[Federal Register Volume 86, Number 244 (Thursday, December 23, 2021)]
[Notices]
[Pages 73004-73006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27955]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 21-13]


Report on the Selection of Eligible Countries for Fiscal Year 
2022

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 20, 2021.
Thomas G. Hohenthaner,
Acting VP/General Counsel and Corporate Secretary.

Report on the Selection of Eligible Countries for Fiscal Year 2022

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) 2022 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 2022, 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 
2022. It identifies countries determined by the Board to be eligible 
under section 607 of the Act (22 U.S.C. 7706) for FY 2022 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 14, 2021 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 2022: Belize and Zambia. The Board also 
selected the following previously selected countries for compact 
assistance for FY 2022: Benin, Burkina Faso, C[ocirc]te d'Ivoire, 
Indonesia, Lesotho, Malawi, Mozambique, Niger, Sierra Leone, and Timor-
Leste.
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 2022'' 
formally submitted to Congress on September 29, 2021, 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

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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 $1,965, or the 
group with a GNI per capita between $1,966 and $4,095.
    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 2022.'' \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-fy22.
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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 leverage public and private resources in support of 
development.
    This was the fourth 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 thirteenth 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 prior 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 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 
related webpages \3\ regarding how MCC assesses performance on the 
Access to Credit, Land Rights and Access, and Business Start-Up 
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/blog/entry/blog-101921-financial-inclusion (Access to Credit and Land Rights and Access) 
and https://www.mcc.gov/who-we-select/indicators/doing-business-indicators-fy22 (Business Start-Up).
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    In addition, this is the sixth 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, two 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): Belize and 
Zambia. 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).
    Belize: Belize offers MCC the opportunity to engage with a country 
that is committed to democratic governance but that faces rising 
poverty rates, significant challenges to economic growth, and 
vulnerability to external shocks. Belize meets the scorecard criteria, 
passing 13 of 20 indicators overall in FY 2022, with strong performance 
on both the Control of Corruption and Democratic Rights ``hard 
hurdles.'' By selecting Belize for a compact, MCC will support the 
government's efforts to strengthen economic growth to reduce poverty 
and address the development challenges facing the country.
    Zambia: Zambia's recent democratic transition and demonstrated 
commitment to pursuing critical economic and democratic governance 
reforms contributed to the Board's decision to select Zambia for a 
subsequent compact. Zambia passes the scorecard in FY 2022, passing 15 
of 20 indicators overall, including both the Control of Corruption and 
Democratic Rights ``hard hurdles.'' By selecting Zambia for a compact, 
MCC can support the government's efforts to make key economic and 
governance reforms, reduce poverty and strengthen economic growth, and 
address the country's pressing development challenges.
Countries Selected To Continue Compact Development
    Ten of the countries selected for compact assistance for FY 2022 
were previously selected for FY 2021. Indonesia, Lesotho, Malawi, 
Mozambique, Sierra Leone, and Timor-Leste were selected to continue 
developing ``domestic'' 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 2022 was based on an assessment of their policy 
performance since their prior selection.
    Although the Board reselected Benin, it endorsed MCC's 
determination to significantly reduce the portion of the planned 
regional investment that would be made in Benin through a concurrent 
compact due to Benin's multi-year decline in its commitment to the 
principles that underpin MCC's eligibility criteria, including the core 
principles of democratic governance.

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Countries Selected To Receive Threshold Program Assistance
    The Board did not newly select any countries to receive threshold 
program assistance for FY 2022.
Countries Selected To Continue Developing Threshold Programs
    The Board selected Kenya and Kiribati to continue developing 
threshold programs. Selection of these countries for FY 2022 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. 2021-27955 Filed 12-21-21; 11:15 am]
BILLING CODE 9211-03-P