New from MCC: Full Management Team, Threshold Concept and Compact Completion

This is a joint post with Casey Dunning.The Millennium Challenge Corporation (MCC) held its quarterly board meeting last week and followed it with a public outreach session.  As we previewed, the meeting covered the MCC’s new management team, updates on compacts in development and implementation, and a concept change for the threshold program.  With no termination or selection issues up for discussion and a reportedly “smooth quarter,” MCC staff and board were able to delve deeper into countries’ compacts.In addition to introducing all members of the now complete MCC management team, CEO Daniel Yohannes unveiled the consolidation of the compact implementation and development teams under Patrick Fine.  The merger of the two teams aims to ensure that staff who are working on compact development are also part of compact implementation. Some of this has already been happening in practice but the official merger of the two teams into the largest single department within MCC will of course come with some internal management challenges.At the public outreach session Yohannes spoke about project developments from compacts in El Salvador and Tanzania – two countries he recently visited.  He also reported that the board delayed approval of the Philippines’ compact until its new government is in place and demonstrates its commitment to MCC principles and processes. (The Philippines’ ambassador sat next to us at the public outreach session, perhaps signaling continued interest in an MCC compact sooner rather than later.)Yohannes also said the MCC is expanding its reach on the Hill and actively working with members of Congress on legislative reforms for the MCC, including concurrent and longer term compact authorities and a technical fix to MCC country categories.  It’s refreshing to see the MCC take proactive and concerted efforts to engage members of Congress and their staff to tackle some important development challenges together. This is the kind of partnership with Congress we’d like to see take place in other areas of U.S. foreign assistance.One of the new issues discussed during the board and public outreach meetings was close-out of compacts.  For the first time in the agency’s history, two countries – Honduras and Georgia – will reach the end of their five-year compacts.  The MCC is currently conducting a working session with resident country directors on compact close-out and “how to bring these ships into port” in a manner that will sustain MCC investments.MCC Vice President of Compact Development and Implementation Patrick Fine described MCC results in Honduras.  Fine said the compact inputs – new roads, modern growing techniques, and high-value crops – are having a positive impact on individual Honduran farmers.  Over 6000 farmers have increased their earnings from $400 to $2000 per hectare, with average earnings coming to about $4000 per hectare.  According to Fine, increased incomes are being reported across the country and farmers are also reinvesting this increased income into more land and improvements to their farms.During the outreach session, Glenn Lines, former resident country director of Madagascar, spoke about the results and lessons learned in MCC’s first compact country. He said Madagascar’s compact had important interim results, despite its early termination following political unrest in the country.The MCC board and the public outreach session attendees also heard about the review and conceptual shift of MCC’s threshold program, led by deputy vice president for policy and international relations Jim Greene.  Greene said the threshold program will continue to help countries achieve compact eligibility but will no longer focus on improving indicator scores.  The MCC will instead use a growth constraints analysis – not the indicators – to design country threshold programs.  Greene and his team will be working out the details of how the new program will work in practice—and some tough questions about the new approach—between now and September.As we’ve noted before, it’s great to see the MCC operating with its full management team on board (if only we could say the same for USAID!). The MCC will have a management retreat at the end of the month which will cover many of the issues touched on here and more as Yohannes and his team prepare to lead the MCC into the future.