The US Millenium Challenge Corporation (MCC) has announced that it is suspending its aid program to Honduras. According to the AFP coverage, MCC officials declared yesterday that:"MCC will terminate two planned activities in the transportation sector totaling approximately 11 million (dollars) from its Compact with Honduras" and that the "MCC also will put on hold approximately four million (dollars) of its contribution for work on the CA-5 road project jointly funded with the Central American Bank for Economic Integration."
This marks the second major round of cuts in US aid to Honduras, and the first primarily non strictly military aid cuts. This follows the cancellation of MCC funds in Nicaragua in June as a result of the fraudulent elections there in November 2008. In the case of Honduras, MCC was chided for weeks to make these cuts, but did so only after much deliberation and second and third chances for the country to correct their paths, as they did with Nicaragua. To me, this suggests that MCC means business in Latin America, and given that they have countries' agreements in writing that certain democratic components must be in place for aid continuation, it may take some of the political sting out of the aid cut.
This marks the second major round of cuts in US aid to Honduras, and the first primarily non strictly military aid cuts. This follows the cancellation of MCC funds in Nicaragua in June as a result of the fraudulent elections there in November 2008. In the case of Honduras, MCC was chided for weeks to make these cuts, but did so only after much deliberation and second and third chances for the country to correct their paths, as they did with Nicaragua. To me, this suggests that MCC means business in Latin America, and given that they have countries' agreements in writing that certain democratic components must be in place for aid continuation, it may take some of the political sting out of the aid cut.
Nonetheless, aid cuts of this magnitude and that undercut the economic viability of an even more struggling Honduran insfrastructure are never good news for anyone, and I'm sure the MCC board made the decision with a heavy heart and realization that the only real losers in this scenario are the people, not the interim government, of Honduras.
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