Report on the Selection of Eligible Countries for Fiscal Year 2023, 77143-77145 [2022-27345]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 87, Number 241 (Friday, December 16, 2022)]
[Notices]
[Pages 77143-77145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27345]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 22-17]


Report on the Selection of Eligible Countries for Fiscal Year 
2023

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: This report is provided in accordance with the Millennium 
Challenge Act of 2003, as amended. The report is set forth in full 
below.

SUPPLEMENTARY INFORMATION: 

Report on the Selection of Eligible Countries for Fiscal Year 2023

Summary

    This report is provided in accordance with section 608(d)(1) of the 
Millennium Challenge Act of 2003, as amended (the Act) (22 U.S.C. 
7707(d)(1)).
    The Act authorizes the provision of assistance under section 605 of 
the Act (22 U.S.C. 7704) to countries that enter into compacts with the 
United States to support policies and programs that advance the 
progress of such countries in achieving lasting poverty reduction 
through economic growth, and are in furtherance of the Act. The Act 
requires the Millennium Challenge Corporation (MCC) to determine the 
countries that will be eligible to receive assistance for the fiscal 
year, based on their demonstrated commitment to just and democratic 
governance, economic freedom, and investing in their people, as well as 
on the opportunity to reduce poverty through economic growth in the 
country. The Act also requires the submission of reports to appropriate 
congressional committees and the publication of notices in the Federal 
Register that identify, among other things:
    1. The countries that are ``candidate countries'' for assistance 
for fiscal year (FY) 2023 based on their per-capita income levels and 
their eligibility to receive assistance under U.S. law, and countries 
that would be candidate countries, but for specified legal prohibitions 
on assistance (section 608(a) of the Act (22 U.S.C. 7707(a)));
    2. The criteria and methodology that the Board of Directors of MCC 
(the Board) used to measure and evaluate the policy performance of the 
``candidate countries'' consistent with the requirements of section 607 
of the Act in order to determine ``eligible countries'' from among the 
``candidate countries'' (section 608(b) of the Act (22 U.S.C. 
7707(b))); and
    3. The list of countries determined by the Board to be ``eligible 
countries'' for FY 2023, with justification for eligibility 
determination and selection for compact negotiation, including with 
which of the eligible countries the Board will seek to enter into 
compacts (section 608(d) of the Act (22 U.S.C. 7707(d))).
    This is the third of the above-described reports by MCC for FY 
2023. It identifies countries determined by the Board to be eligible 
under section 607 of the Act (22 U.S.C. 7706) for FY 2023 with which 
the MCC will seek to enter into compacts under section 609 of the Act 
(22 U.S.C. 7708), as well as the justification for such decisions. The 
report also identifies countries selected by the Board to receive 
assistance under MCC's threshold program pursuant to section 616 of the 
Act (22 U.S.C. 7715).

Eligible Countries

    The Board met on December 8, 2022 to select those eligible 
countries with which the United States, through MCC, will seek to enter 
into a Millennium Challenge Compact pursuant to section 607 of the Act 
(22 U.S.C. 7706). The Board selected the following eligible countries 
for such assistance for FY 2023: Senegal, The Gambia, and Togo. The 
Board also selected the following previously selected countries for 
compact assistance for FY 2023: C[ocirc]te d'Ivoire, Mozambique, Sierra 
Leone, and Zambia.
Criteria
    In accordance with the Act and with the ``Report on the Criteria 
and Methodology for Determining the Eligibility of Candidate Countries 
for Millennium Challenge Account Assistance in Fiscal Year 2023'' 
formally submitted to Congress on September 27, 2022, selection was 
based primarily on a country's overall performance in three broad 
policy categories: Ruling Justly, Encouraging Economic Freedom, and 
Investing in People. The Board relied, to the fullest extent possible, 
upon transparent and independent indicators to assess countries' policy 
performance and demonstrated commitment in these three broad policy 
areas. The Board compared countries' performance on the indicators 
relative to their income-level peers, evaluating them in comparison to 
either the group of countries with a GNI per capita equal to or less 
than $2,045, or the group with a GNI per capita between $2,046 and 
$4,255.
    The criteria and methodology used to assess countries, including 
the methodology for the annual scorecards, are outlined in the ``Report 
on the Criteria and Methodology for

[[Page 77144]]

Determining the Eligibility of Candidate Countries for Millennium 
Challenge Account Assistance for Fiscal Year 2023''.\1\ Scorecards 
reflecting each country's performance on the indicators are available 
on MCC's website at https://www.mcc.gov/who-we-select/scorecards.
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    \1\ Available at https://www.mcc.gov/resources/doc/report-selection-criteria-methodology-fy23.
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    The Board also considered whether any adjustments should be made 
for data gaps, data lags, or recent events since the indicators were 
published, as well as strengths or weaknesses in particular indicators. 
Where appropriate, the Board took into account additional quantitative 
and qualitative information, such as evidence of a country's commitment 
to fighting corruption, investments in human development outcomes, or 
poverty rates. MCC published a Guide to Supplemental Information \2\ to 
increase transparency about the type of supplemental information the 
Board uses to assess a country's policy performance. MCC also published 
web pages \3\ regarding how MCC assesses performance on the new 
Employment Opportunity and revised Natural Resource Protection 
scorecard indicators. In keeping with legislative directives, the Board 
also considered the opportunity to reduce poverty and promote economic 
growth in a country, in light of the overall information available, as 
well as the availability of appropriated funds.
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    \2\ Available at https://www.mcc.gov/resources/doc/guide-to-supplemental-information.
    \3\ Available at https://www.mcc.gov/who-we-select/indicator/employment-opportunity and https://www.mcc.gov/blog/entry/blog-101422-scorecard-indicator-employment (Employment Opportunity) and 
https://www.mcc.gov/who-we-select/indicator/natural-resource-protection (Natural Resource Protection).
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    The Board sees the selection decision as an annual opportunity to 
determine where MCC funds can be most effectively used to support 
poverty reduction through economic growth in relatively well-governed, 
poor countries. The Board carefully considers the appropriate nature of 
each country partnership--on a case-by-case basis--based on factors 
related to poverty reduction through economic growth, the 
sustainability of MCC's investments, and the country's ability to 
attract and leverage public and private resources in support of 
development.
    This was the fifth year the Board considered the eligibility of 
countries for concurrent compacts, as permitted under section 609(k) of 
the Act. In addition to the considerations for compact eligibility 
detailed above, the Board considered whether a country being considered 
for a concurrent compact is making considerable and demonstrable 
progress in implementing the terms of its existing compact.
    This was the fourteenth year the Board considered the eligibility 
of countries for subsequent compacts, as permitted under section 609(l) 
of the Act. MCC's engagement with partner countries is not open-ended, 
and the Board is deliberate when selecting countries for follow-on 
partnerships, particularly regarding the higher bar applicable to 
subsequent compact countries. While the Board did not select any new 
countries for subsequent compacts for FY 2023, the Board considered--in 
addition to the criteria outlined above--a country's performance 
implementing its prior compact, including the nature of the country's 
partnership with MCC, the degree to which the country has demonstrated 
a commitment and capacity to achieve program results, and the degree to 
which the country implemented the compact in accordance with MCC's core 
policies and standards. To the greatest extent possible, these factors 
are assessed using pre-existing monitoring and evaluation targets and 
regular quarterly reporting. This information is supplemented with 
direct surveys and consultation with MCC staff responsible for compact 
implementation, monitoring, and evaluation. MCC published a Guide to 
the Program Surveys \4\ regarding the information collected and 
assessed for any country with an existing or prior compact or threshold 
program to ensure transparency about the type of information the Board 
considers regarding a country's performance on MCC programs, as 
relevant. The Board also considered a country's commitment to further 
sector reform, as well as evidence of improved scorecard policy 
performance.
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    \4\ Available at https://www.mcc.gov/resources/doc/guide-to-program-surveys-fy23.
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    In addition, this is the seventh year where the Board considered an 
explicit higher bar for those countries close to the upper end of the 
candidate pool, looking closely in such cases at a country's access to 
development financing, the nature of poverty in the country, and its 
policy performance.
Countries Newly Selected for Compact Assistance
    Using the criteria described above, two candidate countries under 
section 606(a) of the Act (22 U.S.C. 7705(a) were newly selected for 
assistance under section 607 of the Act (22 U.S.C. 7706): The Gambia 
and Togo.
    The Gambia: The Gambia has been a strong partner for MCC on its 
current $25 million threshold program and is continuing to strengthen 
its democracy following the landmark 2016 elections. The Gambia passes 
the MCC scorecard for the fifth consecutive year in Fiscal Year 2023, 
passing 14 of 20 indicators overall, including the Control of 
Corruption and Democratic Rights ``hard hurdles.'' Selecting The Gambia 
for a compact will allow MCC to deepen its partnership with a country 
that is demonstrating a clear commitment to MCC's eligibility criteria 
and to support the Government of The Gambia's efforts to strengthen 
economic and democratic governance and address its pressing development 
needs.
    Togo: Togo is an engaged MCC partner and has markedly accelerated 
implementation of its $35 million threshold program over the past year. 
Togo has also made efforts to strengthen its policy performance on the 
MCC scorecard over a number of years. In Fiscal Year 2023, Togo passes 
the scorecard for the seventh consecutive year, passing 14 of 20 
indicators overall, with strong performance on the Control of 
Corruption ``hard hurdle.'' While the Government of Togo has overseen 
critical economic reforms, its performance on the Democratic Rights 
indicators on the MCC scorecard has declined in recent years, and it 
does not pass the Political Rights indicator. Selecting Togo for a 
compact will provide MCC the opportunity to continue partnering with a 
motivated government that is pursuing policies to reduce poverty and 
spur economic growth but is facing critical development challenges.
    Country selected for a concurrent compact: In accordance with 
section 609(k) of the Act, one candidate country was newly selected to 
explore development of a concurrent compact for purposes of regional 
integration under section 607 of the Act (22 U.S.C. 7706): Senegal.
    Senegal: Senegal is a dedicated MCC partner and is currently 
implementing a $550 million compact focused on the power sector. 
Senegal has consistently met MCC's scorecard criteria and in Fiscal 
Year 2023, it passes 14 of 20 indicators overall, with strong 
performance on the Control of Corruption and Democratic Rights ``hard 
hurdles.'' Senegal presents a substantial opportunity to explore 
potential investments that could promote regional economic integration, 
increased regional trade, or cross-border collaboration, particularly 
given its geographic location and ties to key regional organizations. 
By selecting Senegal for a

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concurrent regional compact, MCC can support efforts to strengthen 
economic growth, reduce poverty, and address development challenges 
facing both the country, and the wider region.
Countries Selected To Continue Compact Development
    Four of the countries selected for compact assistance for FY 2023 
were previously selected for FY 2022. Mozambique, Sierra Leone, and 
Zambia were selected to continue developing compacts. C[ocirc]te 
d'Ivoire was selected to continue developing a concurrent compact for 
purposes of regional integration. Selection of these countries for FY 
2023 was based on an assessment of their policy performance since their 
prior selection and their progress in developing programs with MCC.
Country Selected To Receive Threshold Program Assistance
    The Board selected Mauritania to receive threshold program 
assistance for FY 2023.
    Mauritania: Mauritania offers MCC the opportunity to engage with a 
country that faces significant challenges to economic growth and that 
is demonstrating a trajectory of reform on the MCC scorecard. While 
Mauritania does not pass the MCC scorecard in FY 2023 due to not 
passing the Democratic Rights ``hard hurdle,'' it passes the Control of 
Corruption ``hard hurdle,'' passes 10 of 20 indicators overall, and has 
taken steps to improve its performance in recent years. Mauritania's 
2019 elections marked its first peaceful transfer of power and provided 
a further impetus to the country's gradual reform process and efforts 
to strengthen democratic governance, fight corruption, undertake 
economic reforms, and address longstanding human rights issues 
including trafficking in persons and hereditary slavery. By selecting 
Mauritania for threshold program assistance, MCC can engage with the 
Government of the Islamic Republic of Mauritania to continue efforts to 
strengthen its policy performance, make critical policy and 
institutional reforms, and address the country's development needs for 
the people of Mauritania.
Country Selected To Continue Developing Threshold Programs
    The Board selected Kiribati to continue developing a threshold 
program. Selection of Kiribati for FY 2023 was based on its continued 
strong policy performance since its prior selection and its progress 
developing its threshold program.
Ongoing Review of Partner Countries' Policy Performance
    The Board emphasized the need for all partner countries to maintain 
or improve their policy performance. If it is determined during compact 
implementation that a country has demonstrated a significant policy 
reversal, MCC can hold it accountable by applying MCC's Suspension and 
Termination Policy.\5\
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    \5\ Available at https://www.mcc.gov/who-we-select/suspension-or-termination.
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    Authority: 22 U.S.C. 7707(d)(2)).

    Dated: December 13, 2022.
Thomas G. Hohenthaner,
Acting VP/General Counsel and Corporate Secretary.
[FR Doc. 2022-27345 Filed 12-13-22; 4:15 pm]
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