were times when you have to build in three hours to get to the airport. Dan get my steps in. Sean easing that congestion, which is a major component of our compact, is going to have a major regional effect because that is a major source of transport and trade. Dan we did a paper a couple years ago about the mcc. One of the things we found more than 50 of the work that was done, that mcc products had done, had an infrastructure component. You could argue the mcc, and i am much in favor of this, there has been a finger on the scale as part of the constraints of growth analysis. They run the constraints of a country through the excel spreadsheet. The smart people at the mcc are helping you and partnering with the government. What comes out when the smoke clears his we need a port. I think it is great. I think we should be doing more a protractor. Do you have any comment on that . We should be doing more infrastructure. Do you have any comment on that . Sean those constraints analyses the final projects are determined by wherever the fact leads, where we wind up. It may be the case. It is the case that most of our portfolio is either transportation or energy infrastructure. In many of our partner countries, those that is where analysis leads. The other thing i would say is, mcc is unique as well because we are not only working on the heart of the infrastructure, but we do institutional and policy reform as an anticorruption with a heavy focus on anticorruption to create an enabling environment that will lead to a sustainable economy. In many of these places, we are engaged in that reform as well. We have a whole other section of projects we can engage in for countries that do not quite meet the compact criteria called Threshold Programs that are smaller projects. Dan it is like mcc finishing school. Sean that is right. Dan smaller projects focused on a specific thing. Sean a country that is on the right track. They are trying to do the right thing. Were trying to help get them to a good place in terms of our criteria. To really go in and leverage institutional reform. Dan we have these transparent set of metrics all over the world. You have a gap here and here. We want to use the Threshold Program to close the gap in these areas. Sean that is right. Dan it is very important. I do think this issue of anticorruption is important. I know it is enter the work you do. We as a country do not fully appreciate this issue. We have been the leader historically over the last 40 years on the issue of anticorruption. It is a vote moving issue around the world. I think to the extent we can be at the front of the parade, the better because i saw the World Economic forum had a study that the issue of corruption is either a number one, number two, or number three in 80 countries. Sean the risk skyrockets more for third parties. Until you can get a handle on that, you are going to have much of a sustainable economy. In cote divoire, one of the ministers was talking to me about the need for more private Sector Investment. The desire to have American Companies come in and work on these projects. He said, we did not know how to bid these projects out until mcc showed up. We do not understand what was needed. We were talking different languages to potential partners. That transparency, the open procurement is itself a way to fight corruption. We have a good track record. Dan talk about when you go about power and roads, if i were to associate with those words, i would think about china. How did china come across the radar screen . Sean china is very active on infrastructure projects, particularly in africa. The mcc serves as a great an alternative system. It is country led. This is something the host country is coming to us and asking for. We demand as part of the process, stakeholder buy in. That is public, private sector, civic society. There has to be by in. Youre not going to have a sustainable project if it is not something folks in partner countries want. We demand openness. We demand accountability. Value for money on our contractors and our projects. We look to identify those projects that will have the greatest amount of measurable impact on the lives of our partner countries citizens. We look to that sustainability. That determination and accountability and Knowledge Transfer to continue on working on their own is a contrast to other models. Dan it is a contrast other models. Sean a stark contrast to other models. It is very desirable. Dan i suspect when you go into many of the countries, i am sure you are welcomed at the ivory coast. Sean we are very welcomed. It was phenomenal to see. It is an honor to be representing mcc. We are there as the United States of america. The u. S. Government is involved in these countries. We have multiple Partner Agencies in our countries. They are very welcoming. It has a lot of cachet to the agency. Dan these countries want the United States. I have two other questions. The role of the private sector. The mcc has spent a lot of time and effort a lot of the project you do either catalyze project Sector Investment or offer the opportunity to bring in the private sector. Can you talk about that . Sean sure. Dan is on our private sector advisory board. Dan good timing. Sean that is a huge part of building a sustainable economy. If you do not have private capital flow and environment attracting the, i do not know how you define it as sustainable. Mcc has leveraged i think 5. 6 billion in private sector dollars into our projects over the course of our history. We have been in 37 countries with 29 comebacks for about 14 s for about 14 billion worth of development assistance. Benefiting about 200 million beneficiaries. The private sector is a huge piece of that. In malawi, the state utility just entered a 20 year power purchasing agreement with jcm capital to develop a commercials scale solar powerplant. There is a lot of sun. 95 of their power is hydro. In cote divoire, we signed an agreement. For them to do an infrastructure plan. We will have a plan that prioritizes Cote Divoires infrastructure projects. Hopefully that will be shopped around to private sector partners. We can get some investment. They are very excited about it. They want to come to the United States. They want to do a roadshow. They went to pick potential the

© 2025 Vimarsana