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Millennium Challenge Corp. poured millions into Honduras in months leading up to putsch

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Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-10-09 12:33 PM
Original message
Millennium Challenge Corp. poured millions into Honduras in months leading up to putsch

U.S. aid agency, established under Bush, seeks to promote economic freedom

The coup d'tat that rocked Honduras in late June and removed democratically elected President Manuel Zelaya from office, sending him into exile in Costa Rica, was preceded by a multi-million dollar build-up of foreign aid from a U.S. agency that includes on its board of directors the president of the International Republican Institute as well as Secretary of State Hillary Clinton.

That taxpayer-funded agency, called the Millennium Challenge Corporation (MCC), oversees a multi-billion dollar foreign-aid fund called the Millennium Challenge Account. It was established in 2004 under the Bush administration as means of combating terrorism by funding development in poor nations under a strict neo-conservative free-trade model.
A review of publicly available financial records reveals that between April 1 and July 31 of this year, nearly $17 million in aid was disbursed to Honduras through the MCC program. That money flowed into Honduras after President Zelaya called for a national referendum in March to decide whether a ballot question should be included in that nations November 2009 general elections which would have asked voters to decide if a national assembly should be convened to amend the Honduran constitution.

But Zelaya had fallen out of favor with the Honduran business class that controls the country well before that point. He was accused of becoming too intertwined with the agenda of Venezuelan President Hugo Chavez, a long-time nemesis of the Washington political class and Wall Street capital interests. That drift toward the left was marked by Zelayas decision to join the Chavez-led, Latin American-centered Bolivarian Alternative for the Americas (ALBA in its Spanish initials) a move ratified by the Honduran Congress in October 2008.

At the time, media reports warned that Honduras decision to join ALBA might result in the MCC rescinding its five-year, $250 million aid compact with Honduras inked in 2005. But it seems quite the opposite happened.

In fact, since Oct. 1, 2008, according to public records, a total of $45.3 million in MCC aid has been pumped into Honduras, representing 56 percent of all aid disbursed under the program through July 31 of this year. (Even though the MCC compact with Honduras calls for an aid package of $250 million to be distributed between 2005 and 2010, as of July 31, 2009, according to MCC records, a total of only $80.3 million in aid has been disbursed to the country more than half, as mentioned, since October 2008.)

The MCC Honduras program is designed to fund agricultural and transportation projects that will increase the productivity and business skills of farmers and their employees who operate small- and medium-sized farms, and will reduce transportation costs between targeted production centers and national, regional, and global markets, according to the MCCs description of the aid compact.

But a criticism of the MCC program is that, though designed in theory to help the poor, its programs actually do more to benefit the wealthy and business class.

A 2007 U.S. Government Accountability Office report focused on the MCCs aid program in the South Pacific island nation of Vanuatu spells out that criticism:

MCC states that the compact is expected to benefit approximately 65,000 poor, rural inhabitants living nearby and using the roads to access markets and social services. According to the MCCs underlying documentation, 57 percent of the compacts monetary benefits will accrue to tourism services providers, transport providers, government workers, and local businesses and 43 percent of the benefits will go to the local population that is, local producers, local consumers, and inhabitants of remote communities. However, MCC does not establish the proportion of local-population benefits that will go to the rural poor.

The MCCs overtly neo-conservative, pro-oligarch underpinnings are further illuminated by its strongest proponents, including the conservative Heritage Foundation think tank.

From an article on the Heritage Foundations Web site:

The MCC has a number of advantages over traditional assistance. MCC programs encourage and allocate aid to countries that embrace policies linked to economic growth and development. The objective indicators used by the MCC to determine which countries will receive funding "based on their performance in governing justly, investing in their citizens, and encouraging economic freedom" mirror those used by The Heritage Foundation in preparing its Index of Economic Freedom.

Among the indicators established under MCC for providing, or continuing to provide, aid to a foreign nation, include: business start-ups, trade policy, fiscal policy, and land rights and access.

Whether the MCCs approach to doling out taxpayers money is appropriate, or not, really is not the point in this case, however. The question here is why would a taxpayer-funded federal agency with a conservative, free-market/free-trade agenda suddenly start ramping up aid to Honduras after its president, Zelaya, clearly took a turn to the left toward Venezuelas Chavez, a perceived arch-enemy of that conservative agenda?

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formercia Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-10-09 01:38 PM
Response to Original message
1. Follow the money
Who got the checks?
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dipsydoodle Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-10-09 04:18 PM
Response to Original message
2. Good find
K & R.
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formercia Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Aug-11-09 05:59 AM
Response to Original message
3. Kick
I can't understand why people can't see the importance of this.
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