[Federal Register Volume 82, Number 246 (Tuesday, December 26, 2017)]
[Notices]
[Pages 61036-61038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27876]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 18-04]


Fiscal Year 2018 Report on the Selection of Eligible Countries 
for Fiscal Year 2018

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).

    Dated: December 20, 2017.
Jeanne M. Hauch,
VP/General Counsel and Corporate Secretary, Millennium Challenge 
Corporation.

Report on the Selection of Eligible Countries for Fiscal Year 2018

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 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 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'') 2018 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 2018, 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 
2018. It identifies countries determined by the Board to be eligible 
under section 607 of the Act (22 U.S.C. 7706) for FY 2018 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 selected by the Board to receive 
assistance under MCC's threshold program pursuant to section 616 of the 
Act (22 U.S.C. 7715).

Eligible Countries

    The Board met on December 19, 2017 to select those eligible 
countries with which the United States, through MCC,

[[Page 61037]]

will seek to enter into a Millennium Challenge Compact pursuant to 
section 607 of the Act (22 U.S.C. 7706) for FY 2018. The Board selected 
the following eligible country for such assistance for FY 2018: Timor-
Leste. The Board also reselected the following countries for compact 
assistance for FY 2018: Burkina Faso, Lesotho, Mongolia, Senegal, Sri 
Lanka, and Tunisia.

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 2018'' 
formally submitted to Congress on September 27, 2017, 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 2018.'' \1\ Scorecards 
reflecting each country's performance on the indicators are available 
on MCC's website at www.mcc.gov/scorecards.
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    \1\ Available at https://www.mcc.gov/resources/doc/report-selection-criteria-and-methodology-fy18.
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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 also took 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 ninth 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)). As in previous years, they considered the 
higher bar expected of subsequent compact countries, including 
examining the implementation of the first compact, and evidence of both 
improved scorecard policy performance and a commitment to reform. 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. In addition, this is the second year where the Board 
considered an explicit higher bar for those countries close to the 
upper end of the candidate pool, looking closely in such cases at a 
country's access to development financing, the nature of poverty in the 
country, and its policy performance.
    As with previous years, a number of countries that performed well 
on the quantitative elements of the eligibility criteria (i.e., on the 
policy indicators) were not chosen to develop a compact for FY 2018. FY 
2018 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 one country that passed the 
scorecard and related stringent eligibility criteria was newly selected 
to develop an MCC compact, and only one country for the threshold 
program.
    MCC's engagement with partner countries is not open-ended, and the 
Board is very deliberate when selecting for follow-on partnerships. In 
making subsequent compact selection decisions, 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 
Supplemental Information \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-fy18.
    \3\ Available at https://www.mcc.gov/resources/doc/guide-to-the-compact-survey-summary-fy18.
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Countries Newly Selected for Compact Assistance

    Using the criteria described above, Timor-Leste was the only 
candidate country under section 606(a) of the Act (22 U.S.C. 7705(a)) 
that was newly selected for assistance under section 607 of the Act (22 
U.S.C. 7706).
    Timor-Leste: Timor-Leste passes the MCC scorecard with 13 of 20 
indicators met, including the hard hurdles on both control of 
corruption and democratic rights (including both Political Rights and 
Civil Liberties). MCC has found Timor-Leste to be a willing and 
committed partner during development of the threshold program over the 
past year. As a result, MCC feels Timor-Leste is now solidly 
exemplifying the profile of a compact partner, and has decided to move 
Timor-Leste from the threshold program to the compact program. Work 
done to date in developing the threshold program will contribute to the 
compact development process.

Countries Reselected To Continue Compact Development

    Five of the countries selected for compact assistance for FY 2018 
were previously selected for FY 2017. These

[[Page 61038]]

countries are Burkina Faso, Mongolia, Senegal, Sri Lanka, and Tunisia. 
The Board reselected these countries based on their continued or 
improved policy performance since their prior selection. Lesotho, which 
had originally been selected for compact assistance for FY 2014, 
received vote deferrals for reselection in FY 2016 and FY 2017. Due to 
positive actions taken by the Government of Lesotho this year, the 
Board has once again selected the country for compact assistance for FY 
2018.

Countries Selected To Receive Threshold Program Assistance

    The Board selected The Gambia to receive threshold program 
assistance.
    The Gambia: The Gambia offers MCC the opportunity to support the 
government as it continues its democratic transition following the 
inauguration of its new president in early 2017 and successful 
legislative elections in April 2017. While it has historically 
struggled to pass the MCC scorecard due to its performance on the 
democratic rights hard hurdle, the recent transition and reforms being 
pursued suggest the country will see strong improvements on these 
indicators in the coming years. The Gambia meets 12 of 20 indicators 
overall on the scorecard and demonstrates good performance on the 
control of corruption indicator.

Ongoing Review of Partner Countries' Policy Performance

    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.

[FR Doc. 2017-27876 Filed 12-21-17; 4:15 pm]
 BILLING CODE 9211-03-P