MCA Monitor Blog
February 25, 2008
MCC Signs Largest Compact to Date ($698m) with Tanzania
Posted by Amy Crone at 12:06 PM
Last weekend, as part of his whirlwind tour of five African countries in six days, President Bush signed the Tanzania Compact – MCC’s 16th and largest to date. Although concerns about possible expansion of U.S. military presence in Africa overshadowed the development focus of his trip, President Bush was nevertheless able to draw attention to U.S. investments in “smart power,” like results being achieved through foreign assistance programs in the areas of health, infrastructure, and education.
Tanzania is the 9th African compact signed by the MCC. The $698 million agreement will focus on the infrastructure, energy, and water sectors. The infrastructure projects consist of improving mainland trunk roads, resurfacing airport runways on Mafia Island, and rehabilitating rural roads on Zanzibar and Pemba islands. The energy component is comprised of three projects to improve island electricity, build a hydropower dam in western Tanzania, and repair transmission lines in six regions. The water projects focus on increasing the volume and quality of potable water to supply two urban areas – Dar es Salaam and Morogoro; where pollution has been caused by unplanned urban growth and adverse environmental effects of a dam. The selection of projects in the Compact to mitigate past mistakes speaks to the longer-term view of the Tanzanian government, which is also evidenced by the development coordination body Development Partners Group. The program is in line with Tanzania’s poverty reduction strategy (MKUKUTA is the Swahili acronym) which aims to increase economic growth through improved business and tourism conditions along with stimulating rural development.
As the Tanzania compact process unfolds, there are a couple of interesting things to watch. First is the extent to which smart sequencing of MCC assistance programs will yield greater, and perhaps faster, results. Tanzania is the first country to complete a threshold program and subsequently sign a compact, and also received a pre-compact grant for environmental and feasibility studies. This use of 609(g) funding could be a best practice for sequencing – the $9.8 million grant will launch the studies which must be completed for implementation. The accountable entity will be working concurrently towards meeting prerequisites to entry into force, at which point the clock starts ticking on the five-year agreement. This substantive and ordered preparatory work – addressing corruption issues through the threshold program, getting a head start on implementation with feasibility studies, and forming the accountable entity prior to compact signing – could all add up to efficient entry into force, effective and swift disbursements, and a program that can spend the $142 million each year to raise the income of every Tanzanian by about $3.50.
The second issue to watch will be how the MCC and Tanzanian authorities manage the impact of rising oil prices, depreciation of the dollar and increasing materials costs (which are derailing implementation progress on infrastructure projects in other compacts) on achievement of Compact goals. The MCC is currently reviewing its entire portfolio, as are other donors, to gauge the impact of these global economic trends. We look forward to an open dialogue on their findings.
October 09, 2007
An Alternative Way to Look at Progress on Compact Implementation (If Only We Could…)
Posted by Sarah Rose at 02:10 PM
The last week of September, the MCC Regional Country Directors (RCDs) and their Deputies were in Washington for several days of meetings. On Wednesday, Sept. 26, the MCC held a public outreach meeting where the RCDs from three compact countries--Honduras (John Wingle), Benin (Randall Wood), and Georgia (Colin Buckley)--discussed the challenges and successes they've experienced working directly with countries as they implement their compacts.
It was refreshing to hear perspectives from folks on the ground about successes achieved and also--importantly--why compacts have been slower to ramp up than anyone, including the MCC, expected. The MCC's slow rate of disbursement is a major point of contention with Congress--a point it is using to justify a low appropriation for FY2008. (As a reminder, MCC must commit all the funds for the lifespan of the compact at signing. The funds are obligated at entry into force, and they are disbursed in performance-based increments when the MCA money sitting in the US Treasury is paid out to the in-country accountable entity.)
MCC has been stating that accountable disbursements--with partner countries running (and learning from) the implementation process--are better than fast disbursements; the RCDs are instrumental in giving that message important (and largely neglected) context. John Wingle, for instance, said that the first big challenge in Honduras was procurement. Since MCC gives responsibility for procurement to the country, there can be delays as processes and structures for transparent procurement are put in place, in many cases for the first time. In Honduras, for instance, the education around conflict of interest avoidance was invaluable and will be applied in all subsequent compact-related procurements (and beyond, one hopes). In addition, MCC held off work on the transportation project in Honduras until mechanisms for sustainability were in place--funding was put on hold until the government met the legislative and financing requirements for a road maintenance fund. And finally, the MCC is raising the bar on resettlement by requiring (and enforcing) that compensation at full market value of the acquired land, including assistance for moving expenses and the restoration of livelihood strategies for affected people, be completed before construction begins. Thus, as the case of Honduras shows, it is MCC's founding principles--country ownership, emphasis on sustainable results, and accountability to all parties (from the partner country implementers and individuals impacted to the US taxpayer)--that are rightfully contributing to initial delays. Many of these are start-up delays, however, that should not persist throughout the compact life-span. Once procurement systems and training are in place, subsequent procurements should go much faster than the first, and once sustainability requirements and social impact issues are resolved, work can begin (with continuous monitoring, of course).
At the end of the session, John Hewko, Vice President of Operations, emphasized that while the amount of money disbursed is one measure of progress, it is not the most important measure. Instead he suggests that the amount committed in contracts for project work is a much better measure, and that these contract commitment numbers show that many MCA compacts are actually progressing very well. Contract commitments may indeed be an important measure of progress, in my own mind for two main reasons: implementation schedule realities and country capacity. On implementation schedule, it is simply a reality that most projects will have minimal initial outlays during the design phase (year one at a minimum) but ramp up considerably in later years (picture a bell curve, more or less). Orientation to the MCA model, contracting for and conducting feasibility studies, project design and impact analyses, and designing the evaluation framework each take several months to complete. On the issue of local capacity, contract commitments are a proxy for a successful country-driven procurement process that met the MCC's standards for transparency and accountability. In that respect, not only is the dollar figure important but so is the fact that the commitment is a measure of impact--the country’s success in meeting a high fiduciary standard associated with implementing MCA programs.
As much as I would love to track and comment on MCC partner countries' progress in completing contracts and committing funds, the MCC does not currently report these figures or publicize examples of "MCA effect" on local capacity building in procurement and otherfiduciary proceedings. To enable a new, more nuanced conversation around MCC's progress in implementing compacts, public presentation of data on commitments would be a good advancement. Including a section on commitments in the monthly public Country Status Reports is one possibility, publishing separate monthly or quarterly reports is another. The Global Fund--which has raised the bar for transparency and accounting--has on its website regularly updated and highly detailed reports on grant commitments and disbursements (which have the added bonus of being in an immediately obvious place for any first-time user). Doing something similar would increase transparency (something the MCC strives toward and what helps set it apart from other foreign assistance programs) and have the potential to influence the discussion of MCC operations in a significant way. The MCC is currently focusing on setting up the systems and structures that enable the best reporting of current and expected commitments. I look forward to seeing those results.
April 30, 2007
A Look at Two Central American Compacts: Reports from Nicaragua and Honduras
Posted by Sheila Herrling at 02:40 PM
With bittersweet pleasure, I post the final two MCA Monitor Field Reports from Sarah Lucas. Over the past 2 years, Sarah has traveled throughout Africa and Latin America capturing the successes and challenges faced by the MCA and partner countries in implementing a new foreign assistance model. Her insights and reflections from the field have been tremendously useful to our Washington-based analysis and monitoring of the MCA. As we often say, true innovation will be demonstrated by institutional change and tangible development gains in the countries themselves. Sarah’s ability to capture the reality on the ground and turn it into practical lessons for enhancing the program’s effectiveness was a tremendous contribution to the MCA Monitor Program. We hope to continue the series with a new contributor soon. In the meantime, enjoy the last two country reports on Nicaragua and Honduras, look out for her last submission compiling the lessons from seven countries, and join me in giving Sarah a huge "bravo" on her contribution to the success of the MCA.
Sarah can now be found at the Millennium Challenge Corporation, where she will be tackling many of the implementation challenge issues she covered in her reports. Smart group, that MCC!
March 30, 2007
MCA Cape Verde Goes to Washington
Posted by Sarah Rose at 02:32 PM
On Monday, March 26, US Congressman Barney Frank hosted a delegation from MCA Cape Verde which presented to Congress the progress to date on its MCA compact. Cape Verde signed a $110 million compact with the MCA in July of 2005 (with an additional $7.5 million in government counterpart financing). It has been almost a year and a half since Entry Into Force (October 2005), so--as MCA watchers are increasingly looking for evidence of implementation--it was a great opportunity to hear about some of the things happening on the ground.
The main story in Cape Verde is what has been accomplished behind the scenes. This is comparable to the "invisible year" story that Sarah Lucas reported from Madagascar (another early MCA country). In fifteen months, MCA Cape Verde has (among other things):
- Established its operational basis: It set up and staffed its management unit, established a procurement review commission and put in place the fiscal agent, constituted its steering and stakeholders committees, and set up implementing entities within various relevant ministries.
- Created the foundation for M&E: It conducted baseline surveys for watershed management and the agriculture/agribusiness projects and started a poverty profile survey that uses GIS to map poverty levels geographically. This will be ongoing throughout the compact lifespan (and beyond, one hopes!).
- Continued outreach to promote local involvement in the MCA projects: It held environmental awareness presentations around the forthcoming roads project and launched procurement training for local associations to bid for projects.
- Contracted for implementation guidance: It received TA on pest fighting, agriculture inspection/certification and identifying sectors for private sector investment and has contracted studies for port rehabilitation.
- Worked to promote an enabling legal environment: It facilitated the passage of a new law on microfinance which will serve as the basis for direct support to microfinance institutions through MCA funds.
- Set the foundation for a financially sound and transparent operation: It has already undergone one external audit, three internal audits (all of which passed without comment) and one review of the financial sector by GAO.
These are important steps that are fundamental to the success of the compact, but they are less directly measurable and not particularly visible to observers outside MCA-CV and the Government of Cape Verde.
More visible, measurable progress is making headway as well. The Government of Cape Verde is working to enhance its e-readiness capabilities, and it has made great strides integrating government information and services in an interactive web-based portal. For example, MCA-CV estimates that by June, citizens will be able to start a business in one day (as opposed to the more than 50 days it takes now). This is a good sign since it shows the MCC Effect continues to work even after compact signing. Furthermore, within the e-government framework the MCA was the driver behind the shift to electronic procurement, M&E and loan applications which is a big boost for transparency. The MCA-Cape Verde partnership marks the first time that Cape Verde is doing a completely paper-free financial execution.
Work has also begun on road construction in Santiago, that also includes a social component: integrated HIV/AIDS awareness campaigns for workers and the population along the roads. Work on four bridges on the island of Santo Antao is scheduled to begin next month, and work on the Port of Praia is scheduled to begin one year from now (although studies are currently underway).
Laurent Brito, managing director of MCA-CV, concluded his presentation by saying that the MCA concept is valid, that the implementing entity agreements build capacity in the government that will ensure sustainability, and that overall, the program will support long run institutional change. These are hopeful words from Cape Verde even though much remains to be done before the five year expiration date. That said, the MCA countries and the stories they tell about changing policies to gain eligibility and changing the mindset about how they and their citizens view and manage foreign aid are terrific for members of Congress to hear.
January 09, 2007
On The Ground In Madagscar
Posted by Sheila Herrling at 06:08 PM
For the past year, CGD's Sarah Lucas has sent snapshot-in-time, on-the-ground assessments of recipient country experiences with the Millennium Challenge Account. Her new report from Madagascar, the first country to sign an MCA compact, reviews experience at the one-year mark. It is a story of managing expectations, fostering civil society consultation, and making the most of innovation. You be the judge about the importance of what Lucas calls "the invisible year." Tell us what you think; what you know.
Sarah has just returned from her Africa voyage and will next head to Latin America. Where would you like to see her go and what should she be looking for?
August 03, 2006
GAO Audits MCC Performance in First 3 Countries
Posted by Sarah Rose at 11:00 AM
GAO's audit (pdf) of MCC operations in Madagascar, Cape Verde and Honduras--the first three compacts--is out. The report is LONG, so let me break out some of the notables in the report. Also, bear in mind that many of the findings and recommendations included in this audit have in fact been applied by the MCC in subsequent compacts:
- Due diligence activities, both ex-ante diagnostic (economic rate of return and poverty/social impact assessment) and overall program monitoring and evaluation strategies are weak. Due to problems of data quality, the initial analysis of certain projects' economic impact may not have reflected actual country conditions. Unreliable benchmarks may make progress toward a goal less meaningful;
- in Madagascar and Cape Verde, participation in the compact design process was fairly limited;
- use of a Project Implementation Unit (PIU) approach to managing MCA programs trades off efficiency/implementation speed for capacity and fiduciary institution building;
- local understaffing at the beginning of compacts makes it harder to achieve all goals within the compact period.
GAO's monitoring and evaluation recommendations for MCC bear particular mention, not only because M&E is a critical tool for enabling MCC to adhere to its unique mission of enforcing accountability, but also because timely, methodologically sound impact analyses can be the best way to inform the design of future development initiatives undertaken by other donors, NGOs, and developing country governments. As discussed in CGD's Evaluation Gap Working Group report, there is a dearth of good impact evaluations. For MCC to become a leader in accountable and effective development programming, it should pay particular attention to GAO's recommendations to improve its M&E by: ensuring the reliability of baseline data collection, clearly linking outcome targets to the economic justification of a project, instituting clear policies for establishing and adjusting targets, and developing early on a design for randomized controlled trials for use throughout the projects' lifecycles. Importantly, the MCC and recipient countries need to exert greater energy and resources to these activities at the outset, not well into the program's implementation.
It will be worth keeping an eye on these issues raised by GAO to see if they are, as the State Department claims, merely transitory, due to the infancy of MCC's compact implementation processes and still evolving policies and procedures.
March 06, 2006
Vanuatu: Compact Signed and Moving Ahead
Posted by Kaysie Brown at 03:52 PM
On March 2, the MCC signed a 5-year, $65.69 million compact with Vanuatu. The grant will focus on rehabilitating transportation infrastructure through eleven infrastructure projects aimed at roads, warehouses, wharves and an airstrip, extending into rural areas. The Compact will also include institutional strengthening efforts and policy reform initiatives such as maintenance equipment, maintenance schemes and the introduction of user fees. According to the MCC, the goal is to create a program that:
will benefit rural agricultural producers and providers of tourist-related goods and services by reducing transportation costs and improving the reliability of access to transportation services.
This is the 7th Compact that the MCC has signed to date. Though it is by far the smallest Compact so far, it may in fact prove to be the first Compact to enter into force relatively quickly. As MCC CEO Danilovich mentioned at a public event held by CGD last month:
…I’d like to say [Vanuatu] has the possibility of becoming our first compact that will enter into force very rapidly because that has been a problem that we’ve had internally, between the signing of the compacts and their entering into force. In Vanuatu we’ll have a situation where that compact will in fact enter into force in a matter of weeks.
January 17, 2006
MCA Monitor Launches "Reports from the Field" Series
Posted by Sheila Herrling at 05:03 PM
Today we launched MCA Monitor: Reports from the Field -- an occasional series that provide an on-the-ground assessment of individual country experiences to inform and support broader MCA policies and operations. Sarah Lucas, Senior Associate, Research and Policy, submitted her first two reports reviewing the early experience of MCC in Mozambique and Malawi. As always, we welcome your feedback.
Sarah is travelling throughout Africa and Asia over the course of this year. In addition to submitting MCA Monitor Reports from the Field, she runs her own travel blog which is full of wonderful stories, pictures, and personal impressions from her travels. There's nothing like putting a human face on the work we do.
December 13, 2005
First Insight into Danilovich's Vision for MCC
Posted by Sheila Herrling at 11:14 AM
CEO Danilovich put some meat on the bones of his vision for the MCC (as well as rather strategically preempting many of the special interests and criticisms from the NGOs present) in a speech delivered to Interaction's annual CEO retreat last week. Danilovich sets forward 5 guiding principles:
"First, MCA is performance-based. As you know, eligibility for receiving assistance is predicated on a country's report card of 16 indicators measuring good governance, economic freedom, and investing in people. MCC seeks to target those countries most dedicated to breaking the cycle of poverty and ensuring our aid dollars have a transformative impact."
For the most part, I think the MCC has done well in implementing a complex process of applying a performance-based measurement system to its decisionmaking process. But there is significant room for improvement in making more transparent the use of Board discretion when the data doesn't show a clear picture. Find our analysis on the MCA Monitor website.
"Second, Millennium Challenge is not for everyone. Country selection will be driven by scores and data, and countries that are bastions of corruption, poor governance, and instability are not suited for the kind of assistance Millennium Challenge will provide."
Hmmm...on this one, the MCC needs to put a little more clarity into what defines a "bastion of corruption," and it needs to defend its choices on selecting countries that fail the corruption hurdle. For example, it would seem to me that a country that fails all six good governance indicators would be a likely candidate for corruption, poor governance and instability. Yet, Kyrgyz Republic, failing all six indicators, was deemed eligible for MCC threshold assistance. And Georgia, failing the corruption hurdle all three years, was deemed eligible and already has a signed compact. On a good note, it is refreshing to see that when a country experiences major performance slippages, the MCC is willing to cut them off, a la Yemen.
"Third, MCC is focused on helping the poor primarily through economic growth, market principles, and private-sector instruments...We will, of course, be careful not to exclude programs that remove impediments to growth and development, such as investments in education and health projects."
I admit that I am a little conflicted on the issue of MCC's niche. The MCC cannot and should not be all things to all people. It should, however, decide exactly what it is going to be, say so, and be willing to defend its choices. To do so, however, the MCC needs to set itself more firmly and strategically within the broader umbrella of U.S. foreign aid. If it is going to stay focused on short-term economic growth investments, it needs to make sure its investments complement the work of other agencies and the recipient government in the longer-term education and health investments. And the MCC absolutely has a responsibility to measure and communicate the poverty and social impact of its investments. It is not enought to simply say that growth is good for the poor.
"A fourth guiding principle is that recipient countries, not the donor, should have primary ownership of the Compact, and it is the recipient country that will conceive, develop, and implement its own program – with MCC oversight and monitoring."
I believe this is a key innovation of the MCC and we need to have the patience to allow this process to be real and to work. We need to be able to measure this process as a success (or failure) of the MCC just as we are so quick to say they are not disbursing money quickly enough. That said, I think the MCC could give a little more guidance to countries as to the scope and type of projects it is most likely to fund to save some time in the iterative process.
"[Fifth,] we must focus on a relatively small number of countries and develop large, transformative Compacts that allocate enough resources to actually make a dent on poverty in those countries."
Yes, yes, yes. And, therefore, adding lower middle income countries to the mix this year was not, in my opinion, a good decision. You can see my views on this in my earlier paper.
Sorry for the long posting but I think this speech was very well done (from a communications perspective) and important in terms of having a benchmark from which to measure Danilovich's ability to carry out what he said. As always, I would love to hear some reactions. Best, Sheila
September 13, 2005
Georgia and United States Sign $295.3 million Compact
Posted by at 09:37 AM
The Republic of Georgia and the United States signed a five-year $295.3 million compact in New York City on September 12.
MCC Chair Condoleezza Rice highlighted the significance of the grant. "The Millennium Challenge Compact that we sign today represents America's long-term commitment to Georgia's future success, and our partnership will only continue to grow stronger as Georgia continues to establish the rule of law, a vibrant and civil society, an independent media, a free economy and an accountable, effective institutions of government at all levels," she said.
The compact aims to boost rural development and reduce poverty in the region outside of the capital city of Tbilisi where more than half of the country's rural population lives.
MCC Temporary CEO Charles Sethness commended Georgia's efforts. "Congratulations to the people and Government of Georgia for this great achievement," he said. "I especially want to thank President Saakashvili for his leadership, his dedicated team for their hard work, and the people of Georgia for developing a concrete plan to lift the poor out of poverty and spur economic growth. This Compact is a testament to the commitment of Georgians to take ownership of their development path. MCC is proud to be Georgia's partner in its efforts to reduce poverty in the regions outside of Tbilisi."
Georgia is the first former Soviet republic to sign a compact with the United States. Armenia, another former Soviet republic, also qualified for MCA fundings, but has yet to get the board's approval.
Madagascar, Honduras, Nicaragua and Cape Verde signed their compacts with the United States earlier this year.
August 17, 2005
MCC Board Approves $295.3 Million Compact with Georgia
Posted by at 02:58 PM
The MCC's Board of Directors approved a compact with Georgia on August 16. The five-year $215 million compact aims to boost rural development and reduce poverty in the region outside of the capital city of Tbilisi where more than half of the country's rural population lives.
Georgia's compact is the first to be approved for a former Soviet republic. The MCC anticipates signing the agreement with Georgia in September after congressional review.
Madagascar, Honduras, Nicaragua and Cape Verde signed their compacts with the United States earlier this year. Armenia, another former Soviet republic, also qualified for MCA fundings, but has yet to get the board's approval.
July 21, 2005
Senegal Signs $6.5 Million Agreement with MCC
Posted by at 03:38 PM
The MCC will extend a $6.5 million grant to the Government of Senegal to assist with the design of their MCA compact proposal. Senegal's proposal includes the development of a large-scale industrial, commercial, and residential site called the Diamniadio Platform.
According to the compact proposal, Senegal plans to develop a new center of economic activities in Diamniadio (30 kilometers from Dakar), improve the city traffic network, and induce the emergence of new regions of development.
July 18, 2005
Cape Verde Compact Discussed at Washington Event
Posted by at 11:55 AM
"I consider the MCA a great innovation in international development," said Cape Verde's Prime Minister Jose Maria Pereira Neves. "It encourages positive change. I believe countries with good policies should be rewarded."
Neves spoke about the Cape Verde compact at a meeting in Washington DC on July 13 organized by the Center for Global Development, Bread for the World and the Millennium Challenge Corporation. The United States and Cape Verde signed a five-year $110 million on July 4 in Praia; the first time a compact has been signed outside of the United States.
The compact will finance projects in infrastructure ($74 million), agriculture ($11 million), and private sector development ($7.2 million). In addition, $8 million and $4 million will be allocated to program administration and monitoring and evaluation.
Cape Verde is the third country to sign a compact with the MCC, and the second in Africa to do so after Madagascar. Nicaragua and Honduras have also signed compacts.
CGD Senior Fellow Steve Radelet, who moderated the discussion, lauded Cape Verde's efforts. "A lot of positive change has taken place in Africa. In the 90's, there were only four democracies. Today, Africa counts close to 20 democracies," Radelet said. "Cape Verde has been at the forefront of that change. It is perhaps hard to notice because it is a small country, but Cape Verde has led the way to change."
MCC CEO Paul Applegarth showcased Cape Verde's accomplishment as an example to emulate. "Now with these compacts, we have real examples that show how the system works," he explained. "We hold it as gospel that countries have to pick and choose what works for them. The other MCA countries can talk to the countries that have signed compacts about their experiences."
Thirteen other countries that qualified for MCA funding do not yet have compacts.
When asked what could have been done differently, Jose Brito, Cape Verde's ambassador to the United States, pointed to one of the main challenges the MCC faces in explaining the innovative concepts that it embodies.
"I recognize the MCA process is complex. At the beginning, the guidelines were not clear. But we learned together through this process," Brito said. "The MCC should also rethink the importance of economic rate of return for the program. Many development projects, particularly in education and agriculture, do not show great economic rate of return at the outset. Yet in the long run, they are essential for poverty reduction."
David Beckmann, President of Bread for the World, urged the audience to help move Congress to support and fully fund President Bush's request $3 billion for the MCA.
"I am excited about the G8 commitment to Africa. This will help millions of people," Beckmann said. "But from the United States perspective, it is a recommitment to an earlier promise. We need to do our part to ensure that promise is kept."
As for the Capeverdians, they are eager to implement the program. "We hope to get the money soon," Ambassador Brito said. "That is what it is all about, not the signing ceremony."
July 14, 2005
Nicaragua and the United States Sign $175 Million Compact
Posted by at 02:54 AM
Nicaragua and the United States signed a five-year $175 million compact on July 14. This is the fourth compact for the Millennium Challenge Corporation.
Nicaragua's compact will improve transportation infrastructure ($92.8 million), promote rural business development ($33.7 million), and strengthen property rights ($26.5 million). An additional $22 million will be allocated to the program oversight and monitoring and evaluation.
Speaking at the ceremony, Secretary of State Condoleezza Rice said the compact was a testament to Nicaragua's commitment to economic growth. "We applaud Nicaragua for freeing the funds from the HIPC debt forgiveness program in order to create the right conditions for lasting prosperity," Rice said.
In 2004, Nicaragua had a strong 5.1 percent growth rate, according to Rice.
Nicaragua's President Enrique Bolanos thanked the people of the United States for their generosity and promised to continue the fight against poverty and corruption. He urged the United States Congress to support CAFTA.
"The MCA was not designed to work by itself. It should be complemented by other trade mechanisms," he said. "To me CAFTA has implications for democracy and security."
July 12, 2005
Bread for the World Calls for More Funds for MCA
Posted by at 03:25 PM
In a statement released earlier today, the Reverend David Beckmann, President of Bread for the World, urged US Congress to fully fund President Bush's $3 billion request for the MCA for FY 06.
In June the House Appropriations foreign aid subcommittee approved only $1.75bn for the MCC next year, which is well below the administration's request for $3bn. The cut is part of a larger reduction reflected in the $20.3 billion foreign aid bill approved unanimously by the subcommittee.
The statement also applauded the MCA compact the United States and Cape Verde signed on July 4 in Praia.
On July 13, Cape Verde's Prime Minister Jose Maria Pereira Neves, MCC CEO Paul Applegarth, Bread for the World President David Beckmann, and CGD Senior Fellow Steve Radelet will discuss the compact and its potential impact on Cape Verde's economic growth and poverty reduction programs. Learn more and RSVP
July 11, 2005
Georgia Expects $300 Million from MCA
Posted by at 06:13 PM
Georgia expects to receive $300 million in MCA funds. According to The Messenger, Georgia's English daily, the MCC has cleared the proposal, adding $100 million to the initial request.
On July 8, The Messenger wrote:
A day after Prime Minister Zurab Noghaideli stated that Georgia will receive USD 200 million in aid from the U.S. government's Millenium Challenge Corporation, officials from the Georgian government's agency Millenium Challenge Georgia (MCG) adjusted the figure upwards to nearly USD 300 million.In a statement released late Thursday describing negotiations held in Washington from June 20 to July 2, MCG confirmed the USD 100 million increase.
"As a result of the negotiations within the framework of the visit of the Georgia's delegation to the USA, the budget for Georgia's Proposal has increased significantly, reaching approximately USD 300 mln," MCC states.
July 05, 2005
Cape Verde and United States Sign Compact
Posted by at 06:57 PM
Cape Verde and the United States signed a $110 million compact in Praia on July 4. The five-year compact focuses on infrastructure, agricultural, and private sector development. This is the first time a compact is signed outside of the United States.
Join us on July 13 when Cape Verde's Prime Minister Jose Maria Pereira Neves: MCC CEO Paul Applegarth; Bread for the World President David Beckmann, and CGD Senior Fellow Steve Radelet discuss the compact and its potential impact on Cape Verde's economic growth and poverty reduction programs. Learn more and RSVP
June 27, 2005
Assessing Nicaragua's Compact
Posted by at 11:03 AM
This afternoon CGD hosted a panel discussion on Nicaragua's MCA compact. The event featured Manuel Agosin, Regional Economic Adviser at the Inter-American Development Bank, Manuel Orozco, Senior Associate and Executive Director for the Remittance and Rural Development Project at Inter-American Dialogue, Salvador Stadthagen, Nicaragua's Ambassador to the United States, and James Vermillion, Managing Director for Latin America at the Millennium Challenge Corporation. Steve Radelet, CGD's Senior Fellow, moderated the discussion.
Speaking on behalf of his government, Ambassador Stadthagen expressed his satisfaction with the MCA approach to development. He underlined country ownership as an important aspect of the program, which allows for meaningful consultation on project design between the donor and the recipient. That significant element, he said, has been lacking in development programs.
Ambassador Stadthagen insisted it was important that the MCA be additional to, but not a replacement of, current development aid, such as USAID funds.
Responding to misgivings about Nicaragua's selection as an MCA country, James Vermillion said they were misplaced.
"Nicaragua was not picked at the MCC Board's discretion," he explained. "They met MCA selection requirements."
The panelists shared their views on the $175 million compact's main components, namely, transportation infrastructure, rural business development, and property rights. They also discussed corruption and the current political crisis.
We will post the transcripts of the discussion as soon as they become available.
June 25, 2005
MCC Hammered
Posted by at 05:28 PM
On June 23, The Economist took a closer look at the MCC. MCC Hammered: In Praise of a bold but unloved aid agency highlights the merits of George Bush's flagship development program and the challenges at hand. The article reads:
GEORGE BUSH's flagship foreign-aid programme is under fire. Since 2002, when the president promised to set it up, the Millennium Challenge Corporation has found only four relatively small poor countries to give money to. Last week, the MCC's chief executive, Paul Applegarth, said he was quitting to "reintroduce" himself to his wife and daughters.
The MCC is unloved by both left and right. A Republican-led House of Representatives sub-committee has just recommended nearly halving its budget, to $1.75 billion next year. American liberals suspect it is part of Mr Bush's conspiracy to conservatise the world. And Europeans mock the MCC as slower, meaner and more ideological than their own aid programmes. Some of this criticism is fair, but much is not.
The "slow" charge is accurate, though that is not the fault of the MCC's overworked staff. Congress did not pass enabling legislation until last year, and the Bush administration, distracted by Iraq, was ill-prepared even then to get the agency up and running.
At first glance, the "mean" charge seems apt, too. Mr Bush initially promised $5 billion a year to fund the MCC, but it has so far disbursed only $400,000. The agency's defence is that it is trying something new and unusual. Other donors tend to focus on tear-jerking issues such as AIDS, or on boosting the budgets of the better-run poor-country governments so they can provide better public services. The MCC seeks to promote economic growth in those countries-which is more complicated and takes more time.
June 22, 2005
Awkward Timing for MCC Chief's Departure
Posted by at 12:46 PM
Financial Times' Andrew Balls reported last night that Paul Applegarth's surprise resignation resulted from failing confidence within the Bush administration that the flagship aid program was fulfilling expectations. Ball wrote:
The timing of the resignation was awkward for the administration, occurring just before the Group of Eight summit in Scotland next month. At the summit, President George W. Bush will promote the Millennium Challenge Account, overseen by the MCC, as the US's preferred way of raising aid flows to African countries.
European proposals, in contrast, are for innovative financing schemes to increase aid, or new taxes. Within the administration, officials are concerned at slow progress made by MCC in disbursing aid. Last week at a meeting with African leaders, Mr Bush pledged to "work harder and faster" to increase aid after receiving complaints about the MCC's excessive bureaucracy.
This meeting followed Mr Applegarth's gradual loss of support of the MCC board members including Condoleezza Rice, secretary of state, and John Snow, Treasury secretary according to administration officials and others close to the MCC.
Mr Applegarth's resignation will be portrayed as signalling that the administration is serious about boosting the MCC. State Department and MCC spokeswomen declined to comment on the resignation. Tony Fratto, Treasury spokesman, said the administration did not comment on personnel decisions, but added: "As the president has said, we want to see the MCC at the leading edge of how development assistance is delivered. We appreciate the work Mr Applegarth did in getting the MCC off the ground."
Read Andrew Balls' full report
June 20, 2005
Who is Watching the MCC?
Posted by at 07:06 PM
Evidently not the Washington press. The New York Times broke the story of Paul Applegarth's resignation on Thursday, June 16, the day after the MCC CEO told his staff he planned to resign. On Friday the NYT's Celia Dugger ran some thoughtful analysis.
Reuters and Associated Press both ran stories, which were picked up in places as distant as South Africa and London, where the Guardian ran an AP story that linked cuts in funding to Applegarth's resignation.
Meanwhile, in Washington, the home turf of Congress and President Bush's signature foreign aid program, nothing.
On Sunday, the NYT ran an editorial, Timely Departure that compared the progress of the MCC to that of the Fast Track Initiative, a multi-donor initiative which focuses on education and is run out of the World Bank. The editorial noted:
Both programs were announced in 2002...Since then, the Millennium Challenge program has signed contracts to give money to only two countries: $108 million to Madagascar and $215 million to Honduras. The program's board recently approved two more, Nicaragua and Cape Verde. Through the Fast Track program, rich countries have actually given money to 12 countries. During the first three years, donors shifted about $905 million in foreign aid to the qualifying countries for primary education; this year the 12 countries will get an additional $350 million...One reason the Fast Track Initiative got going quickly was that it did not waste years in assembling a staff of neophytes who narrowly defined strategies for growth to fit their ideological bent.
The Washington Post, meanwhile, finally noted the change at the MCC with a one-sentence Sunday report on page F3 that was part a gossip column titled Revolving Door. The column included the coming change in leadership in the flagship U.S. aid program along with several recent promotions within the Washington offices of big accounting and consulting firms. On Monday the Washington Post addressed the issue again with three paragraphs buried deep in Al Kamen's In the Loop column. Kamen wrote:
"Eyebrows were raised" recently when the MCC approved turning over the financial management of a large grant to Madagascar to a nonprofit, German-government-owned corporation.
Of course, raised eyebrows or not, letting Madagascar decide how to use the money is at the core of the MCA's vision and untied aid is generally good for development.
Of course, alert readers will have also noticed that The Washington Times covered Applegarth's resignation in the final sentence of an upbeat story on the MCC on Sunday headlined: U.S. Certifies Three More Nations for Aid Program. Washington sleuths with experience reading Pravda and the People's Daily will have had no trouble finding the news!
June 17, 2005
What's Next for the MCC?
Posted by at 02:19 PM
The resignation of Paul Applegarth as the CEO of the MCC, followed by the news that Congress has cut back the funds that President Bush requested for the fledgling aid agency has both critics and supporters of MCC wondering whether it can live up to its bold vision. Although the MCC made a reasonable amount of progress in its first year, whoever becomes the new head will face major challenges. Read Challenges for the New Leader of the Millennium Challenge Corp., by Steve Radelet and myself.
Meanwhile Celia W. Dugger at the New York Times reports that
"with the United States under heavy international pressure to double aid to poor countries, one of President Bush's signature foreign aid initiatives is facing severe cuts in its proposed budget, intense criticism from African leaders and the departure of its director after only a year in the job."
Dugger reports that on Monday
"leaders of five African nations complained forcefully to the president about what they saw as the extremely slow pace of grant making. Mr. Bush, in reply, publicly promised that his administration would work harder and faster. This week's series of unfortunate events contrasts with the soaring hopes the president voiced when announcing plans for the Millennium Challenge Account more than three years ago."
The story was picked up by the International Herald Tribune as "Bush's Good Intentions Get Slashed."
Meanwhile, a Reuters story by Vicky Allen picked up by ABC News on-line as "U.S. House Panel Trims Bush's Pet Foreign Aid Plan" also focused on the cuts to the MCC in the $20.3 billion foreign aid bill approved unanimously by the House Appropriations foreign aid subcommittee. As the story notes, the bill included $1.75 billion for the Millennium Challenge Account, $1.25 billion less than Bush wanted.
In fact, less than full funding for the MCC had long been anticipated, and the $1.75 billion was actually a little higher than the $1.5 billion we expected. But coming quickly on the heels of Paul Applegarth's resignation, the Congressional action definitely contributed to increased public awareness of the challenges that face the MCC.
"By taking the side of liberty and good government,"he declared in March 2002,
"we will liberate millions from poverty's prison."
June 16, 2005
MCC CEO Paul Applegarth to Step Down
Posted by at 10:26 AM
The New York Times reports this morning that Paul Applegarth, the Chief Executive Officer of the Millennium Challenge Corporation will step down at a date yet determined. The MCC will provide more details soon.
The New York Times wrote:
Two days after a group of African leaders complained that the Bush administration's signature program to aid poor nations had proved slow, the head of the program told his staff on Wednesday that he would resign.
Paul V. Applegarth, the chief executive of the Millennium Challenge Corporation for the last 13 months, will step down at a date yet to be determined, an official there said. The corporation administers the Millennium Challenge Account, established by President Bush to provide financial assistance to poor nations that show progress in establishing what the United States considers stable democratic governments and pursuing sound economic and social welfare policies.
The program has given final approval for aid to only two countries, Madagascar and Honduras, and has disbursed almost no money. Program officials have said that more approvals are in the pipeline, that the money will soon begin flowing and that, in any case, the program is as much about encouraging good government as about dispensing financial assistance.
We will continue to monitor this development as more information becomes available.
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June 13, 2005
MCC Board Approves Cape Verde and Nicaragua Compacts, Signs Honduras Compact
Posted by at 07:09 PM
The MCC today approved two new five-year compacts, and held a signing ceremony for the recently approved $215 million compact with Honduras.
Speaking at the ceremony, Secretary of State Condoleezza Rice said that the compact was the reflection of the commitment of the people of Honduras to change. "Honduras compact embodies the new approach to development embraced by nations at the Monterrey Summit in 2002," she said.
Honduran President Ricardo Maduro Joest said that the compact came at a good time for Honduras. "Our citizens must see that our democracy delivers more than promises," he said as he listed a number of reform initiatives.
Following on the Honduran success, the board of directors approved a $110 million compact for Cape Verde and one for $175 million for Nicaragua.
Cape Verde's compact focuses on infrastructure development ($74 million), agricultural development ($11 million), and private sector development ($7.2 million). In addition, $8 million and $4 million will be allocated to program administration and monitoring and evaluation, respectively.
Nicaragua's compact will improve transportation infrastructure ($92.8 million), promote rural business development ($33.7 million), and strengthen property rights ($26.5 million). An additional $22 million will be allocated to the program oversight and monitoring and evaluation.
Today's approval brings the total number of compacts to four. The MCC signed a compact with Madagascar in April.
June 01, 2005
Honduras Closer to MCA Vision
Posted by at 02:21 PM
MCA watchers have been concerned about a seeming lack of civil society participation in proposal design in MCA-eligible countries. That participation is one of MCA's main objectives. Some observers claim that in some countries civil society contributes only at the periphery of the debate while the business community leads the process. Honduras may be different.
The government of Honduras consulted with the MCC and, based on the PRSP, decided to invest the grant in urban development, rural development, employment creation and road infrastructure. That was the plan -- until civil society groups disagreed.
"When we called the civil society to show them our selection from the PRSP, it quickly became clear that the civil society preferred rural productivity enhancement and the transportation segment," said Victoria Diaz, the Honduran government's MCA Coordinator, at a recent event at the Center for Strategic and International Studies. "So we adjusted the proposal to concentrate on those two large components. Not because the civil society wanted that, but it was an important input. One that made the government and the MCC realize that concentrating on two areas would yield better results."
Diaz spoke at the Center for Strategic and International Studies and at InterAction on May 26. Based on her remarks at these two meetings, it seems that in the end Honduras submitted a proposal that is aligned with the PRSP and incorporates civil society recommendations.
Diaz was frank. "This is not a program for the poorest," she said. "We have HIPC for that. This program is for small and medium farmers, and not for the rich. It is designed to give them greater access to the market."
Honduras will use other complementary development funds to support programs targeting the poorest.
Observers have wondered about MCA's compatibility with other donor programs. The Hondurans designed a proposal that would bring various donors to work side by side. For instance, the highway project, which runs from the Pacific to the Atlantic, requires coordination between the Inter-American Central Bank, the World Bank, the MCA and Scandinavian development agencies, as each organization will finance a portion of the project. This undertaking will test the donors' will to collaborate.
In an effort to keep the implementation process transparent, the government of Honduras set up a five-member monitoring and evaluation board. Two civil society representatives will sit on the board with full voting powers along with government appointees. In addition, two other civil society representatives will have observer status for two and a half years while they wait for their rotation. All four represent different umbrella groups.
Honduras' experience may provide an example for the other countries that are still struggling with proposal design and the consultative process. It may also help the MCC improve its guidelines on the consultative process.
Access the CSIS event transcript
Listen to audio from the event
May 17, 2005
MCC's First Year of Operations - GAO Report Highlights
Posted by at 10:18 AM
For two days, April 26 and 27, the United States Congress held hearings on the Millennium Challenge Corporation, for the Senate Foreign Relations Committee and the House International Relations Committee, respectively. The Congress wanted a full report on the MCC's first year of operations.
In his introductory remarks during the HIRC hearing, Chairman Henry Hyde (IL), expressed some growing concern about the MCC's progress:
"The same observers who once received this initiative with such optimism now feel underwhelmed by the cautious pace and the modest scope of the MCA writ large...a program struggling to get off the ground and funding levels for compacts now emerging that lack the boldness necessary to break the cycle of poverty in countries prepared to take that step."
Hyde worried that MCC's incremental approach and the lack of urgency in the implementation of the MCA initiative belied the original vision. The slow pace and the lack of urgency could eventually make the MCA just another development program, with marginal impact, he warned.
To help Congress and other key stakeholders understand MCC's performance, David Gootnick, Director for International Affairs and Trade at the U.S. Government Accountability Office, testified before both the Senate Foreign Relations Committee and the House International Relations Committee.
Gootnick's team monitored MCC's operations over the last 15 months. The GAO analyzed MCC's process for country MCA eligibility and the selection criteria for the Threshold Program. In his report to Congress, Gootnick also discussed progress in compact development, coordination with key stakeholders and the establishment of management structures and accountability mechanisms.
The GAO report, which is now available, recommends that MCC's Chief Executive Officer continue to develop and implement overall plans and related time frames to establish corporate-wide accountability, internal control, and human capital management.
Furthermore, the GAO also recommends that MCC's Board of Directors consider, in addition to its statutory responsibilities, other responsibilities associated with sound and effective governance.
CGD's Senior Fellow Steve Radelet also testified at the HIRC hearing.
April 27, 2005
Leadership, Results Gets Madagascar $110 Million
Posted by at 02:23 PM
"I am a man of action," Madagascar's President Mark Ravalomana told his audience at the Johns Hopkins' School of Advanced International Studies today. Ravalomana was in Washington DC, for the signing of a $110 million poverty reduction compact between his country and the United States.
Madagascar is the first country to receive funds from the Millennium Challenge Account (MCA). The compact is cause for celebration not only for Madagascar, but also for the Millennium Challenge Corporation (MCC), the grant-making institution. Currently, seventeen developing nations meet the eligibility criteria for the fund. But, only Madagascar has qualified for a grant.
A self-made businessman, Ravalomana became president in 2002, after a stint as a mayor of the capital city of Antananarivo. As a mayor, he rehabilitated public services and restored efficient city management.
Drawing on his entrepreneurial skills that served him well as a businessman and mayor, Ravalomana has implemented sweeping political and economic reforms, fighting corruption and increasing transparency in government. The result has been remarkable. According to the Wall Street Journal-Heritage Foundation's 2005 Index of Economic freedom, Madagascar registered the greatest increase in economic freedom in 2004.
"I am a man of action," he said. "I want to see results instead of reports."
Results, and only results, drive the Millennium Challenge Corporation. Accountability in public administration is the foundation of economic progress, an important driver of poverty reduction. Madagascar is on the right track.
In March 2002, President Bush called for a
"new compact for global development,"which would link greater contributions from developed nations to greater responsibility from developing nations. Congress set the MCA, providing $2.5 billion to support Bush's initiative. In January 2004, the U.S. government established the MCC to administer the account. MCA funds would be provided to those countries that rule justly, invest in their people, and encourage economic freedom.
Madagascar needs a lot of action. Eighty percent of the population lives in poor rural areas, surviving on 41 cents a day. With a staggering 47 percent illiteracy rate, Ravalomana can only ask for results.
His leadership helped Madagascar secure $110 million to support national development programs that aim to reduce poverty and create economic growth. The funds will be invested in land titling, financial sector reforms and the agricultural sector.
"We have a lot of confidence in this development program," said Paul Applegarth, CEO of the Millennium Challenge Corporation. "It will create ways for the rural poor to generate income by giving them the opportunity to obtain title to their land, improve their access to credit, and get assistance in identifying market opportunities and production management and marketing techniques."President Bush's new compact for global development calls for greater responsibility from developing nations in the fight against poverty. As he contemplated the development challenges facing Africa, Ravalomana echoed that message.
"We should be proud and self-confident, ready to shape our future, taking destiny in our hands," he said. "It is up to us to lead and accomplish prosperity. Africa should stand up to meet that challenge. We have to take on leadership and responsibilities."
April 18, 2005
Balancing "Country Ownership" and MCA Priorities
Posted by at 08:51 PM
Today Michael Phillips brought the MCA to the front page of the Wall Street Journal. His article was an in-depth look at the first MCA compact with Madagascar, and the national dynamics that ushered this particular compact into being. He opened the article from Antananarivo with this:
"When the Bush Administration invited Madagascar a year ago to apply for aid under a new U.S. program, government officials here came up with a wish list of traditional development projects: a new hospital, more school spending, aid to rice farmers. They even put together a Power Point presentation they thought would wow the Americans. U.S. officials weren't impressed. 'Can you convince us that this is going to bring economic growth to reduce poverty?'"
The answer was apparently "no" because these priorities don't appear in the compact that Madagascar signed with the MCC. This is the part of the story that Phillips didn't tell - just how the MCA and Madagascar got from initial proposal to final compact, and where the MCC's much celebrated concept of "country ownership" fits into the process.
The evolution from proposal to compact reflects an intentionally iterative process that distinguishes the MCC from other donors, and the MCC is right to avoid laundry lists in favor of targeted, complementary priorities. But the differences between the original proposal and final compact raise two key questions:
- First, is the MCA on a path to favor projects that have an immediate impact on economic growth (such as infrastructure and financial sector reform) over those that have a longer-term, slower-moving impact on growth and poverty reduction (such as health, education and micro-credit)? If so, the MCC should be explicit about this and not tempt countries with the promise that they can define funding priorities in any way they like.
- Second, how are final compact elements chosen from the broader list of priorities outlined in country proposals? What are the criteria by which the MCC judges the quality and viability of individual components of the proposal? The MCC has asked the recipient countries, Congress, the advocacy community, and other MCA observers to have faith in the process. Country compacts reflect national priorities and so we should not nit pick about why schools did not win out over roads in a particular case.
This is a good principle. Countries should have the right to not only set priorities, but identify which donors are best equipped to help them meet their various goals. If the World Bank is funding nation-wide education programs, let the Germans fund environmental conservation and the MCA fund land tenure reform. But the key to this principle is the faith in the process. The MCA should offer some candid commentary on how they get from A to B, and how they judge the merits of a given proposal. This will go a long way in soothing the fears of the true believers in "country ownership."
Compare summaries of the original Madagascar proposal and the final compact.
March 21, 2005
Steve Radelet joins MCC CEO Paul Applegarth on NPR
Posted by at 08:38 PM
CGD senior fellow, Steve Radelet and MCC CEO Paul Applegarth were featured guests on WAMU's Kojo Nnamdi show on Monday, March 21. The show provided a public platform for discussion about the MCC approach, the pace of its progress to date, and how the MCA fits into broader U.S. policy towards the developing world.
With regards to the MCA's pace of progress, Steve commented that the slow progress is due mostly to the long delay between initial announcement of the program in March 2003 and final passage of authorization legislation in early 2004. Steve also made detailed remarks on the MCA approach and its role in a broader US development strategy. The show can be heard at WAMU
The MCA Approach
Kojo asked Steve how the MCA differs from traditional US development programs administered through USAID. Steve responded:- Selectivity: The MCC is very selective in the countries it works with, choosing only those that have proven track records of good governance, economic policies that promote economic growth, and commitment to investments in its people.
- Country ownership: The MCA provides an opportunity for countries to set their own priorities rather than having the US government design the programs to be funded. This is reflected in the MCC practice of inviting countries to submit their own proposals for funding, outline their own benchmarks for success, and determine who will implement the funded programs.
- Accountability: The MCC places strong emphasis on measuring results, and holding recipient countries accountable for their commitments. This means that the MCC will channel additional funding towards countries and programs that are meeting their objectives, and away from those that are not.
Kojo also asked Steve about the pros and cons of the MCA approach. Steve responded that the MCA is an innovative and valuable development assistance tool for the countries that are "good performers" where the US can confidently work with the government. It is not, however, designed for countries with weaker leadership and higher rates of corruption. The MCA is one tool in America's aid toolkit, and must be considered part of a broader strategy for engaging with developing countries.
The other side of the MCA
Steve argued that global poverty and health crises such as HIV/AIDS both pose a moral dilemma and a represent a national security imperative for the US - and these issues face all poor countries, not just the "good performers." But unlike its concerted efforts to overall homeland security and national intelligence capacity, the Bush Administration has fallen short of revising its development policy to include different strategies for different countries. This is particularly true of the lack of a coherent US strategy toward weak and failing states.Steve also argued that the US "speaks out of two sides of its mouth" when it comes to supporting poor countries. While the US increases development assistance or promotes preferential trade arrangements with some countries, it also maintains policies - such as farm subsidies and other trade barriers that target goods produced in poor countries - that directly jeopardize the potential for poor countries and people to pursue their own economic development.
To read more on the need for an overarching strategy for US development assistance, see US Foreign Assistance After September 11th: Testimony for the House Committee on International Relations by Steven Radelet, 02/26/2004.
To read recommendations on US policy towards weak and failing states, see Rebuilding Weak States by Stuart Eizenstat, John Edward Porter, and Jeremy Weinstein of CGD's Commission on Weak States and US National Security. Foreign Affairs 01/01/2005.
- Selectivity: The MCC is very selective in the countries it works with, choosing only those that have proven track records of good governance, economic policies that promote economic growth, and commitment to investments in its people.