Selection initiates a multi-year partnership dedicated to pursuing economic growth and poverty reduction through the development and implementation of a compact. MCC monitors the policy performance of compact eligible countries throughout the year. Once a country is selected, MCC expects it to maintain or improve its performance on the indicators, as well as its commitment to good governance more broadly.
The Millennium Challenge Act does not require MCC to determine a country with a current compact as eligible annually, but compact-eligible countries that have not yet signed a compact are reselected each fiscal year during the time it takes to develop their compact.
A country remains eligible for MCC funds unless the Board suspends or terminates the country from eligibility.
Not Meeting the Criteria
MCC recognizes that a compact-eligible country can generally maintain or even improve policy performance, but not meet the formal eligibility criteria in a given year due to any one or a combination of the following factors:
- Graduation from one scorecard income group to another due to increased GNI per capita;
- Introduction of new indicators or new methodologies;
- Improvements in the availability or quality of data;
- Rising income-group medians;
- Slight declines in performance.
None of these factors are likely to be serious enough to warrant a suspension of eligibility. If an eligible country does not meet the criteria in a given year but has not demonstrated a policy reversal or a pattern of actions inconsistent with the eligibility criteria, MCC may ask it to take steps to improve its performance and to demonstrate its commitment to meeting the eligibility criteria.
If a country does demonstrate a significant policy reversal, MCC may issue a warning, or suspend or terminate eligibility and/or assistance. Because of data lags and gaps, this pattern of actions need not be captured in the indicators for MCC to take action.
Suspension or Termination of Compact Eligibility or Threshold Program Assistance
Even after a country has been selected for compact eligibility or threshold program assistance, MCC regularly reviews its partner countries’ policy performance throughout the development and implementation of a compact or threshold program. As part of this review, MCC may engage in a policy dialogue with partner countries, coordinating with our U.S. Government colleagues at the State Department, USAID, and U.S. embassies regarding the country’s commitment and adherence to the MCC selection criteria.
According to MCC’s statute, a country may have its eligibility for assistance suspended or terminated if the country has:
- Engaged in activities contrary to the national security interests of the United States;
- Engaged in a pattern of actions inconsistent with MCA eligibility criteria; or
- Failed to adhere to its responsibilities under a MCC program agreement.
For additional information, please see MCC’s Policy on Suspension and Termination.