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17 November 2006


[Federal Register: November 17, 2006 (Volume 71, Number 222)]

[Notices]               

[Page 66983-66985]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr17no06-82]                         



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MILLENNIUM CHALLENGE CORPORATION



[MCC FR 06-19]



 

Report on the Selection of Eligible Countries for Fiscal Year 

2007



AGENCY: Millennium Challenge Corporation.



ACTION: Notice.



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SUMMARY: This report is provided in accordance with Section 608(d)(2) 

of the Millennium Challenge Act of 2003, Pub. L. 108-199, Division D, 

(the ``Act''), Report on the Selection of Eligible Countries for Fiscal 

Year 2007.



Summary



    This report is provided in accordance with Section 608(d)(2) of the 

Millennium Challenge Act of 2003, Pub. L. 108-199, Division D, (the 

``Act'').

    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



[[Page 66984]]



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 a number of steps to determine the countries 

that, based to the maximum extent possible upon objective and 

quantifiable indicators of a country's demonstrated commitment to just 

and democratic governance, economic freedom and investing in their 

people, will be eligible to receive MCA assistance for a 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 ``candidate countries'' for MCA assistance for a fiscal year 

and all countries that would be candidate countries if they met the 

requirement of Section 606(a)(1)(B) (Section 608(a) of the Act);

    2. the eligibility criteria and methodology that the MCC Board of 

Directors (the ``Board'') will use to select ``eligible countries'' 

from among the ``candidate countries'' (Section 608(b) of the Act); and

    3. the countries determined by the Board to be ``eligible 

countries'' for a fiscal year, the countries on the list of eligible 

countries with which the Board will seek to enter into a Compact and a 

justification for the decisions regarding eligibility and selection for 

negotiation (Section 608(d)(1) of the Act).

    This is the third of the above-described reports by MCC for fiscal 

year 2007 (FY07). It identifies countries determined by the Board to be 

eligible under Section 607 of the Act for FY07 and those that the Board 

will seek to enter into Compacts under Section 609 of the Act, and the 

justification for such decisions.



Eligible Countries



    The Board met on November 8, 2006, to select countries that will be 

eligible for MCA Compact assistance under Section 607 of the Act for 

FY07. The Board determined the following countries eligible for such 

assistance for FY07 and with which MCC may seek to enter into a 

Compact: Armenia; Benin; Bolivia; Burkina Faso; Cape Verde; East Timor; 

El Salvador; Georgia; Ghana; Honduras; Jordan; Lesotho; Madagascar; 

Mali; Moldova; Mongolia; Mozambique; Namibia; Nicaragua; Senegal; Sri 

Lanka; Tanzania; Ukraine; and Vanuatu.

    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 2007'' 

submitted to the Congress on, September 8, 2006, 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 16 

publicly available and independent indicators to assess policy 

performance and demonstrated commitment in these three areas, to the 

maximum extent possible, 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 each of the three 

policy categories and above the median on ``Control of Corruption'' 

and, if the country performed substantially below the median on any 

indictor, 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 and 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, its economic 

policies to promote the sustainable management of natural resources, 

human rights, and the rights of people with disabilities. In addition, 

the Board considered the opportunity to reduce poverty, promote 

economic growth and have a transformational impact in a country in 

light of the overall context of the information available to it as well 

as the availability of appropriated funds.

    Eighteen of the countries selected eligible for MCA assistance for 

FY07 were in the ``low income'' category and were previously selected 

as eligible in at least one previous fiscal year--Armenia, Benin, 

Bolivia, Burkina Faso, East Timor, Ghana, Georgia, Honduras, Lesotho, 

Madagascar, Mali, Mongolia, Mozambique, Nicaragua, Senegal, Sri Lanka, 

Tanzania, and Vanuatu. Three of the countries selected as eligible for 

MCA assistance for FY07 were in the ``lower middle income'' category 

and were previously selected as eligible in at least one previous 

fiscal year--Cape Verde, El Salvador, and Namibia. On November 8, 2006, 

the Board re-selected these countries based on their continued 

performance since their prior selection. The Board also determined that 

no material change has occurred in the performance of these countries 

on the selection criteria since the FY06 selection that would justify 

not including them in the FY07 eligible country list. Six of these 

countries--Benin, Cape Verde, Ghana, Madagascar, Senegal, and Sri 

Lanka--either did not perform above the median on Control of Corruption 

or did not perform above the median in relation to their peers on at 

least half of the indicators in each of the three policy categories. 

However, at this time, MCC does not believe that a serious erosion of 

policy performance has occurred in any of these countries. MCC will ask 

each of these countries to commit to specific actions by their 

respective governments to address indicator performance weaknesses and 

to strive to maintain or improve upon their performance overall.

    Three additional countries were selected for the first time in 

FY07: (1) Two in the ``low income'' category under Section 606(a) of 

the Act--Moldova and Ukraine; and (2) one in the ``lower middle 

income'' category under Section 606(b) of the Act--Jordan. Each 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, there was either evidence that the data did not adequately 

reflect their policy performance or that the government is taking 

corrective action to address the problem.

    All three of these countries are currently participating in the 

Threshold Program. Each country now meets the MCA eligibility criteria 

for Compact assistance but successful implementation of their 

respective Threshold Program--and of the corresponding reform 

commitments--remains critical. The governments will be required to 

demonstrate successful implementation of the Threshold Program during 

the Compact development process in order to reach a Compact and then to 

continue to receive MCA funding under a Compact.

     Moldova: Moldova presents an excellent opportunity for MCC 

to use its Compact funding in a transformational way. Moldova is the 

poorest country in Europe with half of its population living on less 

than $2 per day. It now passes 15 of the 16 indicators, as well as both 

of the two new Natural Resource Management indices. The Government of 

Moldova has adopted a series of



[[Page 66985]]



significant policy and institutional reforms over the last several 

years. After being selected as a Threshold Program Country in FY06, the 

Government of Moldova proposed an ambitious anti-corruption Threshold 

Program and improved its performance on the ``Control of Corruption'' 

indicator from the 46th percentile to the 55th percentile.

     Ukraine: For the first time, Ukraine also passes the MCA 

selection eligibility criteria and has made significant improvements on 

all of the indictors in the ``Ruling Justly'' category. In addition, 

Ukraine passes one of the new supplementary Natural Resources 

Management indices. Ukraine was selected as a Threshold country in 

FY06, and in June 2006, the Board approved its Threshold program which 

is focused on accelerating anti-corruption efforts. MCC expects that 

implementation of Ukraine's Threshold Program will begin soon and will 

bolster the Government of Ukraine's reform efforts.

     Jordan: Jordan passes the MCA selection eligibility 

criteria, including ``Control of Corruption,'' and has demonstrated its 

commitment to MCC principles through home-grown democratic reform 

initiatives, which MCC is currently supporting through the 

implementation of the Threshold Program agreement signed in October, 

2006. Jordan has made significant reform commitments in its Threshold 

Program and MCC will require successful implementation of the Threshold 

Program as the Government of Jordan works to develop and implement a 

Compact. A Compact in Jordan could have a transformation impact as 

structural reforms over the last decade have liberalized the private 

investment regime, opened the trade environment, and established modern 

regulation and institutions for private sector development.

    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 FY07. 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 in which 

countries MCC would likely have the best opportunity to reduce poverty, 

generate economic growth and have a transformational impact).



Selection for Compact Negotiation



    The Board also authorized MCC to seek to negotiate a Compact, as 

described in Section 609 of the Act, with each of the eligible 

countries identified above that develops a proposal that justifies 

beginning such negotiations. MCC will initiate the process by inviting 

newly eligible countries to submit program proposals to MCC (previously 

eligible countries will not be asked to submit another proposal for 

FY07 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: November 14, 2006.

William G. Anderson, Jr.,

Vice President and General Counsel (Acting), Millennium Challenge 

Corporation.

 [FR Doc. E6-19488 Filed 11-16-06; 8:45 am]



BILLING CODE 9210-01-P