MANAGUA – When the board of directors for the Millennium Challenge Corporation (MCC) meets June 10 in Washington, D.C., there will be a lot more at stake than just $64 million in development aid for Nicaragua.
A decision by the MCC to cancel remaining aid would set a precedent: an official verdict from the U.S. government that the Sandinista administration has broken from the country’s democratic order.
That classification could have enormous international consequences for Nicaragua.
Last March, MCC head Rodney Bent said “The government of Nicaragua has failed to reaffirm its commitment to democratic principles and practices since its suspension in December.”
Unfortunately, the situation has not changed since then. Now the world is watching to see how the MCC’s precedent-setting decision on Nicaragua will go next month.
“If the United States is not going to continue with its programs, that is a very important signal for Nicaragua, and one that we will also take very seriously,” Dutch Ambassador Lambert Grijns told The Nica Times last week. Grijns represents the European donor community’s Budget Support Group for Nicaragua, which last year suspended some $70 million in aid over similar concerns for the country’s democracy.
An inside source at the MCC told The Nica Times under condition of anonymity that the June 10 decision is also viewed as a major challenge for the MCC as an institution.
The source said that based on the MCC’s governing principles, cancelation of the Nicaragua compact should be an automatic decision. Otherwise, all of the MCC’s talk about good governance and democracy will be meaningless.
However, the source added, the concern is that Secretary of State Hillary Clinton, who chairs the MCC board of directors, might want to continue the program due to concerns over repercussions from further disengagement with Nicaragua.
Clinton earlier this month said improving relations with Nicaragua was key to reengaging difficult leftist leaders in the region and countering Iran’s growing influence in Latin America.
“We are looking to figure out how to deal with Ortega,” Clinton said. The concern in the MCC, therefore, is that Clinton will not want to implicitly label Nicaragua as a failed democracy by canceling aid – a move that would be counterproductive to reengaging Nicaragua and other leftist leaders in the region.
What’s certain, the MCC source said, is that if the Nicaragua compact is not canceled, it will be for political considerations above anything else, and that could weaken the MCC’s position worldwide.