"Secretary of State Condoleezza Rice, Malagasy President Marc Ravalomanana and MCC CEO Paul Applegarth

Remarks by CEO Paul Applegarth, Secretary of State Condoleezza Rice, and President Marc Ravalomanana

April 18, 2005

(4:00 p.m. EDT)

MR. APPLEGARTH:   Good afternoon.  I’m glad to see so many people here today on this very happy occasion.  Today the Millennium Challenge Corporation is signing our first compact, which is, of course, with the Republic of Madagascar .  We are extremely pleased that the President of Madagascar, His Excellency Marc Ravalomanana, and his distinguished delegation and our Ambassador to Madagascar, Ambassador Jim McGee, have made the long journey to be here today.  And I warm welcome to our MCC Board members, Administrator Natsios and Ken Hackett and our other distinguished and old friends.

We are especially honored that Secretary Rice is here to officiate this ceremony.  Not only is the Secretary Chair of the Board of the MCC, but she played a key role in formulating the vision for the MCA together with Secretary Powell and President Bush.  That vision, announced in Monterrey in 2002, called for a new compact for development to link greater contributions from the United States and other developed nations to greater responsibility from developing countries.

Today, that vision announced in Monterrey is embodied in this compact with Madagascar .  And now, to tell you more about the compact, I yield the podium to our Chair, Secretary Rice.


SECRETARY RICE:  Thank you very much.  Thank you, Paul, and welcome to the Benjamin Franklin Room, where today we are going to sign the first ever Millennium Challenge Account compact with the Republic of Madagascar .

It is a four-year, nearly $110 million program that we have designed together.  Paul will return to the podium in a moment to tell you more about the compact, but let me first thank Paul and the MCC staff for the superb work that has been done on this compact that begins to transform President Bush’s vision into a reality.  And let me thank our Ambassador to Madagascar, Wanda Nesbitt and our current Ambassador, Jim McGee, our former Ambassador and our current Ambassador, Jim McGee, as well as their professional staffs, for help in developing this compact.  This has truly been a partnership in coming to this day.

This is an historical occasion because it is a day we’ve all been waiting for.  The Millennium Challenge Account is one of President Bush’s signature initiatives.  It is one that he had a personal interest in from the very beginning and it is integral to his foreign policy.  That is why we wrote in the National Security Strategy that the twin processes of expanding the circle of development by opening societies and of building the infrastructure of democracy indeed go hand in hand.

The President has never separated international security, political freedom and economic prosperity into separate boxes.  The vision is an integrated one and so is the strategy.  We do not see development as a ““soft issue”” but as a core element of American foreign policy and of international security.  And we do not see development as solely an economic challenge, but rather as a challenge that is fundamentally political in its origin.

Autocratic governments distort the market for political reasons.  When outside observers see shocking inequality and exploitation in a country, some think that capitalism is to blame and conclude that more government intervention in the economy might be the cure.  But what such countries really need is not more government but good government.  What they need is not less free market but a truly free and undistorted market operating within the rule of law.

Economic systems work when access to opportunity is fair so that those with talent and drive can prosper.  A vibrant economy requires, in turn, a political system in which citizens are free to participate so that they can ensure that their government is fair and wise and legitimate and accountable.

And we believe that a country with free political and economic systems is not going to collapse in failure and violence; it is not going to be the source of insecurity for its people, for the region in which it lives or for the world.

The MCA is based on this integrated understanding of how political freedom, economic growth and international security all support each other.  We believe that international support for development will only defeat poverty if that support encourages sound economic and political institutions, if it leads governments to invest in their people, to trust their people and, above all, to free their people to work to their innate talents and aspirations.

As President Bush has said, the prosperity and social vitality and technological progress of a people are directly determined by the extent of their liberty.  Freedom honors and unleashes human creativity and creativity determines the strength and the wealth of nations.

With us today is another president who understands this truth.  President Marc Ravalomanana, it is really a pleasure to have you here.  You know that foreign assistance that is truly effective is foreign assistance that makes itself obsolete.  He knows that if a country needs and accepts foreign assistance year after year, decade after decade, something is wrong with that picture, that a country ought to be freeing itself of that need.

Now, I want to tell you that this is not, by any means, the first time that the President and I have met because not too long after the MCA was created we talked, and he said, ““We are going to be an MCA country.”“  And I said, ““Well, you know, there are these criteria.”“  And he said, ““We’re going to be an MCA country.”“  (Laughter.)  And you know what?  You are an MCA country.  (Applause.)

Perhaps it’s fitting that President Ravalomanana and his country are the first MCA recipients.  The President started out his youth selling yogurt from the back of his bicycle and gradually he built his business into the largest Malagasy-owned enterprise in Madagascar .  He was then elected mayor of a big city and actually had to govern that city.  He knows the practical economics from the inside out and from the underside up.  He’s been there.  He’s seen it all.  And that is why when he became President in 2002, he knew what to do and he knew how to do it.

Over the past three years, President Ravalomanana has spared no effort to put Madagascar’s public financing on a sound basis and to uproot corruption.  He’s spared no effort to invest in health and education of the 16.5 million people of Madagascar, especially the young people.  Madagascar’s mean population age is only 17.5 years old.

President Ravalomanana has supported entrepreneurship and economic freedom.  He has emphasized the importance of human rights and equal opportunity.  Mr. President, you’ve made a difference and we hope now that our MCA partnership can make a difference for the people of Madagascar .

Thank you.


PRESIDENT RAVALOMANANA:   Thank you.  Madame Secretary, Mr. Applegarth, distinguished guests, ladies and gentlemen.

May a President say that he is proud?

Well, I must say that I am proud. I am proud of my government, my staff, and the organizations and people who have brought us to this very important stage.

First, I am proud that Madagascar has been chosen for the MCA program for two years in a row . This is the recognition of our efforts in Good Governance, Economic Reform and Social Welfare.

Indeed Good Governance is my highest priority. Good Governance is the key to everything else. Fighting corruption, enforcing state accountability, creating transparency, improving service delivery and the efficiency of the justice system these are the basis of trust and security.

Economic reform is equally important. All the economic initiatives that we have implemented over the last two years are all based on one philosophy: we will only succeed if we open up our country, face the challenges of international competition, and create suitable conditions and the right climate for international and domestic investment.

Second, I am proud that Madagascar is the first country to sign the MCC Compact. We are honored to be trusted by the American government, Congress and the American people. This might be attributed to our clear vision named Madagascar – naturally.

This is a vision, which aims to strengthen the rural communities, to build industries and commerce suitable to the rural areas and then to create economic growth from the bottom up.

We have a very clear roadmap on how to implement this vision. The compact is perfectly suited to our vision: security and financing for farmers and SMEs, new opportunities to create added value. The MCA compact will assist us in realizing our vision.

The approach of the MCC is also in line with our philosophy of country ownership. We are developing national programs in which we work in close collaboration with donors. We are very happy that our approach to content and procedures are the same. This is a much more effective approach.

Today is a momentous day for my country. On behalf of 17 million Malagasy people, especially on behalf of 13 million of our people who live on less than 1 dollar a day, I thank President Bush for his great initiative, the new compact for global development. I thank him and you, Madam Secretary, for the implementation of this new approach, and particularly for doing something for African countries . And I thank you, Mr Applegarth and your team, for your courage, trust, help and understanding. We are well aware that developing the first MCA compact was an enormous challenge.

On this occasion, I also would like to thank the American People and the US government for their continuous and efficient support in the past and we look forward to working with USAID and USDA in the future.

Where do we go from here? We are the first country to achieve Compact, so we are determined to be the first to deliver results. We will not disappoint you.

We consider this compact to be only the first phase of a mutually-beneficial and longstanding cooperation between the US and Madagascar . We want to show that, with the MCA support, Madagascar will become a new model for economic development in Africa .

Madam Secretary, Mr. Applegarth, Distinguished guests, The seal we put on our partnership today is expected to change the fate of many people in Madagascar . The road ahead is not easy, but we will rise to the challenge.

My government and I will not rest until the living conditions of each and every one of our citizens have improved. This is the Malagasy dream. This, ladies and gentlemen is our vision. Madagascar, Naturally.

I thank you.


MR. APPLEGARTH:   Maybe I’ll reread yours.  I think it’s better than mine.  (Laughter.)

First of all, I’d like to thank all those who worked so hard to bring this first compact to fruition, including His Excellency President Ravalomanana and all of our distinguished guests from Madagascar, Dr. Rice, the other members of the board and their staff, Ambassadors Nesbitt and McGee and Ambassador Narisoa, and, of course, the dedicated MCC and Malagasy team members who really did work tirelessly day and night to bring us to today.

This compact will give Madagascar almost $110 million over a period of the next four years.  It is designed to increase incomes and create opportunities for rural Malagasy.  Eighty percent of Madagascar’s poor live in a rural area and many live on as little as 41 cents a day.  We who come from the more fortunate places of the earth cannot really conceive of such a situation.

We must make opportunities for those living in such hardship.  They deserve a better day and a chance to succeed.  The MCC is opening those doors of opportunity:  land titling, financial sector reform, identifying good crop opportunities for farmers.  We have a lot of confidence in the development program that is laid out in this compact.  The compact will give the rural poor the opportunity to secure property rights.  They’ll finally get a piece of paper that acknowledges they own the piece of land they’ve been working on year after year.

This title to the land will encourage them to invest and help them get credit if they want it to buy needed equipment.  They’ll get advice and technical assistance, and advisors will help them improve their opportunities to market their goods.

It is no mystery why Madagascar was selected to apply for the Millennium Challenge Account.  Under President Ravalomanana’s leadership, Madagascar is taking concrete steps to create an environment where assistance will be effective.

Recently, an independent third party complimented MCC by saying that the Madagascar compact was an ““a rare example of a development aid agency doing virtually everything right.”“  I would like to amend that comment to say that this is an example of one our partner countries doing virtually everything right.

Doing it right, of course, is a key MCC principle and we share this with President Ravalomanana, doing it right fast.


We at MCC, and I personally, are very impressed by what we have heard and seen around your country, Mr. President.  You have a group of very talented people to draw upon.  For example, you engaged technical assistance to help you flesh out your plans, but it was local, not from ex-pats.  Developing local capacity to work on the problems of poverty reduction and national development is one of MCC’s objectives and we encourage our other partner countries to follow your example when they can.

The program that you developed for the compact contains concrete steps that will bring Madagascar closer to achieving long-term economic growth, growth that will create jobs, that will sustain communities and that will bring Madagascar into the community of stable, democratic and prosperous nations.  That is what is unique about Millennium Challenge.  It is about reducing poverty through economic growth.

Growth occurs fastest in countries like Madagascar that adopt and adhere to good policies.  By rooting out corruption, upholding human rights, investing in health and education and supporting individual entrepreneurship, countries are putting themselves on the fastest track to poverty reduction and growth.  This is one of the core lessons of development.  MCC was designed to reward and reinforce those efforts and, looking forward, MCC will continue to identify from among the world’s poorest countries those that are taking the hard steps necessary to create a framework for growth.  We will help them to help themselves decide how they will reduce poverty, develop a plan to do it, and manage their own development program in a way that will show results for this investment of U.S. taxpayer dollars.

MCC and development assistance, in general, are about bringing the best of America to our relationship with the world and are a key component of U.S. national security.  As the 9/11 Commission recommends, a comprehensive U.S. strategy to counter terrorism should include economic policies that encourage development, more open societies and opportunities for people to improve the lives of their families and to enhance prospects for their children’s future.  This is the mission of MCC, the mission of USAID and those elsewhere in the U.S. Government committed to development.

Our President does not separate international security, political freedom and economic prosperity off into separate boxes.  His vision is an integrated one and so is his strategy.  The Madagascar compact is an example of MCC helping countries take effective control of their own development and we are poised to expand this circle of development.  We hope to distribute a recommendation to our Board for a second compact by early next month and we now have potential relationships with as many as 30 countries, some of the poorest of the world, totaling 400 million people.  That is worth celebrating.

So with President Ravalamanana, Secretary Rice, Finance Minister Radavidson, members of the Board, Ambassadors McGee and Narisoa, and our distinguished guests from Madagascar who care to join me, let’s make this official.

(The compact was signed.)