I'm doing this now as well. I asked a friend who is there now, and the answer I got was to write analytically about an issue, and then relate it briefly back to why it's important (to you, or in general). But the emphasis would be discussion of the issue. I think a recommendation here is fitting, but it seems like the topic can be broader and less technical than a strict "policy memo" like the ones asked for by WWS/HKS.
I agree that this topic is frustrating and really unclear. However, the title "Analytical Essay" makes me think they want something just that -- analytical -- for this one and the personal should be largely left to the personal statement.
What do others think?