Remarks by MCC Deputy CEO Rodney Bent at a Water Forum

Washington, D.C.—the U.S. Capitol
Tuesday, April 2, 2008, as prepared

Introduction

Friends of sustainable development and the Millennium Challenge Corporation, on the occasion of World Water Day and this International Year of Sanitation, thank you for joining us today to discuss the importance of safe and reliable water systems. Special thanks to Congressman Earl Blumenauer for his leadership in making this event possible. Congressman Blumenauer’s voice both in this country and around the world in support of the environment, sustainable development, and economic opportunity reflect the goals of the Millennium Challenge Corporation. We welcome the Congressman’s vision for a coherent and comprehensive water strategy, and we are proud to be part of the solution to this enormous problem as we work to reduce poverty through sustainable economic growth in partner countries around the world.

MCC 101

Since Congress created us in 2004, MCC has partnered with 16 countries in Africa, Central America, Eurasia, and the Pacific to invest in their priorities for development. MCC rewards countries practicing good governance, making investments in health and education, and promoting economic freedom. We partner with countries willing to undertake the often difficult work of policy reforms, willing to build their capacity to lead their own sustainable development, and willing to deliver results in the lives of the poor. To date, we have committed $5.5 billion in grants—what we call compacts—to partners worldwide and have signed threshold programs with 17 additional countries to help them move closer to compact-eligibility.

Importance of Water

Water is fundamental to sustainable development. Yet, worldwide some 1.1 billion people have inadequate access to water, and 2.6 billion people lack basic sanitation. What we take for granted with the turn of a faucet, others see as a luxury. The average person in the United States uses more than 600 liters of water a day. According to the 2006 United Nations Human Development Report, 1.8 billion people worldwide have access to a water source not in their own home—but within a one kilometer distance—and they consume around 20 liters of water a day. This deficit carries enormous human and economic costs. Women and girls spend, on average, 15 to 17 hours per week collecting water—as is the case in Mozambique—and it is not uncommon for them to walk more than 10 kilometers in search of water during the dry season. It is estimated that close to half of all people in developing countries suffer from health problems resulting from a lack of water and sanitation. Poor children around the world miss 443 million days of school each year because of water-related illnesses. Such illnesses are a leading cause of death in children under the age of five. In fact, without access to safe drinking water and adequate sanitation, 1.4 million children die each year. Estimates reveal that 88 percent of disease globally is attributable to an unsafe water supply and a lack of sanitation and hygiene, affecting mainly children in the developing world. Productivity losses among a weakened labor force and rising health costs affect economic growth in the developing world as well; some of sub-Sahara’s poorest countries have experienced a five percent drop in their GDP because of such losses. We will be hearing from Malcolm Morris shortly, and I think his analogy of looking at the importance of water around a baseball diamond is appropriate. This is opening week for most baseball teams, after all. Not to steal his time at bat, but Malcolm talks about first base being life—without water, there’s no life. And home plate is economic development—with a reliable and safe supply of water, communities can grow and prosper.

Water in MCC compacts

By the very act of investing in water and sanitation, our partner countries are creating conditions to expand education, improve health, and promote economic development. MCC partner countries recognize the significance of water infrastructure to the sustainability of their initiatives to reduce poverty and stimulate economic growth.While water needs worldwide are enormous and vary by country, MCC’s approach to tackling this development challenge is country-driven. And, we are proud to support our partner countries in their efforts to meet these challenges head on. MCC has committed nearly 17 percent or $937 million of our investments worldwide to water:

Roughly $450 million of MCC investments to date in partner countries worldwide support a safe water supply;
$83 million supports sanitation;
$406 million supports irrigation.
We see this in Cape Verde and Nicaragua, where watershed management, including reservoirs, is a priority.

We see this in Georgia, where MCC funds are improving water sanitation, water supply, and irrigation systems for regions outside the capital city of Tbilisi.

We see this in Armenia, where our investment is improving irrigation systems and building the management capacity of local and national water supply entities.

We see this in Mali, where the MCC compact is improving irrigation systems to stimulate value-added industrial production and economic growth as well as providing support for latrines, wells, and the education of and treatment for water-borne diseases.

We see this in El Salvador, where MCC is expanding access to potable water systems and sanitation services.

We see this in Lesotho, where the MCC grant is improving access to water and sanitation in urban, peri-urban, and rural areas.
We see this in Tanzania, where MCC is rehabilitating water intake and water treatment plants, and expanding the capacity of such plants.

We see this in Mozambique, where our investment is improving water and sanitation services in eight cities and towns and enabling the development of water supply for 600 rural villages. When the panel convenes, you’ll hear more about Mozambique’s water project from MCC’s Stephen Gaull.

MCC’s total investment in water is more than many other donors are directing toward water projects. It is a major deliverable toward fulfilling the commitment the United States government made, along with 185 other countries, to cut in half the percentage of people without access to water and sanitation. This commitment is the centerpiece of the Paul Simon Water for the Poor Act, landmark legislation that former Senator Bill Frist, who now serves on MCC’s board, spearheaded in cooperation with Senator Reid, and with strong support from Congressman Blumenauer. It demonstrates this country’s commitment to achieving the Millennium Development Goals, a blueprint for action to meet the needs of the world’s poorest. MCC’s investment in water and sanitation goes a long way in fulfilling the commitment the United States made at the 2003 G8 summit in Evian, France, where the world’s most advanced economies adopted an action plan to provide safe drinking water and sanitation for the world’s poorest. The plan highlights good governance, market-based approaches, capacity-building, and the development and mobilization of local resources and capital markets to finance water infrastructure in developing countries—strategies that are all hallmarks of the MCC model.

MCC investments in water and sanitation are important for three specific reasons.

First, these investments are country-determined. Many of our partners have directed MCC grants to bolster water and sanitation services.

Second, these investments build capacity. Economic development cannot succeed without well-functioning public services, like water and sanitation.

Third, these investments attract business. On the demand side, entrepreneurs and investors alike require an adequate water supply for their productive and industrial capacity. On the supply side, the private sector—together with civil society and NGO partners—can play a major role in sustainable service provision. In Mozambique, for example, this is the basis for the design of the water and sanitation program.

Conclusion

MCC partner countries know that implementing programs to improve their water systems is one tangible way of tackling poverty and stimulating growth. The Millennium Challenge Corporation will continue to support and encourage their efforts in this pursuit. We invite more investors to look at MCC-funded improvements in water and sanitation and leverage their own investments directly in this sector as well as in complementary or parallel fields. We welcome today’s “meeting of the minds” here on Capitol Hill to discuss further water’s life-giving role in sustainable poverty reduction and development, including the part we are playing at the Millennium Challenge Corporation.