San José, Costa Rica, since 1956

MCC Seeks Continuance in El Salvador

SAN SALVADOR – The U.S. Millennium Challenge Corporation (MCC) is hailing the early success of its $461 million development compact with El Salvador and reaffirming its committed to work with the country’s new left-wing government that takes office next month.

The MCC’s leadership says it has gotten “positive signs” from the incoming administration of President-elect Mauricio Funes and is encouraged the aid program, which still has some $430 million to disperse over the next 36 months, will continue to move forward smoothly and effectively.

“Our recent trip to El Salvador confirmed the current and incoming government’s support for the continuation of MCC’s compact with El Salvador and their dedication to reduce poverty through economic growth,” said Rodney Bent, acting Chief Executive Officer of the MCC. “The incoming Funes administration has made it clear that MCC will continue as an integral part of El Salvador’s national development plan and will act as an economic stimulus for the country.”

Darius Mans, the MCC’s vice president of compact implementation, said the 18-month old program in El Salvador is off to a “very good start.” He says the “tremendous results” so far have built momentum for the project which “bodes well for the future.”

“We are excited about the track record established by President (Tony) Saca and the promise of engaging with President-elect Funes to continue this kind of relationship,” Mans told The Nica Times during a recent interview in the capital city of ElSalvador.

But the first promise of engagement with Funes fell flat when the president-elect snubbed the April 28 ground-breaking ceremony for the new 290-kilometer

Northern Transnational Highway

– the MCC’s flagship project in El Salvador. Funes also ignored several lunch and dinner invitations from Bent and the MCC delegation that flew down from Washington, D.C. to inaugurate the highway project and hold a meet-and greet with the new president-elect.

The day before the ground-breaking ceremony, President Saca said the event – which he thought Funes was going to attend – would be a symbolic passing of the torch from his administration to the next, and a signal that “the country is the number one interest above all else.”

Saca said the

Northern Transnational Highway

project, which will link the northern agricultural zone to Honduras and Guatemala, is “a dream that we Salvadorans have waited for for more than 50 years.” He said the project will “transform the Northern Zone” and give the population of the impoverished agricultural region the “opportunity to join the development that continues in the rest of the country.”

“This project is for the country,” Saca stressed. “This is not a project of one government, but of one country, which is what will make this successful.”

However, some of the symbolism of continuity was lost when Funes failed to show up. The president-elect apparently had other matters to attend to as part of the preparations for his June 1 swearing-in.

Big Carrot

U.S. officials say the MCC, an initiative started under the administration of George W. Bush, represents a new era and new thinking in U.S. relations with the developing world. Billed as a “relationship of equals,” the MCC says the concept is to reward good governance practices by giving qualifying countries the resources they need to set their own course for development.

Bent says the MCC projects are designed to have a small U.S. footprint so the beneficiary countries take ownership in their own development and understand “this is your program, your country, your priorities.”

“We are doing it out of incredibly enlightened self-interest in a recognition that having a heavy ‘Made in the USA’ stamp is going to be counterproductive,” Bent told The Nica Times during an interview in San Salvador.

Playing on the old philosophy of former U.S. President Theodore Roosevelt, Bent says the MCC is an example of “listening carefully and carrying a big carrot.”

Not Everyone’s Onboard

Some leaders have been harder to convince. In neighboring Nicaragua, President Daniel Ortega has consistently mocked and insulted the $175 million compact for Nicaragua, which the MCC considered one of its model programs in terms of implementation and compliance.

After Ortega took power in 2007, the MCC worked hard to convince him that the development project was to the benefit of Nicaragua. Ambassador John Danilovich, former chief executive officer of the MCC, traveled to Managua last year and had a one on-one meeting with Ortega to explain the benefits of the program and assure the Nicaraguan leader that it was a different model and “not a narrow instrument of U.S. foreign policy,” Bent said.

As a result of those efforts, the MCC was “feeling pretty positive” about the prospects of its partnership with the Ortega government.

Then came the Nov. 9 elections, in which the Sandinistas are accused of stealing more than 40 mayors’ seats, prompting the MCC to suspend the remaining $64 million of its compact due to its serious concerns about Ortega’s commitment to democracy.

“I mean these guys stole the elections,” Bent told The Nica Times, adding that he feels “personally disappointed” in Nicaragua after the MCC has invested so much there.

The MCC’s board of directors will make its final decision about Nicaragua during its June 10 quarterly meeting.

In El Salvador, the MCC is hoping for a much smoother transition in the country’s political swing from right to left.

Despite Funes’ recent no-show at the MCC ceremony in El Salvador, political insiders insist the U.S. aid corporation and its local implementing agency, FOMILENIO, shouldn’t have any problem counting on the continued support from the new government.

“(The MCC) in El Salvador has no original sin because the compact was approved in the Legislative Assembly with the support of all political parties, and that is very important,” said Salvador Samayoa, ex-FMLN guerrilla leader and one of the party’s chief negotiators in the 1994 peace process. “If the ruling party, ARENA, would have used its majority in the Assembly at that time to approve the compact while shutting out the Frente, then we would have a problem now. But the Frente voted for this compact, so they can’t change their song now.”

National Development Project

In September 2007, El Salvador signed a five-year, $461 million compact with the MCC, making it the third country in the region – after Honduras and Nicaragua – to benefit from the U.S. development initiative.

El Salvador was also the first “lower-middle income” country in the Americas to benefit from the MCC program, the others qualifying as “low-income countries.”

The MCC compact with El Salvador focuses on education, productive development, water and sanitation services and road infrastructure. To date, $25.6 million has been spent and an additional $122 million contracted, leaving the majority of the compact yet to be executed over the next three years.

José Angel Quirós, executive director of FOMILENIO, says the MCC project has been a success in El Salvador because it’s viewed as an integral part of the country’s national development plan, rather than a political initiative by the U.S. or the Saca administration.

The biggest concern with the project, he said, is “how can we make sure this has the biggest impact possible on the zone?”

Quirós adds that he thinks the government should have an even grander vision of the project, viewing it not only as development for the Northern Zone but as a way of converting the marginalized region into a “motor of development for the rest of the country.”

Though he admits there is some uncertainty involved with the transition to the Funes government, Quirós says “thank God everything that has been said so far indicates there is going to be a continuation of the program.”

Others are more blunt.

Elena Lacayo de Alfaro, a business sector representative to the FOMILENIO board of directors, says “any government or politician would be blind if they didn’t want this plus for the country’s development.”

That sentiment is echoed by other board members.

“No government could be against this,” said Carlos Heymans, representative of non-governmental organizations. “The people would kill any elected official who was against it.”

Next week: the MCC’s “difficult case” of Nicaragua.


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