MCC FY2011 Selection Season Officially Opens with Release of Candidate Report

Let the FY2011 selection round begin!  The Millennium Challenge Corporation (MCC) released the first of three reports that will inform the MCC board of directors’ December decision on which countries are eligible for MCC assistance in FY2011. The latest candidate report classifies countries according to income status and lists countries that are legally prohibited from receiving MCC funds.Countries are deemed candidates for MCC funding if their per capita income levels fall into low income or lower middle income status. This fiscal year there are 55 low income countries (LICs) and 29 lower middle income countries (LMICs) as compared to 56 LICs and 31 LMICs in FY2010.  Unlike the massive fluctuations we saw in FY2010 (a total of 18 countries changed income categories), there is much less upheaval among the FY2011 candidates.  Here’s the quick breakdown:

• Countries graduating from LIC to LMIC status: Egypt, Kosovo, Sri Lanka
• Countries moving down from LMIC to LIC status: The Philippines, the Republic of the Congo, Kiribati
• Countries graduating from LMIC to upper middle income status (and out of MCC candidacy): Albania, Azerbaijan, and Iran (Iran has been legally prohibited from receiving MCC funding in the past and would most certainly have been prohibited this year had it remained in MCC’s income candidacy.)
• Prohibited from funding: Burma, China, Iraq, North Korea, Zimbabwe, and others continue to be on the legally prohibited list, but this year Eritrea has been added as a prohibited country due to its status as a Tier III country under the Trafficking Victims Protection Act.

What do the changes mean? The Philippines is the only compact-eligible country that moved income categories this year (they just signed a $434 million compact).  The Philippines was a LIC in FY2009, an LMIC in FY2010, and is now a LIC again in FY2011.  These transitions will not affect the source of its compacts funds – the Philippines will be funded as a LIC from FY2010 resources – but it does show the arbitrary nature of the LIC/LMIC income cutoff line.This candidate report provides a first glimpse at which countries might be selected as eligible in FY2011.  Stay tuned for more on MCC corruption scores and the rest of the selection process.