Washington, DC The Millennium Challenge Corporations Deputy CEO, Rodney Bent, testified today before the House Foreign Affairs Subcommittee on Asia and the Pacific regarding the projected impact of MCCs assistance to the island nation of Vanuatu, located in the South Pacific, where approximately half the population currently lives in poverty.

MCC signed a five-year, $65.7 million compact with the Government of Vanuatu in March 2006, and implementation of that assistance package is underway. Costly and unreliable transportation has been a major impediment to economic growth and poverty reduction in Vanuatu, a bottleneck which will be addressed by MCCs program there.

Consisting of eleven infrastructure projects including roads, wharves, an airstrip and warehouses the program in Vanuatu aims to benefit poor, rural agricultural producers and providers of tourist-related goods and services by reducing transportation costs and improving reliability of access to transportation services. As with all MCC programs, the aid package was developed largely by the recipient country to ensure robust country ownership of the poverty-reduction effort. MCC worked with the Vanuatu team to maximize the economic returns and poverty impact of the program.

Accountability and demonstrable results are two additional, internationally recognized hallmarks of MCC, which uses detailed and publicized benchmarks to measure the impact of its investment. In a recent report, however, the Government Accountability Office takes issue with MCCs presentation of projected benefits from investments in Vanuatu.

The MCC is reducing poverty by stimulating economic growth in Vanuatu, Mr. Bent said. And, even though GAOs portrayal of the Vanuatu Compacts expected impact reflects a different interpretation of MCCs analysis in some cases, the bottom line is that the program there will benefit the countrys poor significantly. GAOs own analysis, using MCCs underlying data, supports this conclusion.

““I would very much like to again thank the American people for their generosity and results-driven assistance,”” said the Hon. Willie Jimmie Tapangaraua, Minister for Finance and Economic Management for the Government of Vanuatu. ““The MCC program is unique in its focus on results and accountability, and it will make a significant difference in the lives of our people.

““The support, and the readiness, for this transport infrastructure program is very high, the Minister continued. Last week, communities across the eight islands stopped to warmly welcome and offer help to our MCA team and MCC partners on their visits to the eleven program sites. The MCC program is pioneering into areas that have not been considered by our traditional donors, especially infrastructure.

This program is vital to Vanuatu and a role model of aid effectiveness for other donors,”” Minister Tapangaraua said.

MCC acknowledges that basic income data at the household level is often scarce and unreliable in the poorest countries with whom we partner, Mr. Bent said. Therefore, MCC has made a strong commitment to improving the quality of data in our partner countries and has funded baseline surveys in all of our compact countries. This helps us measure the impact of MCC investments and track interim progress toward compact goals. In several cases, these surveys are being used by the governments and other donors for purposes beyond compact projects.

MCC stands by the projected impact of the Vanuatu Compact and we are proud of the work we are doing not only in Vanuatu but also the 26 other countries in which we are working, Mr. Bent said. We are pioneering among foreign assistance programs in many ways, including the degree to which we make public our criteria for estimating program impact.

Mr. Bent continued, We look forward to measuring the actual benefits of this investment once poor farmers can get their crops to market and a broader swath of the population can participate in the wider economy.

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