Liberia and Corruption: Fails half of Millennium Challenge scorecard since 2009

Washington – Liberia has for the first time since 2009 fallen sharply on the annual assessment of the Millennium Challenge Corporation, a collection of 20 independent, third-party indicators that measure a country’s policy performance in the areas of economic freedom, ruling justly and investing in its people.[1]

Every year each MCC candidate country receives a scorecard assessing performance in three policy categories: Ruling Justly, Investing in People, and Encouraging Economic Freedom.

 

$US257 Million Given Liberia in 2015

Liberia first qualified in 2015 and signed the compact grant, which is now being used to support the energy sector, providing access to reliable and affordable electricity and build the foundation for the periodic maintenance of primary roads in the country.

 

    “To obtain a second compact, the board looks at the extent at which a country was able to deliver and have a high-quality implementation of the first compact. The board generally looks for improved performance on the scorecard over time as well. I’m here to engage with President Weah and his administration to review the progress that has been made to date and to take a look ahead at the challenges and opportunities that lie ahead for the completion of the particular compact.”

    Jonathan Nash, Chief Operating officer, Millennium Challenge Corporation(MCC)

 

In 2016, Liberia received a grant of US$257 million from the United States through the MCC to enhance its electricity and road projects. A total of 85% of Compact funds have been committed in contracts, while 73% of total compact budget has been disbursed. Total Compact about $256.7 million. The five-year compact is already into its half way stage and intends to impact an estimated half a million Liberians before ending in 2021.

 

Cautioned in 2018

 

In June this year, Jonathan Nash, the Chief Operating officer of MCC visited Liberia, held several meetings with top government officials and stressed the need for the government to successfully implement its part of the current compact and at the same time focus on maintaining its grades on the scorecard.

 

Mr. Nash also emphasized that if Liberia must regain another compact it must first perform on the upcoming scorecard.

 

Said Nash while in Monrovia in June 2018: “To obtain a second compact, the board looks at the extent at which a country was able to deliver and have a high-quality implementation of the first compact. The board generally looks for improved performance on the scorecard over time as well. I’m here to engage with President Weah and his administration to review the progress that has been made to date and to take a look ahead at the challenges and opportunities that lie ahead for the completion of the particular compact.”

 

Since the MCC Chief Operating Officer warned Liberia about the possibility of losing another compact, the government under President George Weah had appeared to be pretty lackadaisical about the ramifications of its policy action; consequently, these missteps might certainly disrupt the much-publicized Pro-Poor Agenda which would heavily relied on international funding from donor countries.

 

 

Scorecards for 77 countries classified by the World Bank as low and lower-middle income are now publicly available on MCC’s website.

 

Countries are evaluated on the following factors: The prevalence of grand corruption and petty corruption at all levels of government; The effect of corruption on the “attractiveness” of a country as a place to do business;

The frequency of “irregular payments” associated with import and export permits, public contracts, public utilities, tax assessments, and judicial decisions; Nepotism, cronyism and patronage in the civil service; The estimated cost of bribery as a share of a company’s annual sales;

 

MCC’s competitive selection process is a data-driven, transparent method for determining where the agency invests to reduce poverty through driving economic growth.

 

The perceived involvement of elected officials, border officials, tax officials, judges, and magistrates in corruption; The strength and effectiveness of a government’s anti-corruption laws, policies, and institutions; Public trust in the financial honesty of politicians;

 

The extent to which: processes are put in place for accountability and transparency in decision-making and disclosure of information at the local level; government authorities monitor the prevalence of corruption and implement sanctions transparently; conflict of interest and ethics rules for public servants are observed and enforced; the income and asset declarations of public officials are subject to verification and open to public and media scrutiny; senior government officials are immune from prosecution under the law for malfeasance;

 

The government provides victims of corruption with adequate mechanisms to pursue their rights; the tax administrator implements effective internal audit systems to ensure the accountability of tax collection; the executive budget-making process is comprehensive and transparent and subject to meaningful legislative review and scrutiny; the government ensures transparency, open-bidding, and effective competition in the awarding of government contracts;

 

There are legal and functional protections for whistleblowers, anti-corruption activists, and investigators; allegations of corruption at the national and local level are thoroughly investigated and prosecuted without prejudice; government is free from excessive bureaucratic regulations, registration requirements, and/or other controls that increase opportunities for corruption; citizens have a legal right to information about government operations and can obtain government documents at a nominal cost.

 

Borderline Score on Rule of Law, Economy

 

To be considered for an MCC compact, countries are expected to first pass MCC’s scorecard. The tool represents one of the many ways MCC is distinctive in how it works to combat poverty through economic growth around the world. This year, of the 77 countries MCC created scorecards for, 25 countries passed while 52 did not.

 

According to the report released Friday, Liberia fell slightly below the borderline regarding corruption, while scoring low on civil liberties and political rights, scoring 38 percent on Fiscal Policy, 23.5 percent on Inflation, 40 percent on Regulatory Quality, 28 percent on Trade policy and 31 percent on Government’s effectiveness.

 

The country also scored 50 on rule of law, 50 percent on Gender in the economy, 35 percent on Land Rights and Access, 24 percent on Primary Education Expenditures, 21 percent on Natural Resources Protection, 17 percent on Girls Primary Education Completion Rate and 42 percent on child health.

 

The country also did not fare well on health expenditure, with a borderline score of 52 percent. Access to credit score was at 53 percent, Immunization Rates at 54 percent and an impressive 64 percent on business start-up.

 

The MCC scorecards are a key component in the MCC’s annual competitive selection process that determines which countries are eligible to develop compacts – grant investments that last 5-years. The scorecard indicators can also be used by businesses, investors, and the private sector to inform investment decisions and better understand the operating environment in a specific country.

 

The U.S. Government’s Millennium Challenge Corporation (MCC) today released its fiscal year 2020 country scorecards –

 

Competitive Selection of MCC Partners

 

MCC’s competitive selection process is a data-driven, transparent method for determining where the agency invests to reduce poverty through driving economic growth. To be considered for an MCC compact, countries are expected to first pass MCC’s scorecard. The tool represents one of the many ways MCC is distinctive in how it works to combat poverty through economic growth around the world. This year, of the 77 countries MCC created scorecards for, 25 countries passed while 52 did not.

 

Based on scorecard performance, supplemental information, the opportunity to reduce poverty through generating economic growth, and available funding, MCC’s Board of Directors selects new partner countries each December.

 

MCC’s rigorous eligibility criteria and competitive selection process have created a powerful incentive for countries to reform their policies even before a dollar is spent – dubbed “the MCC effect.” Countries around the world are using the MCC scorecard as a road map for policy and institutional reform in order to be eligible for MCC funding. The scorecard helps countries identify where improvement is needed to support long-term growth and poverty reduction. In addition, many countries view their ability to perform well on MCC’s scorecard as a seal of approval, signaling to the private sector that the country is open for business and investment.

 

37 Compact Grants Signed with 29 Countries

 

MCC’s time-limited grants promote private investment to advance economic growth and opportunity, which in turn creates more stable, secure countries and new business and trade opportunities. Over the last 15 years, MCC has signed 37 compacts with 29 countries worth more than $13 billion. These compacts are expected to benefit nearly 190 million people around the world.

 

The Millennium Challenge Corporation is an independent U.S. Government agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants and assistance to poor countries that meet rigorous standards for good governance, from fighting corruption to respecting democratic rights. Learn more about MCC at www.mcc.gov.[2]