CGD Predicts FY2010 Funding Recipients

Dec 6th, 2009 6:48 PM UTC
By Beth Adler

On Tuesday one of our partners, the Center for Global Development (CGD), released their annual MCC predications. Each year CGD analyzes the same data that the MCC will use to choose countries eligible for compact or threshold assistance, and provides their own analysis of countries likely to be selected by the MCC.

The MCC evaluates countries based on 17 indicators that fall into three categories: Investing in People, Ruling Justly, and Economic Freedom. In addition to the indicators, the MCC Board will consider the availability of funding, the opportunity to encourage economic growth and reduce poverty in the country, and, if the country is up for a second compact, their performance during the first. Countries are evaluated in two peer groups—low income countries (LIC) and lower-middle income countries (LMIC). Countries that have not previously been selected for a compact must pass the indicators to be eligible for consideration in the compact selection process. Also, countries that are in the process of developing their compacts, but have not yet signed them, must pass the indicators in order to continue with compact development.

CGD predicts that this year the only new LIC country to be chosen for a compact will be Guyana. Guyana has squarely passed the indicators for the last three years, and has demonstrated important policy changes over the last two years. It is also currently in the second year of a two-year threshold program sponsored by the MCC.

CGD named Rwanda a borderline country: it passes the indicators for the third year in a row, but it fails all three democracy indicators, so the Board will likely wait for improvement on those indicators to select it for a compact. Malawi, Moldova, and Zambia should all be selected to continue with the compact development process. Moldova’s compact was actually approved by the MCC last week but has yet to be signed.

In the LMIC category, CGD predicts that Cape Verde and Georgia (despite the latter missing a pass by one indicator) will be selected to prepare second compacts. Both countries are nearing completion of their first compacts, and would pioneer the second-compact process. Jordan passes the indicators and will likely be reselected to continue compact development.

CGD categorized the Philippines and Indonesia as borderline countries as they are unsure how the Board will address their graduation from the LIC to LMIC category. While the countries passed the indicators as LICs, they now fail in the higher-standard peer group of LMIC countries. CGD predicts that the Board will, and should, select both countries as eligible as they have done with other “graduates” in the past.

You can read the full CGD paper here—let us know what you think, and if you like, you can comment on CGD’s blog, too. The MCC Board will be making a decision next week about countries that will receive compacts with FY2010 funding. Check back to the blog for the results of that meeting.

TAGS: Center for Global Development, MCC, Policy News