[Federal Register Volume 80, Number 251 (Thursday, December 31, 2015)]
[Notices]
[Pages 81868-81870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32353]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 15-06]


Report on the Selection of Eligible Countries for Fiscal Year 
2016

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, Pub. L. 108-199, Division D, 
(the ``Act''), 22 U.S.C. 7708(d)(1).

    Dated: December 18, 2015.
Maame Ewusi-Mensah Frimpong,
Vice President and General Counsel, Millennium Challenge Corporation.

Report on the Selection of Eligible Countries for Fiscal Year 2016

Summary

    This report is provided in accordance with section 608(d)(1) of the 
Millennium Challenge Act of 2003, as amended, Public Law 108-199, 
Division D, (the ``Act'') (22 U.S.C. 7707(d)(1)).
    The Act authorizes the provision of Millennium Challenge Account

[[Page 81869]]

(``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 for 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 assistance 
for fiscal year (``FY'') 2016 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 ``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 ``eligible 
countries'' for FY 2016, with justification for eligibility 
determination and selection for compact negotiation, including with 
which of the eligible countries the Board will seek to enter into 
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 FY 
2016. It identifies countries determined by the Board to be eligible 
under section 607 of the Act (22 U.S.C. 7706) for FY 2016 and countries 
with which the MCC 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. The report also identifies countries determined by the Board 
to be eligible for MCC's Threshold Program under section 616 of the Act 
(22 U.S.C. 7715).

Eligible Countries

    The Board met on December 16, 2015, to select countries that will 
be eligible for assistance under section 607 of the Act (22 U.S.C. 
7706) for FY 2016. The Board selected the following countries as 
eligible for such assistance for FY 2016: Cote d'Ivoire, Kosovo, and 
Senegal. The Board also reselected the following countries as eligible 
for FY 2016 compact assistance: Niger, Nepal, and the Philippines. The 
Board did not vote on the re-selection of Tanzania and Lesotho. The 
Board also reaffirmed its support for Mongolia's continued effort to 
develop its compact proposal that will access funds appropriated to MCC 
when Mongolia was a candidate country.

Criteria

    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 2016'' 
formally submitted to Congress on September 22, 2015, selection was 
based primarily on a country's overall performance in three broad 
policy categories: Ruling Justly, Encouraging Economic Freedom, and 
Investing in People. The Board relied, to the maximum extent possible, 
upon 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'').
    The criteria and methodology used to assess countries on the annual 
scorecards are outlined in the ``Report on the Criteria and Methodology 
for Determining the Eligibility of Candidate Countries for Millennium 
Challenge Account Assistance in Fiscal Year 2016.'' \1\ Scorecards 
reflecting each country's performance on the indicators are available 
on MCC's Web site at www.mcc.gov/scorecards.
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    \1\ Available at https://www.mcc.gov/resources/doc/report-selection-criteria-and-methodology-fy16.
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    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, investments in human development outcomes, or 
poverty rates. For example, for additional information in the area of 
corruption, the Board considered how a country is evaluated by 
supplemental sources like Transparency International's Corruption 
Perceptions Index, the Global Integrity Report, Open Government 
Partnership status, and the Extractive Industry Transparency 
Initiative, among others, as well as on the defined indicator. The 
Board may also take into account the margin of error around an 
indicator, when applicable. In keeping with legislative directives, the 
Board also considered the opportunity to reduce poverty and promote 
economic growth in a country, in light of the overall information 
available, as well as the availability of appropriated funds.
    This was the sixth 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)). The Board also considered the eligibility 
of countries for initial compacts. The Board sees the selection 
decision as an annual opportunity to determine where MCC funds can be 
most effectively invested to support poverty reduction through economic 
growth in relatively well-governed, poor countries. The Board carefully 
considers the appropriate nature of each country partnership--on a case 
by case basis--based on factors related to economic growth and poverty 
reduction, the sustainability of MCC's investments, and the country's 
ability to attract and leverage public and private resources in support 
of development.
    MCC's engagement with partner countries is not open-ended, and the 
Board is very deliberate when determining eligibility for follow-on 
partnerships. 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's partnership with MCC, the degree to which the country has 
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. To the greatest 
extent possible, this was assessed using pre-existing monitoring and 
evaluation targets and regular quarterly reporting. This information 
was supplemented with direct surveys and consultation with MCC staff 
responsible for compact implementation, monitoring, and evaluation. MCC 
published a Guide to

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the Supplemental Information Sheet \2\ and a Guide to the Compact 
Survey Summary \3\ in order to increase transparency about the type of 
supplemental information the Board uses to assess a country's policy 
performance and compact implementation performance. The Board also 
considered a country's commitment to further sector reform, as well as 
evidence of improved scorecard policy performance.
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    \2\ Available at https://www.mcc.gov/resources/doc/guide-to-supplemental-information-fy16.
    \3\ Available at https://www.mcc.gov/resources/doc/guide-to-the-compact-survey-summary-fy15.
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    As with previous years, 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 FY 2016. 
FY 2016 was a particularly competitive year: Several countries were 
already working to develop compacts, multiple countries passed the 
scorecard (some for the first time), and funding was limited due to 
budget constraints. As a result, only three countries that passed the 
scorecard were newly selected for MCC compact eligibility, and two 
others for the threshold program.

Countries Newly Selected for Compact Eligibility

    Using the criteria described above, Cote d'Ivoire, Kosovo, and 
Senegal are the only candidate countries under section 606(a) of the 
Act (22 U.S.C. 7705(a)) that were newly selected as eligible for 
assistance under section 607 of the Act (22 U.S.C. 7706).
    Cote d'Ivoire: After years of working with MCC and MCC indicator 
institutions in order to strengthen their scorecard performance, Cote 
D'Ivoire went from passing 5 to 13 indicators over the last four years, 
due to updating data and pursuing policy reforms linked to the 
scorecard. In FY 2015, Cote D'Ivoire met the minimum scorecard criteria 
for the first time, passing 10 indicators, including both hard hurdles. 
Given the continued improvement from FY 2015 to FY 2016, selection for 
a compact program allows MCC to continue strengthen its relationship 
with Cote d'Ivoire while rewarding continued policy improvement.
    Kosovo: After years of working to improve data collection and 
quality, as well as improve policy outcomes, Kosovo passed the MCC 
scorecard for the first time in FY16, passing 13 of 20 indicators 
including both hard hurdles and passing Control of Corruption. The 
country remains one of the poorest in Europe with close to 30% of the 
population living on less than $2/day, and an economy highly dependent 
on remittances. A compact investment will serve as an opportunity to 
reduce poverty through sustainable economic development while also 
building on the positive relationship built over the past few years.
    Senegal: Senegal has consistently passed the scorecard criteria for 
eight consecutive years and scored above the 90th percentile in Control 
of Corruption for three consecutive years. Through its first compact, 
Senegal has proven to be a strong partner, successfully completing the 
compact ($540 million) in September 2015. In working on a second 
compact, MCC is able to continue to partner with the Government of 
Senegal to reduce poverty and support strong economic investments in 
the country.

Countries Reselected To Continue Compact Development

    Three of the countries selected as eligible for compact assistance 
for FY 2016 were previously selected as eligible in FY 2015. These 
countries are Niger, Nepal and the Philippines. The Board reselected 
these countries based on their continued or improved policy performance 
since their prior selection. The Board also expressed its support for 
continued development of a compact with Mongolia using funds 
appropriated in FY 2015 and prior years, as the country moved in FY 
2016 to the upper middle income category before its proposal was 
finalized. The Board deferred a vote on the selection of Tanzania and 
Lesotho and emphasized the seriousness with which it takes a country's 
commitment to MCC's eligibility criteria.
    Tanzania: The Board deferred a vote on Tanzania's reselection. The 
Board discussed the fact that due to ongoing concerns about the 
Zanzibar elections, as well as the use of Tanzania's Cyber Crimes 
legislation in the context of the national elections, a vote on 
reselection would be premature at this time. The Board may revisit its 
decision over the course of 2016 as more information becomes available.
    Lesotho: The Board deferred a vote on Lesotho's reselection. The 
Board discussed the fact that due to ongoing concerns over the rule of 
law and accountability in the country, and an expected report from the 
Southern Africa Development Community on these same issues, a vote on 
reselection would be premature at this time. The Board may revisit its 
decision over the course of 2016 as more information becomes available.

Countries Selected as Eligible To Receive Threshold Program Assistance

    The Board selected Sri Lanka and Togo as eligible to receive 
threshold program assistance.
    Sri Lanka: Sri Lanka consistently passed the scorecard from FY 2011 
through FY 2015. Though Sri Lanka failed the scorecard in FY 2016 due 
to failing the democratic rights indicators, this was largely due to 
the indicators reflecting events in 2014, and likely not yet capturing 
the democratic rights improvements following the 2015 elections. A 
threshold program investment is an opportunity to build on this 
positive momentum, and allows Sri Lanka the opportunity to further 
strengthen its scorecard performance. It also allows MCC the 
opportunity to work with the government on the country's ongoing 
efforts in policy reform.
    Togo: Togo has shown consistent improvements on the MCC scorecard 
over the past three years. A government committee has been strongly 
engaged with MCC to strategize and prioritize policy improvements, 
including reforming the family code to ensure gender equality and 
improving control of corruption. As a result, Togo moved from passing 5 
of 20 indicators in FY 2014 to 10 of 20 indicators in FY 2016. Togo's 
eligibility for threshold program assistance will allow MCC to engage 
with Togo on continued policy reform, as well as offer Togo an 
opportunity to further strengthen its scorecard performance.

Ongoing Review of Partner Countries' Policy Performance

    Once MCC has signed a compact with a country, MCC does not consider 
the country for reselection on an annual basis during the term of its 
compact. However, the Board emphasized the need for all partner 
countries to maintain or improve their policy performance. If it is 
determined during compact implementation that a country has 
demonstrated a significant policy reversal, MCC can hold it accountable 
by applying MCC's Suspension and Termination Policy.\4\
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    \4\ Available at https://www.mcc.gov/resources/doc/policy-on-suspension-and-termination.
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[FR Doc. 2015-32353 Filed 12-30-15; 8:45 am]
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