Transcript - Millennium Challenge Corporation

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COOPER: Thanks, Loren and thanks Martha. An excellent overview of the compact. I wanted to ask a few questions before we opened it up to your questions. And first is last month, the MCC celebrated its eighth anniversary and we’ve now signed 24 compacts. What’s new and innovative about this compact, the Indonesia compact? BOWEN: Well, as I hope you heard in what we’ve just been saying about the compact, there really is quite a lot of innovation; some for MCC institutionally and some sort of catching the wave of innovation that’s happening within the government on Indonesia itself and the civil society and business community partners that we’ve been working with. From that perspective, I’d say that the key things to understand by project are that Green Prosperity is really this idea of taking low-carbon development directly to the district level. It is a very, very important innovation. This is an agreement that we’ve made at the national level but as we know, the actions, the decisions about land use and energy mix are made at the district level and by working there, I think that’s something that’s newer for MCC and a very important step for the government of Indonesia as well. As I mentioned the nutrition project is the first of its kind to provide incentives to the health system itself to prevent rather than just treat stunting, it’s actually an important development within Indonesia. And also, its, you know, less usual for MCC to do health projects like this and I think that having an incredibly strong economic rationale for being able to make this investment, that’s been a real innovation for us as an institution. And then finally, I mean always feel slightly sophomoric saying it, but the procurement modernization project, I mean it’s really based on the idea that there’s some innovation going on. You know, there really is a lot of excitement about making a more level playing field, a better playing field in Indonesia for public procurements and I think there’s a lot of excitement about that, and we really are sort of on the cutting edge of that and it’s been very interesting, you know, working with the government of Indonesia on this project. Sometimes we struggle to keep up. I mean they really are—they are doing it, and we have worked with them to design a program that we think can be adapted and help them to do it over the coming years. But when you look at the compact as a whole, you’ll see a significant degree of sort of adaptability that we’ve built in basically because, you know, these things are changing. Laws are changing, regulations are changing and we want to be part of that for the next six years. COOPER: Did you have anything to add? LABOVITCH: No. No, nothing to add. COOPER: Okay. Mr. Ambassador had mentioned that there were some challenges during the course of the development of this compact. I’m interested to learn your perspectives on that. What were the biggest challenges from the MCC perspective? BOWEN: We always like to say it’s been a unique engagement and a very rewarding one. But with any new type of engagement, there’s been a huge learning curve for both of us, I think. For us, just basically what I was saying like getting to know our partner, getting to know the momentum and the enthusiasm with which certain reforms and changes are being pursued. I think it took us some time to really just get used to the dynamism and the action that we’re were seeing on the other side. MCC and Indonesia: Investing in Innovation for | February 6, 2012 Sustainable Economic Growth 10
Conversely, you know, our Indonesian colleagues are a team that we work with in our working groups often say that they don’t always enjoy the work, but they’re glad we got them to do it. And it—for them, it really has been a different type of engagement, too, you know, donor implemented programs are very common on Indonesia. This type of program is not common and it’s been a lot of work for them, a lot of work for people who don’t normally do this type of work. I think they often tell us that they really feel that the country ownership model is something that they’ve come to truly, truly appreciate. And they’ll contrast it with other experiences they’ve had. This is a larger country than MCC usually works with. And I—it really does come back to what the Ambassador was saying and what Patrick was saying, about how it really has been a part of a partnership; and the more that we’ve seen it as part of a partnership, and understood that country ownership is critical, we can’t just sort of dream up ideas in Washington and then go and say, ‘Hey Government of Indonesia, what do you think about this idea?’ You know, that’s not going to work and it’s been a great pillar of the comprehensive partnership over the last year and a half or so. But I think it’s really been because we’ve both committed as partners. DJALAL: Can I add to that a little bit? I think that the—I agree completely with what Martha is saying. The biggest challenge is there are two things: what MCC is offering—what MCC wants—and what Indonesia wants. And the challenge has been how to minimize the gap between these two things. And this is why the presence of Troy and Martha on the ground figuring out exactly what Indonesia wants and then matching that with what America’s offering. That’s the biggest challenge. And the other one is making sure that the work that we’ve done together and—and the projects do climb up in terms of bureaucratic priorities in Indonesia. I think in the end, we have reached a stage whereby this reached presidential attention, this reached ministerial attention, (inaudible) was fully seized on this (inaudible) and she appointed the—the Vice Minister, Mr. Lukita (ph) to work on this. So it climbed up drastically on the bureaucratic agenda and that’s what made this program successful, but it didn’t happen overnight and as with other parts of our partnership, it took a lot of back and forth, a lot of tussle, but all in good spirit and at the end what count is we all became better partners. LABOVITCH: Well, yeah, let me add to that, too, that the part of what’s been great for us is the capacity and the ambition of the Indonesians has really helped push us in a direction—and in an innovative direction, most importantly, that I think has been really special on this side. For instance, with the Green Prosperity, there is a deep appreciation in Indonesia for the inter-relationships between poverty and the environment. And I think for MCC, not that we haven’t done environmental programs before, we have. But we’ve never done anything, you know, quite this big and substantial with respect to its very core objective to address both of those issues, poverty and environment and that comes from the knowledge, the appreciation and the desire on behalf of the Indonesians to address these issues. And so it’s been really good for us as well. COOPER: Well, I just wanted to follow up about Green Prosperity. If you’re able to have the impact that we’re seeking, and the facilities are working the way that you want them to, what’s it going to mean? What are the stakes? What will it mean for low carbon development? LABOVITCH: Great question. MCC and Indonesia: Investing in Innovation for | February 6, 2012 Sustainable Economic Growth 11
Page 1 and 2: Transcript February 6, 2012 | www.m
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Page 13 and 14: COOPER: Thanks. Martha, what’s th
Page 15 and 16: thinking on this, but I think it wi
Page 17 and 18: QUESTION: Fred Still (ph) from (ina
Page 19 and 20: So I can’t tell you exactly what
Page 21: But in terms of timeline, I expect

Transcript - Millennium Challenge Corporation

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