[Federal Register Volume 76, Number 9 (Thursday, January 13, 2011)]
[Notices]
[Pages 2423-2425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-609]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 11-01]
Report on the Selection of Eligible Countries for Fiscal Year
2011
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: This report is provided in accordance with section 608(d)(1)
of the Millennium Challenge Act of 2003, Public Law 108-199, Division
D, (the ``Act''), 22 U.S.C. 7708(d)(1).
Report on the Selection of Eligible Countries for Fiscal Year 2011
Summary
This report is provided in accordance with section 608(d)(1) of the
Millennium Challenge Act of 2003, Public Law 108-199, Division D, (the
``Act'') (22 U.S.C. 7707(d)(1)).
The Act authorizes the provision of Millennium Challenge Account
(``MCA'') assistance under section 605 of the Act (22 U.S.C. 7704) to
countries that enter into compacts with the United States to support
policies and programs that advance the progress of such countries in
achieving lasting economic growth and poverty reduction, and are in
furtherance of the Act. The Act requires the Millennium Challenge
Corporation (``MCC'') to determine the countries that will be eligible
to receive MCA assistance during the fiscal year, based on their
demonstrated commitment to just and democratic governance, economic
freedom, and investing in their people, as well as on the opportunity
to reduce poverty and generate economic growth in the country. The Act
also requires the submission of reports to appropriate congressional
committees and the publication of notices in the Federal Register that
identify, among other things:
1. The countries that are ``candidate countries'' for MCA
assistance during fiscal year 2011 (``FY11'') based on their per-capita
income levels and their eligibility to receive assistance under U.S.
law, and countries that would be candidate countries but for specified
legal prohibitions on assistance (section 608(a) of the Act (22 U.S.C.
7707(a)));
2. The criteria and methodology that the Board of Directors of MCC
(the ``Board'') will use to measure and evaluate the policy performance
of the ``candidate countries'' consistent with the requirements of
section 607 of the Act in order to select ``MCA eligible countries''
from among the ``candidate countries'' (section 608(b) of the Act (22
U.S.C. 7707(b))); and
3. The list of countries determined by the Board to be ``MCA
eligible countries'' for FY11, with justification for eligibility
determination and selection for compact negotiation, including with
which of the MCA eligible countries the Board will seek to enter into
MCA compacts (section 608(d) of the Act (22 U.S.C. 7707(d))).
This is the third of the above-described reports by MCC for FY11.
It identifies countries determined by the Board to be eligible under
section 607 of the Act (22 U.S.C. 7706) for FY11 and countries with
which the Board will seek to enter into compacts under section 609 of
the Act (22 U.S.C. 7708), as well as the justification for such
decisions.
Eligible Countries
The Board met on January 5, 2011, to select countries that will be
eligible for MCA compact assistance under section 607 of the Act (22
U.S.C. 7706) for FY11. The Board selected the following countries as
eligible for such assistance for FY11: Cape Verde, Georgia, Ghana,
Indonesia, Malawi, and Zambia.
In accordance with the Act and with the ``Report on the Criteria
and Methodology for Determining the Eligibility of Candidate Countries
for Millennium Challenge Account Assistance in Fiscal Year 2011''
formally submitted to the Congress on September 30, 2010, selection was
based primarily on a country's overall performance in three broad
policy categories: Ruling Justly, Encouraging Economic Freedom, and
Investing in People. As a basis for determining which countries would
be eligible for MCA compact assistance, the Board relied, to the
maximum extent possible, upon 17 transparent and independent indicators
to assess countries' policy performance and demonstrated commitment in
these three broad policy areas. The Board compared countries'
performance on the indicators relative to their income-level peers,
evaluating them in comparison to either the group of low income
countries (``LIC'') or the group of lower-middle income countries
(``LMIC''). In particular, the Board considered if a country performed
above the median in relation to its peers on at least three indicators
in each of the Ruling Justly, Investing in People, and Encouraging
Economic Freedom policy categories, and above the median on the Control
of Corruption indicator. Scorecards reflecting each country's
performance on the indicators are available on MCC's Web site at http://www.mcc.gov.
The Board also considered whether any adjustments should be made
for data gaps, data lags, or recent events since the indicators were
published, as well as strengths or weaknesses in particular indicators.
Where appropriate, the Board took into account additional quantitative
and qualitative information, such as evidence of a country's commitment
to fighting corruption and promoting democratic governance, and its
effective protection of human rights. For countries that graduated from
the LIC group to the LMIC group within the last two years, due to an
increase in their per capita gross national income, the Board also took
into account supplemental information that showed how the new LMIC
countries would have performed in comparison to the LIC group. This is
consistent with a 2009 congressional decision to allow MCC to fund as
LICs a set of countries that had recently transitioned to the LMIC
category. Finally, the Board considered the opportunity to reduce
poverty and promote economic growth in a country, in light of the
overall context of the information available, as well as the
availability of appropriated funds.
This was the second year the Board considered the eligibility of
countries for subsequent compacts, as permitted under section 609(k) of
the Act (22 U.S.C. 7708(k)). In determining subsequent compact
eligibility, the Board considered--in addition to the criteria outlined
above--the country's performance implementing its first compact,
including the nature of the country partnership with MCC, the degree to
which the country has
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demonstrated a commitment and capacity to achieve program results, and
the degree to which the country has implemented the compact in
accordance with MCC's core policies and standards. Using this higher
bar to measure eligibility, Ghana and Georgia were selected as eligible
for MCA assistance for a second compact under section 607 of the Act
(22 U.S.C. 7706).
As a candidate country under section 606(a) of the Act (22 U.S.C.
7705(a)), Ghana consistently performs well on the MCC indicator
criteria. Its continued track record of democratic governance is
demonstrated by its regular ranking among the top LIC performers in the
Ruling Justly category. Implementation of Ghana's Compact is on track
to achieve its objectives, and the investment is managed by a strong
Ghanaian-led and staffed team. The Ghana Compact has also already
generated tangible interest from the private sector. MCC believes that
a second compact offers opportunities for deeper investment in a low
income country that not only has a demonstrated commitment to a
positive policy environment and effective program implementation, but
is also considered a regional economic anchor in West Africa.
As a candidate country under section 606(b) of the Act (22 U.S.C.
7705(b)), Georgia performs well on the MCC indicator criteria, even
after having transitioned from the LIC group to the more competitive
LMIC group two years ago. Georgia is widely recognized as an investment
climate reformer and is regularly among the top performers in the
Encouraging Economic Freedom category for all MCC candidate countries.
Although Georgia does not meet the formal indicator criteria in the
Investing in People category this year, supplemental information,
including analysis from the World Health Organization, describes a
situation in which the performance on MCC's Immunization Rates
indicator can be largely attributed to a temporary shortage of one
vaccine and the introduction of alternative, private vaccination
facilities that were not captured in 2010 data. As a result, MCC does
not have policy concerns in this category. The government of Georgia
has demonstrated commitment to the ongoing Georgia Compact and the
Georgian-led implementation unit is effectively managing the compact
through its final months. MCC sees a subsequent compact in Georgia as
an opportunity to support growth and poverty reduction in a country
with a track record of rigorous policy reform and a desire to foster
private sector investment in its own development.
Country partners that are developing or implementing compacts must
also show a commitment to maintaining and improving their policy
performance. While MCC's indicators work well as a transparent way of
identifying those countries that are most committed to sound
development policies and for discerning trends over the medium-term,
they are not as well-suited for tracking incremental progress from
year-to-year. Countries may be generally maintaining performance but
not meet the criteria in a given year due to factors such as:
Graduation from the LIC category to the LMIC category,
Data improvements or revisions,
MCC's introduction of two new indicators in fiscal year
2008 and the accompanying requirement that countries pass three of the
five indicators in the Investing in People category,
Increases in peer-group medians for some indicators, and
Slight declines in performance.
Four of the countries selected as eligible for MCA compact
assistance in FY11 were previously selected as eligible last year.
Because they have not yet signed a compact agreement, they needed to be
reselected as eligible for FY11 to continue compact development and
receive funding from this fiscal year. Two of these countries are in
the LIC category: Malawi and Zambia. Two countries, Indonesia and Cape
Verde, are in the LMIC category.
The Board reselected these countries based on their continued good
performance since their prior selection. The Board determined that
since their fiscal year 2010 selection, there has been no material
change in their performance on the indicator criteria that indicates a
serious decline in policy performance. This includes the two
countries--Cape Verde and Indonesia--that do not meet the formal
indicator criteria this year. Although the data available at the time
of the publication of the scorecards suggested that Cape Verde did not
meet the Investing in People criteria this year, after the publication
of the scorecards, revised data for FY11 were received from UNESCO. The
revised data for the expenditures on primary education indicator
indicate that Cape Verde would have passed this indicator, and the
Investing in People category, had the revised figures been available at
the time of scorecard publication. Additionally, Cape Verde's progress
in achieving high levels of primary education attainment is widely
recognized by third party experts. Indonesia transitioned to the more
competitive LMIC category last year and fares less well against the
higher standards, but would have continued to meet MCC's indicator
criteria as an LIC. Last year, Congress granted MCC authority that
allows Indonesia to be funded as a LIC for up to three years.
The Board also reviewed the policy performance of countries that
are implementing compacts. However, these countries do not need to be
reselected each year in order to continue implementation. Once MCC
makes a commitment to a country through a compact agreement, MCC will
not consider the country for reselection on an annual basis during the
term of its compact. MCC will continue to work with a country--even if
it does not meet the indicator criteria each year--as long as the
country has not demonstrated a pattern of actions inconsistent with the
eligibility criteria. If it is determined that a country has
demonstrated a significant policy reversal, MCC can hold it accountable
by applying MCC's Suspension and Termination Policy.
The Board emphasized the need for all partners to continue to
improve their policy environment and, if they do not meet the criteria,
to demonstrate their ongoing commitment by informing MCC of actions
they are undertaking. Countries participating in this policy
improvement process may work with MCC to develop and implement a
forward-looking action plan that outlines the steps they plan to take
to improve performance on certain policy criteria, including key areas
of governance (e.g., public financial management), or provide periodic
reports on government efforts to improve performance on specific
indicators. MCC recognizes that there are cases in which countries that
do not meet the indicator criteria have not demonstrated a significant
policy reversal.
Finally, a number of countries that performed well on the
quantitative elements of the selection criteria (i.e., on the policy
indicators) were not chosen as eligible countries for FY11. As
discussed above, the Board considered a variety of factors in addition
to the country's performance on the policy indicators in determining
whether it was an appropriate candidate for assistance (e.g., the
country's commitment to fighting corruption and promoting democratic
governance; the availability of appropriated funds; and where MCC would
likely have the best opportunity to reduce poverty and generate
economic growth).
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Selection To Initiate the Compact Process
The Board also authorized MCC to invite Ghana and Georgia to submit
a proposal for a second compact, as described in section 609 of the Act
(22 U.S.C. 7708).
Submission of a proposal is not a guarantee that MCC will finalize
a compact with an eligible country. Any MCA assistance provided under
section 605 of the Act (22 U.S.C. 7704) will be contingent on the
successful negotiation of a mutually agreeable compact between the
eligible country and MCC, approval of the compact by the Board, and the
availability of funds.
Dated: January 7, 2011.
Melvin F. Williams, Jr.,
VP/General Counsel and Corporate Secretary, Millennium Challenge
Corporation.
[FR Doc. 2011-609 Filed 1-12-11; 8:45 am]
BILLING CODE 9211-03-P