Nica business leaders urge caution amid U.S. calls to cut aid

November 21, 2008

César Zamora, president of the Nicaraguan-American Chamber of Commerce (AMCHAM), says that calls in Washington to suspend millions of dollars in U.S. aid to Nicaragua is a “nuclear bomb” that would hurt the common people and “radicalize the government” of President Daniel Ortega.

U.S. Democratic Rep. Howard L. Berman, chairman of the House Foreign Affairs Committee, sent a letter yesterday to John Danilovich, CEO of the U.S. Millennium Challenge Corp. (MCC), urging the U.S. government´s aid organization to suspend its $175 million program in Nicaragua in light of Nicaragua´s questionable elections.

Nicaragua´s MCC compact, signed two years ago during the end of the administration of former President Enrique Bolaños, provides U.S. funding for sustainable development projects in the northern departments of León and Chinandega.

“It is time to consider carefully whether it is still appropriate to spend $175 million of U.S. taxpayer money through MCC´s Nicaragua compact,” said the letter to Danilovich from Berman. “I urge you to suspend the Nicaragua MCC program until, at a minimum, we achieve better clarity regarding the behavior of the Ortega government in the recent electoral contest.”

Berman´s letter comes in the wake of the highly suspect results of the Nov. 9 elections. The Ortega-controlled Supreme Electoral Council (CSE) gave a majority of the mayors´ seats to the ruling Sandinista Front, despite claims that more than a third of the 146 polls were rigged.

Berman, of California, said that for more than two years, MCC indicators that determine eligibility – rule of law, investment in people and the promotion of economic freedom – have eroded steadily in Nicaragua. Continuing U.S. aid to Nicaragua “in its current form seems to call into question the credibility of the MCC program overall.”

“Worse, it may in some measure be undermining the credibility of the United States itself in the region,” Berman added.

Zamora, however, is urging the U.S. government to be prudent and not make any hasty decision that would “only cause suffering to common Nicaraguans.”

The MCC, Zamora stressed, is “possibly the only hope that northern Nicaragua has for any sustainable and important development.”

While the business chamber president acknowledges the political crisis afflicting Nicaragua, he said cutting aid would be a “nuclear bomb for the economy.” Trying to punish Ortega this way would be counterproductive because it would “radicalize the government.”

“We are in a profound crisis, and to be honest, I still don´t see the light at the end of the tunnel,” Zamora told The Nica Times yesterday. “But cutting off aid would make any light at the end of the tunnel impossible. They need to give a window to the politicians to see if we can get out of this crisis.”

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