U.S. Freezes $64M In Aid to Nicaragua

MANAGUA, Nicaragua – Citing “deep concern” over Nicaragua’s democratic process, the U.S. Millennium Challenge Corporation (MCC) announced Tuesday that it is freezing $64 million in aid.

The announcement came a day after U.S. Rep. Howard L. Berman, chairman of the House Foreign Affairs Committee, urged the MCC to suspend its $175 million program in Nicaragua due to concerns over the decline of democracy here.

The U.S. developmental–aid organization announced that it is suspending all disbursements for new projects not under contract.

Ambassador John Danilovich, CEO of MCC, expressed “deep concern and disappointment” Tuesday over the Nov. 9 municipal elections in Nicaragua, which have been riddled with allegations of fraud, and he ordered MCC to re–evaluate its compact with Nicaragua.

Sarah Stevenson, MCC spokeswoman  in Washington, D.C., told The Nica Times that the MCC has already contracted $111 million of the $175 million it committed to Nicaragua. That means an outstanding $64 million has been frozen.

Stevenson said most current projects and employees of the MCC in Nicaragua will not be affected, but the organization will not be disbursing funds for any new projects. However, the N1 highway under construction from Managua to León could suffer.

César Zamora, president of the Nicaraguan–American Chamber of Commerce (AMCHAM), told The Nica Times on Monday that a suspension of MCC funding for Nicaragua would be a “nuclear bomb for the economy.”

–Tim Rogers