[Federal Register: January 2, 2009 (Volume 74, Number 1)]
[Notices]
[Page 121-123]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ja09-48]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 09-04]
Report on the Selection of Eligible Countries for Fiscal Year
2009
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).
The Act authorizes the provision of Millennium Challenge Account
(``MCA'') assistance under section 605 of the Act 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 take steps to determine the countries that, based on their
demonstrated commitment to just and democratic governance, economic
freedom, and investing in their people, as well as the opportunity to
reduce poverty and generate economic growth in the country, will be
eligible to receive MCA assistance during the fiscal year. These steps
include 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 during FY09 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. 7708(a));
2. The criteria and methodology that the Board of Directors of MCC
(the Board) will use to measure and evaluate the relative 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. 7708(b)); and
3. The list of countries determined by the Board to be ``MCA
eligible countries'' for FY09, with justification for eligibility
determination and selection for compact negotiation, including 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. 7708(d)).
This is the third of the above-described reports by MCC for fiscal
year 2009 (FY09). It identifies countries determined by the Board to be
eligible under section 607 of the Act for FY09 (22 U.S.C. 7706) and
countries with which the Board will seek to enter into compacts under
section 609 of the Act, as well as the justification for such
decisions.
Eligible Countries
The Board met on December 11, 2008 to select countries that will be
eligible for MCA compact assistance under section 607 of the Act for
FY09. The Board selected the following countries as eligible for such
assistance for FY09: Colombia, Indonesia, Jordan, Malawi, Moldova, the
Philippines, Senegal, and Zambia.
In accordance with the Act and with the ``Report on the Criteria
and Methodology for Determining the
[[Page 122]]
Eligibility of Candidate Countries for Millennium Challenge Account
Assistance in Fiscal Year 2009'' submitted to the Congress on October
9, 2008, selection was based primarily on a country's overall
performance in relation to three broad policy categories: (1) ``Ruling
Justly''; (2) ``Encouraging Economic Freedom''; and (3) ``Investing in
People.'' The Board relied upon 17 transparent and independent
indicators to assess to the maximum extent possible policy performance
and demonstrated commitment in these three areas as a basis for
determining which countries would be eligible for MCA compact
assistance. In determining eligibility, the Board considered if a
country performed above the median in relation to its peers on at least
half of the indicators in the Ruling Justly and Economic Freedom policy
categories, above the median on at least three of five indicators in
the Investing in People policy category, and above the median on the
``Control of Corruption'' indicator. The Board also took into account
whether the country performed substantially below the median on any
indictor and if so, whether it is taking appropriate action to address
the shortcomings. Scorecards reflecting each country's performance on
the indicators are available on MCC's Web site at http://www.mcc.gov.
The Board also considered whether any adjustments should be made
for data gaps, lags, trends, 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 and promoting democratic governance, and its
effective protection of human rights. In addition, the Board considered
the opportunity to reduce poverty and promote economic growth and
poverty reduction in a country, in light of the overall context of the
information available, as well as the availability of appropriated
funds.
Three countries were selected as eligible for the first time in
FY09. Indonesia and Zambia, both low income candidates, were selected
under section 606(a) of the Act (22 U.S.C. 7705(a)). Colombia, a lower
middle income candidate, was selected under section 606(b) (22 U.S.C.
7705(b)) of the Act. All three of these countries: (1) Performed above
the median in relation to their peers on at least half of the
indicators in each of the three policy categories; (2) performed above
the median on corruption; and (3) in cases where they performed
substantially below the median on an indicator, demonstrated that
actions to address the problem are being taken or had data that did not
accurately reflect their policy performance.
Indonesia meets MCC's indicator criteria for the first time in
FY09, after having made steady progress improving its Control of
Corruption score over the past several years. The Government of
Indonesia has demonstrated a strong commitment to fighting corruption:
anti-corruption institutions have been strengthened and high-level
anti-corruption investigations and prosecutions have become
increasingly common. In addition to anti-corruption reforms, the
Government has initiated a series of reforms to improve the investment
climate. Indonesia is in its second year of a successful Threshold
program that has focused on reducing corruption and improving
immunization rates.
Zambia meets MCC's indicator criteria for the first time this year,
performing above the median on 16 of 17 indicators. Anti-corruption
efforts are a high priority for the Government of Zambia, and
performance on the Control of Corruption indicator has improved in
recent years. Zambia is also nearing the end of a successful anti-
corruption Threshold Program. In recent years, Zambia has moved to a
relatively open environment for investment and has demonstrated prudent
macroeconomic management.
Colombia meets the indicator criteria for the second year in row.
The Government of Colombia has pursued a significant reform agenda,
including major tax, civil service, and justice sector reforms.
Colombia has also been cited as a top reformer by the World Bank's
Doing Business report for two years in a row. In addition, President
Uribe's strategy to expand the professional armed forces and promote a
strong state presence throughout the country has yielded significant
results in terms of improving security. While the U.S. Government
provides a substantial amount of assistance to Colombia through other
accounts, the majority has gone toward counternarcotics aid.
Five countries selected as eligible for MCA assistance in FY09 were
previously selected as eligible in at least one prior fiscal year;
however, because they have not yet signed a compact agreement, they
needed to be reselected as eligible for FY09 funds. Four of these
countries were in the low income category: Malawi, Moldova, the
Philippines, and Senegal. One country, Jordan, was in the lower middle
income category.
The Board reselected these countries based on their continued
performance since their prior selection. The Board determined that no
material change has occurred in the performance of these countries on
the indicator criteria since the FY08 selection that would justify not
including them in the FY09 eligible country list. Only one of the
countries--the Philippines--did not meet the indicator criteria,
performing just below the median on the Control of Corruption
indicator; however, MCC does not believe that the Philippines has
demonstrated a pattern of action inconsistent with the selection
criteria (i.e., a serious policy reversal) since it was last selected
as eligible. The Board also stressed that the Philippines must meet the
selection criteria, particularly the Control of Corruption indicator,
before it would approve a compact.
Country partners which are implementing compacts must show a
commitment to maintain and improve their policy performance. Once we
sign a compact with these countries, they will not need to be
reselected annually. MCC's Board closely evaluates a country's policy
performance throughout the life of the compact. While MCC's indicators
work well as a transparent way of identifying those countries that are
most committed to sound development policies and for discerning trends
over the medium-term, they are not as well-suited for tracking
incremental progress from year-to-year. Countries may be generally
maintaining performance but not meet the criteria in a given year due
to factors such as:
Graduation from the low income country category to the
lower middle income country category,
Data improvements and revisions,
Last year's introduction of two new indicators and the
requirement that countries pass three of the five indicators in the
Investing in People category,
Increases in peer-group medians,
Slight declines in performance.
Once MCC has made a commitment to a country through a signed
compact, MCC continues to work with that country--even if it doesn't
meet the indicator criteria each year--as long as it has not
demonstrated a pattern of actions inconsistent with the eligibility
criteria. If it is determined that a country has demonstrated a
significant policy reversal, the Board can hold it accountable by
applying the Suspension and Termination Policy.
For those countries that have not demonstrated a significant policy
reversal but do not meet the indicator criteria, MCC will invite these
countries
[[Page 123]]
to participate or continue their participation in MCC's policy
improvement process. Countries participating in the policy improvement
process are asked to develop and implement a forward-looking action
plan that outlines the steps they plan to take to improve performance
on certain policy criteria. They then periodically report on progress
made on the plan.
Finally, 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 FY09. As
discussed above, the Board considered a variety of factors in addition
to the country's performance on the policy indicators in determining
whether they were appropriate candidates for assistance (e.g., the
country's commitment to fighting corruption and promoting democratic
governance; the availability of appropriated funds; and the countries
in which MCC would likely have the best opportunity to reduce poverty
and generate economic growth).
Selection for Compact Negotiation
The Board also authorized MCC to invite Indonesia, Zambia, and
Colombia to submit a proposal for a compact, as described in section
609 of the Act (22 U.S.C. 7708) (previously eligible countries that
were reselected will not be asked to submit another proposal for FY09
assistance). MCC has posted guidance on the MCC Web site (http://
www.mcc.gov) regarding the development and submission of MCA program
proposals. 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 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
availability of funds.
Dated: December 22, 2008.
John C. Mantini,
Acting General Counsel, Millennium Challenge Corporation.
[FR Doc. E8-30965 Filed 12-31-08; 8:45 am]
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