[Federal Register Volume 85, Number 248 (Monday, December 28, 2020)]
[Notices]
[Pages 84374-84375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28491]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 20-10]


Report on the Selection of Eligible Countries for Fiscal Year 
2021

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: This report is provided in accordance with the Millennium 
Challenge Act of 2003, as amended. The report is set forth in full 
below.

    Authority: Section 608(d)(2) of the Millennium Challenge Act of 
2003, as amended, 22 U.S.C. 7707(d)(2) (the Act).

    Dated: December 18, 2020.
Brian Finkelstein,
Acting VP/General Counsel and Corporate Secretary.

Report on the Selection of Eligible Countries for Fiscal Year 2021

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 poverty reduction 
through economic growth, 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 through 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) 2021 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) used 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 2021, 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 
2021. It identifies countries determined by the Board to be eligible 
under section 607 of the Act (22 U.S.C. 7706) for FY 2021 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 15, 2020 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 country for 
such assistance for FY 2021: Sierra Leone. The Board also selected the 
following previously selected countries for compact assistance for FY 
2021: Benin, Burkina Faso, C[ocirc]te d'Ivoire, Malawi, Mozambique, 
Niger, 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 2021'' 
formally submitted to Congress on September 15, 2020, 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 $1,945, or the group with a GNI per capita between $1,946 and 
$4,045.
    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 for Fiscal Year 2021.'' \1\ Scorecards 
reflecting each country's performance on the indicators are available 
on MCC's website at https://www.mcc.gov/who-we-select/scorecards.
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    \1\ Available at https://www.mcc.gov/resources/doc/report-selection-criteria-methodology-fy21.
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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 poverty reduction through economic growth, the 
sustainability of MCC's investments, and the country's ability to 
attract and

[[Page 84375]]

leverage public and private resources in support of development.
    This was the third year the Board considered the eligibility of 
countries for concurrent compacts. 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 twelfth year the Board considered the eligibility of 
countries for subsequent compacts, as permitted under section 609(l) of 
the Act. MCC's engagement with partner countries is not open-ended, and 
the Board is 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 related web page \3\ regarding how MCC assesses 
performance on the Access to Credit, Business Start-Up, and Land Rights 
and Access indicators on the scorecard, in order to increase 
transparency about the type of supplemental information the Board uses 
to assess a country's policy 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.
    \3\ Available at https://www.mcc.gov/who-we-select/indicators/doing-business-indicators-fy21.
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    In addition, this is the fifth 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
    Using the criteria described above, one candidate country under 
section 606(a) of the Act (22 U.S.C. 7705(a) was newly selected for 
assistance under section 607 of the Act (22 U.S.C. 7706): Sierra Leone. 
In accordance with section 609(k) of the Act, no candidate countries 
were newly selected to explore development of a concurrent compact 
program under section 607 of the Act (22 U.S.C. 7706).
    Sierra Leone: Sierra Leone has been an engaged and committed 
partner in the threshold program, consistently demonstrating a 
willingness to adopt challenging reforms. It is also a remarkable 
example of the ``MCC Effect'', having strengthened its scorecard 
performance substantially through sustained reform efforts spanning two 
administrations. Sierra Leone passes the scorecard for the second year 
in a row in FY 2021, passing 13 indicators overall with strong 
performance on both the Democratic Rights and Control of Corruption 
``hard hurdles.'' The country also took steps to strengthen its 
investment climate this year, including acceding to the New York 
Convention on the Recognition and Enforcement of Foreign Arbitral 
Awards. By selecting Sierra Leone for a compact, MCC will support the 
government's efforts to strengthen economic growth to reduce poverty.
Countries Selected to Continue Compact Development
    Eight of the countries selected for compact assistance for FY 2021 
were previously selected for FY 2020. Malawi, Mozambique, Timor-Leste, 
and Tunisia were selected to continue developing bilateral compacts. 
Benin, Burkina Faso, C[ocirc]te d'Ivoire, and Niger were selected to 
continue developing concurrent compacts for the purpose of regional 
integration. Selection of these countries for FY 2021 was based on 
their continued or improved policy performance since their prior 
selection.
Countries Selected To Receive Threshold Program Assistance
    The Board selected Kiribati to receive threshold program 
assistance.
    Kiribati: Kiribati offers MCC the opportunity to engage with a 
country that faces significant challenges to economic growth. Kiribati 
is a strong scorecard performer, having consistently met the scorecard 
criteria, and passes 13 of 20 indicators in FY 2021. It passes the 
Control of Corruption hard hurdle and demonstrates some of the highest 
democratic rights scores of any MCC candidate country. Kiribati has 
been an important United States partner in the central Pacific since a 
treaty of friendship was signed in 1979, and this threshold program 
will build upon that relationship.
Countries Selected To Continue Developing Threshold Programs
    The Board selected Ethiopia, The Gambia, and Kenya to continue 
developing threshold programs. Selection of these countries for FY 2021 
was based on their continued performance since their prior selection.

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/who-we-select/suspension-or-termination.

[FR Doc. 2020-28491 Filed 12-21-20; 4:15 pm]
BILLING CODE 9211-03-P