Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2014, 57885-57889 [2013-22929]

Download as PDF Federal Register / Vol. 78, No. 183 / Friday, September 20, 2013 / Notices MILLENNIUM CHALLENGE CORPORATION [MCC FR 13–06] Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2014 Millennium Challenge Corporation. ACTION: Notice. AGENCY: 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’’). SUMMARY: Dated: September 16 2013. Melvin F. Williams, Jr., VP/General Counsel and Corporate Secretary, Millennium Challenge Corporation. Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries for Millennium Challenge Account Assistance in Fiscal Year 2014 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). The Act authorizes the provision of Millennium Challenge Account (MCA) 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 the Millennium Challenge Corporation (MCC) to take a number of steps in determining which countries will be selected as eligible for MCA compact assistance for fiscal year (FY) 2014 based on the countries’ demonstrated commitment to just and democratic governance, economic freedom, and investing in their people, as well as MCC’s opportunity to reduce poverty and generate economic growth in the country. These steps include the submission of reports to the congressional committees specified in the Act and publication of notices in the Federal Register that identify: • The countries that are ‘‘candidate countries’’ for MCA assistance for FY 2014 based on per capita income levels and eligibility to receive assistance under U.S. law. This report identifies 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)); • 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); and • The list of countries determined by the Board to be ‘‘eligible countries’’ for FY 2014, with justification for eligibility determination and selection for compact 57885 negotiation, including those eligible countries with which MCC will seek to enter into compacts (section 608(d) of the Act). This report sets out the criteria and methodology to be applied in determining eligibility for FY 2014 MCA assistance. Criteria and Methodology for FY 2014 The Board will base its selection of eligible countries on several factors, including: • The country’s overall performance in the three broad policy categories of Ruling Justly, Encouraging Economic Freedom, and Investing in People; • MCC’s opportunity to reduce poverty and generate economic growth in a country; and; • The availability of MCC funds. In addition, the Board will consider a country’s performance during implementation of a prior compact or threshold program, if applicable. Section 607 of the Act requires that the Board’s determination of eligibility be based ‘‘to the maximum extent possible, upon objective and quantifiable indicators of a country’s demonstrated commitment’’ to the criteria set out in the Act. Performance in Policy Categories In FY 2014 the Board will use 20 indicators to assess the policy performance of individual countries. These indicators are grouped under the three policy categories listed in Table 1. A description of each indicator, including definitions and sources, can be found in Annex A. TABLE 1 Ruling justly Encouraging economic freedom Fiscal Policy Inflation Regulatory Quality Trade Policy Gender in the Economy Land Rights and Access Access to Credit Business Start-Up Sources: Freedom House FRINGE Special Open Net Initiative World Bank/Brookings mstockstill on DSK4VPTVN1PROD with NOTICES Political Rights Civil Liberties Freedom of Information Government Effectiveness Rule of Law Control of Corruption Sources: IMF World Bank/Brookings Heritage Foundation IFC International Fund for Agricultural Development To assess policy performance of a particular candidate country, the Board will consider whether a country performs above the median of their income peers or absolute threshold on at least half of the indicators; above the median on the Control of Corruption indicator; and above the absolute VerDate Mar<15>2010 17:24 Sep 19, 2013 Jkt 229001 PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 Investing in people Public Expenditure on Health. Total Public Expenditure on Primary Education. Natural Resource Protection. Immunization Rates. Girls’ Education: • Primary Completion Rate (LICs). • Secondary Education Enrollment (LMICs). Child Health. Sources: World Health Organization. UNICEF. UNESCO. National Sources. CIESIN/YCLEP. threshold on either the Civil Liberties or Political Rights indicators. Indicators with absolute thresholds in lieu of a median include: (i) Inflation, on which E:\FR\FM\20SEN1.SGM 20SEN1 57886 Federal Register / Vol. 78, No. 183 / Friday, September 20, 2013 / Notices a country’s inflation rate must be under a fixed ceiling of 15 percent; (ii) Immunization Rates (lower middle income countries (LMICs) only), on which an LMIC must have immunization coverage above 90 percent; (iii) Political Rights, on which countries must score above 17 out of 40; and (iv) Civil Liberties, on which countries must score above 25 out of 60. The Board will also consider whether a country performs substantially worse in any policy category than it does on the overall scorecard, and countries must meet a minimum standard of passing one indicator in each category. As outlined in Annex C, countries are compared only to others in their same income category: Low income countries (LICs) or LMICs. Considerations of Prior Compact Implementation Countries that have completed their compact, or are within 18 months of compact completion, may be considered for eligibility for a subsequent compact. To determine eligibility for subsequent compacts, the Board will consider the country’s policy performance using the methodology and criteria described above, as well as the country’s track record of performance implementing its prior compact. To assess implementation of a prior compact, the Board will consider 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. In FY 2014, the Board will assess countries on their performance on the prior compact through supplemental information covering the categories and issues shown in Table 2. A more detailed list of compact performance considerations and MCC reporting sources is provided in Annex B. TABLE 2 Country partnership Program results Political Will Management Capacity Financial Results Project Results Target Achievements Sources: Indicator tracking tables Quarterly reporting Impact evaluations Sources: Quarterly reporting Survey of MCC staff Similarly, the Board may consider a country’s performance on a threshold program, including the nature of the country partnership with MCC, the government’s commitment to MCC values and goals, and the progress towards threshold program development or implementation. To gather information on these topics, MCC looks to regular threshold program reporting, documentation of changes in timing or scope of a threshold program in implementation, a survey of involved MCC staff, and impact or performance evaluations (when available). mstockstill on DSK4VPTVN1PROD with NOTICES Other Considerations for the Board Supplementary Information Consistent with the Act, the 20 policy performance indicators will be the predominant basis for determining which countries will be eligible for MCA assistance. However, the Board may exercise discretion when evaluating performance on the indicators and determining a final list of eligible countries. Where necessary, the Board also may take into account other quantitative and qualitative information (supplemental information) to determine whether a country performed satisfactorily in relation to its peers in a given income category. There are elements of the criteria set out in the Act for which there is either limited quantitative information, or no welldeveloped performance indicator. Until such data and/or indicators are VerDate Mar<15>2010 17:24 Sep 19, 2013 Adherence to standards Jkt 229001 Commitment to MCC Operational Guidelines and Policies. Audit Findings. Sources: Quarterly reporting. GAO Audits. Survey of MCC staff. developed, the Board may rely on additional data and qualitative information to assess policy performance. For example, the State Department Human Rights Report contains qualitative information to make an assessment on a variety of criteria outlined by Congress, such as the rights of people with disabilities, the treatment of women and children, workers’ rights, and human rights. Similarly, MCC may consult a variety of third party sources to better understand the domestic potential for private sector led investment and growth. The Board may also consider whether supplemental information should be considered to make up for data gaps, lags, trends, or other weaknesses in particular indicators. For example, for additional information in the area of corruption, the Board may consider how a country is evaluated by supplemental sources like Transparency International’s Corruption Perceptions Index, the Global Integrity Report, Open Government Partnership status, and the Extractive Industry Transparency Initiative, among others, as well as on the defined indicator. due to a number of factors, such as: (i) Changes in the peer group median; (ii) transition into a new income category (e.g., from LIC to LMIC categories); (iii) numerical declines in scores that are within the statistical margin of error; (iv) slight declines in policy performance; (v) revisions or corrections of data; (vi) introduction of new subdata sources; or (vii) changes in the indicators used to measure performance. None of these factors alone signifies a significant policy reversal or warrants suspension or termination of eligibility and/or assistance. However, countries that demonstrate a significant policy reversal may be issued a warning or face suspension or termination of eligibility and/or assistance. According to the Act, ‘‘[a]fter consultation with the Board, the Chief Executive Officer may suspend or terminate assistance in whole or in part for a country or entity … if … the country or entity has engaged in a pattern of actions inconsistent with the criteria used to determine the eligibility of the country or entity ....’’ Consistent with the Act and MCC’s Policy on Suspension and Termination, this pattern of actions does not need to be captured in the indicators for MCC to take action. Continuing Policy Performance Partner countries that are developing or implementing a compact are expected to seek to maintain and improve policy performance. MCC recognizes that current partner countries may not meet the eligibility criteria from time to time PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 Relationship to Legislative Criteria Within each policy category, the Act sets out a number of specific selection criteria. As indicated in Table 1, a set of E:\FR\FM\20SEN1.SGM 20SEN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 78, No. 183 / Friday, September 20, 2013 / Notices 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 VerDate Mar<15>2010 17:24 Sep 19, 2013 Jkt 229001 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). Annex A 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 1. 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. Source: Freedom House 2. 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. Source: Freedom House 3. 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. Source: Freedom House/FRINGE Special/ Open Net Initiative 4. 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 PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 57887 things. Source: Worldwide Governance Indicators (World Bank/Brookings) 5. 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. Source: Worldwide Governance Indicators (World Bank/Brookings) 6. 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. Source: Worldwide Governance Indicators (World Bank/Brookings) Encouraging Economic Freedom 1. 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. Source: International Monetary Fund Country Reports, National Governments, and the International Monetary Fund’s World Economic Outlook Database 2. Inflation: The most recent average annual change in consumer prices. Source: The International Monetary Fund’s World Economic Outlook Database 3. 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, among other areas. Source: Worldwide Governance Indicators (World Bank/ Brookings) 4. Trade Policy: A measure of a country’s openness to international trade based on weighted average tariff rates and non-tariff barriers to trade. Source: The Heritage Foundation 5. 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. Source: International Finance Corporation 6. 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. Source: The International Fund for Agricultural Development and the International Finance Corporation 7. Access to Credit: An index that rates countries on rules and practices affecting the E:\FR\FM\20SEN1.SGM 20SEN1 57888 Federal Register / Vol. 78, No. 183 / Friday, September 20, 2013 / Notices 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. Source: International Finance Corporation 8. 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. Source: International Finance Corporation Investing in People 1. Public Expenditure on Health: Total expenditures on health by government at all levels divided by GDP. Source: The World Health Organization 2. Total Public Expenditure on Primary Education: Total expenditures on primary education by government at all levels divided by GDP. Source: The United Nations Educational, Scientific and Cultural Organization and National Governments 3. 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). Source: The Center for International Earth Science Information Network and the Yale Center for Environmental Law and Policy 4. Immunization Rates: The average of DPT3 and measles immunization coverage rates for the most recent year available. Source: The World Health Organization and the United Nations Children’s Fund 5. Girls Education: a. 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. Source: United Nations Educational, Scientific and Cultural Organization b. 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. Source: United Nations Educational, Scientific and Cultural Organization Topic 6. 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. Source: The Center for International Earth Science Information Network and the Yale Center for Environmental Law and Policy Annex B 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. 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 (https:// www.mcc.gov/pages/results/m-and-e) Web pages. MCC reporting/data source Published documents • Quarterly implementation reporting • Quarterly results reporting • Survey of MCC staff • Quarterly results published as ‘‘Table of Key Performance Indicators’’ (available by country): https://go.usa.gov/jMcC. • Survey questions to be posted: https:// 1.usa.gov/PE0xCX. Program Results Financial Results • Commitments • Disbursements Project Results • Output, outcome, objective targets • MCA commitment to ‘focus on results’ • MCA cooperation on impact evaluation • Percent complete for process/outputs • Relevant outcome data • Details behind target delays Target Achievements • • • • • • Indicator tracking tables Quarterly financial reporting Quarterly implementation reporting Quarterly results reporting Survey of MCC staff Impact evaluations • Monitoring and Evaluation Plans (available by country): https://go.usa.gov/jMcC. • Quarterly Status Reports (available by country): https://1.usa.gov/NfEbcI. • Quarterly results published as ‘‘Table of Key Performance Indicators’’ (available by country): https://1.usa.gov/QoduNl. • Survey questions to be posted: https:// 1.usa.gov/PE0xCX. Adherence To Standards • Procurement • Environmental and social • Fraud and corruption • Program closure • Monitoring and evaluation • All other legal provisions mstockstill on DSK4VPTVN1PROD with NOTICES Country Partnership Political Will • Status of major conditions precedent • Program oversight/implementation Æ project restructures Æ partner response to MCA capacity issues • Political independence of MCA Management Capacity • Project management capacity • Project performance • Level of MCC intervention/oversight • Relative level of resources required • Audits (GAO and OIG) • Quarterly implementation reporting • Survey of MCC staff • Published OIG and GAO Audits. • Survey questions to be posted: https:// 1.usa.gov/PE0xCX. Country Specific Sustainability • Implementation entity • MCC investments Role of private sector or other donors • Quarterly implementation reporting • Quarterly results reporting • Survey of MCC staff • Quarterly results published as ‘‘Table of Key Performance Indicators’’ (available by country): https://1.usa.gov/QoduNl. • Survey questions to be posted: https:// 1.usa.gov/PE0xCX. VerDate Mar<15>2010 17:24 Sep 19, 2013 Jkt 229001 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 E:\FR\FM\20SEN1.SGM 20SEN1 Federal Register / Vol. 78, No. 183 / Friday, September 20, 2013 / Notices Annex C 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 divide countries into two groups for FY 2014 scorecard comparisons: • Scorecard LICs are countries with GNI per capita below IDA’s historical ceiling for eligibility ($1,965 for FY 2014). • Scorecard LMICs are countries with GNI per capita above IDA’s historical ceiling for eligibility but below the World Bank’s upper middle income country threshold ($1,966– $4,085 for FY 2014). The list of countries categorized as LICs and LMICs for the purpose of scorecard assessments can be found below.1 Low Income Countries (FY 2014 Scorecard) 1. Afghanistan mstockstill on DSK4VPTVN1PROD with NOTICES 1 In December 2011, a statutory change requested by the agency altered the way MCC must group countries in determining whether MCC’s 25 percent LMIC funding cap applies. This change, designed to bring stability to the funding stream, affects how MCC funds countries selected as eligible and does not affect the way scorecards are created. For determining whether a country can be funded as an LMIC or LIC: Æ The poorest 75 countries are now considered low income for the purposes of MCC funding. They are not limited by the 25 percent funding cap on LMICs. Æ Countries with a GNI per capita above the poorest 75 but below the World Bank’s upper middle income country threshold ($4,035 in FY 2014) 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 2014 Candidate Country Report lists LIC and LMIC countries based on this new definition and outlines which countries are subject to the 25 percent funding cap. VerDate Mar<15>2010 17:24 Sep 19, 2013 Jkt 229001 2. Bangladesh 3. Benin 4. Burkina Faso 5. Burma 6. Burundi 7. Cambodia 8. Cameroon 9. Central African Republic 10. Chad 11. Comoros 12. Congo, the Democratic Republic of 13. Cote d’Ivoire 14. Djibouti 15. Eritrea 16. Ethiopia 17. Gambia 18. Ghana 19. Guinea 20. Guinea-Bissau 21. Haiti 22. India 23. Kenya 24. Korea, Democratic People’s Republic of 25. Kyrgyz Republic 26. Laos 27. Lesotho 28. Liberia 29. Madagascar 30. Malawi 31. Mali 32. Mauritania 33. Mozambique 34. Nepal 35. Nicaragua 36. Niger 37. Nigeria 38. Pakistan 39. Papua New Guinea 40. Rwanda 41. Sao Tome and Principe 42. Senegal 43. Sierra Leone 44. Solomon Islands 45. Somalia 46. South Sudan 47. Sudan 48. Tajikistan 49. Tanzania 50. Togo 51. Uganda 52. Uzbekistan 53. Vietnam 54. Yemen 55. Zambia 56. Zimbabwe Lower Middle Income Countries (FY 2014 Scorecard) 1. Armenia 2. Bhutan 3. Bolivia PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 57889 4. Cape Verde 5. Congo, Republic of 6. Egypt 7. El Salvador 8. Georgia 9. Guatemala 10. Guyana 11. Honduras 12. Indonesia 13. Kiribati 14. Kosovo 15. Micronesia 16. Moldova 17. Mongolia 18. Morocco 19. Paraguay 20. Philippines 21. Samoa 22. Sri Lanka 23. Swaziland 24. Syria 25. Timor-Leste 26. Ukraine 27. Vanuatu [FR Doc. 2013–22929 Filed 9–19–13; 8:45 am] BILLING CODE 9211–03–P MILLENNIUM CHALLENGE CORPORATION [MCC FR 13–07] Notice of Quarterly Report (April 1 2013–June 30, 2013) Millennium Challenge Corporation. SUMMARY: The Millennium Challenge Corporation (MCC) is reporting for the quarter April 1, 2013, through June 30, 2013, on assistance provided under section 605 of the Millennium Challenge Act of 2003 (22 U.S.C. 7701 et seq.), as amended (the Act), and on transfers or allocations of funds to other federal agencies under section 619(b) of the Act. The following report will be made available to the public by publication in the Federal Register and on the Internet Web site of the MCC (www.mcc.gov) in accordance with section 612(b) of the Act. AGENCY: Dated: September 16, 2013. Paul C. Weinberger, Vice President, Congressional and Public Affairs, Millennium Challenge Corporation. E:\FR\FM\20SEN1.SGM 20SEN1

Agencies

[Federal Register Volume 78, Number 183 (Friday, September 20, 2013)]
[Notices]
[Pages 57885-57889]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22929]



[[Page 57885]]

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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 13-06]


Report on the Criteria and Methodology for Determining the 
Eligibility of Candidate Countries for Millennium Challenge Account 
Assistance in Fiscal Year 2014

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

-----------------------------------------------------------------------

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 16 2013.
Melvin F. Williams, Jr.,
VP/General Counsel and Corporate Secretary, Millennium Challenge 
Corporation.

Report on the Criteria and Methodology for Determining the Eligibility 
of Candidate Countries for Millennium Challenge Account Assistance in 
Fiscal Year 2014

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).
    The Act authorizes the provision of Millennium Challenge Account 
(MCA) 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 the Millennium Challenge 
Corporation (MCC) to take a number of steps in determining which 
countries will be selected as eligible for MCA compact assistance for 
fiscal year (FY) 2014 based on the countries' demonstrated commitment 
to just and democratic governance, economic freedom, and investing in 
their people, as well as MCC's opportunity to reduce poverty and 
generate economic growth in the country. These steps include the 
submission of reports to the congressional committees specified in the 
Act and publication of notices in the Federal Register that identify:
     The countries that are ``candidate countries'' for MCA 
assistance for FY 2014 based on per capita income levels and 
eligibility to receive assistance under U.S. law. This report 
identifies 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));
     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); and
     The list of countries determined by the Board to be 
``eligible countries'' for FY 2014, 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).
    This report sets out the criteria and methodology to be applied in 
determining eligibility for FY 2014 MCA assistance.
    Criteria and Methodology for FY 2014
    The Board will base its selection of eligible countries on several 
factors, including:
     The country's overall performance in the three broad 
policy categories of Ruling Justly, Encouraging Economic Freedom, and 
Investing in People;
     MCC's opportunity to reduce poverty and generate economic 
growth in a country; and;
     The availability of MCC funds.
    In addition, the Board will consider a country's performance during 
implementation of a prior compact or threshold program, if applicable.
    Section 607 of the Act requires that the Board's determination of 
eligibility be based ``to the maximum extent possible, upon objective 
and quantifiable indicators of a country's demonstrated commitment'' to 
the criteria set out in the Act.

Performance in Policy Categories

    In FY 2014 the Board will use 20 indicators to assess the policy 
performance of individual countries. These indicators are grouped under 
the three policy categories listed in Table 1. A description of each 
indicator, including definitions and sources, can be found in Annex A.

                                 Table 1
------------------------------------------------------------------------
                           Encouraging economic
     Ruling justly               freedom            Investing in people
------------------------------------------------------------------------
Political Rights         Fiscal Policy            Public Expenditure on
                                                   Health.
Civil Liberties          Inflation                Total Public
Freedom of Information   Regulatory Quality        Expenditure on
Government               Trade Policy              Primary Education.
 Effectiveness           Gender in the Economy    Natural Resource
Rule of Law              Land Rights and Access    Protection.
Control of Corruption    Access to Credit         Immunization Rates.
                         Business Start-Up        Girls' Education:
                                                   Primary
                                                   Completion Rate
                                                   (LICs).
                                                   Secondary
                                                   Education Enrollment
                                                   (LMICs).
                                                  Child Health.
Sources:                 Sources:                 Sources:
    Freedom House           IMF                      World Health
                                                      Organization.
    FRINGE Special          World Bank/Brookings     UNICEF.
    Open Net Initiative     Heritage Foundation      UNESCO.
    World Bank/             IFC                      National Sources.
     Brookings
                            International Fund       CIESIN/YCLEP.
                             for Agricultural
                             Development
------------------------------------------------------------------------

    To assess policy performance of a particular candidate country, the 
Board will consider whether a country performs above the median of 
their income peers or absolute threshold on at least half of the 
indicators; above the median on the Control of Corruption indicator; 
and above the absolute threshold on either the Civil Liberties or 
Political Rights indicators. Indicators with absolute thresholds in 
lieu of a median include: (i) Inflation, on which

[[Page 57886]]

a country's inflation rate must be under a fixed ceiling of 15 percent; 
(ii) Immunization Rates (lower middle income countries (LMICs) only), 
on which an LMIC must have immunization coverage above 90 percent; 
(iii) Political Rights, on which countries must score above 17 out of 
40; and (iv) Civil Liberties, on which countries must score above 25 
out of 60. The Board will also consider whether a country performs 
substantially worse in any policy category than it does on the overall 
scorecard, and countries must meet a minimum standard of passing one 
indicator in each category. As outlined in Annex C, countries are 
compared only to others in their same income category: Low income 
countries (LICs) or LMICs.

Considerations of Prior Compact Implementation

    Countries that have completed their compact, or are within 18 
months of compact completion, may be considered for eligibility for a 
subsequent compact. To determine eligibility for subsequent compacts, 
the Board will consider the country's policy performance using the 
methodology and criteria described above, as well as the country's 
track record of performance implementing its prior compact.
    To assess implementation of a prior compact, the Board will 
consider 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.
    In FY 2014, the Board will assess countries on their performance on 
the prior compact through supplemental information covering the 
categories and issues shown in Table 2. A more detailed list of compact 
performance considerations and MCC reporting sources is provided in 
Annex B.

                                 Table 2
------------------------------------------------------------------------
  Country partnership        Program results      Adherence to standards
------------------------------------------------------------------------
Political Will           Financial Results        Commitment to MCC
Management Capacity      Project Results           Operational
                         Target Achievements       Guidelines and
                                                   Policies.
                                                  Audit Findings.
Sources:                 Sources:                 Sources:
    Quarterly reporting     Indicator tracking       Quarterly
                             tables                   reporting.
    Survey of MCC staff     Quarterly reporting      GAO Audits.
                            Impact evaluations       Survey of MCC
                                                      staff.
------------------------------------------------------------------------

    Similarly, the Board may consider a country's performance on a 
threshold program, including the nature of the country partnership with 
MCC, the government's commitment to MCC values and goals, and the 
progress towards threshold program development or implementation. To 
gather information on these topics, MCC looks to regular threshold 
program reporting, documentation of changes in timing or scope of a 
threshold program in implementation, a survey of involved MCC staff, 
and impact or performance evaluations (when available).

Other Considerations for the Board

Supplementary Information
    Consistent with the Act, the 20 policy performance indicators will 
be the predominant basis for determining which countries will be 
eligible for MCA assistance. However, the Board may exercise discretion 
when evaluating performance on the indicators and determining a final 
list of eligible countries. Where necessary, the Board also may take 
into account other quantitative and qualitative information 
(supplemental information) to determine whether a country performed 
satisfactorily in relation to its peers in a given income category. 
There are elements of the criteria set out in the Act for which there 
is either limited quantitative information, or no well-developed 
performance indicator. Until such data and/or indicators are developed, 
the Board may rely on additional data and qualitative information to 
assess policy performance. For example, the State Department Human 
Rights Report contains qualitative information to make an assessment on 
a variety of criteria outlined by Congress, such as the rights of 
people with disabilities, the treatment of women and children, workers' 
rights, and human rights. Similarly, MCC may consult a variety of third 
party sources to better understand the domestic potential for private 
sector led investment and growth.
    The Board may also consider whether supplemental information should 
be considered to make up for data gaps, lags, trends, or other 
weaknesses in particular indicators. For example, for additional 
information in the area of corruption, the Board may consider how a 
country is evaluated by supplemental sources like Transparency 
International's Corruption Perceptions Index, the Global Integrity 
Report, Open Government Partnership status, and the Extractive Industry 
Transparency Initiative, among others, as well as on the defined 
indicator.
Continuing Policy Performance
    Partner countries that are developing or implementing a compact are 
expected to seek to maintain and improve policy performance. MCC 
recognizes that current partner countries may not meet the eligibility 
criteria from time to time due to a number of factors, such as: (i) 
Changes in the peer group median; (ii) transition into a new income 
category (e.g., from LIC to LMIC categories); (iii) numerical declines 
in scores that are within the statistical margin of error; (iv) slight 
declines in policy performance; (v) revisions or corrections of data; 
(vi) introduction of new sub-data sources; or (vii) changes in the 
indicators used to measure performance. None of these factors alone 
signifies a significant policy reversal or warrants suspension or 
termination of eligibility and/or assistance.
    However, countries that demonstrate a significant policy reversal 
may be issued a warning or face suspension or termination of 
eligibility and/or assistance. According to the Act, ``[a]fter 
consultation with the Board, the Chief Executive Officer may suspend or 
terminate assistance in whole or in part for a country or entity 
[hellip] if [hellip] the country or entity has engaged in a pattern of 
actions inconsistent with the criteria used to determine the 
eligibility of the country or entity ....'' Consistent with the Act and 
MCC's Policy on Suspension and Termination, this pattern of actions 
does not need to be captured in the indicators for MCC to take action.
Relationship to Legislative Criteria
    Within each policy category, the Act sets out a number of specific 
selection criteria. As indicated in Table 1, a set of

[[Page 57887]]

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).

Annex A

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

    1. 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. Source: Freedom House
    2. 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. Source: Freedom House
    3. 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. Source: Freedom 
House/FRINGE Special/Open Net Initiative
    4. 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. Source: Worldwide 
Governance Indicators (World Bank/Brookings)
    5. 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. Source: 
Worldwide Governance Indicators (World Bank/Brookings)
    6. 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. Source: 
Worldwide Governance Indicators (World Bank/Brookings)

Encouraging Economic Freedom

    1. 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. Source: International Monetary Fund Country 
Reports, National Governments, and the International Monetary Fund's 
World Economic Outlook Database
    2. Inflation: The most recent average annual change in consumer 
prices. Source: The International Monetary Fund's World Economic 
Outlook Database
    3. 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, among other areas. Source: Worldwide 
Governance Indicators (World Bank/Brookings)
    4. Trade Policy: A measure of a country's openness to 
international trade based on weighted average tariff rates and non-
tariff barriers to trade. Source: The Heritage Foundation
    5. 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. Source: 
International Finance Corporation
    6. 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. Source: The International Fund for Agricultural 
Development and the International Finance Corporation
    7. Access to Credit: An index that rates countries on rules and 
practices affecting the

[[Page 57888]]

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. 
Source: International Finance Corporation
    8. 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. Source: International Finance Corporation

Investing in People

    1. Public Expenditure on Health: Total expenditures on health by 
government at all levels divided by GDP. Source: The World Health 
Organization
    2. Total Public Expenditure on Primary Education: Total 
expenditures on primary education by government at all levels 
divided by GDP. Source: The United Nations Educational, Scientific 
and Cultural Organization and National Governments
    3. 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). Source: The 
Center for International Earth Science Information Network and the 
Yale Center for Environmental Law and Policy
    4. Immunization Rates: The average of DPT3 and measles 
immunization coverage rates for the most recent year available. 
Source: The World Health Organization and the United Nations 
Children's Fund
    5. Girls Education:
    a. 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. Source: United Nations Educational, Scientific and 
Cultural Organization
    b. 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. Source: United Nations Educational, Scientific and Cultural 
Organization
    6. 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. Source: The Center for 
International Earth Science Information Network and the Yale Center 
for Environmental Law and Policy

Annex B

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. 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 (https://www.mcc.gov/pages/results/m-and-e) Web pages.

------------------------------------------------------------------------
                            MCC reporting/data
         Topic                    source            Published documents
------------------------------------------------------------------------
Country Partnership       Quarterly        Quarterly
Political Will            implementation           results published as
 Status of        reporting                ``Table of Key
 major conditions         Quarterly        Performance
 precedent                results reporting        Indicators''
 Program          Survey of MCC    (available by
 oversight/               staff                    country): https://
 implementation                                    go.usa.gov/jMcC.
[cir] project                                      Survey
 restructures                                      questions to be
[cir] partner response                             posted: https://
 to MCA capacity issues                            1.usa.gov/PE0xCX.
 Political
 independence of MCA
 Management Capacity
 Project
 management capacity
 Project
 performance
 Level of MCC
 intervention/oversight
 Relative level
 of resources required
------------------------------------------------------------------------
Program Results           Indicator        Monitoring
Financial Results         tracking tables          and Evaluation Plans
 Commitments      Quarterly        (available by
 Disbursements    financial reporting      country): https://
Project Results           Quarterly        go.usa.gov/jMcC.
 Output,          implementation           Quarterly
 outcome, objective       reporting                Status Reports
 targets                  Quarterly        (available by
 MCA commitment   results reporting        country): https://
 to `focus on results'    Survey of MCC    1.usa.gov/NfEbcI.
 MCA              staff                    Quarterly
 cooperation on impact    Impact           results published as
 evaluation               evaluations              ``Table of Key
 Percent                                   Performance
 complete for process/                             Indicators''
 outputs                                           (available by
                                                   country): https://1.usa.gov/QoduNl.
                                                   Survey
                                                   questions to be
                                                   posted: https://1.usa.gov/PE0xCX.
 Relevant
 outcome data
 Details behind
 target delays
Target Achievements
------------------------------------------------------------------------
Adherence To Standards    Audits (GAO      Published OIG
 Procurement      and OIG)                 and GAO Audits.
 Environmental    Quarterly        Survey
 and social               implementation           questions to be
 Fraud and        reporting                posted: https://
 corruption               Survey of MCC    1.usa.gov/PE0xCX.
 Program          staff
 closure
 Monitoring and
 evaluation
 All other
 legal provisions
------------------------------------------------------------------------
Country Specific          Quarterly        Quarterly
 Sustainability           implementation           results published as
 Implementation   reporting                ``Table of Key
 entity                   Quarterly        Performance
 MCC              results reporting        Indicators''
 investments              Survey of MCC    (available by
Role of private sector    staff                    country): https://
 or other donors                                   1.usa.gov/QoduNl.
                                                   Survey
                                                   questions to be
                                                   posted: https://1.usa.gov/PE0xCX.
------------------------------------------------------------------------


[[Page 57889]]

Annex C

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 divide countries into two groups for FY 2014 
scorecard comparisons:
     Scorecard LICs are countries with GNI per capita below 
IDA's historical ceiling for eligibility ($1,965 for FY 2014).
     Scorecard LMICs are countries with GNI per capita above 
IDA's historical ceiling for eligibility but below the World Bank's 
upper middle income country threshold ($1,966-$4,085 for FY 2014).
    The list of countries categorized as LICs and LMICs for the 
purpose of scorecard assessments can be found below.\1\
---------------------------------------------------------------------------

    \1\ In December 2011, a statutory change requested by the agency 
altered the way MCC must group countries in determining whether 
MCC's 25 percent LMIC funding cap applies. This change, designed to 
bring stability to the funding stream, affects how MCC funds 
countries selected as eligible and does not affect the way 
scorecards are created. For determining whether a country can be 
funded as an LMIC or LIC:
    [cir] The poorest 75 countries are now considered low income for 
the purposes of MCC funding. They are not limited by the 25 percent 
funding cap on LMICs.
    [cir] Countries with a GNI per capita above the poorest 75 but 
below the World Bank's upper middle income country threshold ($4,035 
in FY 2014) 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 2014 Candidate Country Report lists LIC and LMIC 
countries based on this new definition and outlines which countries 
are subject to the 25 percent funding cap.
---------------------------------------------------------------------------

Low Income Countries

(FY 2014 Scorecard)

1. Afghanistan
2. Bangladesh
3. Benin
4. Burkina Faso
5. Burma
6. Burundi
7. Cambodia
8. Cameroon
9. Central African Republic
10. Chad
11. Comoros
12. Congo, the Democratic Republic of
13. Cote d'Ivoire
14. Djibouti
15. Eritrea
16. Ethiopia
17. Gambia
18. Ghana
19. Guinea
20. Guinea-Bissau
21. Haiti
22. India
23. Kenya
24. Korea, Democratic People's Republic of
25. Kyrgyz Republic
26. Laos
27. Lesotho
28. Liberia
29. Madagascar
30. Malawi
31. Mali
32. Mauritania
33. Mozambique
34. Nepal
35. Nicaragua
36. Niger
37. Nigeria
38. Pakistan
39. Papua New Guinea
40. Rwanda
41. Sao Tome and Principe
42. Senegal
43. Sierra Leone
44. Solomon Islands
45. Somalia
46. South Sudan
47. Sudan
48. Tajikistan
49. Tanzania
50. Togo
51. Uganda
52. Uzbekistan
53. Vietnam
54. Yemen
55. Zambia
56. Zimbabwe

Lower Middle Income Countries

(FY 2014 Scorecard)

1. Armenia
2. Bhutan
3. Bolivia
4. Cape Verde
5. Congo, Republic of
6. Egypt
7. El Salvador
8. Georgia
9. Guatemala
10. Guyana
11. Honduras
12. Indonesia
13. Kiribati
14. Kosovo
15. Micronesia
16. Moldova
17. Mongolia
18. Morocco
19. Paraguay
20. Philippines
21. Samoa
22. Sri Lanka
23. Swaziland
24. Syria
25. Timor-Leste
26. Ukraine
27. Vanuatu

[FR Doc. 2013-22929 Filed 9-19-13; 8:45 am]
BILLING CODE 9211-03-P
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