MCC CEO VISIT HIGHLIGHTS FIRST COMPACT SUCCESS AND LOOKS

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SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: OVIP EAID PREL EFIN CV
SUBJECT: MCC CEO VISIT HIGHLIGHTS FIRST COMPACT SUCCESS AND LOOKS
TOWARD SECOND COMPACT

Summary




1. (U) Millennium Challenge Corporation (MCC) CEO Daniel
Yohannes' visit to Cape Verde last week reviewed the tangible
accomplishments of the 2005-2010 MCC Compact with Cape Verde
and set the groundwork for the preparation of a second Compact
for FY 2011-2016. As Yohannes met with the Cape Verdean
Government, civil society, business leaders, and project
managers, he congratulated Cape Verde for remaining on track to
complete the first MCC Compact in the world and urged
interlocutors to remain on schedule. Cape Verdean partners are
considering several options for the second Compact proposal and
Yohannes had the opportunity to participate in those early
discussions. He also learned about promising areas for future
engagement, including the possible contribution by the Cape
Verdean diaspora in the United States. End summary.



Reviewing the First Compact's Successes




2. (U) MCC CEO Daniel Yohannes, Deputy Vice President Jonathan
Bloom and the Washington delegation visited Cape Verde on
February 3-5 as part of Yohannes' first field visit since he
began his position. He traveled to two major MCC infrastructure
projects - two completed roads to interior city of Assomada on
Santiago Island and the works underway of the port of Praia. He
reviewed the results of the e-government system and observed the
first Compact's positive influence on local schools in Cha de
Tanque and neighboring rural communities on Santiago. All major
local press outlets covered his visit, including his statement
upon arrival and the joint press conference with Cape Verdean
Prime Minister Neves. Cape Verde's MCC counterpart, MCA,
briefed the delegation on how the infrastructure projects
directly contributed to Cape Verde's development. Yohannes also
discussed the final details of closing out the MCC project later
this year with GOCV officials. He urged Cape Verdean officials
to continue to build on the strong democratic and financial
foundations that have been the country's recipe for success.
Both sides are confident that the three-pronged development of
roads, ports, and agriculture will conclude on time and within
budget in October this year.



Looking Towards Second Compact




3. (SBU) Yohannes' arrival coincided with the early planning
meetings for a second Compact development process in Cape Verde
and helped encourage broad involvement by civil society, private
sector, municipal officials, and GOCV officials. Despite rumors
circulating on the overall value of the second Compact, Yohannes
focused on the pre-requisites for qualification, timing, and
potential areas of cooperation in his discussions. In private,
he told Finance Minister Cristina Duarte and Foreign Minister
Jose Brito that a second Compact was unlikely to surpass the
$110 million total of the first Compact and the ministers
recognized the financial limitations facing both governments
this year.




4. (U) Turning to specifics, Yohannes encouraged Cape Verdean
officials to establish a Compact focused on new areas which will
bolster Cape Verde's development over the next decade. In a
separate lunch meeting, Yohannes met with entrepreneurs from
several potential second Compact industries, including the
telecommunications, renewable energy, transportation, and
construction sectors. These discussions allowed the delegation
to gauge development and private sector partnership
opportunities. The strongest contenders appeared to be
renewable energy business and agribusinesses, which proposed the
cultivation of fruits and vegetables in place of traditional
subsistence farming. The Cape Verdean government plans to
submit a proposal in the coming months for approval sometime in
FY2011.




5. (SBU) Comment: The successful visit reinforced the message
that Cape Verde has done an impressive job of staying on track
as it pioneers the MCC Compact completion phase. Government and
private sector partners are justifiably proud of their
accomplishments over the past five years and hope to repeat the

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successful work in a second Compact. As we get closer to
negotiating the second Compact, managing public expectations
about its scope and focus will likely become more challenging.
Nonetheless, for now our partners remain pleased with the visit
and Cape Verde's progression towards the second Compact. End
comment.
BROWN