Millennium Challenge Corporation Candidate Country Report for Fiscal Year 2025

AGENCY:

Millennium Challenge Corporation.

ACTION:

Notice.

SUMMARY:

The Millennium Challenge Act of 2003, as amended, requires the Millennium Challenge Corporation to publish a report that identifies countries that are “candidate countries” for Millennium Challenge Account assistance during Fiscal Year 2025. The report is set forth in full below.

(Authority: 22 U.S.C. 7707(a))

Millennium Challenge Corporation Candidate Country Report for Fiscal Year 2025

Summary

This report to Congress is provided in accordance with section 608(a) of the Millennium Challenge Act of 2003, as amended, 22 U.S.C. 7701, 7707(a) (the Act).

The Act authorizes the provision of assistance for global development through the Millennium Challenge Corporation (MCC) for countries that enter into a Millennium Challenge Compact with the United States to support policies and programs that advance the progress of such countries to achieve lasting economic growth and poverty reduction. The Act also authorizes the provision of assistance to countries for the purpose of assisting such country to become compact eligible. The Act requires MCC to take a number of steps in selecting countries to which MCC will seek to provide assistance, including determining the countries that will be eligible countries for fiscal year (FY) 2025 based on (a) a country's demonstrated commitment to (i) just and democratic governance, (ii) economic freedom, and (iii) investments in its people; (b) the opportunity to reduce poverty and generate economic growth in the country; and (c) the availability of funds to MCC. These steps include the submission to the congressional committees specified in the Act and publication in the Federal Register of reports on the following:

• The countries that are “candidate countries” for FY 2025 are 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);
• The criteria and methodology that the MCC Board of Directors (the Board) will use to measure and evaluate the relative policy performance of the “candidate countries” consistent with the requirements of subsections (a) and (b) of section 607 of the Act 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 2025, identification of such countries with which the Board will seek to enter into compacts, and a justification for such eligibility determination and selection for compact negotiation (section 608(d) of the Act).

This report is the first of three required reports listed above.

Candidate Countries for FY 2025

The Act requires the identification of all countries that are candidate countries for purposes of eligibility for MCC assistance for FY 2025 and the identification of all countries that would be candidate countries for purposes of eligibility for MCC assistance but for specified legal prohibitions on assistance. Qualification as a candidate country is defined in sections 606(a) and (b) of the Act, under which:

A country will be a candidate country in the low income category for FY 2025 if it:

• has a per capita income that is not greater than the World Bank's lower middle income country threshold for such fiscal year ($4,515 gross national income per capita for FY 2025);
• is among the 75 countries identified by the World Bank as having the lowest per capita income; and
• is not ineligible to receive United States economic assistance under part I of the Foreign Assistance Act of 1961, as amended (the Foreign Assistance Act), by reason of the application of the Foreign Assistance Act or any other provision of law.

A country will be a candidate country in the lower middle income category for FY 2025 if it:

• has a per capita income that is not greater than the World Bank's lower middle income country threshold for such fiscal year ($4,515 gross national income per capita for FY 2025);
• is not among the 75 countries identified by the World Bank as having the lowest per capita income; and
• is not ineligible to receive United States economic assistance under part I of the Foreign Assistance Act by reason of the application of the Foreign Assistance Act or any other provision of law.

Under section 606(c) of the Act as applied for FY 2025, a country with per capita income changes from FY 2024 to FY 2025 such that the country would be reclassified from the low income category to the lower middle income category or vice versa will retain its income status in its former category for FY 2025 and two subsequent fiscal years (FY 2026 and FY 2027). A country that has transitioned to the upper middle income category does not qualify as a candidate country.

Under section 616 of the Act, the Board may select countries from this list of candidate countries for the purpose of assisting such country to become an eligible country (traditionally referred to as threshold programs) if such country demonstrates a significant commitment to meeting the requirements of subsections (a) and (b) of section 607 of the Act but fails to meet such requirements.

Pursuant to section 606(d) of the Act, the Board identified the following countries as candidate countries under the Act for FY 2025. In so doing, the Board referred to the prohibitions on assistance to countries for FY 2024 under the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2024 (FY 2024 SFOAA) contained in Division F of the Further Consolidated Appropriations Act, 2024 (Pub. L. 118-47).

Candidate Countries: Low Income Category

1. Afghanistan *

2. Angola

3. Bangladesh

4. Benin

5. Bhutan

6. Bolivia

7. Burundi

8. Cabo Verde

9. Cambodia *

10. Cameroon

11. Central African Republic

12. Chad

13. Comoros

14. Congo, Dem. Rep.

15. Congo, Rep.

16. Cote d'Ivoire

17. Djibouti *

18. Egypt, Arab Rep.

19. Eswatini

20. Ethiopia

21. Gambia, The

22. Ghana

23. Guinea-Bissau

24. Honduras

25. India

26. Kenya

27. Kiribati

28. Kyrgyz Republic

29. Lao PDR

30. Lebanon

31. Lesotho

32. Liberia

33. Madagascar

34. Malawi

35. Mauritania

36. Morocco

37. Mozambique

38. Nepal

39. Nigeria

40. Pakistan

41. Papua New Guinea *

42. Philippines

43. Rwanda

44. Sao Tome and Principe

45. Senegal

46. Sierra Leone

47. Solomon Islands

48. Somalia

49. Tajikistan

50. Tanzania

51. Timor-Leste

52. Togo

53. Tunisia

54. Uganda

55. Uzbekistan

56. Vanuatu

57. Vietnam

58. Yemen, Rep.

59. Zambia

* This country was ranked Tier 3 in the 2024 Trafficking in Persons Report issued by the U.S. Department of State. If, consistent with section 110 of the Trafficking Victims Protection Act of 2000, the President determines that the United States will not provide non-humanitarian nontrade-related assistance to the country, then it would no longer be a candidate country for FY 2025.

Candidate Countries: Lower Middle Income Category

1. Jordan

2. Micronesia, Federated States of

3. Samoa

Countries That Would Be Candidate Countries but for Legal Provisions That Prohibit Assistance

Countries that would be considered candidate countries for purposes of eligibility for MCC assistance for FY 2025 but are ineligible to receive United States economic assistance under part I of the Foreign Assistance Act by reason of the application of any provision of the Foreign Assistance Act or any other provision of law are listed below. This list is based on legal prohibitions against economic assistance that apply as of July 29, 2024.

Prohibited Countries: Low Income Category

• Burkina Faso is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Burma is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns relative to its record on human rights and pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Eritrea is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns related to its record on human rights and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Guinea is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Haiti is ineligible to receive foreign assistance unless the Secretary of State provides a certification pursuant to section 7045(g)(2) of the FY 2024 SFOAA.
• Korea, North is ineligible to receive foreign assistance as it is subject to numerous restrictions including section 7007 of the FY 2024 SFOAA and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Mali is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Nicaragua is ineligible to receive foreign assistance as it is subject to numerous restrictions including under section 7047(c) of the FY 2024 SFOAA related to its recognition posture with respect to the Russian Federation occupied Georgian territories of Abkhazia and Tskhinvali Region/South Ossetia, and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Niger is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• South Sudan is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns relative to its record on human rights, and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Sudan is ineligible to receive foreign assistance as it is subject to numerous restrictions including the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Syria is ineligible to receive foreign assistance as it is subject to numerous restrictions including section 7007 of the FY 2024 SFOAA and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Zimbabwe is ineligible to receive foreign assistance, including pursuant to section 7042(j)(2) of the FY 2024 SFOAA, which prohibits (with limited exceptions) assistance for the central government of Zimbabwe unless the Secretary of State certifies and reports to Congress that the rule of law has been restored, including respect for ownership and title to property, and freedoms of expression, association, and assembly.

Prohibited Countries: Lower Middle Income Category

• Sri Lanka is ineligible to receive foreign assistance pursuant to section 7044(c)(2) of the FY 2024 SFOAA, which restricts (with limited exceptions) assistance for the central government unless the Secretary makes certain certifications regarding actions taken by the Government of Sri Lanka and reports to the Committees on Appropriations.

Countries identified above as candidate countries, as well as countries that would be considered candidate countries but for the applicability of legal provisions that prohibit U.S. economic assistance, may be the subject of future statutory restrictions or determinations, or changed country circumstances, that affect their legal eligibility for assistance under part I of the Foreign Assistance Act by reason of application of the Foreign Assistance Act or any other provision of law for FY 2025.

Appendix: Candidate Countries and Prohibited Countries in the Event of Enactment of Millennium Challenge Corporation Candidate Country Reform Act Legislation or Similar Legislation

As of the date of this report, legislation known as the Millennium Challenge Corporation Candidate Country Reform Act is under active consideration by the United States Congress. If passed as currently drafted, the legislation would reform the income threshold for countries to be candidate countries for purposes of eligibility for MCC assistance by changing it to the World Bank threshold for initiating the International Bank for Reconstruction and Development graduation process for the fiscal year ($7,895 gross national income per capita for FY 2025). It would also eliminate the distinction between lower income category and lower middle income category countries.

Should this legislation (or legislation that similarly reforms the income threshold for countries to become candidates) become law before FY 2026, the Board identified that the following countries would be qualified, based on their income status, as candidate countries for consideration under the Act for FY 2025:

1. Afghanistan *

2. Albania

3. Algeria

4. Angola

5. Armenia

6. Bangladesh

7. Belize

8. Benin

9. Bhutan

10. Bolivia

11. Botswana

12. Burundi

13. Cabo Verde

14. Cambodia *

15. Cameroon

16. Central African Republic

17. Chad

18. Colombia

19. Comoros

20. Congo, Dem. Rep.

21. Congo, Rep.

22. Cote d'Ivoire

23. Djibouti *

24. Ecuador

25. Egypt, Arab Rep.

26. El Salvador

27. Equatorial Guinea

28. Eswatini

29. Ethiopia

30. Fiji

31. Gambia, The

32. Georgia

33. Ghana

34. Guatemala

35. Guinea-Bissau

36. Honduras

37. India

38. Indonesia

39. Iraq

40. Jamaica

41. Jordan

42. Kenya

43. Kiribati

44. Kosovo

45. Kyrgyz Republic

46. Lao PDR

47. Lebanon

48. Lesotho

49. Liberia

50. Libya

51. Madagascar

52. Malawi

53. Marshall Islands

54. Mauritania

55. Micronesia, Federated States of

56. Moldova

57. Mongolia

58. Morocco

59. Mozambique

60. Namibia

61. Nepal

62. Nigeria

63. North Macedonia

64. Pakistan

65. Papua New Guinea *

66. Paraguay

67. Peru

68. Philippines

69. Rwanda

70. Samoa

71. Sao Tome and Principe

72. Senegal

73. Sierra Leone

74. Solomon Islands

75. Somalia

76. South Africa

77. Suriname

78. Tajikistan

79. Tanzania

80. Thailand

81. Timor-Leste

82. Togo

83. Tonga

84. Tunisia

85. Tuvalu

86. Uganda

87. Ukraine

88. Uzbekistan

89. Vanuatu

90. Vietnam

91. Yemen, Rep.

92. Zambia

If the Millennium Challenge Corporation Candidate Country Reform Act legislation or legislation that similarly reforms the income threshold for countries to become candidates were to become law, the following countries would be considered candidate countries for purposes of eligibility for MCC assistance for FY 2025, but are ineligible to receive United States economic assistance under part I of the Foreign Assistance Act by reason of the application of any provision of the Foreign Assistance Act or any other provision of law are listed below. This list is based on legal prohibitions against economic assistance that apply as of July 29, 2024.

Prohibited Countries

• Azerbaijan is ineligible to receive foreign assistance pursuant to section 907 of the FREEDOM Support Act (22 U.S.C. 5801).
• Belarus is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns relative to its record on human rights and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Burkina Faso is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Burma is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns relative to its record on human rights and pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Eritrea is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns relative to its record on human rights and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Guinea is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Haiti is ineligible to receive foreign assistance unless the Secretary of State provides a certification pursuant to section 7045(g)(2) of the FY 2024 SFOAA.
• Iran is ineligible to receive foreign assistance as it is subject to numerous restrictions including section 7007 of the FY 2024 SFOAA and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Korea, North is ineligible to receive foreign assistance as it is subject to numerous restrictions including section 7007 of the FY 2024 SFOAA and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Mali is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Nicaragua is ineligible to receive foreign assistance as it is subject to numerous restrictions including under section 7047(c) of the FY 2024 SFOAA related to its recognition posture with respect to the Russian Federation occupied Georgian territories of Abkhazia and Tskhinvali Region/South Ossetia and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Niger is ineligible to receive foreign assistance pursuant to the military coup restriction in section 7008 of the FY 2024 SFOAA.
• South Sudan is ineligible to receive foreign assistance as it is subject to numerous restrictions including for concerns relative to its record on human rights, and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Sri Lanka is ineligible to receive foreign assistance pursuant to section 7044(c)(2) of the FY 2024 SFOAA, which restricts (with limited exceptions) assistance for the central government unless the Secretary makes certain certifications regarding actions taken by the Government of Sri Lanka and reports to the Committees on Appropriations.
• Sudan is ineligible to receive foreign assistance as it is subject to numerous restrictions including the military coup restriction in section 7008 of the FY 2024 SFOAA.
• Syria is ineligible to receive foreign assistance as it is subject to numerous restrictions including section 7007 of the FY 2024 SFOAA and its status as a Tier 3 country under the Trafficking Victims Protection Act of 2000 (22 U.S.C. 7101 et seq.).
• Zimbabwe is ineligible to receive foreign assistance, including pursuant to section 7042(j)(2) of the FY 2024 SFOAA, which prohibits (with limited exceptions) assistance for the central government of Zimbabwe unless the Secretary of State certifies and reports to Congress that the rule of law has been restored, including respect for ownership and title to property, and freedoms of expression, association, and assembly.

The countries identified above that would be candidate countries should the legislation pass; as well as countries that would be considered candidate countries but for the applicability of legal provisions that prohibit U.S. economic assistance, may be the subject of future statutory restrictions or determinations that affect their legal eligibility for assistance under part I of the Foreign Assistance Act by reason of application of the Foreign Assistance Act or any other provision of law for FY 2025.

[FR Doc. 2024-20132 Filed 9-6-24; 8:45 am]

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