The announcement was made by U.S. State Secretary Hillary Clinton, in San José, Costa Rica.
Clinton remarked that Honduras has taken important actions that “deserve recognition and normalization”.
“For the U.S. administration, new President Porfirio Lobo, elected in ‘free, just and legitimate’ elections, has ‘moved quickly to implement several recommendations’ included in the San José Agreement, promoted by Costa Rican president Oscar Arias, as well as the Tegucigalpa-San José Agreement, promoted by the United States”, reported Elnuevodiario.com.ni.
The country won't be able to access Millennium Challenge Account funds, as it has ranked too low in governability and combating corruption.
On December 9th, the Millennium Challenge Account Corporation will choose which countries are eligible to receive more funds from the program. Nicaragua has been deemed ineligible, as it got less than 50 points both in governability and corruption.
The funds will be used in the projects that were going to be financed by the withdrawn resources of the U.S. Millennium Challenge Fund.
The president of Nicaragua, Daniel Ortega, announced on Sunday, June 14th that its Venezuelan counterpart Hugo Chávez approved $50 million to the Central American country for the project of territorial, infrastructure, and rural road improvements.
These CRM funds had been designated for the construction of a highway project and a property regulation project.
The board of directors of the Millennium Challenge Fund (CRM) unanimously resolved to reduce the aid to Nicaragua by $64 million (of a total of $175 million). These funds had been frozen since November 2008 after questioning involving municipal commissions.
Holland announced that it will not pay the 12 million euros of aid to the Nicaragua government scheduled for 2008 and 2009 due to the contested municipal election held on November 9.
"I don't see it as reasonable to give direct aid to the Sandinista government which has done all it can to prevent free and fair elections," said the Minister of Development, Bart Koenders, in a release.
At the request of the government, the BCIE approved the loan for which the country will provide the equivalent for the construction of two roads, in addition to the Millennium Challenge Account.
The first of the two highways will join La Paz Centro in Malpaisillo with Villa 15 de Julio, to form an alternate route to El Guasuale; the second road is from Nejapa, Izapa to Puerto Sandino.
The EU has joined the the stance adopted by the US regarding the Millennium Account, and announced that it will not turn over some $37 million to Nicaragua.
This is due to the criticism of the recent electoral process and complains about "the offenses" committed by President Daniel Ortega against contributors.
Fraysse insisted that the measure is not "repression or blackmail" of Ortega's government, who is accused of electoral fraud by the opposition, but suggested that Nicaragua has not complied with "norms" established in the cooperation agreements.
John J. Danilovich, president of the CRM assistance program, reported that all subsequent payments will be frozen.
Warnings were given. The US ambassador, Robert Callahan, had warned that they would review the level of economic cooperation for Nicaragua due to the claims of fraud in the recent municipal elections.
The Millennium Challenge Account is a 5 year program base on a 175 million dollar donation from the government and people of the United States.