[Federal Register Volume 79, Number 242 (Wednesday, December 17, 2014)]
[Notices]
[Pages 75187-75189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29567]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 14-09]


Report on the Selection of Eligible Countries for Fiscal Year 
2015

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 12, 2014.
Thomas G. Hohenthaner,
Vice President/General Counsel and Corporate Secretary (Acting), 
Millennium Challenge Corporation.
Report on the Selection of Eligible Countries for Fiscal Year 2015
Summary
    This report is provided in accordance with section 608(d)(1) of the 
Millennium Challenge Act of 2003, as amended, 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 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 MCA 
assistance for fiscal year (``FY'') 2015 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 select ``MCA 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 ``MCA 
eligible countries'' for FY 2015, 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 FY 
2015. It identifies countries determined by the Board to be eligible 
under section 607 of the Act (22 U.S.C. 7706) for FY 2015 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 10, 2014, to select countries that will 
be eligible for MCA compact assistance under section 607 of the Act (22 
U.S.C. 7706) for FY 2015. The Board selected the following countries as 
eligible for such assistance for FY 2015: Mongolia, Nepal, and the 
Philippines. The Board also reselected the following countries as 
eligible for FY 2015 MCA compact assistance--Benin, Lesotho, Liberia, 
Morocco, Niger, and Tanzania. Sierra Leone, which was not reselected 
for compact assistance, was selected as eligible for threshold 
assistance. Cote d'Ivoire was also selected as eligible for threshold 
assistance, and Guatemala was reselected for eligibility for threshold 
program funds from FY 2015. The Board also confirmed its support for 
MCC's efforts to explore new partnerships in South Asia that could 
contribute to regional economic benefits. This is because, under the 
right circumstances, such a regional approach may present opportunities 
to take advantage of higher rates of return on investment and/or 
larger-scale reductions in poverty.
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 2015'' 
formally submitted to Congress on September 18, 2014, 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 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 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 2015'' (www.mcc.gov/pages/docs/doc/report-selection-criteria-and-methodology-fy15). 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. For example, for additional information in the area of 
corruption, the Board considered how a country is evaluated by 
supplemental sources like

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Transparency International's Corruption Perceptions Index, the Global 
Integrity Report, Open Government Partnership status, and the 
Extractive Industry Transparency Initiative, among others, as well as 
on the defined indicator. The Board may also take into account the 
margin of error around an indicator, when applicable. 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 sixth 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 factors related to economic growth and poverty 
reduction, 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 very deliberate 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'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, 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. MCC published a Guide to the Supplemental 
Information Sheet (www.mcc.gov/pages/docs/doc/pub-guide-to-supplemental-information-fy15) and a Guide to the Compact Survey 
Summary (www.mcc.gov/pages/docs/doc/summary-compact-survey-summary-fy15) 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. The Board also considered a 
country's commitment to further sector reform, as well as evidence of 
improved scorecard policy 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 FY 2015. 
FY 2015 was a particularly competitive year: seven countries were 
already working to develop compacts, multiple countries passed the 
scorecard (some for the first time), and funding was limited due to 
budget constraints. As a result, only three countries that passed the 
scorecard were newly selected for MCC compact eligibility, and two for 
the threshold program (one of which was Sierra Leone, moving from 
compact to threshold program eligibility).
Countries newly selected for compact eligibility
    Using the criteria described above, Mongolia, Nepal, and the 
Philippines are the only candidate countries under section 606(a) of 
the Act (22 U.S.C. 7705(a)) that were newly selected as eligible for 
MCA assistance for a compact under section 607 of the Act (22 U.S.C. 
7706).
    Mongolia: After graduating to LMIC status in FY 2013, Mongolia has 
passed MCC's scorecard criteria for two consecutive years and has shown 
improvement on the Control of Corruption indicator. It also remains a 
strong democracy in its region. Rapid growth in the mining sector has 
fostered recent economic growth; however, 27 percent of the population 
live below the national poverty line, on par with countries such as 
Honduras or Nicaragua. The country successfully implemented its first 
compact, which focused on strengthening property rights, reducing non-
communicable diseases, bolstering vocational education, reducing air 
pollution, and constructing an all-weather road to link markets.
    Nepal: Nepal has consistently passed the scorecard criteria for 
four consecutive years. Over the past year, Nepal held successful 
elections and made progress towards completing a draft constitution, 
thus demonstrating continued progress toward institutionalizing 
democratic governance. Nepal has also shown stronger policy performance 
as the political situation has stabilized, including improved 
performance on the Political Rights indicator. Selection for a compact 
offers Nepal a significant opportunity for poverty reduction in a 
critically important region. A compact investment will build on the 
economic analysis and development work completed during eligibility for 
the Threshold Program.
    Philippines: The Philippines once again met MCC's scorecard 
criteria in FY 2015, despite graduating to LMIC status in FY 2012, 
where the standards are higher and therefore more difficult to meet. 
The Philippines' improvement has been most notable on the Control of 
Corruption indicator, on which it improved from the 24th to 61st 
percentile in just three years. The country is on track to successfully 
complete its current compact, which focuses on reducing transportation 
costs through road rehabilitation, as well as bringing efficiencies to 
tax collection and investing in small-scale, community-driven 
development projects.
Countries reselected to continue compact development
    Five of the countries selected as eligible for MCA compact 
assistance for FY 2015 were previously selected as eligible in FY 2014. 
These countries include Lesotho, Liberia, Morocco, Niger, and Tanzania. 
The Board reselected these countries based on their continued or 
improved policy performance since their prior selection.
    In FY15, unlike in FY14, Benin also meets the scorecard criteria, 
including passing the Control of Corruption hurdle. The Board 
reselected Benin as compact eligible, as well.
Countries selected as eligible to receive threshold assistance
    The Board selected Cote d'Ivoire as eligible to receive threshold 
assistance. After years of working with MCC and MCC indicator 
institutions in order to strengthen their scorecard performance, Cote 
D'Ivoire went from passing 5 to 10 indicators over the last two years, 
due to updating data and pursuing policy reforms linked to the 
scorecard. In FY 2015, Cote D'Ivoire meets the minimum scorecard 
criteria for the first time, passing 10 indicators, including both hard 
hurdles. Selection for eligibility for threshold assistance will allow 
Cote d'Ivoire an opportunity to further strengthen its scorecard 
performance, and allow MCC the opportunity to work with the government 
on the country's ongoing efforts in policy reform.
    The Board also selected Sierra Leone as eligible to receive 
threshold assistance. Sierra Leone has been

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committed to reform and is a strong partner of MCC--taking numerous 
steps to improve transparency and fight corruption over 2014, even in 
the face of the Ebola crisis. Sierra Leone also continued to improve 
its overall scorecard performance by meeting 12 of 20 indicators this 
year versus 11 of 20 last year. However, Sierra Leone did not meet 
MCC's scorecard criteria for the second year, again narrowly missing a 
passing score on the Control of Corruption indicator. By selecting 
Sierra Leone as eligible for threshold assistance, MCC aims to support 
the government in its efforts to continue its positive overall policy 
trajectory, while also allowing MCC to bolster Sierra Leone's efforts 
by supporting continued institutional and policy reforms as the country 
emerges from its Ebola crisis.
Countries reselected to continue developing threshold programs
    This year the Board reselected Guatemala as eligible to continue 
developing a threshold program. Guatemala continues to pass more than 
half of the scorecard overall by meeting 11 of 20 indicators. It also 
continues to meet the Democratic Rights hurdle. Guatemala improved on 
the Control of Corruption indicator and currently performs on the 
median in the 50<SUP>th</SUP> percentile.
Ongoing review of partner countries' policy performance
    Countries already implementing compacts do not need to be 
reselected each year in order to continue implementation. Once MCC 
makes a commitment to a country through a compact, 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 
(www.mcc.gov/pages/about/policy/policy-on-suspension-and-termination).
Regional partnerships
    The Board also confirmed its support for MCC's efforts to explore 
new partnerships in South Asia that could contribute to regional 
economic benefits. This is because, under the right circumstances, such 
a regional approach may present opportunities to take advantage of 
higher rates of return on investment and/or larger-scale reductions in 
poverty.
[FR Doc. 2014-29567 Filed 12-16-14; 8:45 am]
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