[Federal Register Volume 83, Number 244 (Thursday, December 20, 2018)]
[Notices]
[Pages 65363-65366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27571]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 18-14]
Report on the Selection of Eligible Countries for Fiscal Year
2019
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: This report is provided in accordance with section 608(d)(2)
of the Millennium Challenge Act of 2003.
Dated: December 14, 2018.
Jeanne M. Hauch,
VP/General Counsel and Corporate Secretary.
Report on the Selection of Eligible Countries for Fiscal Year 2019
Summary
This report is provided in accordance with section 608(d)(1) of the
Millennium Challenge Act of 2003, as amended (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
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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'') 2019 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 determine ``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 2019, 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
2019. It identifies countries determined by the Board to be eligible
under section 607 of the Act (22 U.S.C. 7706) for FY 2019 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 11, 2018, to select those eligible
countries with which the United States, through MCC, will seek to enter
into a Millennium Challenge Compact pursuant to section 607 of the Act
(22 U.S.C. 7706). The Board selected the following eligible countries
for such assistance for FY 2019: Indonesia, Malawi, Kosovo, Benin,
Burkina Faso, C[ocirc]te d'Ivoire, Ghana and Niger. The Board also
selected the following previously-selected countries for compact
assistance for FY 2019: Burkina Faso, Lesotho, Timor-Leste 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 2019''
formally submitted to Congress on September 13, 2018, 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 fullest 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 countries with a GNI per capita equal to or less
than $1,875, or the group with a GNI per capita between $1,876 and
$3,895.
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 2019.'' \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-fy19.
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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. 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.
The Board sees the selection decision as an annual opportunity to
determine where MCC funds can be most effectively used 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 programs, and the country's ability to attract and leverage
public and private resources in support of development.
This was the first year the Board considered the eligibility of
countries for concurrent compacts, as permitted under the African
Growth and Opportunity Act and MCA Modernization Act, Public Law 115-
167, signed by President Trump in April 2018, which authorizes MCC to
enter into one additional concurrent compact with a country if one or
both of the compacts with the country are for the purpose of regional
economic integration, increased regional trade, or cross-border
collaborations. In addition to the considerations for compact
eligibility detailed above, the Board considered whether a country
being considered for a concurrent compact is making considerable and
demonstrable progress in implementing the terms of its existing
Compact.
This was the tenth year the Board considered the eligibility of
countries for subsequent compacts, as permitted under section 609(k) of
the Act. MCC's engagement with partner countries is not open-ended, and
the Board is very deliberate when selecting countries for follow-on
partnerships, particularly regarding the higher bar applicable to
subsequent compact countries. In making these 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, these factors were 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
[[Page 65365]]
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-fy19.
\3\ Available at https://www.mcc.gov/resources/doc/guide-to-the-compact-survey-summary-fy19.
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In addition, this is the third 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.
Countries Newly Selected for Compact Assistance
Countries selected for a first or subsequent compact: Using the
criteria described above, three candidate countries under section
606(a) of the Act (22 U.S.C. 7705(a)) were newly selected for
assistance under section 607 of the Act (22 U.S.C. 7706): Indonesia,
Malawi and Kosovo.
Indonesia: Indonesia has demonstrated impressive gains on its
scorecard, now passing 15 of 20 indicators overall in the higher income
category. In particular, Indonesia's Control of Corruption score has
risen every year for eight straight years, while its Political Rights
and Civil Liberties scores remain strong. Key metrics were achieved in
two projects in the first compact and both have been adopted as models
for implementation across the government. While the third project ran
into delays that led to the deobligation of funds, MCC has learned from
the experience of partnering with the Government of Indonesia and will
work with it to focus a subsequent compact and leverage the lessons
learned from the first compact to maximize the impact and effectiveness
of U.S. assistance.
Kosovo: Kosovo has been an engaged and committed partner in the
threshold program, demonstrating a willingness to commit to governance
reforms. The country passes the scorecard for the second year in a row,
passing 13 of 20 indicators overall, including Control of Corruption.
At the same time, it remains one of the poorest countries in Europe,
suffering from chronically high unemployment, low educational outcomes,
and poor employment security. By selecting Kosovo for a compact, MCC
will accelerate the government's efforts to strengthen economic growth
to reduce poverty.
Malawi: Malawi is one of the strongest scorecard performers in
MCC's entire candidate pool, passing 18 of 20 indicators, including
high Democratic Rights scores, despite being the third-poorest country
in the world and MCC's poorest partner country. The country
demonstrated commitment in the first compact. In addition to finishing
all planned construction works, Malawi achieved important milestones
under the compact, including approving and implementing an electricity
tariff that is partially cost-reflective, and signing the first power-
purchasing agreement with an independent power producer, moving the
energy sector closer to long-term sustainability.
Countries selected for a concurrent compact: In accordance with
section 609(k) of the Act, five candidate countries were newly selected
to explore development of a concurrent compact under section 607 of the
Act (22 U.S.C. 7706): Benin, Burkina Faso, C[ocirc]te d'Ivoire, Ghana,
and Niger.
Benin: Benin continues its strong scorecard performance in FY 2019,
passing 13 of 20 indicators, with particularly high scores on
Democratic Rights and Control of Corruption. MCC's partnership with the
government has remained strong throughout the current compact, despite
politically challenging reforms required under the program and the
arrival of a new government in 2016. A strong scorecard performer and
current partner, Benin presents substantial regional potential.
Burkina Faso: In FY 2019, Burkina Faso maintains its stronger
scorecard performance compared to its first partnership with MCC,
passing 13 of 20 indicators with strong performance on Control of
Corruption (92nd percentile) and both Democratic Rights indicators.
Selected to develop a subsequent compact in December 2016, Burkina Faso
has a long track record of engagement with MCC and has been an
effective partner throughout compact development. Burkina Faso has
demonstrated strong scorecard performance, robust engagement as a
compact partner, and presents potentially rich opportunities to
strengthen regional integration efforts.
C[ocirc]te d'Ivoire: Passing 14 of 20 scorecard indicators in FY
2019, C[ocirc]te d'Ivoire is a positive ``MCC effect'' story, with
clear scorecard improvement over multiple years through intensive
engagement with indicator institutions and implementing policy reforms.
C[ocirc]te d'Ivoire's current compact focuses on urban transport and
planning and training skilled workers. Compact development and early
implementation have benefited from high-level government support.
C[ocirc]te d'Ivoire is a model partner that has strongly engaged MCC
throughout compact development and early implementation and presents
substantial regional opportunities.
Ghana: A strong scorecard performer, passing 17 of 20 indicators,
Ghana registers some of the highest Democratic Rights scores among MCC
partners, while also scoring in the 90th percentile on Control of
Corruption. Ghana's current compact entered into force in September
2016 and is expected to close in September 2021. Significant progress
has already been made toward the goal of the current power sector
compact to transform the country's power sector through private sector
participation in its electricity utilities and key sector reforms.
Ghana has demonstrated strong scorecard performance, built a successful
compact partnership with MCC, and has significant regional potential.
Niger: Niger has been a solid scorecard performer, passing 12 of 20
indicators in FY 2019. Niger's current compact is focused on large-
scale irrigation systems, road rehabilitation, and activities to ensure
infrastructure sustainability. The compact entered into force in
January 2018 and is expected to close in January 2023. Niger has been a
committed partner, with high-level participation and strong engagement,
and is a country with significant regional potential.
Countries Selected To Continue Compact Development
Four of the countries selected for compact assistance for FY 2019
were previously selected for FY 2018. These countries are Burkina Faso,
Lesotho, Timor-Leste, and Tunisia, whose selection for FY 2019 was
based on their continued or improved policy performance since their
prior selection.
Countries Selected To Receive Threshold Program Assistance
The Board selected Ethiopia and the Solomon Islands to receive
threshold program assistance.
Ethiopia: Ethiopia offers MCC the opportunity to recognize the
Government of Ethiopia's important reform efforts following the arrival
of a new Prime Minister, Abiy Ahmed, in April. Since he took office,
the Government of Ethiopia has embarked on a series of significant
reforms, including releasing thousands of political prisoners,
apologizing for past state-led human rights abuses, and easing
restrictions on media outlets. Ethiopia also renewed relations with
neighboring Eritrea and signed a 20-year old peace treaty. Despite
historically low Democratic Rights scores, the remarkable initial pace
of change presents an opportunity for MCC to
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partner with Ethiopia as it seeks to accelerate its reform agenda.
Solomon Islands: In FY 2019 the Solomon Islands graduated from the
lower income scorecard category to the higher income scorecard
category, and as a result of the stiffer competition now fails the
scorecard, passing only 9 of 20 indicators, while still passing Control
of Corruption and Democratic Rights. The Solomon Islands represents an
opportunity to engage a historically strong scorecard performer in the
Indo-Pacific, a region of increasing interest.
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.
[FR Doc. 2018-27571 Filed 12-19-18; 8:45 a.m.]
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