[Federal Register Volume 77, Number 249 (Friday, December 28, 2012)]
[Notices]
[Pages 76535-76537]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31278]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 12-13]
Report on the Selection of Eligible Countries for Fiscal Year
2013
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 21, 2012.
Melvin F. Williams, Jr.,
VP/General Counsel and Corporate Secretary, Millennium Challenge
Corporation.
Report on the Selection of Eligible Countries for Fiscal Year 2013
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. 7707(d)(1)).
The Act authorizes the provision of Millennium Challenge Account
(``MCA'') 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 MCA assistance during 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:
The countries that are ``candidate countries'' for MCA assistance
during fiscal year 2013 (``FY13'') 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)));
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 ``MCA eligible countries''
from among the ``candidate countries'' (section 608(b) of the Act (22
U.S.C. 7707(b))); and
The list of countries determined by the Board to be ``MCA eligible
countries'' for FY13, with justification for eligibility determination
and selection for compact negotiation, including with which of the MCA
eligible countries the Board will seek to enter into MCA 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 FY13.
It identifies countries determined by the Board to be eligible under
section 607 of the Act (22 U.S.C. 7706) for FY13 and countries 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 determined by the Board to be
eligible for MCC's Threshold Program under section 616 of the Act (22
U.S.C. 7715).
Eligible Countries
The Board met on December 19, 2012, to select countries that will
be eligible for MCA compact assistance under section 607 of the Act (22
U.S.C. 7706) for FY13. The Board selected the following countries as
eligible for such assistance for FY13: Liberia, Morocco, Niger, Sierra
Leone, and Tanzania. The Board also reselected the following countries
as eligible for MCA compact assistance: Benin, El Salvador, Georgia,
and Ghana.
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 2013''
formally submitted to Congress on September 14, 2012, selection was
based primarily on a country's overall performance in three broad
policy
[[Page 76536]]
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 scorecard countries (``LIC'') or the
group of lower-middle income scorecard countries (``LMIC'').
The criteria and methodology used to assess countries on the annual
scorecards is outlined in the ``Report on the Criteria and Methodology
for Determining the Eligbility of Candidate Countries for Millennium
Challenge Account Assistance in Fiscal Year 2013.'' Scorecards
reflecting each country's performance on the indicators are available
on MCC's Web site at www.mcc.gov/scorecards.
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.
This was the fourth 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)). 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 where the country is on its growth path, the
sustainability of MCC's investments, and the country's ability to
attract and leverage public and private resources in support of
development.
MCC's engagement with partner countries is not open-ended, and the
Board is particularly selective when determining eligibility for
follow-on partnerships. In determining subsequent compact eligibility,
the Board considered--in addition to the criteria outlined above--the
country's performance implementing its first compact, including the
nature of the country 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. For the first time, MCC published a Guide to the
Supplemental Information Sheet and a Guide to the Compact Survey
Summary, 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.
As with previous years, a number of countries that performed well
on the quantitative elements of the selection criteria (i.e., on the
policy indicators) were not chosen as eligible countries for FY13. FY13
was a particularly competitive year: five countries were within the
window of consideration for subsequent compacts, multiple other
countries passed the scorecard (some for the first time), and funding
was limited due to budget constraints. As a result, not every country
that passed the scorecard was selected for MCC eligibility.
Countries Newly Selected for Compact Eligibility
Using the criteria described above, Morocco, Liberia, Niger, Sierra
Leone, and Tanzania are candidate countries under section 606(a) of the
Act (22 U.S.C. 7705(a)) that were selected as eligible for MCA
assistance for a compact under section 607 of the Act (22 U.S.C. 7706).
Liberia passed the MCC scorecard for the first time in FY13, after
several years of improving economic governance and strengthening
democratic institutions. Scorecards for Liberia can be found here:
www.mcc.gov/scorecards. Liberia is a post-conflict country that has
held two democratic elections since the end of its civil war, electing
the first female president in sub-Saharan Africa. Liberia's efforts to
combat corruption have been recognized in numerous assessments,
including on the Control of Corruption indicator, and it has made
significant improvements to macroeconomic management in recent years.
Liberia's threshold program, focused on expanding girls' access to
education, land rights and access, and trade opportunities, is
scheduled to conclude September 2013. Capacity constraints may impact
the timeline of the compact development process.
Morocco is a consistently strong performer on the MCC scorecard.
Scorecards for Morocco can be found here: www.mcc.gov/scorecards. In
the wake of the Arab Spring, the Government of Morocco has reacted in a
relatively peaceful and responsive manner, including expanding
democratic rights through the adoption of new powers for the prime
minister and the parliament. A second compact can help to solidify
economic reforms and growth necessary for long-term regional stability.
Morocco is scheduled to conclude its first compact in September 2013.
The initial MCC compact has invested in expansion of fruit tree
agriculture, support for small-scale fisheries and fish-markets,
enhancement of the artisanal sector in the Fez Medina, and training for
small-scale businesses across all these sectors, with an emphasis on
training for women and youth including literacy training. In the
current compact, Morocco's government established a high-capacity team,
which is currently completing one of the largest and most complex
compacts in MCC's history.
Niger is one of the poorest countries in the world but has
relatively strong policy performance, as indicated by two consecutive
years passing the MCC indicators. Scorecards for Niger can be found
here: www.mcc.gov/scorecards. In 2011, Niger was the first country to
demonstrate that with sufficient political will, countries can restore
their MCC eligibility. Niger's constitutional reform, clean and
competitive elections, and peaceful transfer of power to civilian
government prompted MCC to reinstate Niger's threshold eligibility last
year. Since that time, Niger has pursued reforms related to democratic
and economic governance and contributed to efforts to promote stability
in the region. Niger has been a strong MCC partner in its threshold
program, operating a dedicated program and policy analysis unit through
both elected governments and even during its period of suspension.
Niger is currently finalizing its constraints to growth analysis, an
exercise that forms the basis of MCC's compact development process, and
this will now shift from a threshold program assessment tool to part of
the
[[Page 76537]]
compact development process. Capacity constraints may impact the
timeline for the compact development process.
Sierra Leone is a post-conflict country that has undergone dramatic
reforms over the past several years. Many of these reforms are
reflected in the FY13 scorecard, which Sierra Leone passes for the
first time, after notable improvements in all scorecard categories.
Sierra Leone recently held its third democratic election since the end
of its civil war, which was widely recognized as peaceful, transparent,
and participatory. It has strengthened its anti-corruption commission,
provided free health care to children under five and pregnant and
lactating women, expanded vaccine coverage, improved access to credit,
and lowered trade barriers. The Government of Sierra Leone's policy
reforms, direct engagement with MCC's indicator institutions and now
passing scorecard illustrate the strength of the MCC's incentive
effect. Scorecards for Sierra Leone can be found here: www.mcc.gov/scorecards. Capacity constraints may result in a longer compact
development process.
Tanzania is a democratic nation experiencing economic growth and
working to reduce one of the highest poverty rates in the world. In
FY13, Tanzania passed the indicator criteria for the eighth consecutive
year. Scorecards for Tanzania can be found here: www.mcc.gov/scorecards. Tanzania is one of only four countries to be included as a
pilot country for the U.S. Partnership for Growth (PFG) initiative.
Tanzania's role as a pilot PFG country makes it uniquely situated to
utilize compact resources effectively. In 2011, under the PFG
initiative, Tanzania completed a constraints to growth analysis. There
is an engaged MCA team already in operation, and the Government of
Tanzania and U.S. Government have, through the PFG, both committed to
focusing efforts towards combating specifically-identified constraints
to growth. Tanzania's current compact, which will close in September
2013, is investing in roads, access to potable water, and improving the
energy sector.
With this selection decision, MCC looks forward to increased
competition during compact development among those countries already
selected. The agency believes that a deeper pool of qualified
contenders competing for scarce budget resources will reinforce the
importance of maintaining strong performance on the policy indicators
and can inspire a more efficient, high-quality compact development
process.
Countries Re-Selected To Continue Compact Development
Four of the countries selected as eligible for MCA compact
assistance in FY13 were previously selected as eligible. Reselection
allows them to continue compact development and access funding from
FY2013. These countries include Benin, El Salvador, Georgia, and Ghana.
The Board reselected these countries based on their continued
performance since their prior selection. The Board determined that
since their initial selection, there has been no material change in
their performance on the indicator criteria that indicates a serious
decline in policy performance. All four countries pass the scorecards.
Countries Newly Selected for Threshold Program Eligibility
For FY13, the Board selected Guatemala as eligible for threshold
assistance. This selection is consistent with the recently re-designed
threshold program. Under the re-designed concept, the new threshold
country programs will no longer focus explicitly on trying to move
indicator scores. Rather, the program will allow countries to diagnose
binding constraints to economic growth and demonstrate the capacity and
political will to make difficult policy reforms in partnership with
MCC. This will contribute directly to the Board's understanding of a
country's capacity to undertake the type of policy reforms typically
required to enable a compact investment to have maximum sustainable
impact.
Guatemala passes 10 of 20 indicators on the scorecard, including
both Democratic Rights indicators, and performs on the median on
Control of Corruption. Guatemala's government has engaged on a series
of reform to improve the fight against corruption and strengthen the
rule of law.
Countries Re-Selected To Continue Developing Threshold Programs
Two countries selected as eligible for threshold assistance in FY13
were previously selected as eligible. Reselection allows them to
continue developing threshold programs and access funding from FY2013.
These countries are Honduras and Nepal.
The Board reselected these countries based on their continued
performance since their prior selection. The Board determined that
since their initial selection, there has been no material change in
their performance that indicates a serious decline in policy
performance.
Ongoing Review of Partner Countries' Policy Performance
The Board also reviewed the policy performance of countries that
are implementing compacts. These countries do not need to be re-
selected each year in order to continue implementation. Once MCC makes
a commitment to a country through a compact agreement, MCC does not
consider the country for reselection on an annual basis during the term
of its compact. The Board emphasized the need for all partner countries
to maintain or improve their policy performance. If it is determined
that a country has demonstrated a significant policy reversal, MCC can
hold it accountable by applying MCC's Suspension and Termination
Policy.
Selection to Initiate the Compact Process
The Board also authorized MCC to invite Liberia, Morocco, Niger,
Sierra Leone, and Tanzania to submit a proposal for a compact, as
described in section 609 of the Act (22 U.S.C. 7708).
Submission of a proposal is not a guarantee that MCC will finalize
a compact with an eligible country. Any MCA assistance provided under
section 605 of the Act (22 U.S.C. 7704) will be contingent on the
successful negotiation of a mutually agreeable compact between the
eligible country and MCC, approval of the compact by the Board, and the
availability of funds.
[FR Doc. 2012-31278 Filed 12-27-12; 8:45 am]
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