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Patrick Fine

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MCC's Distinct Model for Development

Posted: 01/06/12 10:58 AM ET

While we appreciate Ken Adelman's description of the Millennium Challenge Corporation (MCC) as "[t] he best government innovation of the past decade," ("Saving the MCC from the Solyndra Effect," December 12, 2011), we wanted to set the record straight about how the projects in MCC's grant agreement (or compact) with Indonesia were selected.

Mr. Adelman's main criticism of MCC's compact with Indonesia was that MCC did not allow the Indonesians to "choose how best to help their own people to prosperity," but instead selected the Green Prosperity Project for them. In fact, the compact was developed in a manner consistent with MCC's core principle of country-led development and the projects included in the compact reflect priorities identified by the people of Indonesia through an extensive public consultation process.

The Government of Indonesia (GOI) developed the Green Prosperity Project to support its commitment to environmentally sustainable, less carbon intensive development, as reflected in Indonesia's goal to reduce greenhouse gas emissions by 26 percent by 2020 while maintaining a target of seven percent annual economic growth.

The objective of the Green Prosperity Project is to increase productivity in project areas by expanding access to renewable energy and improving land use practices. This objective is consistent with MCC's core mission to reduce poverty through sustainable economic growth and directly supports Indonesia's own goals to expand economic development while also reducing pressure on forests and other natural assets that people rely on for their livelihoods and well-being.

All projects supported by the Green Prosperity Project must demonstrate a suitable economic rate of return and be developed with appropriate environmental and social safeguard measures consistent with GOI and MCC requirements and international best practices.

MCC maintains a distinct model for development -- one that is country-driven, reform-centered and results-focused -- which allows us to maximize the effectiveness and sustainability of the projects we fund. MCC's model embodies the principles of development effectiveness and we maintain a commitment to mutual accountability and shared responsibility with our partner countries in order to deliver tangible results wherever we work around the world.