Thursday, June 11, 2009

US cancels remaining MCC funds to Nicaragua

Updating an ongoing story, the US has announced that it will cut the remaining $60+ million in aid through the Millennium Challenge (MCC) grant to Nicaragua, based on the prior suspension of this aid after the disputed municipal elections this past November.

"Given the lack of meaningful reforms or progress in these areas by the government of Nicaragua, the board has agreed to terminate these projects," said MCC CEO Rodney Bent, yesterday.

Written before the decision was made, a thoughtful CSM article was written by Tim Rogers earlier this week analyzing the politics at play and the Nicaraguan poor who are affected most.

On Tuesday, the International Budget Support Group (GAP) concluded weeks-long discussions with the Ortega government in Nicaragua, agreeing to temporarily continue aid but with no concrete time frames, amounts, or agreed-upon electoral reform measures for the Nicaraguan government to undertake. They claim that the US decision will be highly anticipated but play no direct role in their decisions to continue or halt aid programs to Nicaragua.

As implied in Rogers' piece, the US decision is likely to heighten tension between the rural poor, indigenous groups and the Sandinista government, tension in part already raised by the imbroglio in Peru with and
ongoing in the Miskito region of Nicaragua.

Budget-wise, Nicaragua is in serious trouble. While the Ortega administration continues to flout the necessity of aid from traditional donor countries, the sustainability of Venezuelan aid continues to be questioned and Russian and Iran aid continue to be small fries, by comparison.

Sources: NY Times, AP, La Prensa, Tico Times, CSM, IPS

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