This report to Congress is provided in accordance with section 608(b) of the Millennium Challenge Act of 2003, as amended (the Act), 22 U.S.C. 7707(b).

Section 605 (22 U.S.C. 7704) of the Act authorizes the provision of assistance to countries that enter into a Millennium Challenge Compact with the United States to support policies and programs that advance the progress of such countries in achieving lasting economic growth and poverty reduction. The Act requires MCC to take a number of steps in selecting countries for compact assistance for FY 2026 based on the countries' demonstrated commitment to just and democratic governance, economic freedom, and investing in their people, MCC's opportunity to reduce poverty and generate economic growth in the country, and the availability of funds. These steps include the submission of reports to the congressional committees specified in the Act and publication of information in the Federal Register that identify:

(1) The countries that are “candidate countries” for assistance for FY 2026 based on per capita income levels and 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 MCC's Board of Directors (Board) will use to measure and evaluate policy performance of the candidate countries consistent with the requirements of subsections (a) and (b) of section 607 of the Act (22 U.S.C. 7706) 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 2026, with justification for eligibility determination and selection for compact negotiation, including those eligible countries with which MCC will seek to enter into compacts (section 608(d) of the Act; 22 U.S.C. 7707(d)).

This report satisfies item 2 above.

Since MCC was created, it has relied on the World Bank's gross national income (GNI) per capita income data (Atlas method) and the historical ceiling for eligibility as set by the World Bank's International Development Association (IDA) to divide countries into separate income categories for purposes of creating scorecards. These categories are used to account for the income bias that occurs when countries with more per capita resources perform better than countries with fewer. Using the historical IDA eligibility ceiling for the scorecard evaluation groups ensures that the poorest countries compete with their income level peers and are not compared against countries with more resources to mobilize. Following the passage of the Millennium Challenge Corporation Candidate Country Reform Act in FY 2025, MCC began grouping the countries newly added into the income pool by this legislation (countries with GNI per capita above the World Bank's lower middle income/upper middle income country threshold but below the threshold for initiating the International Bank for Reconstruction and Development (IBRD) graduation process) in a third group to maintain this principle of countries competing with their income peers.

In FY 2026, MCC will continue to use the historical IDA classifications for eligibility and the lower middle income/upper middle income country threshold to categorize countries in groups for purposes of FY 2026 scorecard comparisons:

• Countries with GNI per capita equal to or less than IDA's historical ceiling for eligibility ( i.e., $2,155 for FY 2026);

• Countries with GNI per capita above IDA's historical ceiling for eligibility but below the World Bank's lower middle income/upper middle income country threshold ( i.e., $2,156 and $4,495 for FY 2026); and

• Countries with GNI per capita above the World Bank's lower middle income/upper middle income country threshold but below the threshold for initiating the IBRD graduation process ( i.e., $4,496 and $7,855 for FY 2026).

The list of countries for FY 2026 scorecard assessments is set forth below:

The following indicators will be used to measure candidate countries' demonstrated commitment to the criteria found in section 607(b) of the Act. The indicators are intended to assess the degree to which the political and economic conditions in a country serve to promote broad-based sustainable economic growth and reduction of poverty and thus provide a sound environment for the use of MCC funds. The indicators are not goals in themselves; rather, they are proxy measures of policies that are linked to broad-based sustainable economic growth. The indicators were selected based on (i) their relationship to economic growth and poverty reduction; (ii) the number of countries they cover; (iii) transparency and availability; and (iv) relative soundness and objectivity. Where possible, the indicators are developed by independent sources.

1. Control of Corruption: An index of surveys and expert assessments that rate countries on: “grand corruption” in the political arena; the frequency of petty corruption; the effects of corruption on the business environment; and the tendency of elites to engage in “state capture,” among other things. Pass: Score must be above the median score for the income group.

2. Government Accountability: Independent experts rate countries on the prevalence of free and fair electoral processes; political pluralism and participation of all stakeholders; government accountability and transparency; freedom from domination by the military, foreign powers, totalitarian parties, religious hierarchies and economic oligarchies; and the political rights of all groups, among other things. Pass: Score must be above the minimum score of 17 out of 40.

3. Personal Freedom: Independent experts rate countries on their freedom of expression and belief; association and organizational rights; rule of law and human rights; and personal autonomy and economic rights, among other things. Pass: Score must be above the minimum score of 25 out of 60.

4. Freedom of Information: Measures the legal and practical steps taken by a government to enable or allow information to move freely through society; this includes measures of press freedom, national freedom of information laws, and freedom of speech as measured by the extent to which a county is shutting down social media or the internet. Pass: Score must be above the median score for the income group.

5. Government Effectiveness: An index of surveys and expert assessments that rate countries on the quality of public service provision; civil servants' competency and independence from political pressures; and the government's ability to plan and implement sound policies, among other things. Pass: Score must be above the median score for the income group.

6. Rule of Law: An index of surveys and expert assessments that rate countries on the extent to which the public has confidence in and abides by the rules of society; the incidence and impact of violent and nonviolent crime; the effectiveness, independence, and predictability of the judiciary; the protection of property rights; and the enforceability of contracts, among other things. Pass: Score must be above the median score for the income group.

1. Business Start-Up: An index that rates countries on the time and cost of complying with all procedures officially required for an entrepreneur to start up and formally operate an industrial or commercial business as well as the overall business environment in a country. Pass: Score must be above the median score for the income group.

2. Inflation: The most recent average annual change in consumer prices. Pass: Score must be 15 percent or less.

3. Regulatory Quality: An index of surveys and expert assessments that rate countries on the burden of regulations on business; price controls; the government's role in the economy; and foreign investment regulation, among other areas. Pass: Score must be above the median score for the income group.

4. Trade Policy: A measure of a country's openness to international trade based on weighted average tariff rates and non-tariff barriers to trade. Pass: Score must be above the median score for the income group.

5. Women in the Economy: An index that measures the extent to which laws provide men and women equal capacity to generate income or participate in the economy, including factors such as the capacity to access institutions, get a job, register a business, sign a contract, open a bank account, choose where to live, to travel freely, property rights protections, and protections against domestic violence, among others. Pass: Score must be above the median score for the income group.

6. Property and Land Rights: An index that rates countries on the extent to which the institutional, legal, and market framework provides secure land tenure and access to land in rural areas and the extent to which all individuals have the right to private property in practice and in law, including measures of intellectual property rights, risk of expropriation, and the quality of contract enforcement. Pass: Score must be above the median score for the income group.

7. Access to Credit: An index that ranks countries based on access and use of formal and informal financial services as measured by the number of bank branches and ATMs per 100,000 adults and the share of adults that have an account at a formal or informal financial institution. Pass: Score must be above the median score for the income group.

8. Employment Opportunity: Measures the rights of people to work. Pass: Score must be above the median score for the income group.

9. International Market Access: Measures a country government's commitment to the free movement of capital, citizen access to international capital markets, and the barriers to global market access through import or export controls. Pass: Score must be above the median score for the income group.

10. Market Competitiveness: Measures a country government's commitment to strengthening market forces in the economy by promoting a business environment that allows for innovation and open competition while limiting expropriation, and monopolies. Pass: Score must be above the median score for the income group.

1. Health Expenditures: Total current expenditures on health by government (excluding funding sourced from external donors) at all levels divided by GDP. Pass: Score must be above the median score for the income group.

2. Chronic Disease: An indicator measuring the prevalence of chronic diseases. Measures the likelihood of dying between ages 30 and 70 due to cardiovascular disease, cancer, diabetes, or chronic respiratory disease. Pass: Score must be above the median score for the income group.

3. Child Health: An index made up of three indicators: (i) access to improved water, (ii) access to improved sanitation, and (iii) child (ages 1-4) mortality. Pass: Score must be above the median score for the income group.

4. Natural Resource Protection: Assesses a country government's commitment to preserving biodiversity and natural habitats, responsibly managing ecosystems and fisheries, and engaging in sustainable agriculture. Pass: Score must be above the median score for the income group.

5. Workforce Development: An indicator measuring education within the workforce. This indicator measures the proportion of youth and adults enrolled in training, non-formal education, and formal education in the last 12 months. Pass: Score must be above the median score for the income group.

6. Girls' Education:

a. Girls' Primary Completion Rate: The number of female students enrolled in the last grade of primary education minus repeaters divided by the population in the relevant age cohort (gross intake ratio in the last grade of primary). Countries with a GNI/capita of $2,155 or less are assessed on this indicator. Pass: Score must be above the median score for the income group.

b. Girls' Lower Secondary Completion Rate: Countries with a GNI/capita between $2,156 and $4,495 are assessed on the number of female pupils that have completed the last grade of lower secondary education divided by the population within three to five years of the intended age of completion, expressed as a percentage of the total population of females in the same age group. Pass: Score must be above the median score for the income group.

c. Girls' Upper Secondary Completion Rate: Countries with a GNI/capita of between $4,496 and $7,895 are assessed on the number of female pupils that have completed the last grade of upper secondary education divided by the population within three to five years of the intended age of completion, expressed as a percentage of the total population of females in the same age group. Pass: Score must be above the median score for the income group.

Within each policy category, the Act sets out a number of specific selection criteria. A set of objective and quantifiable policy indicators is used to inform eligibility decisions for assistance and to measure the relative performance by candidate countries against these criteria. Performance against each of these criteria is assessed by at least one of the objective indicators. Most are addressed by multiple indicators. The specific indicators appear in parentheses next to the corresponding criterion set out in the Act.

Section 607(b)(1): Just and democratic governance, including a demonstrated commitment to—

(A) promote political pluralism, equality and the rule of law ( Government Accountability, Personal Freedom, Rule of Law, and Women in the Economy );

(B) respect human and civil rights, including the rights of people with disabilities ( Government Accountability, Personal Freedom, Employment Opportunity, and Freedom of Information );

(C) protect private property rights ( Personal Freedom, Regulatory Quality, Rule of Law, and Property and Land Rights );

(D) encourage transparency and accountability of government ( Government Accountability, Personal Freedom, Freedom of Information, Control of Corruption, Rule of Law, Government Effectiveness, and Employment Opportunity );

(E) combat corruption ( Control of Corruption, Government Accountability, Personal Freedom, Rule of Law, and Freedom of Information ); and

(F) the quality of civil society enabling environment ( Personal Freedom, Freedom of Information, Employment Opportunity, and Rule of Law ).

Section 607(b)(2): Economic freedom, including a demonstrated commitment to economic policies that—

(A) encourage citizens and firms to participate in global trade and international capital markets ( International Market Access, Inflation, Trade Policy, and Regulatory Quality );

(B) promote private sector growth (Market Competitiveness, Inflation, Business Start-Up, Property and Land Rights, Access to Credit, Women in the Economy, and Regulatory Quality );

(C) strengthen market forces in the economy (Market Competitiveness, Business Start-Up, Inflation, Trade Policy, Property and Land Rights, Access to Credit, and Regulatory Quality ); and

(D) respect worker rights, including the right to form labor unions ( Employment Opportunity, Personal Freedom, and Women in the Economy ).

Section 607(b)(3): Investments in the people of such country, particularly women and children, including programs that—

(A) promote broad-based primary education ( Girls' Primary Education Completion Rate, Girls' Lower Secondary Education Completion Rate, Workforce Development, and Employment Opportunity );

(B) strengthen and build capacity to provide quality public health and reduce child mortality ( Chronic Disease, Health Expenditures, and Child Health ); and

(C) promote the protection of biodiversity and the transparent and sustainable management and use of natural resources ( Natural Resource Protection ).

MCC reporting and data in the following chart are used to assess threshold program performance, compact performance of MCC compact countries nearing the end of compact implementation ( i.e., within 18 months of compact end date), or for current MCC compact countries under consideration for a concurrent compact, where appropriate. Some reporting used for assessment may contain sensitive information and adversely affect implementation or MCC-partner country relations. This information is for MCC's internal use and is not made public. However, key implementation information is summarized in compact status and results reports that are published quarterly on MCC's website under MCC country programs ( www.mcc.gov/where-we-work ) and monitoring and evaluation ( www.mcc.gov/our-impact/m-and-e ) web pages.

For completed compacts, additional information is used to assess compact performance and is found in a country's “Star Report.” The Star Report captures key information to provide a framework for results and improve the ability to disseminate learning and evidence throughout the lifecycle of an MCC investment from selection to final evaluation. For each compact and threshold program, evidence is collected on performance indicators, evaluation results, partnerships, sustainability efforts, and learning, among other elements.

In addition to the Star Reports, MCC also surveys staff on topics related to the quality of the partnership during design and implementation of programs, progress toward program results, a partner country's commitment to undertaking policy and institutional reforms, and compliance with MCC standards. Additional information on the survey can be found in the Guide to the Program Surveys: https://www.mcc.gov/resources/doc/guide-to-the-program-surveys/ .