Report on the Selection of Eligible Countries for Fiscal Year 2020

Federal Register, Volume 84 Issue 243 (Wednesday, December 18, 2019)
[Federal Register Volume 84, Number 243 (Wednesday, December 18, 2019)]
[Pages 69393-69395]
From the Federal Register Online via the Government Publishing Office []
[FR Doc No: 2019-27284]
[MCC FR 19-10]
Report on the Selection of Eligible Countries for Fiscal Year
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
SUMMARY: This report is provided in accordance with section 608(d)(2)
of the Millennium Challenge Act of 2003, as amended (the ``Act''), 22
U.S.C. 7707(d)(2).
    Dated: December 13, 2019.
Christopher J. Dunn,
Acting VP/General Counsel and Corporate Secretary.
Report on the Selection of Eligible Countries for Fiscal Year 2020
    This report is provided in accordance with section 608(d)(1) of the
Millennium Challenge Act of 2003, as amended (the Act) (22 U.S.C.
    The Act authorizes the provision of 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 assistance for the fiscal year, based
on their
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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 assistance
for fiscal year (FY) 2020 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 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 2020, with justification for eligibility
determination and selection for compact negotiation, including with
which of the eligible countries the Board will seek to enter into
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
2020. It identifies countries determined by the Board to be eligible
under section 607 of the Act (22 U.S.C. 7706) for FY 2020 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 selected by the Board to receive
assistance under MCC's threshold program pursuant to section 616 of the
Act (22 U.S.C. 7715).
Eligible Countries
    The Board met on December 9, 2019, to select those eligible
countries with which the United States, through MCC, will seek to enter
into a Millennium Challenge Compact pursuant to section 607 of the Act
(22 U.S.C. 7706). The Board selected the following eligible country for
such assistance for FY 2020: Mozambique. The Board also selected the
following previously-selected countries for compact assistance for FY
2020: Benin, Burkina Faso, C[ocirc]te d'Ivoire, Indonesia, Lesotho,
Malawi, Niger, Timor-Leste, and Tunisia.
    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 2020''
formally submitted to Congress on September 18, 2019, 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 fullest 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 countries with a GNI per capita equal to or less
than $1,925, or the group with a GNI per capita between $1,925 and
    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 2020 \1\''. Scorecards
reflecting each country's performance on the indicators are available
on MCC's website at
    \1\ Available at
    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.
    The Board sees the selection decision as an annual opportunity to
determine where MCC funds can be most effectively used 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 programs, and the country's ability to attract and leverage
public and private resources in support of development.
    This was the second year the Board considered the eligibility of
countries for concurrent compacts. In addition to the considerations
for compact eligibility detailed above, the Board considered whether a
country being considered for a concurrent compact is making
considerable and demonstrable progress in implementing the terms of its
existing Compact.
    This was the eleventh year the Board considered the eligibility of
countries for subsequent compacts, as permitted under section 609(l) of
the Act. MCC's engagement with partner countries is not open-ended, and
the Board is deliberate when selecting countries for follow-on
partnerships, particularly regarding the higher bar applicable to
subsequent compact countries. In making these selection decisions, 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, these factors were 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 Supplemental
Information \2\ and a Guide to the Compact Survey Summary \3\ 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.
    \2\ Available at
    \3\ Available at
    In addition, this is the fourth year where the Board considered an
explicit higher bar for those countries close to the upper end of the
candidate pool, looking closely in such cases at a country's access to
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financing, the nature of poverty in the country, and its policy
Countries Newly Selected for Compact Assistance
    Using the criteria described above, one candidate country under
section 606(a) of the Act (22 U.S.C. 7705(a) was newly selected for
assistance under section 607 of the Act (22 U.S.C. 7706): Mozambique.
In accordance with section 609(k) of the Act, no candidate countries
were newly selected to explore development of a concurrent compact
program under section 607 of the Act (22 U.S.C. 7706).
    Mozambique: Mozambique successfully completed its first MCC compact
in September 2013 and has recently demonstrated encouraging policy
improvement on the MCC scorecard, passing 13 of 20 indicators, with
clear improvement on its Control of Corruption score. A new compact
would build on the country's continued commitment to sector reform and
MCC's strong relationship with the country developed under the first
compact partnership. By selecting Mozambique for a compact, MCC will
support the government's efforts to strengthen economic growth to
reduce poverty.
Countries Selected To Continue Compact Development
    Nine of the countries selected for compact assistance for FY 2020
were previously selected for FY 2019. Burkina Faso, Indonesia, Lesotho,
Malawi, Timor-Leste, and Tunisia were selected to continue developing
bilateral compacts. Benin, Burkina Faso, C[ocirc]te d'Ivoire, and Niger
were selected to continue developing concurrent compacts for the
purpose of regional integration. Selection of these countries for FY
2020 was based on their continued or improved policy performance since
their prior selection.
Countries Selected To Receive Threshold Program Assistance
    The Board selected Kenya to receive threshold program assistance.
    Kenya: Kenya offers MCC the opportunity to engage with the country
on policy and institutional reform. Kenya is an important partner in
East Africa, where MCC's presence is growing. Although Kenya has not
previously passed the Control of Corruption indicator on the MCC
scorecard, its performance rose to the 50th percentile this year (a
country must score above the 50th percentile to pass the indicator).
More broadly, Kenya passes 15 of 20 indicators overall on the
scorecard, including the Democratic Rights ``hard hurdle'' indicators.
Countries Selected To Continue Developing Threshold Programs
    The Board selected Ethiopia and Solomon Islands to continue
developing threshold programs. Ethiopia has continued on its reform
path and saw improvements on the democratic rights ``hard hurdle''
indicators of political rights and civil liberties this year. Solomon
Islands held successful elections in April 2019 and continues apace
with program development.
Ongoing Review of Partner Countries' Policy Performance
    The Board emphasized the need for all partner countries to maintain
or improve their policy performance. If it is determined during compact
implementation that a country has demonstrated a significant policy
reversal, MCC can hold it accountable by applying MCC's Suspension and
Termination Policy.\4\
    \4\ Available at
[FR Doc. 2019-27284 Filed 12-13-19; 4:15 p.m.]