*EPF513 05/07/2004
Transcript: New MCC Aid Chief says Development Aid to Support Policy Reforms
(Millennium Challenge Corporation names first eligible countries) (6060)

The new U.S. Millennium Challenge Corporation (MCC) will offer supplemental aid to selected poor countries for long-term development projects that focus on policy reform and economic growth, says Paul Applegarth, the corporation's new chief executive officer.

Millennium Challenge Account (MCA) funding that the MCC will administer is intended to be an incentive for countries to adopt policies that encourage good governance, channel increased investment for education, health care and employment programs, and promote rule of law, said Applegarth. The official briefed reporters May 6 at the State Department's National Press Center in Washington.

Earlier in the day, the MCC board of directors selected the first group of countries eligible to submit proposals for MCA funding according to 16 criteria. Those 16 countries are Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Mozambique, Nicaragua, Senegal, Sri Lanka and Vanuatu.

The board also approved a "Threshold Program" to assist countries that are close to meeting the qualifying criteria improve their performance so that they are eligible for funding in future years.

Applegarth said the pace at which money will be distributed would depend on how quickly countries submit quality proposals. After a proposal is received, the country and MCC will negotiate a formal agreement -- or compact -- that will clearly state the project's objectives, what results will be measured and how, and how the spending of the funds will be monitored.

Applegarth said information about the ranking indicators, country ratings, guidance for developing proposals, answers to common questions about the MCA and the MCC, and texts of the formal agreements between the MCC and recipient countries may be found on the MCC web site, www.mcc.gov.

Secretary of State Colin Powell chairs the MCC board, which includes Treasury Secretary John Snow, U.S. Trade Representative Robert Zoellick and USAID Administrator Andrew Natsios.

Following is the transcript of Applegarth's briefing:

(begin transcript)

May 6, 2004

Washington Foreign Press Center Announcement
Official Transcript of FPC Briefing

FOREIGN PRESS CENTER BRIEFING WITH PAUL APPLEGARTH, CEO OF THE MILLENNIUM CHALLENGE CORPORATION

TOPIC: THE DECISION BY THE BOARD OF THE MILLENNIUM CHALLENGE CORPORATION REGARDING COUNTRIES ELIGIBLE FOR MILLENNIUM CHALLENGE ACCOUNT ASSISTANCE IN FY 2004

LIVE DIGITAL VIDEO CONFERENCE (DVC) LINK TO THE NEW YORK FOREIGN PRESS CENTER

THE WASHINGTON FOREIGN PRESS CENTER
WASHINGTON, D.C. 3:50 P.M. EDT
THURSDAY, MAY 6, 2004

MODERATOR: Good afternoon, ladies and gentlemen. Welcome to the Washington Foreign Press Center. Glad to have you here this afternoon. My apologies for the late start, there were some traffic problems in town today.

But we're very pleased to be able to welcome to our podium for the first time, Mr. Paul Applegarth, who was nominated by President Bush and confirmed, I believe, just yesterday, to serve as the first Chief Executive Officer of the Millennium Challenge Corporation.

He brings to this position a strong blend of general management, direct investment and international finance fund management experience; and he has extensive international and domestic experience in the private sector, public sector and public-private environments.

Today's briefing will deal with the topic, "The decision by the Board of the Millennium Challenge Corporation [MCC] regarding countries eligible for Millennium Challenge Account [MCA] assistance in fiscal year 2004."

Mr. Applegarth will have a brief statement to make, and after that will be very happy to take your questions.

Mr. Applegarth.

APPLEGARTH: Thank you, Paul. I'd like to keep this informal for a couple of reasons. One, it was not just yesterday, it was quite late last night that I was confirmed, and, indeed, the papers were signed by the President sometime this morning.

As a result, my prepared remarks are with the emphasis on "remarks" and less on "prepared."

But I'm quite open to make a few comments and then really throw it up for questions.

Today really is a milestone for MCC. Today is the day the countries were picked. And it's certainly a beginning for me, but it's also really the beginning for what MCC is all about. And it's really intended to be a new approach to foreign assistance.

There's a lot of quite legitimate, good purposes for foreign assistance: disaster relief, assisting in the cases of famine and flood; just alleviating the needs of the poor just because people are poor -- food aid.

But over the years, those short-term needs have squeezed out a focus on longer-term growth. And that's what MCC's mission is. It's set up to focus on the longer-term; to really encourage policy-reform in countries that promote growth.

There's been a lot of research to show that the countries that do best are the countries that have the best policies. And what does that mean? That means policies in terms of promoting economic freedom, in terms of promoting a good government, good governance, and then how they use their own resources in terms of investing in people.

And it's that policy environment which MCC's really designed to encourage. It's really intended to incentivize countries to adopt those policies and to reward those that do and then to assist them in setting forth their own development priorities.

MCC is different in that it is truly intended to be a partnership with the countries selected to qualify. It is up to the countries -- today, the Board has done its act. The countries have already worked, in terms of their policies in qualifying. And those of you who have had a chance to look at the MCC website will see the country rankings against the criteria.

And I encourage you to spend a lot of time on that website. MCC is really intending to use the web as a primary communications tool, because there are a lot of people -- it has a lot of folks it needs to recognize. We are investing a lot of time and effort to make sure that the best and most current information about what MCC is about is on that website; and it will not be a stale website.

But if you look at the criteria and you look at the countries, the Board today chose to recognize the countries that have really performed the best against those criteria. I think these are objective criteria established by third parties, intended to very much have the countries know how they're going to be measured. The Board today selected 16 countries as eligible this year. Thirteen of those 16 are strong qualifiers under those criteria.

In addition, the Board, which has discretion, felt that there were recent steps by three governments, and three countries that were notable that should be recognized, and because of lags in the data and so on and so forth, that simply weren't there. And so it really wanted to recognize those and to indicate its willingness to work with those countries in their economic priorities.

The steps now -- you know, being selected today does not mean a country automatically gets money. It's important, but it's a very important recognition by MCC of the efforts these countries have made. And what happens now is that the countries will come and present their proposals for economic growth. What are their priorities? The intention is that they will do this in consultation with their own civic societies. But they will then come in and make their proposals to MCC. MCC will evaluate them in terms of growth, the same way if you were doing an investment, you would look at financial returns. Well, MCC is not looking at financial returns. It's looking at economic growth returns, first and foremost.

And if the proposal is good and the country clearly feels ownership and wants to get it done, then MCC will, as part of a compact, some would call it a compact, will agree to provide assistance and support. The important elements of a compact is the country and MCC will agree together on what the outcome should be in terms of results and measures. And those measures will be put into the compact, and so that everybody can see how the country is doing under the measures with the idea that, again, we want to see good results from the compacts and from the efforts, and how the countries do really well, and hopefully the countries will do quite well.

If, but if they're not, and the government support falls away in the partnership -- and this really is intended as a partnership -- but if the partner is no longer interested, then the compact will stop. And so it's really important to understand that this is a recognition by the United States that the countries selected are partners, that they're making good steps, and that we really want to assist those countries to do what they want to do in terms of growth, sustainable growth, and that we're willing to work with them, but that they have to continue to be a good partner and they have to be there. And there has to be the continued recognition and policy reform and constant effort.

We're already seeing a lot of good changes by other countries in policies. A country that fails to keep pushing in the direction of good policies at the end of the day will either not make the cut next year or will have to be looked at in terms of the compact issue.

So I think those are the key elements, which is: it's a question of focusing countries that have already got good policy to continue to move in that direction. It's a partnership that focuses on growth, that focuses on accountability and outcome and results, which will really benefit the country and benefit the poor of the country, the poor in those countries.

These are all, at the end of the day, very poor countries. And the people there are poor, and I think that is a reflection about both President Bush and the bipartisan support this program has in Congress to say, "We want to do something about this," and this is part of the United States' international vision and its international effort. And this is a major step. And those of you, a lot of you know what Ambassador Tobias is doing in the HIV/AIDS program, but again, it's important to look and see these efforts as a part of the United States' international security strategy.

As many of you may not know, development assistance was added to the security strategy, along with defense and diplomacy at the beginning of the Bush Administration. These are tangible efforts to implement that strategy and a tangible statement with real money, real American tax dollars being invested in development, invested in growth and in that effort. And on that, I will cut it off and answer questions.

MODERATOR: Okay. Let me remind you, as usual, to use the microphone and identify yourself and your organization.

Let's start in the front here.

QUESTION: Thank you. I'm Charlie Cobb with AllAfrica.com. While I don't want to burden you with the minutiae of indicators and particular countries, we've noted that already in East Africa there has been some reaction to the fact that none of the East African countries are on that list, yet both Uganda and Kenya are close to United States.

And it raises, one writer says, a broader question about the MCC, MCA. Is there a kind of gray area here between sort of making good steps, as you posed it, and actually satisfying all of the 16 indicators? And do you actually have to satisfy all of the 16 indicators, or is there some point in which, having made good steps, you are considered eligible? And of course, the Ugandans and the Kenyans would argue, "We are making good steps."

APPLEGARTH: That's a good question, and as a result of my unprepared prepared remarks, I forgot to mention the third decision by the Board today, which was really to acknowledge the idea of a threshold program for countries that are close but aren't there yet, and with the idea that the MCC may set aside some money to work with those countries to improve their performance under the criteria. This is different than the fundamental large amounts of assistance that will flow through an MCA compact.

But countries that come in with credible ideas on how they can improve their performance under the criteria and therefore, more clearly qualify, those proposals will be entertained, and in this case, the MCC will be working closely with USAID. And I see a couple of our USAID [U.S. Agency for International Development] colleagues sitting in the back, and in many ways, AID [USAID] can help these countries improve their performance. MCC is prepared to participate in that process, with the idea that they're going to participate going forward.

I take it you do have the press release with the list of countries that just came out, is that right? Okay.

MODERATOR: All right. Let's take the gentlemen in the back there, please, in the middle.

QUESTION: Emad Mekay with InterPress Service and also with Al Sharq Al Awsat newspaper in London. Sir, are you -- could you say when is the deadline for those countries to submit their proposals to begin actually getting the money? And will that money be delivered in cash, or in technical assistance, or what exactly, what's the form they will get it?

And are there any preset criteria of how much each country can get? Like, is there, like, a fixed amount of money for each country that qualified for the account?

And finally, on the issue of security, have these countries -- any of these countries been helpful in the war on terror? Is that part of the qualifications, the -- or the preconditions they have to go through before they qualify for the account? Thank you.

APPLEGARTH: I'm sorry, I have three elements to your question. One, is there a deadline; is it cash or technical assistance; and then --

QUESTION: How much each country will get, and fourth, the security element. And whether they have been helpful in the war on terror or not. Thank you.

APPLEGARTH: Let me explain the process going forward. The intention is, obviously, no one, and I mean no one, knew which countries were going to be picked until -- or what the countries were until about 11:00 this morning. And the press release is coming out right now and has been quite closely held up to now.

There is no such deadline, but what we intend to do is have a senior delegation from MCC visit each of the countries, probably starting in late May, okay? To get it out, really explain to senior government officials in each of the countries involved, as well as other leaders in the society about what MCC is, because you all are a relatively informed and educated group. You're here in Washington. It's your life to do that. But there are a lot of other people who are not necessarily up to speed. We want to make sure MCC is really understood, and to make sure that the governments understand this really is a recognition of what the efforts they've been making.

Following that, then, countries will have the option to put in a compact proposal. And as I mentioned earlier, ideas of what that compact might look like are already up on the website. When they put it in is up to them. This is part of the story of country ownership here.

It is up to the country how fast or slow things go forward right now. When a country gets funded or if it gets funded is going to depend on how good the proposal is, how quickly it's prepared, how much it demonstrates participation in putting it together and the various other things that were talked about in the proposal.

So the Congress has allocated $1 billion this year to be spent in FY04. That money doesn't expire. It's available to be used going forward. The President's asked for $2.5 billion for next year. I can assure that, based on our early analysis, that full $2.5 billion is fully needed, absolutely. And certainly, we're going to do everything in our power to explain to Congress why, in a time when money is tough, why this is important and why it's important that we get that request fully funded. As you may know, President Bush has already said he would like to see MCC at 5 billion in FY06. So this is a significant ramp-up in operations going forward.

As to when countries get the money, it's very much up to the countries at this stage. The MCC is there, ready, open for business. In terms of cash, the intention is to evaluate the proposal and see what the money is needed, but there's $1 billion there to be invested in these compacts from this year money alone.

In terms of the country allocations, first and foremost, it will depend a lot on the quality of the proposals and what the programs are; some programs that promote growth are relatively expensive, some are not. But since we don't know yet what the country priorities are, it's very hard to tell how much each country might get. At the end of the day, we'll obviously have to look at a variety of additional criteria. There's got to be some equity in terms of per capita spending or investment. There's got to be some impact on the overall economy, and so on.

But again, the focus here is to promote growth, and to do it in a way that the country believes makes sense, and to be able to help them achieve that growth. And the criteria are on the website. And the Board felt it was important that those are the criteria that were followed, and 13 of the 16 countries showed that they clearly qualify under the criteria.

In the other cases, there's a very strong reason, in terms of policy effort and policy reform that was quite influential so that the board said, "We'll take three countries that have this and pull them up to that first group." But first and foremost, MCC is about policy reform and encouraging good policies in the belief that no matter how much money MCC might provide, if a country has good policies, it's going to grow and it's going to attract capital from elsewhere, and even encourage local investors to invest themselves in the economy.

MODERATOR: The question about the country's role in the war on terrorism?

APPLEGARTH: I'm sorry? Well, there is no war on terrorism criteria on the website.

MODERATOR: Okay, good. The lady on the left, please.

QUESTION: Thank you. Shafaq Mehraliyeva with Azer Taj news agency.

Mr. Applegarth, could you please elaborate a little bit on your threshold country program?

First of all, will the list of the countries who are eligible for this program be revealed? And what kind of procedures will follow after that? Do you expect these countries to, again, submit the proposal to USAID or MCC to work with them?

Thank you.

APPLEGARTH: Yes, the board, in the discussion today, there was a number of countries that were identified as, "Hey, this will be a good threshold country." If it was close, well, maybe. But there was no explicit list identified.

And I think there's a sense that, it was, first, important to figure out which countries had qualified today and to focus on those first and foremost. And it's hard to figure out what you do with those who missed until you know those who made. All right? And that was really happening as we were talking.

And I think there are a number of countries that are close, including some that are in East Africa, for example. Also it's pretty clear where they don't measure up against the criteria, and the governments can figure that out. And I'm sure we'd be glad to talk about that and so on with them.

In terms of threshold country-type proposals, again, USAID and MCC are friends. Okay? AID has got 7,000 people, it's got a legacy of experience in countries around the world. MCC would be crazy not to take advantage of that and to benefit from that. And so whether a proposal came into AID or to MCC is not going to matter. I think we're lucky to work very closely with AID in -- on those countries, but while keeping MCC's primary focus on the countries that have qualified for MCC contact.

MODERATOR: Let's take the lady right there.

QUESTION: Kathryn McConnell, Washington File.

Once you accept a proposal, will the accepted proposals be on the website to serve as the model for other countries?

APPLEGARTH: The intention is the compacts will be on the website once they are signed and approved. MCC is really built on transparency.

As many of you know, this is week 14 for the MCC. In that time, it has had two or three major congressional notifications. It's had two meetings for ambassadors. It has had two or three public outreach meetings for which the general public were invited, including you all. It has had a number of meetings already with individual countries.

The intention is to let everybody understand what the criteria are and how the basis for decision-making is. And again, I mention, re-mention the use of the web. If you're trying to convince people that this process is not politically driven and that the real focus is policy reform, and that's what you're trying to do, you have to put your money where your mouth is and you have to demonstrate it in the way you behave. And that's what MCC is about -- and make the policies and choose countries that everybody agrees are meeting the policies, the criteria -- the criteria are up on the website, the methodology's on the website, and the country rankings are on the website. Countries can see that. And I think if you look and see the actions of the Board today, there's a very close correlation between those rankings and what the Board actions were.

MODERATOR: Could you just mention what the website is, please?

APPLEGARTH: Yes, www.mcc.gov. Not our most creative moment, I don't think, but anyway, it's easy to find. I think if you type mca.gov, you end up at the same place, but mcc.gov is there.

MODERATOR: Okay. Let's go to Ben in the middle, please.

QUESTION: Thank you, sir. My name is Ben Bangoura, I'm Washington correspondent for Guinea News. I would like to know if this is a permanent setup of account, I mean, is this the substitute for foreign aid as we know it traditionally -- this Millennium Account? Is it a permanent account? Is it the substitute for the old form of foreign policy -- aid, foreign aid as we knew it?

APPLEGARTH: In terms of the money, it's intended to be additional, to be additional foreign assistance. It doesn't mean there won't be adjustments and subaccounts and so on and so forth. If you look, though, at the totals, MCC money is additional to traditional foreign aid. So I think where there's a belief is that if MCC gets it right, it can be an example for other elements of assistance, both in the United States and elsewhere, that foreign assistance accomplishes a lot of things but I think everybody acknowledges there are areas where it can be improved. MCC is an effort to do something different, to make it better by focusing on things that people do believe in, which is growth, which is partnership, which is accountability and measuring results.

We have within MCC a team that is focused on an ongoing basis in establishing measures of performance and building them into the compacts and measuring how the performance is going into this compact. In addition, we'll have a small team that really focuses on lessons learned that might be, in terms of investing in growth, what works, if you like, if I can take a phrase, that will then take those ideas and make sure that they're transmitted out elsewhere in the development community.

And we intend to work closely with other agencies in the U.S. Government, with other donors, with the multilateral institutions, the World Bank, the regional banks and so on in this. And we're going to exchange ideas. We've got things to learn as well as hopefully to teach at some point.

MODERATOR: Ben, do you have another question?

QUESTION: I don't know if you could comment on this, but I would like to know how close individual countries like Guinea is close to be eligible for this account.

APPLEGARTH: I'm sorry, did you mention a particular country?

QUESTION: Individual countries like Guinea.

APPLEGARTH: Guinea.

QUESTION: Do you have -- yeah, do you have any comment on specifics there?

APPLEGARTH: I think the best thing to do is to let the scores speak for themselves. And I'd just refer you right to the website, and look up Guinea and you'll see, okay? And you can judge for yourself what might need to be done. All right? And hopefully that's not only you, but the Government of Guinea and others in Guinea will look at that.

MODERATOR: Okay, let's go to the gentleman in the back, please.

QUESTION: Emad Makey with Interpress again. I'm also with the Al Sharq Al Awsat newspaper in London.

Sir, you're probably aware of the PRSP . . . [Poverty Strategy Reduction Papers].

APPLEGARTH: I haven't got my full scorecard with all these initials named, but I know what you're talking about, yeah.

QUESTION: Yeah. Basically, it's very much the same -- I think the same, unless you explain to us otherwise. Countries come up with a proposal of a certain set of economic measures that they will take, and they're very much on the same mind: privatization, opening up, accountability, good governance. So how does the MCC differ from that -- from the one administered by the IMF [International Monetary Fund] and the World Bank? Thank you.

APPLEGARTH: Well, I am certainly no expert on the PRSPs, but I understand some are quite good and some are not.

I think the elements [on which] the MCC perhaps is different is really its laser-like focus on growth and accountability, on country ownership. I am not sure how PRSP -- whether they really originate with the country or they originate with the agency with whom they're being drafted or where the ideas really come from. But we really do intend to have the country ideas drive what we're doing to do. There will certainly be some lessons learned in terms of successes in the process followed by the Bank and the IMF. But I think there's also opportunities because of the approach of what MCC is doing and the fact that this is really what MCC's all about, while both the Bank and IMF have other missions and other objectives and so on and so forth, that we'll really focus on and try to implement some of the good ideas that are represented in the PRSP process and carrying them forth.

MODERATOR: Good. Let's come back to Charlie up front here, please.

QUESTION: Yes, Charlie Cobb with AllAfrica again. I would like to --

APPLEGARTH: You all keep the same names, don't you?

QUESTION: Yes. (Laughter.) I'd like to follow up some on Ben's question -- initial question here. If things go as best they can, as you would like them to go, as you envision them, and more countries meet the criteria and become involved with the MCC and presumably the MCC gets more resources, isn't it -- if you could look down the road some, wouldn't the MCC become the primary instrument of U.S. foreign assistance? And is that a part of the vision?

APPLEGARTH: Primary instrument? No, I don't think so. I think primary model, as an aspiration, or a model? Maybe. At least for a part of what foreign assistance is about. Don't forget there are other legitimate needs of foreign assistance, and we can't forget that there are people who need food aid. MCC's not in the business of providing food aid. It's providing assistance, helping countries reduce the need for food aid, but no, certainly not an instrument, but in terms of growth and development policy, if MCC could become a model to provide lessons learned for others, absolutely.

QUESTION: If I can just follow up very quickly, as you're surely aware, there's been lots of criticism over the years, indeed, over the decades of USAID, and there have been various calls for a redesign of U.S. foreign assistance. And this whole question during -- I guess it was last year when the MCA was being discussed in the Congress came up, the prospects of the MCA, or the MCC, I guess we're talking about now, basically replacing USAID.

APPLEGARTH: Yeah, I've heard some of the history, and look, I would be sure that in the past, people were uncertain about what this was all about, largely why isn't it part of AID or State Department, is that what it was? The point is to make it different and better. I have to assure you that the support we have gotten from AID has been critical to getting MCC off the ground. As I said earlier, it's week 14. There has been a lot of AID assistance and people helping us, on a loaned basis elsewhere. Andrew Natsios, Administrator of AID, is on the Board and he is a strong supporter. And we exchange ideas a lot. We've had mission directors come in, talk about their lessons and ideas, give us -- so on and so forth. To quote myself, MCC would be crazy not to take advantage of the experience and resources and people at AID.

MODERATOR: Let's go to South Africa and then we'll go to Ben for the last question.

QUESTION: My name is Deon Lamprecht from News 24 in South Africa.

If you look at the statement (inaudible) of the MCC, in many ways it looks like a clan, if I can call it that, of NEPAD [New Partnership for Africa's Development].

APPLEGARTH: I'm sorry. The --

QUESTION: Of NEPAD.

APPLEGARTH: Yes, but I didn't hear the first part. NEPAD I certainly know.

QUESTION: Okay. Now, one major difference is that with MCC will promote growth and good policy and good governance in some African countries, when NEPAD, aim of NEPAD is to promote it in all African countries.

A big problem of getting NEPAD off the ground is lack of -- lack of capacity, structure-building logistics. Would it make more sense for the U.S. to give hard and direct support to NEPAD to build that capacity rather than pump money into some countries?

APPLEGARTH: Well, I'm not sure I got the whole question, but I will say that there are a lot of good things about NEPAD and there are a lot of elements in the way that NEPAD's been put together that I think are important for MCC. I've spent some time in Africa. I've watched -- you probably watch NEPAD closely.

The principles of countries taking ownership for their own growth and responsibility is an important principle of NEPAD. It's certainly an important principle for MCC. The idea of accountability is an important principle to NEPAD, important principle to MCC. Peer review is an important principle to NEPAD; we have partner review. Important principle. Maybe there will be some lessons in the sort of the partnership review that come out a compact that NEPAD can use as an example. Maybe MCC could use some examples from NEPAD.

And to the extent there's a lack of capacity to implement and a country that's part of NEPAD is also part of MCC, that's part of what MCC is all about is to give that country the capacity to carry on some of the ideals and vision of NEPAD.

MODERATOR: Okay, let's go to Ben.

QUESTION: Thank you, sir. I would like you to elaborate a little bit on the term "threshold country" and how soon can these countries expect there to be online as eligible for this Millennium account? Why the specific term "threshold"?

APPLEGARTH: Why the specific term "threshold"?

QUESTION: Yes.

APPLEGARTH: Well, if you don't quote me, it's because I think the legislation said something like countries who just missed or nearly missed, and we felt rather than calling something nearly missed, threshold was better. And I give, actually, credit to AID for that. But I'd rather not see that particular quote in the press.

But it really is -- it's more aspirational. Why talk about just missing or failure when we're really talking about countries that are at the doorstep to go forward, okay? I mean, so it's a bit of a joke, but nonetheless, this is a point, that these are countries that are there. We're going to try to give them a little push along so they can really then qualify for MCC funding or MCA funding. So that's where the term came from.

In terms of timing, it's really, again -- we've still got a lot of mechanics to work out about how this will work, but I would hope over time, we and AID will be looking at solid proposals from countries that, again, originate in countries that say, "All right, we looked at the website. We looked and we see where we are in the criteria. Maybe we don't entirely agree with the data or something, but yeah, maybe there's some truth to this and this is what we're going to do about it and how we're going to improve our performance." And that happens and the Board said it's ready to consider looking to provide some help in that case.

QUESTION: You didn't spell out some of those criterias here, but as looking at the list of countries here, one important country is South Africa, which is not here. Is any specific explanation on why this country, which is very democratic and that has some very good reforms, is --

APPLEGARTH: What, South Africa?

QUESTION: Yeah.

APPLEGARTH: Not only is it democratic, it's also very rich.

QUESTION: Which --

APPLEGARTH: Relative to the others on the list, the -- I don't think they're on the -- I don't think they're eligible to compete this year.

QUESTION: Oh, okay.

APPLEGARTH: There's a -- the basic criteria are set forward in the legislation and there's a per capital income to it.

QUESTION: Okay.

APPLEGARTH: And per capita income -- South Africa's above it.

QUESTION: Okay.

QUESTION: Thank you.

MODERATOR: One quick last one? Okay.

APPLEGARTH: Another last one.

MODERATOR: Absolutely last one.

QUESTION: Thank you. Mr. Applegarth, in terms of evaluating the countries, maybe you mentioned that, do you guys evaluate the countries with three scores according to three policy categories, or you gave them 16 scores for 16 each indicators?

APPLEGARTH: Well, I encourage you to take a close look at the criteria and methodology. Again, it's on the website. But to give you a summary, there are 16 indicators. There are three broad categories. And it's going to get very technical, particularly for our last question, but two of the indicators, two of the criteria have six indicators; the other one has four indicators. The basic tests were, you had to be above the median and at least half of the indicators under each criterion, if that's not getting too technical, and we particularly look at the corruption indicator. And then even if you did that, if you fell substantially below on a couple of -- even if you passed an overall criterion, fell substantially low in some of the indicators, and you weren't, as a country, making steps to improve your performance, then you don't pass. That was -- those considered -- those criteria there and that's out there.

MODERAOTR: Okay. Thank you. Thank you very much, Mr. Applegarth. Thank you, ladies and gentlemen.

APPLEGARTH: Thank you all. I hope we have a chance to do this again sometime.

(end transcript)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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