The MCA Monitor Update is a quarterly newsletter summarizing key events and issues related to the Millennium Challenge Account examined through CGD’s MCA Monitor.
Contents
1. Getting Ready for the FY2009 Country Selection Process 2. Georgia Compact Receives $100 Million Boost 3. MCA Budget: FY 2009 Cuts Held at Bay; Continuing Resolution 4. MCC Raising the Bar on Transparency: Impact Evaluations & Procurements Consolidated Online 5. First Stage II Threshold Program Signed in Albania 6. Five Compact Countries Complete Entry-into-Force 7. Two New Compacts Signed: Namibia and Burkina Faso 8. More MOUs: Memoranda of Understanding Signed with AGRA and MFA
1. Getting Ready for the FY2009 Country Selection Process
This week, MCC released its FY2009 scorecards which comprise the compilation of country performance on all 17 indicators. MCC has been preparing for the annual country selection process (when the Board selects countries as eligible for MCA funding in the coming Fiscal Year) since this summer when the independent sources began releasing this year’s data. MCC’s FY2009 process officially kicked off in October with the release of the annual Report on the Criteria and Methodology for Determining the Eligibility of Candidate Countries. This legislatively mandated report started the 60-day clock ticking until the Board meeting in December. Also in October, the MCA Monitor provided a preview of this year’s round with the release of our analysis of the hard-hurdle Control of Corruption indicator.
Up next: in anticipation of the December 11th Board meeting, keep your eyes peeled for the MCA Monitor’s annual predictions paper based on the scorecards to be released next week.
2. Georgia Compact Receives $100 Million Boost
As part of the U.S. government response to the recent conflict in Georgia over events in two separatist regions, the MCC provided an additional $100 million for the Georgian compact. The amendment to the Compact, which was approved by the Board of Directors, would include additional money for expansion of current projects in infrastructure and enterprise development as well as fund new projects in the energy sector. As the MCA Monitor has noted, the use of MCC funds to address politically motivated objectives is a slippery slope and, in this case, comes at opportunity costs of funding other programs. Despite calls by us and others to ensure that any new funding undergoes routine MCC due diligence procedures, particularly economic rate of return and beneficiary impact analyses, the press release remains vague noting only that “the funding will be administered in accordance with the existing compact framework.”
3. MCA Budget: FY 2009 Cuts Held at Bay; Continuing Resolution
The Senate supplemental bill to rescind $525 million from the FY 08 MCA budget in order to fund emergency humanitarian aid and Jordan refugee assistance was scaled back to $58 million. Kudos to “advocacy in action” efforts of the MCC, a group of international NGOs, think tanks and other Senators resulting in the lower figure. The rescission was in favor of finding funding elsewhere for the cyclone relief in Burma, Jordan’s efforts to deal with Iraqi refugees, and food security programs. Since the rescission did not go through, the MCC had enough money to fund the Burkina Faso and Namibia compacts.
The budget saga continued for the MCA in September with Congress passing a Continuing Resolution to keep the federal budget funded at FY2008 levels through March 6, 2009. It remains to be seen how the MCA budget will fare in the new administration’s negotiations on the FY2009 and FY2010 budgets.
4. MCC Raising the Bar on Transparency: Impact Evaluations & Procurements Consolidated Online
The MCC continued to enhance transparency of its operations through the launch of a one-stop-shop for agency procurement information. The new format was released in July, and streamlines the search for procurement information on agency programs. These opportunities are still posted in other locations (such as accountable entity websites, UN Development Business, and dgMarket), but all are consolidated and updated on MCC’s contracts and procurement page. Along with related efforts through the release of ERR analyses, impact evaluations, and forthcoming beneficiary analyses, MCC is pushing the envelope for increased transparency beyond other USG foreign assistance agencies.
In October the MCC began posting its impact evaluations on the website. As a consideration in the calculation of economic rates of return, the publication of these assessments is a useful additional tool to understand how the MCC is different than traditional foreign assistance programs. Incorporation of monitoring and evaluation throughout the Compact lifecycle is an important component of the MCC focus on accountability for results and the publication of impact evaluations upholds the agency’s premium on transparency.
5. First Stage II Threshold Program Signed in Albania
This is the first year in which the MCC has offered countries the option of a Stage II Threshold Program. Approved by the Board of Directors in December 2007, it is intended to reward those who have current Threshold Programs coming to an end, have not been selected as Compact eligible, and have demonstrated success on policy reforms. Paraguay, Zambia, and Albania were invited to submit proposals in 2008. Albania’s Stage II program, signed in October, is a continuation of the original Threshold Program focused on corruption as well as judicial and public administration capacity.
6. Five Compact Countries Complete Entry-into-Force
This September, five countries reached entry-into-force (EIF), marking the point at which Compact funding is obligated. The completion of this important milestone in Lesotho, Mongolia, Morocco, Mozambique, and Tanzania marks the transition from preparatory stages to compact implementation and is also when the 5-year clock begins. While the funds for a given compact are committed when the document is signed, they do not become obligated until EIF. These five bring the total to 16 out of the 18 signed compacts (the remaining two compacts were just signed this summer) into the implementation stage, an important signal of progress and another means to measure progress.
7. Two New Compacts Signed: Namibia and Burkina Faso
In July, MCC signed a $304 million Compact with Namibia focused on agriculture, tourism, and education. Eligible since FY06, Namibia received a $3.25 million pre-compact grant in April to finalize the details of the Compact. The projects in the agreement include: an education component to improve school infrastructure, vocational and skills training, and provide access to textbooks; a project to promote Namibian tourism, develop ecotourism conservancies, and improve management and infrastructure in Etosha National Park; and an agriculture project focused on land access and management, livestock support, and development of indigenous natural products. The Compact has yet to be ratified by the Namibian National Assembly, however, due to concerns regarding procurement rules.
In July, MCC signed a five year $481 million agreement with Burkina Faso, building on its successful threshold program which addressed girls’ primary education through building and improving schools to be girl friendly as well as investing in teacher training and incentive plans to keep girls in school. The Compact continues this program, and includes new projects focused on rural land governance, agricultural development, and building roads. Burkina Faso is the second country (after Tanzania) to proceed from threshold to compact status, and both may show that utilizing the threshold program as an introduction to doing business with the MCC could be an effective strategy.
8. More MOUs: Memoranda of Understanding Signed with AGRA and MFA
In our last newsletter we reported that MCC had signed three MOUs that were of questionable added value to the organization. This summer and fall the MCC signed two more: first with the Alliance for a Green Revolution in Africa (AGRA) and then with the Ministry of Foreign Affairs of Denmark (MFA). The agreement with MFA is similar to those signed previously with DFID and GE promoting collaboration and sharing of lessons learned; it does have more specificity however with regards to areas in which the two might focus together. These include: climate change, building private sector partnerships, gender, and monitoring and evaluation practices. While an improvement from the earlier MOUs, it remains unclear how this agreement will be executed to make further strides in poverty alleviation.
The partnership with AGRA, on the other hand, is a smart collaboration between the results-oriented MCC and an organization with a complementary mission to advance development and agricultural research which could directly affect the methods used in compact implementation. The agreement also hits the ground running this year with pilot programs scheduled in Mali, Ghana, and Madagascar. As the MCA Monitor has noted, this cooperation comes at a crucial time when funding for research in international agricultural institutions has declined and when it is more essential than ever to address issues of hunger in Africa.
Center for Global Development. MCA Monitor Update: Fall 2008 (By email)
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