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 You are in: Secretary of State Condoleezza Rice > Former Secretaries of State > Former Secretary of State Colin L. Powell > Speeches and Remarks > 2004 > February

Inaugural Board Meeting of the Millennium Challenge Corporation

Secretary Colin L. Powell
Washington, DC
February 2, 2004

4:00 p.m. EST

Inaugural Board Meeting of the Millennium Challenge CorporationSECRETARY POWELL: Good afternoon, ladies and gentlemen. It's my great pleasure to begin this meeting, which is the first meeting of the new Millennium Challenge Corporation. And before I begin with opening remarks, I would like to suggest that we do have a quorum present and we are able now to conduct business, since all of the four known members of the Board are here.

Let me begin with a few introductory remarks about the purpose of not only our efforts here today, but of the Millennium Challenge Corporation. I'm delighted, of course, to welcome my fellow Board members, Treasury Secretary John Snow, United States Trade Representative Bob Zoellick and Administrator Andrew Natsios of the United States Agency for International Development. And I look forward to serving with all of my colleagues in this very, very important work.

I also wish to warmly welcome the members of the public who have come here today to witness these -- historic, frankly -- proceedings. In March of 2002, at the Financing for Development Summit in Monterrey, Mexico, President Bush caught the world's attention when he called for a new compact for global development that would link greater contributions from developed countries to greater responsibilities from developing countries.

President Bush's Millennium Challenge Initiative was to be unprecedented in magnitude, the most substantial international development assistance effort since the Marshall Plan, and the most significant increase in development aid since the Kennedy Administration. The Millennium Challenge Development Initiative would have its own funding and operate in addition to our ongoing humanitarian HIV/AIDS and other foreign assistance programs.

Today, with this first meeting, the creation of the Millennium Challenge Corporation, the President's bold vision becomes reality. Many have helped us reach this day. Beyond dedicated public servants within the Bush Administration, academics, researchers, nongovernmental organizations and businesses have contributed their valuable ideas and insights. The United States Congress passed the Millennium Challenge Act with strong bipartisan support and appropriated $1 billion for the corporation's first year. All deserve our deepest thanks.

The work of the Millennium Challenge Corporation will reflect experience gained by the international community over a half-century. Donor and developing countries alike have learned four important lessons:

First, growth matters. The Millennium Challenge Corporation reflects the new international consensus that a growth-based approach to development assistance works best. Our ambitious pro-growth strategy is designed to lift the most people out of poverty as fast as possible. We seek to work with developing countries to help them achieve a doubling of their income in ten years.

The second lesson is that policies matter. The Millennium Challenge Corporation will only support poor countries that have adopted growth-promoting governance and economic policies and countries which invest in their people. Today, we embark on a process for identifying countries that will be selected for Millennium Challenge Corporation assistance, and the prospect of obtaining Millennium Challenge Corporation funding will serve as an incentive for developing countries that have not yet adopted pro-growth policies, encourage them to do so, thereby enabling them to become eligible for Millennium Challenge Corporation help in the future.

The third lesson is that partnership matters. Development aid has the greatest impact when funders and developing countries work in true partnership to define development needs, set priorities and to shape programs. The Millennium Challenge Corporation will encourage our partners in the developing world to come up with their own innovative solutions to particular development challenges.

Fourth, results matter. Measurable, tangible results that affect every day lives. The Millennium Challenge Corporation will enter into business-like agreements called "compacts" with developing countries that lay out concrete objectives, benchmarks and responsibilities for meeting their mutually-established development goals. Poor countries that take the tough policy decisions to fight corruption and improve their laws, regulations, institutions and democratic systems will have our help. We will help them build schools, improve agriculture productivity, extend credit to entrepreneurs, reform their judicial systems and find their niche in the international marketplace.

In short, we will help developing countries build their own capacities for success, paving the way for lasting permanent progress.

I will add a fifth and final lesson which animates all the rest: People matter. The spread of political and economic freedoms and the advance of science and technology have lifted hundreds of millions of people out of poverty. Yet, today, half the human race, more than three billion people, still live on less than $2 a day; more than one billion people do not have safe water to drink; two billion people lack adequate sanitation; another two billion have no electricity. The plight of the world's poor presents all of us with a profound moral challenge.

Alleviating their suffering also holds profound implications for freedom and security across the globe for a world in which ordinary people have hope for the future is a world in which democracy and prosperity will spread and tyrants and terrorists cannot thrive. In the words of President Bush, the United States seeks to, "draw whole nations into an expanding circle of opportunity and enterprise."

That's the bright promise of the Millennium Challenge Initiative, and the practical business of our Millennium Challenge Corporation.

I would now like to yield the floor to Treasury Secretary Snow for a few additional comments.

Mr. Secretary.

SECRETARY SNOW: Thank you, Colin, and let me say, I am delighted to be here to participate in this historic event. We have long sought the creation of the Millennium Challenge Corporation to implement the President's vision for how to go about helping poor countries grow. Growth is no accident, as the Secretary said. Growth is the consequence of policy choices, and the policy choices that lead to growth are the things the Secretary talked about, ruling justly, investing in people, education, encouraging economic freedom and the choices that economic freedom makes possible.

By rewarding countries that make those choices, we'll do an enormous amount of good to alleviate poverty and promote prosperity in the world because there really is no other way to go about doing it. It's the right way. It's the right way to do it.

I want to also commend the Congress for acting as they did in this case, and want to emphasize that underlying this program is the focus on measurable results, to see real results and to watch results, and to make the donor countries owners of the policies that produce results, and to make them accountable for the results. And then we want transparency. We want to be able to talk to the Congress about those results, keep the Congress informed, keep the American people informed, let them know that their taxpayer money is going to achieve the objective of poverty elimination, economic growth and more abundance for the poor peoples of the world.

We at Treasury are delighted to be associated with this noble undertaking. I want to thank from Treasury, Clay Lowery and John Wingle for their credible efforts in the background on this, and of course, John Taylor for his leadership role. We've greatly valued working along with you and the people from State and other departments, who have made this day possible.

SECRETARY POWELL: Thank you, John.

I'd be remiss if I didn't offer Ambassador Zoellick and Administrator Natsios an opportunity to say a word.

AMBASSADOR ZOELLICK: Thank you, Mr. Chairman. I'll be very brief. At times in the past, people have often debated whether it's a question of aid versus trade or trade versus aid. And I think one of the hard-earned lessons that we've had is that it's not a question of one or the other, it's how the two are interconnected.

A lot of our trade agreements focus on some of the core growth policies that are at the heart of the Millennium Challenge Account: transparency; anti-corruption measures; developing the rule of law; fair and open procurement systems. And so I want to complement those -- and I know that there were a number, particularly in the Congress, that saw the same interconnections that Andrew and I deal with all the time -- because the other side of this is, to make trade work we often have to help countries develop the capacity, so they can take part in the negotiations, implement the rules and link them to their growth and development strategies. And in particular, while I know many members of Congress were very helpful at this, I want to single out Jim Kolbe, who has always been to me a model of an individual who recognizes the benefits of effective aid programs, but also trade, and I know we will work closely with him in the future, Mr. Chairman.

Thank you.


MR. NATSIOS: First, we are at a critical moment in the history of development assistance. In the last 20 years, we've only had one or two LDCs -- least developed countries -- graduate. The current system, as it's designed now, is not working particularly well, and the question is why.

I think people respond to incentives in the north and in the south, and I'm not sure the incentives are the right ones. The President's program radically changes the incentives. Conditionality has not been a huge success. It works. It's necessary. But it has not been sufficient.

The big weakness of conditionality is that it never created a constituency in the countries themselves for the economic changes needed to stimulate growth, and without local constituencies and local support and local leadership, ultimately change does not become institutionalized, does not become permanent and people -- countries slip back.

Reformers exist in every country, except for countries like North Korea, and even there I suppose there might be some secret reformers somewhere in the leadership, if they're not in a prison camp. But in the developing world, for the most part, there are reformers in every country. The question is, how much local support do they have and are they in critical positions in governments? There are heads of state who are the leading reformers in their countries, and those countries are taking off.

The question is, how do we support the reformers in any country, and the President's initiative is already having the effect in many countries of empowering the reformers to be more vocal, more aggressive, more visible in their countries to insist on human rights reforms, governance reforms, attacks on corruption and efforts to redirect budget resources toward their own people and on economic reforms that will stimulate growth.

I have one example, I won't tell you the country, where the speaker of a parliament came in to see me and said, "We want to be a Millennium Challenge Account country," and I said, "That doesn't distinguish you from any other developing country because everybody wants to be, but I have to say, I just looked at your record and you have one of the most corrupt political systems in the world, and you've been stonewalling four major reforms for five years in the parliament, so you're not going to make it." And he didn't say anything.

I went to the country four months later, and I met him a second time, and he said, "You know, all five reforms have now gone through the parliament." I said, "Well, why did they do that?" They said, "When I came back, it caused a furor, because I told everyone we weren't going to make it because of the level of corruption in the country."

So it does make a difference to support the reformers, and that's what the President's initiative does. I think this initiative may have more influence in the countries that don't get chosen but are near misses, than it does in the countries that get chosen and have the money invested into it, because those countries that aren't moving toward reform now have an incentive to do that, and I think that's one of the great innovations in this legislation.

SECRETARY POWELL: Thank you, Andrew. I can second what Andrew just said. I see it in my travels around the world now and in the visits I have here in the department from foreign ministers and other ministers around the world who want to become part of this program. And it's a lot easier for me to deal with their requests when I say, "Human rights, transparency, the rule of law, ending of corruption, that's what it's going to take, and until you do that, don't talk to me," and it really does incentivize them. And I think the ones who will really be incentivized, as Andrew said, are those that may be just below the cut and want to become eligible for the additional monies that are going to be available in future years.

With these opening remarks -- I'd first of all like to thank my board members for their remarks and for their willingness to serve on the board -- with these opening remarks, we are ready to begin our agenda, and I'd like to move to the first item of business, and it's an administrative requirement, and that's the waiver of the seven-day notice requirement.

The Federal Register Notice notifying the public of this meeting was filed five days before the board meeting rather than the typical seven days, due to the need to get the MCC operational as soon as possible and the unavailability of board members later in this week, so we found ourselves compressed in time.

The Sunshine Act authorizes the waiver of the seven-day requirement if the majority of the board votes to do so because agency business requires such a waiver.

At Tab 1 in your book is a proposed resolution to waive the seven-day requirement for this February 2, 2004 initial meeting of the MCC Board of Directors, and I would ask if I could have a motion to approve.

SECRETARY SNOW: I will move it.

SECRETARY POWELL: May I have a second?


SECRETARY POWELL: Any question, comment, disagreement, since we're here doing it?

If not, I assume all are in favor.

(Chorus of ayes.)


Thank you.

The next item of business is to put somebody in charge of this organization besides the board members present.

As you know, the chief executive officer of the corporation is a person who will be nominated by the President for the advice and consent of the Congress, and that will take some time before the individual goes through the entire confirmation process. So in the interim, we need an interim CEO, and there is one individual who I believe is uniquely qualified to serve in this capacity, and his name is Under Secretary of State Al Larson, who is well known to all of us, has a great deal of experience in development work and economic activity.

For those of you who don't know Al, he is sitting over there. Stand up, Al, and be recognized.

And Al Larson is, I think, a tremendous candidate, and I believe that the board knows him well, and so I would ask the board members for any comments they may have.

In this instance, it isn't just a matter of the board giving oral approval. Because of the nature of this appointment, we will need written, unanimous consent, meaning all members of the board have to sign the document in front of you in just a moment, giving their consent to this appointment of Al Larson as interim CEO.

I offer the board an opportunity to speak for or against Al in this matter.

SECRETARY SNOW: Well, as someone who knows Al well and has worked with him closely, we at Treasury, and I, can enthusiastically express our support for his appointment as the interim CEO.

AMBASSADOR ZOELLICK: The position that Al holds is an eminent one in the State Department. It's been held by a number of excellent people in the past.


He has certainly risen to whatever level of performance they had, and exceeded it, and has been a great partner, so I think it's an excellent idea.

MR. NATSIOS: We work with Al on a daily basis, and we think it's an excellent choice.

SECRETARY POWELL: Thank you very much, gentlemen. You'll have at Tab 2, I believe, the -- you'll have at Tab 2 the unanimous written consent form, and I would ask you each to sign the appropriate place.

(Resolution being signed.)

We've all signed the resolutions. There are two resolutions associated with this. The resolutions are approved by unanimous, written consent, and I now invite the interim CEO to join us.




The next item of business is approval of bylaws, and I would invite the new interim CEO, Under Secretary Larson, to lead the discussion.

UNDER SECRETARY LARSON: Thank you very much, Mr. Chairman, and thank you and the members of the board for the confidence you've shown in me.

This is a corporation, and we need to have operating bylaws. The working group of the Millennium Challenge Corporation has produced a set of proposed bylaws that have been very carefully vetted. I think they have been reviewed by your staffs, and I would recommend them for your approval.

There is a resolution at Tab 3 of your books that would be a resolution of approval of the proposed bylaws.

SECRETARY POWELL: Motion to approve the proposed bylaws, please?



SECRETARY POWELL: Any comments or question? You've had a chance to review them. I know your staffs have been through them thoroughly and any remaining difficulties that existed with the bylaws have been resolved to the satisfaction of the staffs of all board members and the board members themselves, is my understanding.

Any comments or questions? All in favor?

(Chorus of ayes.)


The next item on our agenda is a website presentation. And I would invite Mr. John Wingle, who is our website meister, to take the floor and make the presentation with respect to our new website.


MR. WINGLE: Thank you. I hope that won't become my official title. The website for the Millennium Challenge Account will be located at www.mcc.gov, and it will also be available at www.mca.gov. We currently have a welcome message from the Secretary on our homepage. As operations ramp up and things evolve, we plan to use this as a portal to provide links to the most popular portions of the site and to point you to new information on the site.

Each menu item along the top pulls up a different submenu item. The first menu item about MCA contains an overview that's quite similar to what you've received in your fact sheets, information about the Board of Directors, information about speeches, documents and congressionally mandated reports. Our first congressionally mandated report will be available soon after the board approves it regarding the candidate countries that will be eligible to compete in FY 2004.

Under operations, we provide information about how we plan on doing business. In country selection, again, shortly after, we'll have the list of candidate countries up. Once we have decided on the selection methodology and the board has ruled on exactly what indicators will be used, we'll provide information for each of the countries about that.

I've done a few demo countries. These indicators here are purely illustrative. This is a country that doesn't do very well on most of the indicators. Red indicates failure. I'll show you a country that does better on the indicators. You can see, again, these indicators will change as the board decides on what the final selection criteria will be, but we plan on providing a clear format for you to see whether they pass or fail the indicator, how the country has been doing over time and even the standard areas where they are available.

In addition to slicing information by function over the compact and the implementation of monitoring evaluation, will also allow you to access information on a particular country. So if you're looking for a grant agreement or a compact or a monitoring evaluation report, you can either go to that country and find all the information on that country, or you can go to operations and see, for instance, all the compacts that have currently been signed.

We'll also have information on opportunities, both employment and business opportunities, and then, to contact us -- we do want to hear from the general public on how we're doing -- one way we'll do that is to provide a mailing list and give you information. We also will have public comment sites and other forums for receiving information.

In addition to this very preliminary site that we've set up, we also plan on using the web to solicit information from our implementers and to use as much information technology as we can to facilitate and make the MCA more effective.

Thank you.

SECRETARY POWELL: Thank you very much, John.

I'd like to now turn to other business under item six, and I would ask Under Secretary Larson to lead the discussion on future board meetings and agendas. There is information at Tab 4 for board members to follow us.

UNDER SECRETARY LARSON: Thank you, Mr. Chairman. I might add that it's the corporation to publish the bylaws on the website as well.

Because we are getting a start well into the current fiscal year, it will be important to schedule at least four board meetings in the next calendar year. We would propose that the first such board meeting take place in early- to mid-May and that would be at a time when it would be possible for the board to make the selection of participating countries in the Millennium Challenge Corporation.

After that, we are looking towards the possibility of a late July board meeting, and at that point, we would hope to be able to present to the board initial compacts with participating and partner countries for their approval, and to identify candidate countries for participation in the program in fiscal year '04.

Later this calendar year, perhaps in October, we could have a board meeting that would involve country selection for 2005, approval of additional compacts and approval of the administrative budget, and then we're looking ahead to the likelihood of a meeting in the first quarter of 2005.

That is intended to give an update. We, of course, have the possibility of having board decisions by written procedure and that will be necessary on a number of occasions.

SECRETARY POWELL: Thank you very much. Any questions by members of the board? If not, we can go to the next item, which is to close the meeting. And I would ask Under Secretary Larson to explain the basis upon which the meeting will be closed and then there will be a resolution that will follow.

Board members have at Tab 5 the proposed resolution to close this portion of the board meeting, and then we'll retire to another room for closed session of the meeting. May I have a motion to adopt the resolution of Tab 5?

A PARTICIPANT: I'll move it.



(Chorus of ayes.)

SECRETARY POWELL: Thank you very much.

This then brings to a close the first open meeting of the Millennium Challenge Corporation. I'd like to express my thanks to all the board members for being here, but especially to express my appreciation to so many people who have turned out from all the various communities that we'll be working with and to let you know that we look forward to working with you all.

You will find this to be an open and accessible corporation and operation. We need advice, we need assistance and we hope that you will regularly visit our website. But beyond that, you will make your presence felt. You will let us know what you think we should be doing.

I am excited about this corporation and I know my board members are, but the one who is most excited about it is the President of the United States. This is his baby, this is his corporation, and he intends to use this corporation and the monies that Congress makes available to make fundamental changes in the whole manner in which we provide development assistance to those nations who are governing wisely and well, transparently and with openness, and all fundamentally based on the rule of law, democracy and open economic systems.

So watch us closely, and let us all join together as a big family in making a difference, helping people lift themselves out of poverty and helping governments put themselves on a solid path to democracy and sustainable development.

Thank you all very much for coming.


Released on February 2, 2004

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