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This MCA Monitor analysis draws on newly released data to explore which countries are most likely to be selected for FY 2006 funding from the Millennium Challenge Account. Highlights include:
Thirty-four countries pass the basic indicators test for FY 2006, including 26 countries from the original Low-Income Country (LIC) group and eight from the new Lower Middle-Income Country (LMIC) group. Although the Board is unlikely to select all of these countries, they are likely to choose more than the 17 they selected last year.
The Board seems likely to select Burkina Faso, East Timor, and Tanzania from the low-income group. Other possibilities include The Gambia and Uganda (each of which pass the test for the first time); and Guyana, Malawi, and Zambia (which are very close to passing these tests). India also passes the tests for the first time, but is unlikely to be selected.
The authors also suggest that it makes little sense for the United States to be considering providing grants to the new lower middle-income country group. These countries are three times richer than the low-income group on average, have access to other sources of financing, and for the most part have already graduated from other aid programs. Furthermore, MCC does not have the funding, staff or accumulated experience to expand to a new set of countries.
The authors recommend that the Board should be clearer in explaining its exceptions and consider adding new rules that it has been applying de facto (like a democracy criterion) that would minimize exceptions.