San José, Costa Rica, since 1956

U.S. Sen. Lugar lobbies to cut aid to Nicaragua

MANAGUA, Nicaragua – For the second time in two years, the U.S. Millennium Challenge Corporation (MCC) is studying the possibility of cutting development aid to Nicaragua because of bad governance.

On Dec. 15 U.S. Senator Richard Lugar (R-Indiana), ranking member of the Senate Committee on Foreign Relations, asked MCC Chief Executive Officer Daniel Yohannes to address Nicaragua’s continued patter of action that is clearly inconsistent with MCC eligibility criteria.”

Lugar called Nicaragua’s actions “unfortunate” and inconsistent with MCC criteria.

MCC press officer Sarah Johnson told The Nica Times this week that the MCC is preparing a response to Sen. Lugar’s letter.

 Of the original $175 million MCC compact pledged to Nicaragua in 2005, $64 million in undesignated aid was terminated due to widespread allegations of electoral fraud in the 2008 municipal elections here. Of the remaining $113.5 million in aid that was already earmarked for specific development projects in Nicaragua, all but $8.5 million has been spent. The MCC compact is scheduled to finish in mid 2011.

  “We have been in contact with members of the two parties in the U.S. Congress and see that a large number of representatives are interested in the Costa Rican case,” said Costa Rican Foreign Minister René Castro.

“There is precious little that the Democrats and Republicans will agree on in the areas of foreign affairs when the new Congress convenes in January, but the erosion of democracy in Nicaragua – and the need to arrest it – is one,” said Francisco Aguirre, ex-Nicaraguan Foreign Minister.

Some Washington insiders, such as Kevin Casas-Zamora, former Costa Rican vice president and a senior fellow at the Brookings Institution, says Lugar’s letter is “an isolated gesture.”

“To tell you the truth, I haven’t noticed much impatience with Ortega here in Washington,” he said. 

 For more on the MCC and Nicaraguan aid, follow

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