Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2015

 
CONTENT

Federal Register, Volume 79 Issue 185 (Wednesday, September 24, 2014)

Federal Register Volume 79, Number 185 (Wednesday, September 24, 2014)

Notices

Pages 57135-57140

From the Federal Register Online via the Government Printing Office www.gpo.gov

FR Doc No: 2014-22652

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MILLENNIUM CHALLENGE CORPORATION

MCC FR 14-06

Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2015

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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

Dated: September 18, 2014.

John C. Mantini,

Assistant General Counsel, Millennium Challenge Corporation.

Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance for Fiscal Year 2015

Summary

In accordance with section 608(b)(1) of the Millennium Challenge Act of 2003 (the ``Act'', 22 U.S.C. 7707(b)(1)), the Millennium Challenge Corporation (MCC) is submitting the following report. This report identifies the criteria and methodology that the Millennium Challenge Corporation (MCC) intends to use to determine which candidate countries may be eligible to be considered for assistance under the Act for FY 2015.

Under section 608 (c)(1) of the Act, MCC will, for a thirty-day period following publication, accept and consider public comment for purposes of determining eligible countries under section 607 of the Act (22 U.S.C. 7706).

Criteria and Methodology for FY 2015

This document explains how the Board of Directors (Board) of the Millennium Challenge Corporation (MCC) will identify, evaluate, and determine eligibility of countries for Millennium Challenge Account (MCA) assistance for fiscal year (FY) 2015. The statutory basis for this report is set forth in appendix A. Specifically, this document discusses:

  1. Which countries MCC will evaluate

  2. How the Board evaluates these countries

    1. Overall

    2. For selection for first compact eligibility

    3. For selection for second/subsequent compact eligibility

    4. For selection for the threshold program

  3. Which countries are evaluated?

    As discussed in the August 2014 Report on Countries that are Candidates for Millennium Challenge Account Eligibility for Fiscal Year 2015 and Countries that Would be Candidates but for Legal Prohibitions (the ``Candidate Country Report''), MCC evaluates all low-income countries (LICs) and lower-middle income countries (LMICs) countries as follows:

    For scorecard evaluation purposes for FY 2015, MCC defines LICs as those countries between $0 and $1985 GNI per capita, and LMICs as those countries between $1986 and $4125 GNI per capita.\1\

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    \1\ This corresponds to LIC and LMIC definitions using the historic International Development Association (IDA) thresholds published by the World Bank.

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    For funding purposes for FY 2015, MCC defines the poorest 75 countries as LICs, and the remaining countries up to the upper-

    middle income (UMIC) threshold of $4125 as LMICs.\2\

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    \2\ By law, no more than 25 percent of all compact funds for a given fiscal year may be provided to LMIC countries (using this ``funding'' definition).

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    Lists of all LICs and LMICs under scorecard evaluation are provided in appendix B, including which countries among them are statutorily prohibited from receiving U.S. assistance. The list using the ``funding'' definition appeared in the Candidate Country Report, which describes how funding categories work.

  4. How does the Board evaluate these countries?

    1. Overall Evaluation

      The Board looks at three legislatively mandated factors in its evaluation of any candidate country for compact eligibility: (1) Policy performance; (2) the opportunity to reduce poverty and generate economic growth; and (3) the availability of MCC funds.

      1. Policy Performance

        Because of the importance of needing to evaluate a country's policy performance--and needing to do so in a comparable, cross-country way--

        the Board relies to the maximum extent possible upon the best-available objective and quantifiable indicators of policy performance. These indicators act as proxies of the country's commitment to good governance, as laid out in MCC's founding legislation. Comprised of 20 third-party indicators in the categories of ``encouraging economic freedom,'' ``investing in people,'' and ``ruling justly,'' MCC ``scorecards'' are created for all LICs and LMICs. To ``pass'' the indicators on the scorecard, the country must perform above the median among its income group (as defined above), except in the cases of inflation, political rights, civil liberties, and immunization rates (LMICs only), where minimum threshold scores have been established. In particular, the Board considers whether the country

        Passed at least 10 of the 20 indicators, with at least one in each category,

        passed the ``Control of Corruption'' indicator, and

        passed either the ``Political Rights'' or ``Civil Liberties'' indicator.

        While satisfaction of all three aspects means a country is termed to have ``passed'' the scorecard, the Board also considers whether the country performed ``substantially worse'' in any one policy category than it does on the scorecard overall. Appendix C describes all 20 indicators, their definitions, what is required to ``pass,'' their source, and their relationship to the legislative criteria.

        The 20 policy performance indicators are the predominant basis for determining which countries will be eligible for MCC assistance, and the Board expects a country to be passing its scorecard at the point the Board decides to select the country for either a first or second/

        subsequent compact. However, the Board also recognizes that even the best-available data has inherent challenges. For example, data gaps, real-time events versus data lags, the absence of narratives and nuanced detail, and other similar weaknesses affect each of these indicators. In such instances, the Board uses its judgment to interpret policy performance as measured by the scorecards. The Board may also consult other sources of information to further enhance its understanding of a given country's policy performance beyond the issues on the scorecard, which is especially useful given the unique perspective each Board member brings to the table (e.g., specific policy issues related to trade, civil society, other U.S. aid programs, financial sector performance, and security/foreign policy issues). The Board uses its judgment on how best to weigh such information in assessing overall policy performance.

      2. The Opportunity To Reduce Poverty and Generate Economic Growth

        The Board also consults other sources of qualitative and quantitative information to have a more detailed view of the opportunity to reduce poverty and generate economic growth in a country.

        While the Board considers a range of other information sources depending on

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        the country, specific areas of attention typically include better understanding the issues, trends, and trajectory of:

        The control of corruption and rule of law;

        The state of democratic and human rights (especially of vulnerable groups \3\);

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        \3\ For example, women; children; lesbian, gay, bisexual, and transgender individuals; people with disabilities; and workers.

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        The perspective of civil society on salient governance issues;

        The potential for the private sector (both local and foreign) to lead investment and growth;

        The levels of poverty within a country; and

        The country's institutional capacity.

        Where applicable, the Board also considers MCC's own experience and ability to reduce poverty and generate economic growth in a given country--such as considering MCC's core skills versus the country's needs, capacity within MCC to work with a country, and the likelihood that MCC is seen by the country as a credible partner.

        The goal in using this information is to have greater clarity regarding the likelihood that MCC investments will have an appreciable impact on reducing poverty and generating economic growth in a given country. The Board has used such information both to not select countries that are otherwise passing their scorecards, as well as to better understand when a country's performance on a particular indicator may not be up to date, and/or about to change. More details on this subject (sometimes referred to as ``supplemental information'') can be found on MCC's Web site at http://www.mcc.gov/documents/reports/report-2012001121001-fy13-selection-supplemental-info.pdf.

      3. The Availability of MCC Funds

        The final factor that the Board must consider when evaluating countries is the funding available. The agency's allocation of its budget is constrained, and often specifically limited, by provisions in authorizing legislation and appropriations acts. MCC has a continuous pipeline of countries in compact development, compact implementation, and compact closure, as well as threshold programs. Consequently, the Board factors in the overall portfolio picture when making its selection decisions given the funding available for each of the agency's programs.

        Sub-sections B and C describe how each of these three legislatively mandated factors are applied with regard to two selection situations facing the Board each December: Selection of countries for first compact eligibility and selection of countries for second/subsequent compact eligibility. Subsection D describes selection of countries for the threshold program.

    2. Evaluation for Selection of Countries for First Compact Eligibility

      When selecting countries for compacts, the Board looks at all three legislatively mandated aspects described in the previous section: (1) Policy performance, first and foremost as measured by the scorecards and bolstered through additional information as described in the previous section; (2) the opportunity to reduce poverty and generate economic growth, examined through the use of other supporting information, as described in the previous section; and (3) the funding available.

      At a minimum, the Board looks to see that the country passes its scorecard. It also examines supporting evidence that the country's commitment to good governance is on a sound footing and on a positive trajectory, and that MCC has funding to support a meaningful compact with that country. Where applicable, previous threshold program information is also considered. The Board then weighs the information described above across each of the three dimensions.

      The approach described above is then applied in any additional years of selection of a country to continue to develop a first compact, with the added benefit of having cumulative scorecards, cumulative records of policy performance, and other accumulated supporting information to determine the overall pattern of performance over the emerging multi-year trajectory.

    3. Evaluation for Selection of Countries for Second/Subsequent Compact Eligibility

      Section 609(k) of the Millennium Challenge Act of 2003, as amended, specifically authorizes MCC to enter into ``one or more subsequent Compacts.'' MCC does not consider subsequent compact eligibility, however, before countries have completed their compact, or are within 18 months of completion, (e.g., a second compact if they have completed or are within 18 months of completing their first compact). Selection for subsequent compacts is not automatic and is intended only for countries that (1) exhibit successful performance on their previous compact; (2) exhibit improved scorecard policy performance during the partnership; and (3) exhibit a continued commitment to further their sector reform efforts in any subsequent partnership. As a result, the Board has an even higher standard when selecting countries for subsequent compacts.

      1. Successful Implementation of the Previous Compact

        To evaluate the degree of success of the previous compact, the Board looks to see if there is a clear evidence base of success within the budget and time limits of the compact, in particular by looking at three aspects:

        (a) The degree to which there is evidence of strong political will and management capacity: Is the partnership characterized by the country ensuring that both policy reforms and the compact itself are both being implemented to the best ability that the country can deliver;

        (b) The degree to which the country has exhibited a commitment and capacity to achieve program results: Are the financial and project results being achieved; to what degree is the country committing its own resources to ensure the compact is a success; to what extent is the private sector engaged (if relevant); and other compact-specific issues; and

        (c) The degree to which the country has implemented the compact in accordance with MCC's core policies and standards: That is, is the country adhering to MCC's policies and procedures, including in critical areas such as remediating unresolved fraud and corruption/

        abuse or misuse of funds issues; procurement; and monitoring and evaluation.

        Details on the specific types of information examined (and sources used) in each of the three areas are provided in appendix D. The overall sentiment is that the Board is looking for evidence that the previous compact will be completed or has been completed successfully, on time and on budget, and that there is a commitment to continued, robust reform going forward.

      2. Improved Scorecard Policy Performance

        Beyond successful implementation of the previous compact, the Board expects the country to have improved its overall scorecard policy performance during the partnership and to pass the scorecard in the year of selection for the subsequent compact. The Board focuses on:

        The overall scorecard pass/fail rate over time, what this suggests about underlying policy performance, as well as an examination of the underlying reasons;

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        The progress over time on policy areas measured by both hard-hurdle indicators--Control of Corruption, and Democratic Rights--

        including an examination of the underlying reasons; and

        Other indicator trajectories as deemed relevant by the Board.

        In all cases, while the Board expects the country to be passing its scorecard, other sources of information are examined to understand the nuance and reasons behind scorecard or indicator performance over time, including any real-time updates, methodological changes within the indicators themselves, shifts in the relevant candidate pool, or alternative policy performance perspectives (such as gleaned through consultations with civil society and related stakeholders). Other sources of information are also consulted to look at policy performance over time in areas not covered by the scorecard but that are deemed important by the Board (such as trade, foreign policy concerns, etc.).

      3. A Commitment To Further Sector Reform

        The Board expects that subsequent compacts will endeavor to tackle deeper policy reforms necessary to unlock an identified constraint to growth. Consequently, the Board considers its own experience during the previous compact in considering how committed the country is to reducing poverty and increasing economic growth, and therefore tries to gauge the country's commitment for further sector reform should it be selected for a subsequent compact. This includes:

        Assessing the country's delivery of policy reform during the previous compact (as described above);

        Assessing expectations of the country's ability and willingness to continue embarking on sector policy reform in a subsequent compact;

        Examining both other sources of information that describe the nature of the opportunity to reduce poverty and generate growth (as outlined in A.2 above), and the relative success of the previous compact overall, as already discussed; and

        Finally, considering how well funding can be leveraged for impact, given its experience in the previous compact.

        Through this overall approach to subsequent compact selection, the Board applies the three legislatively mandated evaluation criteria (policy performance, the opportunity to reduce poverty and generate economic growth, and the funding available) in a way that rests critically on deeply assessing the previous partnership: from a compact success standpoint, a commitment to improved scorecard policy performance standpoint, and a commitment to continued sector policy reform standpoint. The Board then weighs all of the information described above in making its decision.

        The approach described above is then applied in any additional years of selection to continue to develop the subsequent compact, with the added benefit of having even further detail on previous compact implementation, cumulative scorecards, cumulative records of policy performance, and other accumulated supporting information to determine the overall pattern of performance over the resulting multi-year trajectory.

    4. Evaluation for Eligibility for Threshold Programs

      The Board may also select countries to participate in the Threshold Program. The Threshold Program provides assistance to candidate countries that exhibit a significant commitment to meeting the eligibility criteria described in the previous sub-sections, but fail to meet such requirements. Specifically, in examining the policy performance, the opportunity to reduce poverty and generate economic growth, and the funding available, the Board will consider whether a country potentially eligible for threshold program assistance appears to be on a trajectory to becoming a viable contender for compact eligibility in the medium term.

      APPENDIX A: Statutory Basis for this Report

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

      Section 605 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 2015 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 MCA assistance for FY 2015 based on per capita income levels and eligibility to receive assistance under U.S. law. (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 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 2015, 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 reflects the satisfaction of item 2 above.

        APPENDIX B: Lists of all LICs, LMICs, and Statutorily Prohibited Countries for Evaluation Purposes

        Income Classification for Scorecards

        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 two income categories for purposes of creating scorecards: LICs and LMICs. 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 scorecards ensures that the poorest countries compete with their income level peers and are not compared against countries with more resources to mobilize.

        MCC will continue to use the traditional income categories for eligibility to categorize countries in two groups for purposes of FY 2015 scorecard comparisons:

        LICs are countries with GNI per capita below IDA's historical ceiling for eligibility ($1,985 for FY 2015); and

        LMICs, which are countries with GNI per capita above IDA's historical ceiling for eligibility but below the World Bank's upper middle income country threshold ($1,986-$4,125 for FY 2015).

        The list of countries categorized as LICs and LMICs for the purpose of scorecard assessments can be found below.\4\

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        \4\ In December 2011, a statutory change requested by the agency altered the way MCC must group countries for the purposes of applying MCC's 25 percent LMIC funding cap. This change, designed to bring stability to the funding stream, affects how MCC funds countries selected for compacts and does not affect the way scorecards are created. For determining whether a country can be funded as an LMIC or LIC:

        The poorest 75 countries are now considered LICs for the purposes of MCC funding. They are not limited by the 25 percent funding cap on LMICs.

        Countries with a GNI per capita above the poorest 75 but below the World Bank's upper middle income country threshold ($4,125 for FY 2015) are considered LMICs for the purposes of MCC funding. By law, no more than 25 percent of all compact funds for a given fiscal year can be provided to these countries.

        The FY 2015 Candidate Country Report lists LICs and LMICs based on this new definition and outlines which countries are subject to the 25 percent funding cap.

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        Low Income Countries (FY 2015 Scorecard)

      4. Afghanistan

      5. Bangladesh

      6. Benin

      7. Burkina Faso

      8. Burma

      9. Burundi

      10. Cambodia

      11. Cameroon

      12. Central African Republic

      13. Chad

      14. Comoros

      15. Congo, the Democratic Republic of

      16. Cote d'Ivoire

      17. Djibouti

      18. Eritrea

      19. Ethiopia

      20. Gambia

      21. Ghana

      22. Guinea

      23. Guinea-Bissau

      24. Haiti

      25. India

      26. Kenya

      27. Korea, Democratic People's Republic of

      28. Kyrgyz Republic

      29. Laos

      30. Lesotho

      31. Liberia

      32. Madagascar

      33. Malawi

      34. Mali

      35. Mauritania

      36. Mozambique

      37. Nepal

      38. Nicaragua

      39. Niger

      40. Pakistan

      41. Rwanda

      42. Sao Tome and Principe

      43. Senegal

      44. Sierra Leone

      45. Solomon Islands

      46. Somalia

      47. South Sudan

      48. Sudan

      49. Tajikistan

      50. Tanzania

      51. Togo

      52. Uganda

      53. Uzbekistan

      54. Vietnam

      55. Yemen

      56. Zambia

      57. Zimbabwe

        Lower Middle Income Countries (FY 2015 Scorecard)

      58. Armenia

      59. Bhutan

      60. Bolivia

      61. Cabo Verde

      62. Congo, Republic of

      63. Egypt

      64. El Salvador

      65. Georgia

      66. Guatemala

      67. Guyana

      68. Honduras

      69. Indonesia

      70. Kiribati

      71. Kosovo

      72. Micronesia

      73. Moldova

      74. Mongolia

      75. Morocco

      76. Nigeria

      77. Papua New Guinea

      78. Paraguay

      79. Philippines

      80. Samoa

      81. Sri Lanka

      82. Swaziland

      83. Syria

      84. Timor-Leste

      85. Ukraine

      86. Vanuatu

        Statutorily Prohibited Countries for FY 2015 Scorecards (Included in the Data Pool for Comparative Purposes, but by Law Cannot Be Considered for Funding)

      87. Bolivia

      88. Burma

      89. Cambodia

      90. Eritrea

      91. North Korea

      92. Sudan

      93. Syria

      94. Zimbabwe

        APPENDIX C: Indicator Definitions

        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 MCA 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. Listed below is a brief summary of the indicators (a detailed rationale for the adoption of these indicators can be found in the Public Guide to the Indicators on MCC's public Web site at www.mcc.gov).

        Ruling Justly

      95. Political Rights: Independent experts rate countries on the prevalence of free and fair elections of officials with real power; the ability of citizens to form political parties that may compete fairly in elections; freedom from domination by the military, foreign powers, totalitarian parties, religious hierarchies and economic oligarchies; and the political rights of minority groups, among other things. Pass: Minimum score of 17 out of 40. Source: Freedom House

      96. Civil Liberties: Independent experts rate countries on freedom of expression; association and organizational rights; rule of law and human rights; and personal autonomy and economic rights, among other things. Pass: Minimum score of 25 out of 60. Source: Freedom House

      97. 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 the extent to which a county is filtering internet content or tools. Pass: Score must be above the median score for the income group. Source: Freedom House/

        FRINGE Special/Open Net Initiative

      98. 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. Source: Worldwide Governance Indicators (World Bank/Brookings)

      99. 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. Source: Worldwide Governance Indicators (World Bank/Brookings)

      100. 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. Source: Worldwide Governance Indicators (World Bank/Brookings)

        Encouraging Economic Freedom

      101. Fiscal Policy: The overall budget balance divided by gross domestic product (GDP), averaged over a three-year period. The data for this measure comes primarily from IMF country reports or, where public IMF data are outdated or unavailable, are provided directly by the recipient government with input from U.S. missions in host countries. All data are cross-checked with the IMF's World Economic Outlook database to try to ensure consistency across countries and made publicly available. Pass: Score must be above the median score for the income group. Source: International Monetary Fund Country Reports, National Governments, and the International Monetary Fund's World Economic Outlook Database

      102. Inflation: The most recent average annual change in consumer prices. Pass: Score must be 15% or less. Source: The International Monetary Fund's World Economic Outlook Database

      103. 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,

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        among other areas. Pass: Score must be above the median score for the income group. Source: Worldwide Governance Indicators (World Bank/Brookings)

      104. 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. Source: The Heritage Foundation

      105. Gender 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 the capacity to access institutions, get a job, register a business, sign a contract, open a bank account, choose where to live, and to travel freely. Pass: Score must be above the median score for the income group. Source: International Finance Corporation

      106. Land Rights and Access: An index that rates countries on the extent to which the institutional, legal, and market framework provide secure land tenure and equitable access to land in rural areas and the time and cost of property registration in urban and peri-urban areas. Pass: Score must be above the median score for the income group. Source: The International Fund for Agricultural Development and the International Finance Corporation

      107. Access to Credit: An index that rates countries on rules and practices affecting the coverage, scope, and accessibility of credit information available through either a public credit registry or a private credit bureau; as well as legal rights in collateral laws and bankruptcy laws. Pass: Score must be above the median score for the income group. Source: International Finance Corporation

      108. 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. Pass: Score must be above the median score for the income group. Source: International Finance Corporation

        Investing in People

      109. Public Expenditure on Health: Total expenditures on health by government at all levels divided by GDP. Pass: Score must be above the median score for the income group. Source: The World Health Organization

      110. Total Public Expenditure on Primary Education: Total expenditures on primary education by government at all levels divided by GDP. Pass: Score must be above the median score for the income group. Source: The United Nations Educational, Scientific and Cultural Organization and National Governments

      111. Natural Resource Protection: Assesses whether countries are protecting up to 17 percent of all their biomes (e.g., deserts, tropical rainforests, grasslands, savannas and tundra). Pass: Score must be above the median score for the income group. Source: The Center for International Earth Science Information Network and the Yale Center for Environmental Law and Policy

      112. Immunization Rates: The average of DPT3 and measles immunization coverage rates for the most recent year available. Pass: Score must be above the median score for LICs, and 90% or higher for LMICs. Source: The World Health Organization and the United Nations Children's Fund

      113. Girls Education:

        1. 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). LICs are assessed on this indicator. Pass: Score must be above the median score for the income group. Source: United Nations Educational, Scientific and Cultural Organization

        2. Girls Secondary Enrollment Education: The number of female pupils enrolled in lower secondary school, regardless of age, expressed as a percentage of the population of females in the theoretical age group for lower secondary education. LMICs will be assessed on this indicator instead of Girls Primary Completion Rates. Pass: Score must be above the median score for the income group. Source: United Nations Educational, Scientific and Cultural Organization

      114. 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. Source: The Center for International Earth Science Information Network and the Yale Center for Environmental Law and Policy

        Relationship to Legislative Criteria

        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 MCA assistance and to measure the relative performance by candidate countries against these criteria. The Board's approach to determining eligibility ensures that 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 (Political Rights, Civil Liberties, Rule of Law, and Gender in the Economy);

        (B) respect human and civil rights, including the rights of people with disabilities (Political Rights, Civil Liberties, and Freedom of Information);

        (C) protect private property rights (Civil Liberties, Regulatory Quality, Rule of Law, and Land Rights and Access);

        (D) encourage transparency and accountability of government (Political Rights, Civil Liberties, Freedom of Information, Control of Corruption, Rule of Law, and Government Effectiveness); and

        (E) combat corruption (Political Rights, Civil Liberties, Rule of Law, Freedom of Information, and Control of Corruption);

        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 (Fiscal Policy, Inflation, Trade Policy, and Regulatory Quality);

        (B) promote private sector growth (Inflation, Business Start-Up, Fiscal Policy, Land Rights and Access, Access to Credit, Gender in the Economy, and Regulatory Quality);

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

        (D) respect worker rights, including the right to form labor unions (Civil Liberties and Gender in the Economy); and

        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 Completion Rate, Girls' Secondary Education Enrollment Rate, and Total Public Expenditure on Primary Education);

        (B) strengthen and build capacity to provide quality public health and reduce child mortality (Immunization Rates, Public Expenditure on Health, and Child Health); and

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

        APPENDIX D: Subsequent Compact Considerations

        MCC reporting and data in the following chart are used to assess compact performance of MCC partners nearing the end of compact implementation (i.e., within the 18-month window). 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 Web site under MCC country programs (www.mcc.gov/pages/countries) or monitoring and evaluation (http://www.mcc.gov/pages/results/m-and-e) Web pages.

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        MCC reporting/

        Topic data source Published documents

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        COUNTRY PARTNERSHIP

        Political Will:

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        Status of major Quarterly

        conditions precedent. Quarterly results published as

        implementation ``Table of Key

        reporting. Performance

        Indicators''

        Quarterly (available by

        results country): http://

        reporting. go.usa.gov/jMcC.

        Survey Survey questions to

        of MCC staff. be posted: http://1.usa.gov/1q0zp3n.

        Program oversight/

        implementation.

        cir project

        restructures.

        cir partner response

        to MCA-unit capacity

        issues.

        Political

        independence of MCA-unit

        Management Capacity

        Project management

        capacity

        Project

        performance

        Level of MCC

        intervention/oversight

        Relative level of

        resources required

        PROGRAM RESULTS

        Financial Results:

        Commitments-- Monitoring

        including contributions to Indicator and Evaluation Plans

        compact funding. tracking tables. (available by

        country): http://go.usa.gov/jMcC.

        Disbursements..... Quarterly

        Quarterly Status Reports

        financial (available by

        reporting. country): http://1.usa.gov/NfEbcI.

        Project Results:

        Output, outcome, Quarterly

        objective targets. Quarterly results published as

        implementation ``Table of Key

        reporting. Performance

        Indicators''

        (available by

        country): http://1.usa.gov/QoduNl.

        Survey

        questions to be

        posted: http://1.usa.gov/PE0xCX.

        MCA-unit commitment to `focus on Quarterly

        results'. results

        reporting.

        MCA-unit Survey

        cooperation on impact of MCC staff

        evaluation. Impact

        evaluations.

        Percent complete

        for process/outputs.

        Relevant outcome

        data

        Details behind

        target delays

        Target Achievements

        ADHERENCE TO STANDARDS:

        Procurement....... Audits Published

        (Government OIG and GAO Audits.

        Accountability Survey

        Office and questions to be

        MCC's Office of posted: http://

        the Inspector 1.usa.gov/PE0xCX.

        General).

        Quarterly

        implementation

        reporting.

        Survey

        of MCC staff.

        Environmental and

        social.

        Fraud and

        corruption.

        Program closure...

        Monitoring and

        evaluation.

        All other legal

        provisions.

        COUNTRY SPECIFIC

        Sustainability:

        Implementation Quarterly

        entity. Quarterly results published as

        implementation ``Table of Key

        reporting. Performance

        Indicators''

        Quarterly (available by

        results country): http://

        reporting. 1.usa.gov/QoduNl.

        Survey Survey

        of MCC staff. questions to be

        posted: http://1.usa.gov/PE0xCX.

        MCC investments...

        Role of private sector or other

        donors:

        Other relevant

        investors/investments.

        Other donors/

        programming.

        Status of related

        reforms.

        Trajectory of

        private sector involvement

        going forward.

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        FR Doc. 2014-22652 Filed 9-23-14; 8:45 am

        BILLING CODE 9211-03-P