Notice of Entering Into a Compact With the Republic of El Salvador, 62469-62472 [2014-24773]
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Federal Register / Vol. 79, No. 201 / Friday, October 17, 2014 / Notices
Affected Public: Students and parents
applying for YCC program, YCC
program staff, and students in YCC
program.
Form(s): Total annual respondents:
4,000 students; 4,000 parents; and 244
staff.
Annual Frequency: One time for the
consent, assent, and BIFs, one time for
each round of site visits, and two times
for the grantee survey.
Comments submitted in response to
this comment request will be
summarized and/or included in the
request for Office of Management and
Budget approval of the information
collection request; they will also
become a matter of public record.
(MCC) is publishing a summary of the
Millennium Challenge Compact
between the United States of America,
acting through the Millennium
Challenge Corporation, and the
Republic of El Salvador. Representatives
of the United States Government and El
Salvador executed the Compact
documents on September 30, 2014. The
complete text of the Compact has been
posted at https://www.mcc.gov/
documents/agreements/compact112906-elsalvador.pdf.
Dated: October 14, 2014.
Thomas G. Hohenthaner,
Acting Vice President and General Counsel,
Millennium Challenge Corporation.
Summary of Millennium Challenge
Compact With the Republic of El
Salvador
Dated: October 8, 2014.
James H. Moore, Jr.,
Deputy Assistant Secretary for Policy, U.S.
Department of Labor.
1. Overview
[FR Doc. 2014–24676 Filed 10–16–14; 8:45 am]
BILLING CODE 4510–23–P
MILLENNIUM CHALLENGE
CORPORATION
[MCC FR 14–08]
Notice of Entering Into a Compact With
the Republic of El Salvador
Millennium Challenge
Corporation.
ACTION: Notice.
AGENCY:
In accordance with Section
610(b)(2) of the Millennium Challenge
Act of 2003 (22 U.S.C. 7701–7718), the
Millennium Challenge Corporation
SUMMARY:
The Millennium Challenge
Corporation (‘‘MCC’’) has signed a fiveyear, $277 million compact with the
Republic of El Salvador aimed at
reducing poverty and accelerating
economic growth (the ‘‘Compact’’). The
Compact is intended to assist the
Government of El Salvador (‘‘GoES’’) to
strengthen the investment climate,
enhance the role of public-private
partnerships in delivering key services,
and improve the country’s productivity
and competitiveness in international
markets. Through intensive policy
reforms and an integrated set of
investments in the institutional capital,
human capital, and physical capital of
El Salvador, MCC expects that the
Compact will help set the foundation for
lasting economic growth and poverty
reduction.
2. Background
This Compact will build on GoES
reforms and initiatives and is informed
by consultations with over 200
businesses. First, the Compact will
invest in the institutional capital of El
Salvador in order to enhance the
investment climate by streamlining the
regulatory environment and supporting
the implementation of public-private
partnerships. Second, the Compact will
support policy reforms and invest in
human capital to improve education
quality and better match workforce
skills with the demands of the labor
market. Third, the Compact will invest
in physical capital to reduce logistics
and transportation costs by improving
key road segments and border
infrastructure in major transport
corridors.
The Compact’s three projects
represent a total investment of $365.2
million, of which MCC will contribute
$277 million, and the GoES will commit
$88.2 million—a 32 percent matching
contribution that is well above the 15
percent country contribution required
for second compacts with lower-middle
income countries.
3. Program Overview and Budget
Below is a summary describing the
components of the Compact. The budget
and expected impacts are preliminary
based on due diligence and project
appraisal.
COMPACT BUDGET OVERVIEW
MCC
Funding
Project
GoES
Funding
Total
investment
Portion of
budget
(percent)
Millions of US$
Investment Climate Project ..............................................................................
Human Capital Project .....................................................................................
Logistical Infrastructure Project .......................................................................
Monitoring and Evaluation ...............................................................................
Program Administration ...................................................................................
42.4
100.7
109.6
4.3
20.0
50.0
15.0
15.7
........................
7.5
92.4
115.7
125.3
4.3
27.5
25.3
31.7
34.3
1.2
7.5
Total ..........................................................................................................
$277.0
$88.2
$365.2
100
4. Summary of Projects and Activities
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Investment Climate Project
The constraints to economic growth
analysis and consultations with
investors identified excessive ‘‘red tape’’
and discretionary application of rules as
negatively affecting the investment
climate in El Salvador. Firms also
identified the need for key public
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infrastructure to increase productivity,
but tight fiscal constraints and weak
institutional capacity limit the ability of
the GoES to provide such infrastructure.
The Investment Climate Project seeks to
address these deficiencies in El
Salvador’s investment climate by
improving the regulatory environment
and the GoES’s capacity to provide key
public services in partnership with the
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private sector through the following two
activities:
• The Regulatory Improvement
Activity will prioritize and promote
investment climate reforms with the
goal of creating a more efficient and
profitable business environment. MCC
will support the development of an
institutional framework and system,
including an independent institution
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focused on continuous regulatory
improvement and the prioritization and
implementation of a select set of
reforms. The reforms will focus on areas
critical to El Salvador’s competitiveness
in international markets and may
include trade facilitation, border
crossing and customs procedures,
environmental permitting, and
harmonization of municipal and
national regulations. The regulatory
improvement institution will also
consider the extent to which regulations
can be improved to reduce the potential
for corruption. In designing and
implementing reforms, the institution
will ensure that the proposed reforms
are consistent with the GoES’s
obligations under international trade
and investment agreements, including
the Dominican Republic-Central
America Free Trade Agreement. As part
of the activity, the GoES will commit to
review, simplify and potentially
eliminate regulations early in the
Compact implementation process. Such
concrete demonstrations of high level
commitment to the reform process will
be necessary to achieve a dramatic
change in the perceptions of the
business climate in El Salvador.
• The Partnership Development
Activity seeks to enable the GoES to
partner with private enterprise in
innovative ways to provide critical
public services in the face of tight fiscal
constraints. The GoES has recently
passed several laws to facilitate private
investment and trade. Most notably, the
GoES legislature unanimously passed a
law in May 2013 and subsequent
reforms in May 2014 to facilitate publicprivate partnerships (‘‘PPPs’’) in the
provision of key public services. MCC
will invest in capacity building to
properly develop, implement, and
monitor such partnerships under this
law. MCC will make available funding
for transaction advisory services to
develop and tender PPPs for two key
infrastructure projects. Projects
currently under review are the
expansion of the El Salvador
International Airport and a wind farm.
MCC and the GoES are also sponsoring
the El Salvador Investment Challenge
(‘‘ESIC’’), a program to more efficiently
and transparently allocate limited GoES
resources to public goods needed to
support private investment in the
international trade of goods and
services. The ESIC generated 74
investment project proposals in its
initial call for proposals, of which 13 are
being evaluated for the next phase of
development. The GoES plans to
institutionalize the ESIC as an
instrument for attracting private
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investment and will contribute up to
$50 million to the ESIC during the term
of the Compact.
The estimated economic rate of return
(‘‘ERR’’) for the Investment Climate
Project is 18.56 percent, using a
weighted estimate of the calculated
ERRs for each activity.
Human Capital Project
The quality of education in El
Salvador is below what the country
requires to be competitive in world
markets. The Human Capital Project is
designed to improve the quality of
education and to better match the
supply of skills of students coming out
of secondary school with the demand of
a labor market oriented towards
international trade. The project consists
of the following two activities:
• The Education Quality Activity
supports complementary interventions
to provide Salvadoran students the
benefits of competency-based education,
increased classroom time, teachers
trained in requisite subject-matters and
pedagogical skills, and an institutional
and physical environment conducive to
learning. MCC’s investment will
strengthen the national education
system by reforming the laws, policies,
and operations that govern continuous
professional development for teachers,
student assessment, and information
systems. The activity will strengthen
and expand the implementation of the
full-time inclusive school model, which
increases classroom time from 25 to 40
hours per week, in an estimated 400
schools grouped in 45–55 clusters,
focusing resources on grades 7–12. The
curriculum improvement component
will focus on English, mathematics,
science and information technology,
and other 21st century skills.
• The Technical, Vocational
Education and Training (‘‘TVET’’)
System Reform Activity seeks to
harmonize the skills supplied by private
and public TVET providers with the
skills demanded by the labor market.
The activity will strengthen the national
TVET governance system by supporting
legal, policy, and operational reforms
within the system. MCC will support
the establishment of a public entity
governed by a board comprised of an
equal number of public and private
sector representatives to provide the
legal and institutional framework for an
integrated TVET system. The activity
will also fund TVET curricula
development with participation from
the private sector, career counseling,
and job-matching services. It will also
fund the establishment of a framework
and standards for accreditation of TVET
training organizations and certification
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of teachers and students. The activity
will also strengthen the capacity of the
TVET system for identifying labor
market trends that will inform the
strategic direction of the TVET system,
including the establishment of a
monitoring and evaluation (‘‘M&E’’)
framework and a labor market
observatory.
The estimated ERR for the Human
Capital Project is 11.35 percent.
Logistical Infrastructure Project
The constraints analysis identified
transportation and logistics as main
factors contributing to the productivity
and competitiveness of Salvadoran
exports. Consultations with businesses
during Compact development also
highlighted certain transportation and
logistics deficiencies, including the
need to expand and rehabilitate key
road segments in the coastal zone of El
Salvador. The Logistical Infrastructure
Project is comprised of two activities
designed to reduce logistical and
transportation costs and relieve
bottlenecks at critical sections along the
logistical corridor that connects the
main border crossing with Honduras at
El Amatillo, the Ports of La Union and
Acajutla, and the international airport:
• The Coastal Highway Expansion
Activity seeks to relieve congestion at
the most transited segment (27
kilometers) of El Salvador’s coastal
highway by expanding this road from
two to four lanes. The coastal highway
is one of the two most important
logistical corridors in the country and
connects the country’s major logistical
nodes along the Southern coastal zone
of the country, including its two sea
ports (La Union and Acajutla) and the
international airport.
• The Border Crossing Infrastructure
Activity seeks to relieve the freight and
passenger traffic congestion at the
border crossing into Honduras at El
Amatillo by improving a 5.7 kilometer
road leading to the border and
modernizing the border-crossing
facilities on the Salvadoran side. MCC
will invest in the construction of control
stations at the border, including
buildings, internal access and
connecting roads, parking areas, water
and sanitation, and other infrastructure
components that may be necessary for
the effective functioning of these
stations.
The estimated ERR for the Logistical
Infrastructure Project is 20.31 percent,
using a weighted estimate of the
calculated ERRs for each activity.
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5. Program Logic, Expected Results, and
Beneficiaries
In order for El Salvador to be
competitive and raise productivity in
internationally-traded goods and
services, the factors of production in El
Salvador must be competitive on world
markets. Those factors include human
capital, physical capital, and often
logistics/transportation. The
institutional environment can also affect
productivity. As a result, the Compact
takes a multi-pronged approach to
enhance El Salvador’s competitiveness
in these factors of productivity.
By streamlining the business
environment, improving the quality of
education, and reducing transportation
and logistics costs, MCC’s investments
are intended to increase the
productivity of current firms involved
in the trade of international goods and
services, which is expected to increase
current production (and subsequently,
employment). Firms are then expected
to invest new revenues in more
productive technology to realize greater
returns on future production. Higher
employment and output are expected
over time through this self-reinforcing
feedback loop which is enabled by
greater productivity in traded goods and
services.
The expected beneficiaries of the
Regulatory Improvement Activity are
the firms operating in El Salvador
(currently more than 25,000) that will
experience cost savings as a result of
regulatory reforms. The potential
expansion of the El Salvador
International Airport under the
Partnership Development Activity is
expected to decrease delays and travel
costs for travelers, while the wind farm
project would increase the GoES’s
ability to attract investment for
renewable energy. The beneficiaries of
the ESIC are expected to be those firms
whose proposals are selected for grant
funding, workers who realize net
income gains associated with
employment as a result of the projects,
and third parties who benefit from the
public investment.
MCC expects the Human Capital
Project to directly benefit students in
grades 7–12 in general and technical
education, who realize higher incomes
as a result of more years of education.
In particular, the project is expected to
contribute to preventing or postponing
the dropout of approximately 176,000
students. Direct beneficiaries of the
TVET System Reform Activity are
expected to be TVET students who
receive higher incomes as a result of
receiving skills that are better matched
to labor market needs. Additional
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beneficiaries of the project include
students who do not attend a full-time
inclusive school but receive increased
incomes as a result of improved quality
of education that result from the
implementation of reforms at the
national level. Communities may also
experience reductions in crime as a
result of the full-time inclusive school
model, due to increased permanence in
school and lowered social vulnerability
of students.
The beneficiaries for the Logistical
Infrastructure Project are the estimated
171,159 individuals living within five
kilometers of either side of the project
sites. Because of the nature of the
activities as key logistical thoroughfares,
benefits in the form of reduced vehicle
operating costs and travel time are
expected to accrue to individuals and
firms that travel along those corridors.
6. 2006 El Salvador Compact Update
and Sustainability Information
In November 2006, the Millennium
Challenge Corporation signed a fiveyear, $460.94 million compact (the
‘‘2006 Compact’’) with the GoES to
improve the economic opportunities of
Salvadorans through strategic
investments in agricultural production,
rural business development, education,
and transportation infrastructure. The
2006 Compact consisted of the
following three projects:
1. The Connectivity Project, to reduce
travel cost and time within the Northern
Zone,
2. The Human Development Project,
to increase the human and physical
capital of residents of the Northern Zone
and further employment and business
opportunities, and
3. The Productive Development
Project, to increase production and
employment through technical
assistance, credit guarantees, and capital
investments.
The 2006 Compact entered into force
on September 20, 2007 and closed on
September 20, 2012.
Key Achievements of the Compact are
as follows:
• Connectivity Project: A total of
223.32 kilometers of road, including
three large bridges, and 20 smaller
bridges were constructed in northern El
Salvador to help improve connectivity
for farmers and local producers with the
rest of the country. This east-west road
in the north stretches close to the
borders with Guatemala to the west and
Honduras to the east, and the
improvements have reduced travel time
across the Northern Zone from 12 hours
to 6.5 hours.
• Human Development Project:
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62471
Electrification: An estimated 35,412
households now have electricity in their
homes, thanks to the installation of new
power lines and solar power systems,
helping to increase the percentage of
households with electricity connections
in the Northern Zone from 78 percent in
2007 to 90 percent in 2011.
Water and Sanitation: MCC funded
about 272 kilometers of water pipes as
part of the 2006 Compact’s investment
in water and basic sanitation that
helped connect 7,624 households to
potable water.
Education: MCC funded the
construction of a new technical
community college, improvements to a
teacher training center, and the
expansion and rehabilitation of 20 high
schools. The rehabilitation of the high
schools alone is expected to benefit
more than 9,700 students every year.
• Productive Development Project:
MCC funding assisted an estimated
17,500 producers through the provision
of training, seeds, equipment, and
technical assistance. The project
provided 30 loans to small and mediumsized businesses in the Northern Zone
to develop new or expand investments
in the agriculture, tourism and
handicrafts value chains. These loans
totaled $5.7 million, of which
approximately 20 percent went to
women-owned businesses.
Sustainability:
Although no contribution was
required from El Salvador during the
implementation of the 2006 Compact,
the GoES contributed substantially in
parallel to the Compact to enhance the
success of the program.
The Connectivity Project: In the final
year of compact implementation (2012),
the GoES also carried out two road
maintenance reforms, increasing annual
road maintenance funding by about $26
million (∼37% increase). At the end of
the five years, the GoES allocated an
additional $13 million to complete two
remaining segments of the Northern
Transnational Highway. During the
four-month closure period, all activities
under the 2006 Compact were
successfully completed.
The Human Development Project’s
activities were extensions of existing
GoES programs, built on the National
Plan for Education 2021 and designed to
strengthen and install permanent
capacities in key Salvadoran ministries
and institutions. In addition, the
Ministry of Education agreed to fund
infrastructure and equipment
maintenance and continued an
agreement with the Gloria de Kriete
Foundation to fund scholarship for
secondary education through 2014.
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The Productive Development Project
was designed to transition producers to
higher-profit activities, generate new
investment, expand markets and sales,
and create new jobs in ways that
stimulate sustainable economic growth
and poverty reduction. Actions
accomplished to ensure sustainability of
investments made under the Productive
Development Project included the
establishment of contracts between
beneficiaries and supported
cooperatives and major retailers for the
purchase of horticulture and dairy
products. The Ministry of Agriculture
also incorporated the project’s
beneficiaries into its national Family
Agriculture Plan, its signature
agriculture extension service aimed at
improving the profitability of individual
and small and medium-sized producers.
Environmental and Social
Sustainability:
As part of an effort to ensure
environmental and social sustainability,
all Projects included consultations with
the public regarding various aspects of
their implementation. The design of the
Projects, including their major activities,
was included in a strategic
environmental assessment that was
completed prior to implementation. The
sustainability of the projects was also
enhanced by the institutional capacity
building and training in environmental
management acquired through the close
cooperation among the environmental
units of the implementing agencies, the
Millennium Challenge Account (MCA),
and MCC. The Salvadoran Ministry of
Environment (MARN) received Compact
funding support to offset the additional
regulatory costs associated with the
Projects. Over the course of the
Compact, collaboration improved
between MARN and the environment
units of the implementing agencies.
The GoES and private sector and civil
society organizations have consistently
worked to ensure the sustainability of
the 2006 Compact and we expect them
to continue to support these
investments going forward.
[FR Doc. 2014–24773 Filed 10–16–14; 8:45 am]
BILLING CODE 9211–03–P
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NATIONAL SCIENCE FOUNDATION
Federal-Commercial Spectrum Data;
Workshop
The National Coordination
Office (NCO) for Networking and
Information Technology Research and
Development (NITRD).
ACTION: Notice—Federal-Commercial
Spectrum Data: Understanding
AGENCY:
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Information Exchange Needs, Issues,
and Approaches.
FOR FURTHER INFORMATION CONTACT:
Wendy Wigen at 703–292–4873 or
wigen@nitrd.gov. Individuals who use a
telecommunications device for the deaf
(TDD) may call the Federal Information
Relay Service (FIRS) at 1–800–877–8339
between 8 a.m. and 8 p.m., Eastern time,
Monday through Friday.
DATES: October 21, 2014.
SUMMARY: Representatives from Federal
research agencies, private industry, and
academia will identify R&D in the area
of spectrum data requirements that will
promote progress toward more efficient
spectrum utilization and sharing.
SUPPLEMENTARY INFORMATION:
Overview
The Wireless Spectrum Research and
Development Senior Steering Group
(WSRD SSG) will hold its next
workshop, Federal-Commercial
Spectrum Data: Understanding
Information Exchange Needs, Issues,
and Approaches, on October 21, from
8:30 a.m.–5:30 p.m., at the National
Science Foundation, 4201 Wilson Blvd.
Room I–1235, Arlington, VA. Dynamic
information sharing and management
creates innovative opportunities in
many areas including network and
business intelligence, devices,
applications, public safety operations
and security; but developing the next
generation of spectrum management
tools is complex. It requires consensus
among stakeholders on several
important issues such as: The purpose
of collecting and sharing information,
the type and minimal amount of data
needed, how to get it into the SAS, the
necessary level of security, and
enforcement.
The NTIA and the FCC are increasing
their efforts to identify and make
available new spectral bands with the
understanding that this will necessitate
the use of spectrum sharing techniques.
To ensure success, it is critical to first
determine the spectrum data
requirements of the stakeholders in
order to create new policy and develop
new techniques and procedures for
dynamic spectrum usage. The event
agenda and information about the
webcast will be available the week of
the event at: https://www.nitrd.gov/
nitrdgroups/index.php?title=Wireless_
Spectrum_Research_and_Development_
(WSRD)#title
Background
The Presidential Memorandum,
Presidential Memorandum on
Unleashing the Wireless Broadband
Revolution (https://www.whitehouse.gov/
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the-press-office/presidentialmemorandum-unleashing-wirelessbroadband-revolution), released on June
14, 2013, directed the implementation
of ‘‘policies for sharing with authorized
non-federal parties of classified,
sensitive, or proprietary data regarding
assignments, utilization of spectrum,
system configurations, business plans,
and other information’’. The
Presidential Council of Advisors on
Science and Technology (PCAST)
released a report (https://
www.whitehouse.gov/sites/default/files/
microsites/ostp/pcast_spectrum_report_
final_july_20_2012.pdf) in July 2012
that advocated setting up Spectrum
Access System (SAS) databases, with a
uniform interface analogous to the
Internet’s Domain Naming System
(DNS), to provide federal information
and access restrictions.
Over the past three years, the WSRD
has held a series of workshops that
addressed the challenge defined in these
documents. Information gathered from
this workshop will be instrumental in
helping the WSRD SSG develop
recommendations that will be released
in a workshop report prepared for the
Office of Science and Technology
Policy.
Submitted by the National Science
Foundation for the National
Coordination Office (NCO) for
Networking and Information
Technology Research and Development
(NITRD) on October 14, 2014.
Suzanne H. Plimpton,
Reports Clearance Officer, National Science
Foundation.
[FR Doc. 2014–24741 Filed 10–16–14; 8:45 am]
BILLING CODE 7555–01–P
NATIONAL SCIENCE FOUNDATION
Advisory Committee for Computer and
Information Science and Engineering:
Notice of Meeting
In accordance with the Federal
Advisory Committee Act (Pub. L. 92–
463, as amended), the National Science
Foundation (NSF) announces the
following meeting:
Name: Advisory Committee for
Computer and Information Science and
Engineering (CISE) (1115).
Date/Time: November 13, 2014: 12:30
p.m. to 5:30 p.m., November 14, 2014:
8:30 a.m. to 12:30 p.m.
Place: National Science Foundation,
4201 Wilson Boulevard, Suite 1235,
Arlington, Virginia 22230.
Type of Meeting: Open.
Contact Person: Carmen Whitson,
National Science Foundation, 4201
Wilson Boulevard, Suite 1105,
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]]>Agencies
[Federal Register Volume 79, Number 201 (Friday, October 17, 2014)]
[Notices]
[Pages 62469-62472]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24773]
=======================================================================
-----------------------------------------------------------------------
MILLENNIUM CHALLENGE CORPORATION
[MCC FR 14-08]
Notice of Entering Into a Compact With the Republic of El
Salvador
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In accordance with Section 610(b)(2) of the Millennium
Challenge Act of 2003 (22 U.S.C. 7701-7718), the Millennium Challenge
Corporation (MCC) is publishing a summary of the Millennium Challenge
Compact between the United States of America, acting through the
Millennium Challenge Corporation, and the Republic of El Salvador.
Representatives of the United States Government and El Salvador
executed the Compact documents on September 30, 2014. The complete text
of the Compact has been posted at https://www.mcc.gov/documents/agreements/compact-112906-elsalvador.pdf.
Dated: October 14, 2014.
Thomas G. Hohenthaner,
Acting Vice President and General Counsel, Millennium Challenge
Corporation.
Summary of Millennium Challenge Compact With the Republic of El
Salvador
1. Overview
The Millennium Challenge Corporation (``MCC'') has signed a five-
year, $277 million compact with the Republic of El Salvador aimed at
reducing poverty and accelerating economic growth (the ``Compact'').
The Compact is intended to assist the Government of El Salvador
(``GoES'') to strengthen the investment climate, enhance the role of
public-private partnerships in delivering key services, and improve the
country's productivity and competitiveness in international markets.
Through intensive policy reforms and an integrated set of investments
in the institutional capital, human capital, and physical capital of El
Salvador, MCC expects that the Compact will help set the foundation for
lasting economic growth and poverty reduction.
2. Background
This Compact will build on GoES reforms and initiatives and is
informed by consultations with over 200 businesses. First, the Compact
will invest in the institutional capital of El Salvador in order to
enhance the investment climate by streamlining the regulatory
environment and supporting the implementation of public-private
partnerships. Second, the Compact will support policy reforms and
invest in human capital to improve education quality and better match
workforce skills with the demands of the labor market. Third, the
Compact will invest in physical capital to reduce logistics and
transportation costs by improving key road segments and border
infrastructure in major transport corridors.
The Compact's three projects represent a total investment of $365.2
million, of which MCC will contribute $277 million, and the GoES will
commit $88.2 million--a 32 percent matching contribution that is well
above the 15 percent country contribution required for second compacts
with lower-middle income countries.
3. Program Overview and Budget
Below is a summary describing the components of the Compact. The
budget and expected impacts are preliminary based on due diligence and
project appraisal.
Compact Budget Overview
----------------------------------------------------------------------------------------------------------------
Portion of
Project MCC Funding GoES Funding Total budget
investment (percent)
----------------------------------------------------------------------------------------------------------------
Millions of US$
----------------------------------------------------------------------------------------------------------------
Investment Climate Project...................... 42.4 50.0 92.4 25.3
Human Capital Project........................... 100.7 15.0 115.7 31.7
Logistical Infrastructure Project............... 109.6 15.7 125.3 34.3
Monitoring and Evaluation....................... 4.3 .............. 4.3 1.2
Program Administration.......................... 20.0 7.5 27.5 7.5
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Total....................................... $277.0 $88.2 $365.2 100
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4. Summary of Projects and Activities
Investment Climate Project
The constraints to economic growth analysis and consultations with
investors identified excessive ``red tape'' and discretionary
application of rules as negatively affecting the investment climate in
El Salvador. Firms also identified the need for key public
infrastructure to increase productivity, but tight fiscal constraints
and weak institutional capacity limit the ability of the GoES to
provide such infrastructure. The Investment Climate Project seeks to
address these deficiencies in El Salvador's investment climate by
improving the regulatory environment and the GoES's capacity to provide
key public services in partnership with the private sector through the
following two activities:
The Regulatory Improvement Activity will prioritize and
promote investment climate reforms with the goal of creating a more
efficient and profitable business environment. MCC will support the
development of an institutional framework and system, including an
independent institution
[[Page 62470]]
focused on continuous regulatory improvement and the prioritization and
implementation of a select set of reforms. The reforms will focus on
areas critical to El Salvador's competitiveness in international
markets and may include trade facilitation, border crossing and customs
procedures, environmental permitting, and harmonization of municipal
and national regulations. The regulatory improvement institution will
also consider the extent to which regulations can be improved to reduce
the potential for corruption. In designing and implementing reforms,
the institution will ensure that the proposed reforms are consistent
with the GoES's obligations under international trade and investment
agreements, including the Dominican Republic-Central America Free Trade
Agreement. As part of the activity, the GoES will commit to review,
simplify and potentially eliminate regulations early in the Compact
implementation process. Such concrete demonstrations of high level
commitment to the reform process will be necessary to achieve a
dramatic change in the perceptions of the business climate in El
Salvador.
The Partnership Development Activity seeks to enable the
GoES to partner with private enterprise in innovative ways to provide
critical public services in the face of tight fiscal constraints. The
GoES has recently passed several laws to facilitate private investment
and trade. Most notably, the GoES legislature unanimously passed a law
in May 2013 and subsequent reforms in May 2014 to facilitate public-
private partnerships (``PPPs'') in the provision of key public
services. MCC will invest in capacity building to properly develop,
implement, and monitor such partnerships under this law. MCC will make
available funding for transaction advisory services to develop and
tender PPPs for two key infrastructure projects. Projects currently
under review are the expansion of the El Salvador International Airport
and a wind farm. MCC and the GoES are also sponsoring the El Salvador
Investment Challenge (``ESIC''), a program to more efficiently and
transparently allocate limited GoES resources to public goods needed to
support private investment in the international trade of goods and
services. The ESIC generated 74 investment project proposals in its
initial call for proposals, of which 13 are being evaluated for the
next phase of development. The GoES plans to institutionalize the ESIC
as an instrument for attracting private investment and will contribute
up to $50 million to the ESIC during the term of the Compact.
The estimated economic rate of return (``ERR'') for the Investment
Climate Project is 18.56 percent, using a weighted estimate of the
calculated ERRs for each activity.
Human Capital Project
The quality of education in El Salvador is below what the country
requires to be competitive in world markets. The Human Capital Project
is designed to improve the quality of education and to better match the
supply of skills of students coming out of secondary school with the
demand of a labor market oriented towards international trade. The
project consists of the following two activities:
The Education Quality Activity supports complementary
interventions to provide Salvadoran students the benefits of
competency-based education, increased classroom time, teachers trained
in requisite subject-matters and pedagogical skills, and an
institutional and physical environment conducive to learning. MCC's
investment will strengthen the national education system by reforming
the laws, policies, and operations that govern continuous professional
development for teachers, student assessment, and information systems.
The activity will strengthen and expand the implementation of the full-
time inclusive school model, which increases classroom time from 25 to
40 hours per week, in an estimated 400 schools grouped in 45-55
clusters, focusing resources on grades 7-12. The curriculum improvement
component will focus on English, mathematics, science and information
technology, and other 21st century skills.
The Technical, Vocational Education and Training
(``TVET'') System Reform Activity seeks to harmonize the skills
supplied by private and public TVET providers with the skills demanded
by the labor market. The activity will strengthen the national TVET
governance system by supporting legal, policy, and operational reforms
within the system. MCC will support the establishment of a public
entity governed by a board comprised of an equal number of public and
private sector representatives to provide the legal and institutional
framework for an integrated TVET system. The activity will also fund
TVET curricula development with participation from the private sector,
career counseling, and job-matching services. It will also fund the
establishment of a framework and standards for accreditation of TVET
training organizations and certification of teachers and students. The
activity will also strengthen the capacity of the TVET system for
identifying labor market trends that will inform the strategic
direction of the TVET system, including the establishment of a
monitoring and evaluation (``M&E'') framework and a labor market
observatory.
The estimated ERR for the Human Capital Project is 11.35 percent.
Logistical Infrastructure Project
The constraints analysis identified transportation and logistics as
main factors contributing to the productivity and competitiveness of
Salvadoran exports. Consultations with businesses during Compact
development also highlighted certain transportation and logistics
deficiencies, including the need to expand and rehabilitate key road
segments in the coastal zone of El Salvador. The Logistical
Infrastructure Project is comprised of two activities designed to
reduce logistical and transportation costs and relieve bottlenecks at
critical sections along the logistical corridor that connects the main
border crossing with Honduras at El Amatillo, the Ports of La Union and
Acajutla, and the international airport:
The Coastal Highway Expansion Activity seeks to relieve
congestion at the most transited segment (27 kilometers) of El
Salvador's coastal highway by expanding this road from two to four
lanes. The coastal highway is one of the two most important logistical
corridors in the country and connects the country's major logistical
nodes along the Southern coastal zone of the country, including its two
sea ports (La Union and Acajutla) and the international airport.
The Border Crossing Infrastructure Activity seeks to
relieve the freight and passenger traffic congestion at the border
crossing into Honduras at El Amatillo by improving a 5.7 kilometer road
leading to the border and modernizing the border-crossing facilities on
the Salvadoran side. MCC will invest in the construction of control
stations at the border, including buildings, internal access and
connecting roads, parking areas, water and sanitation, and other
infrastructure components that may be necessary for the effective
functioning of these stations.
The estimated ERR for the Logistical Infrastructure Project is
20.31 percent, using a weighted estimate of the calculated ERRs for
each activity.
[[Page 62471]]
5. Program Logic, Expected Results, and Beneficiaries
In order for El Salvador to be competitive and raise productivity
in internationally-traded goods and services, the factors of production
in El Salvador must be competitive on world markets. Those factors
include human capital, physical capital, and often logistics/
transportation. The institutional environment can also affect
productivity. As a result, the Compact takes a multi-pronged approach
to enhance El Salvador's competitiveness in these factors of
productivity.
By streamlining the business environment, improving the quality of
education, and reducing transportation and logistics costs, MCC's
investments are intended to increase the productivity of current firms
involved in the trade of international goods and services, which is
expected to increase current production (and subsequently, employment).
Firms are then expected to invest new revenues in more productive
technology to realize greater returns on future production. Higher
employment and output are expected over time through this self-
reinforcing feedback loop which is enabled by greater productivity in
traded goods and services.
The expected beneficiaries of the Regulatory Improvement Activity
are the firms operating in El Salvador (currently more than 25,000)
that will experience cost savings as a result of regulatory reforms.
The potential expansion of the El Salvador International Airport under
the Partnership Development Activity is expected to decrease delays and
travel costs for travelers, while the wind farm project would increase
the GoES's ability to attract investment for renewable energy. The
beneficiaries of the ESIC are expected to be those firms whose
proposals are selected for grant funding, workers who realize net
income gains associated with employment as a result of the projects,
and third parties who benefit from the public investment.
MCC expects the Human Capital Project to directly benefit students
in grades 7-12 in general and technical education, who realize higher
incomes as a result of more years of education. In particular, the
project is expected to contribute to preventing or postponing the
dropout of approximately 176,000 students. Direct beneficiaries of the
TVET System Reform Activity are expected to be TVET students who
receive higher incomes as a result of receiving skills that are better
matched to labor market needs. Additional beneficiaries of the project
include students who do not attend a full-time inclusive school but
receive increased incomes as a result of improved quality of education
that result from the implementation of reforms at the national level.
Communities may also experience reductions in crime as a result of the
full-time inclusive school model, due to increased permanence in school
and lowered social vulnerability of students.
The beneficiaries for the Logistical Infrastructure Project are the
estimated 171,159 individuals living within five kilometers of either
side of the project sites. Because of the nature of the activities as
key logistical thoroughfares, benefits in the form of reduced vehicle
operating costs and travel time are expected to accrue to individuals
and firms that travel along those corridors.
6. 2006 El Salvador Compact Update and Sustainability Information
In November 2006, the Millennium Challenge Corporation signed a
five-year, $460.94 million compact (the ``2006 Compact'') with the GoES
to improve the economic opportunities of Salvadorans through strategic
investments in agricultural production, rural business development,
education, and transportation infrastructure. The 2006 Compact
consisted of the following three projects:
1. The Connectivity Project, to reduce travel cost and time within
the Northern Zone,
2. The Human Development Project, to increase the human and
physical capital of residents of the Northern Zone and further
employment and business opportunities, and
3. The Productive Development Project, to increase production and
employment through technical assistance, credit guarantees, and capital
investments.
The 2006 Compact entered into force on September 20, 2007 and
closed on September 20, 2012.
Key Achievements of the Compact are as follows:
Connectivity Project: A total of 223.32 kilometers of
road, including three large bridges, and 20 smaller bridges were
constructed in northern El Salvador to help improve connectivity for
farmers and local producers with the rest of the country. This east-
west road in the north stretches close to the borders with Guatemala to
the west and Honduras to the east, and the improvements have reduced
travel time across the Northern Zone from 12 hours to 6.5 hours.
Human Development Project:
Electrification: An estimated 35,412 households now have
electricity in their homes, thanks to the installation of new power
lines and solar power systems, helping to increase the percentage of
households with electricity connections in the Northern Zone from 78
percent in 2007 to 90 percent in 2011.
Water and Sanitation: MCC funded about 272 kilometers of water
pipes as part of the 2006 Compact's investment in water and basic
sanitation that helped connect 7,624 households to potable water.
Education: MCC funded the construction of a new technical community
college, improvements to a teacher training center, and the expansion
and rehabilitation of 20 high schools. The rehabilitation of the high
schools alone is expected to benefit more than 9,700 students every
year.
Productive Development Project: MCC funding assisted an
estimated 17,500 producers through the provision of training, seeds,
equipment, and technical assistance. The project provided 30 loans to
small and medium-sized businesses in the Northern Zone to develop new
or expand investments in the agriculture, tourism and handicrafts value
chains. These loans totaled $5.7 million, of which approximately 20
percent went to women-owned businesses.
Sustainability:
Although no contribution was required from El Salvador during the
implementation of the 2006 Compact, the GoES contributed substantially
in parallel to the Compact to enhance the success of the program.
The Connectivity Project: In the final year of compact
implementation (2012), the GoES also carried out two road maintenance
reforms, increasing annual road maintenance funding by about $26
million (~37% increase). At the end of the five years, the GoES
allocated an additional $13 million to complete two remaining segments
of the Northern Transnational Highway. During the four-month closure
period, all activities under the 2006 Compact were successfully
completed.
The Human Development Project's activities were extensions of
existing GoES programs, built on the National Plan for Education 2021
and designed to strengthen and install permanent capacities in key
Salvadoran ministries and institutions. In addition, the Ministry of
Education agreed to fund infrastructure and equipment maintenance and
continued an agreement with the Gloria de Kriete Foundation to fund
scholarship for secondary education through 2014.
[[Page 62472]]
The Productive Development Project was designed to transition
producers to higher-profit activities, generate new investment, expand
markets and sales, and create new jobs in ways that stimulate
sustainable economic growth and poverty reduction. Actions accomplished
to ensure sustainability of investments made under the Productive
Development Project included the establishment of contracts between
beneficiaries and supported cooperatives and major retailers for the
purchase of horticulture and dairy products. The Ministry of
Agriculture also incorporated the project's beneficiaries into its
national Family Agriculture Plan, its signature agriculture extension
service aimed at improving the profitability of individual and small
and medium-sized producers.
Environmental and Social Sustainability:
As part of an effort to ensure environmental and social
sustainability, all Projects included consultations with the public
regarding various aspects of their implementation. The design of the
Projects, including their major activities, was included in a strategic
environmental assessment that was completed prior to implementation.
The sustainability of the projects was also enhanced by the
institutional capacity building and training in environmental
management acquired through the close cooperation among the
environmental units of the implementing agencies, the Millennium
Challenge Account (MCA), and MCC. The Salvadoran Ministry of
Environment (MARN) received Compact funding support to offset the
additional regulatory costs associated with the Projects. Over the
course of the Compact, collaboration improved between MARN and the
environment units of the implementing agencies.
The GoES and private sector and civil society organizations have
consistently worked to ensure the sustainability of the 2006 Compact
and we expect them to continue to support these investments going
forward.
[FR Doc. 2014-24773 Filed 10-16-14; 8:45 am]
BILLING CODE 9211-03-P
