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29 December 2007
[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Notices]
[Page 73885-73887]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de07-171]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 07-16]
Report on the Selection of Eligible Countries for Fiscal Year
2008
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: This report is provided in accordance with section 608(d)(1)
of the Millennium Challenge Act of 2003, Public Law 108-199, Division
D, (the ``Act'').
The Act authorizes the provision of Millennium Challenge Account
(``MCA'') assistance under section 605 of the Act to countries that
enter into compacts with the United States to support policies and
programs that advance the progress of such countries in achieving
lasting economic growth and poverty reduction, and are in furtherance
of the Act. The Act requires the Millennium Challenge Corporation
(``MCC'') to take steps to determine the countries that, based to the
maximum extent possible on objective and quantifiable indicators of a
country's demonstrated commitment to just and democratic governance,
economic freedom, and investing in their people, will be eligible to
receive MCA assistance for a fiscal year. These steps include the
submission of reports to appropriate congressional committees
[[Page 73886]]
and the publication of notices in the Federal Register that identify,
among other things:
1. The ``candidate countries'' for MCA assistance for a fiscal
year, and all countries that would be candidate countries if they met
the requirement of section 606(a)(1)(B) (section 608(a) of the Act);
2. The eligibility criteria and methodology that the MCC Board of
Directors (the ``Board'') will use to select ``eligible countries''
from among the ``candidate countries'' (section 608(b) of the Act); and
3. The countries determined by the Board to be ``eligible
countries'' for a fiscal year, the countries on the list of eligible
countries with which the Board will seek to enter into a compact, and a
justification for the decisions regarding eligibility and selection for
negotiation (section 608(d)(1) of the Act).
This is the third of the above-described reports by MCC for fiscal
year 2008 (FY08). It identifies countries determined by the Board to be
eligible under section 607 of the Act for FY08 and those that the Board
will seek to enter into compacts under section 609 of the Act, and the
justification for such decisions.
Eligible Countries
The Board met on December 12, 2007 to select countries that will be
eligible for MCA compact assistance under section 607 of the Act for
FY08. The Board determined the following countries eligible for such
assistance for FY08: Armenia, Benin, Bolivia, Burkina Faso, El
Salvador, Georgia, Ghana, Honduras, Jordan, Lesotho, Madagascar,
Malawi, Mali, Moldova, Mongolia, Morocco, Mozambique, Namibia,
Nicaragua, Senegal, Tanzania, Timor Leste, Ukraine and Vanuatu, and
with which MCC may seek to enter into a compact: Bolivia, Burkina Faso,
Jordan, Malawi, Moldova, Namibia, Senegal, Tanzania, Timor Leste, and
Ukraine.
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 2008''
submitted to the Congress on September 17, 2007, selection was based
primarily on a country's overall performance in relation to three broad
policy categories: (1) ``Ruling justly''; (2) ``encouraging economic
freedom''; and (3) ``investing in people.'' The Board relied upon 17
publicly available and independent indicators to assess policy
performance and demonstrated commitment in these three areas, to the
maximum extent possible, for determining which countries would be
eligible for MCA compact assistance. In determining eligibility, the
Board considered if a country performed above the median in relation to
its peers on at least half of the indicators in each of the three
policy categories, and above the median on ``control of corruption''
and, if the country performed substantially below the median on any
indictor, whether it is taking appropriate action to address the
shortcomings. Scorecards reflecting each country's performance on the
indicators are available on MCC's Web site at http://www.mcc.gov.
The Board also considered whether any adjustments should be made
for data gaps, lags, trends, or recent events since the indicators were
published, 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 and promoting democratic governance, its
economic policies to promote the sustainable management of natural
resources, and its effective protection of human rights and the rights
of people with disabilities. In addition, the Board considered the
opportunity to reduce poverty, promote economic growth and poverty
reduction in a country, in light of the overall context of the
information available to it as well as the availability of appropriated
funds.
One country was selected as eligible for the first time in FY08:
Malawi, a low income candidate, was selected under section 606(a) of
the Act. Malawi (1) performed above the median in relation to their
peers on at least half of the indicators in each of the three policy
categories; (2) performed above the median on corruption; and (3) in
cases where they performed substantially below the median on an
indicator, there was either evidence that the data did not adequately
reflect their policy performance or that the government is taking
corrective action to address the problem.
Malawi is currently participating in the threshold program. Malawi
meets the eligibility criteria for the first time in FY08, scoring
above the median on 13 of 17 indicators, including the corruption
indicator. The government of Malawi has demonstrated a strong
commitment to fighting corruption, and is well into the implementation
of a threshold program focused on accelerating anticorruption reforms
and improving fiscal policy. There is a significant opportunity for a
compact with Malawi to reduce poverty and promote economic growth.
Roughly seven million people (over half the population) live on less
than $2 a day. Although Malawi now meets the MCA eligibility criteria
for compact assistance, successful implementation of its threshold
program--and of the corresponding reform commitments--remains critical.
Hence, the government of Malawi will be required to demonstrate
successful implementation of the threshold program during the compact
development process in order to reach a compact and then to continue to
receive MCA funding under a compact.
Seventeen of the countries selected eligible for MCA assistance for
FY08 were in the ``low income country'' category and were previously
selected as eligible in at least one prior fiscal year--Benin, Bolivia,
Burkina Faso, Ghana, Georgia, Honduras, Lesotho, Madagascar, Mali,
Moldova, Mongolia, Mozambique, Nicaragua, Senegal, Tanzania, Timor
Leste and Vanuatu. Six of the countries selected as eligible for MCA
assistance for FY08 were in the ``lower middle income country''
category and were previously selected as eligible in at least one prior
fiscal year--Armenia, El Salvador, Jordan, Morocco, Namibia, and
Ukraine.
On December 12, 2007, the Board reselected these countries based on
their continued performance since their prior selection. The Board also
determined that no material change has occurred in the performance of
these countries on the selection criteria since the FY07 selection that
would justify not including them in the FY08 eligible country list.
Eleven countries--Armenia, Benin, El Salvador, Honduras, Madagascar,
Mali, Morocco, Mozambique, Namibia, Timor Leste, and Ukraine--either
did not perform above the median on control of corruption or did not
perform above the median in relation to their peers on at least half of
the indicators in each of the three policy categories. Cape Verde was
not reselected as eligible, as this is the third year it does not meet
the criteria in its new lower middle income country competition. MCC
does not believe that a serious policy reversal or a pattern of actions
inconsistent with the selection criteria has occurred in any of these
countries. In analyzing performance, MCC found that these countries did
not meet the criteria, due to one or a combination of the following
factors:
Graduation from the ``low income country'' to the ``lower
middle income country'' category,
Data improvements and revisions,
[[Page 73887]]
The introduction of two new indicators and a new
methodology in the ``iInvesting in people'' category,
Slight declines in performance, and
Score changes within the margin of error.
Therefore, all of the 12 countries can continue with compact
implementation or compact development, providing they demonstrate
progress toward meeting the criteria. These MCC countries will be
required to develop and implement a remediation plan to address policy
performance and/or data issues which prevent countries from meeting the
eligibility criteria. The remediation process will give MCC and other
U.S. Government agencies a basis for policy dialogue with the country
about how to improve performance while allowing the country to
demonstrate commitment to and progress toward meeting the eligibility
criteria.
The Board also did not reselect Sri Lanka and the Gambia. Sri Lanka
was not reselected this year due to the ongoing conflict in the
country, which has escalated to a level that precludes MCC activities
and which is inconsistent with the performance of an MCC-eligible
country. The Gambia's eligibility was suspended in previous years and
it was not considered this year for eligibility.
Finally, a number of countries that performed well on the
quantitative elements of the selection criteria (i.e., on the policy
indicators) were not chosen as eligible countries for FY08. As
discussed above, the Board considered a variety of factors in addition
to the country's performance on the policy indicators in determining
whether they were appropriate candidates for assistance (e.g., the
country's commitment to fighting corruption and promoting democratic
governance; the availability of appropriated funds; and the countries
in which MCC would likely have the best opportunity to reduce poverty
and generate economic growth).
Selection for Compact Negotiation
The Board also authorized MCC to invite Malawi to submit a proposal
for a compact, as described in section 609 of the Act. MCC will
initiate the process by inviting Malawi to submit a program proposal to
MCC for due diligence review (previously eligible countries will not be
asked to submit another proposal for FY08 assistance). MCC has posted
guidance on the MCC Web site (http://www.mcc.gov) regarding the development
and submission of MCA program proposals. Submission of a proposal is
not a guarantee that MCC will finalize a compact with an eligible
country. Any MCA assistance provided under section 605 of the Act will
be contingent on the successful negotiation of a mutually agreeable
compact between the eligible country and MCC, approval of the compact
by the Board, and availability of funds.
Dated: December 21, 2007.
William G. Anderson, Jr.,
Vice President and General Counsel, Millennium Challenge Corporation.
Henry Pitney,
Alternate Certifying Officer.
[FR Doc. E7-25312 Filed 12-27-07; 8:45 am]
BILLING CODE 9210-01-P