US Continues to Provide Honduran Regime With MCC Aid Money, Despite Having Cut Off Other Countries Following Coups

For Immediate Release

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Dan Beeton, 202-239-1460

US Continues to Provide Honduran Regime With MCC Aid Money, Despite Having Cut Off Other Countries Following Coups

WASHINGTON - The U.S. continues to provide the coup regime in Honduras with tens of
millions of dollars in aid money through the Millennium Challenge
Corporation (MCC), despite having cut off MCC assistance to Mauritania
and Madagascar following coups d'etat in those countries, the Center
for Economic and Policy Research (CEPR) describes in a new issue brief.
The brief notes that while the U.S. suspended MCC money within days
following coups in both Mauritania and Madagascar, MCC commitments in
Honduras, worth more than $190 million, have not been put on hold after
over 57 days following the coup. The U.S. also cut MCC aid to Nicaragua
this year following what the U.S. alleged were electoral irregularities
in municipal elections.

"There
appears to be a double standard regarding MCC assistance following
coups," CEPR Co-Director Mark Weisbrot
said. "It is unclear why the U.S. has not cut MCC funds to Honduras,
considering its stated opposition to the ouster of President Zelaya and
its stated intentions to pressure the coup leaders."

There has been growing pressure on the Obama administration to enact
further sanctions on the regime. On August 7, 16 Democratic members of
Congress wrote
President Obama urging him to freeze the assets of coup leaders and
deny them entry into the U.S. The administration has not responded to
the letter, nor has it made a legal determination as to whether a coup
d'etat took place in Honduras, almost two months after Honduran
military forces broke into President Manuel Zelaya's home and rousted
him from his bed at gunpoint before flying him out of the country. A
legal determination that these events did constitute a coup would
trigger a suspension of aid under the Foreign Assistance Act.

"This has been a violent coup, with a wave of repression including assassinations of Zelaya supporters, beatings and physical assaults,
mass detentions, and attacks on media outlets critical of the coup,"
Weisbrot said. "The U.S. government could quickly end the coup with
serious economic pressure, but it hasn't even frozen the coup leaders'
assets."

The MCC is a U.S.
government-run corporation created in 2004 and tasked with managing the
Millennium Challenge Account (MCA), a fund whose mission is to provide
development assistance to low-income developing countries.  A country's
eligibility to receive assistance from the MCC is based on a series of
"selection indicators" related to "Ruling Justly", "Investing in
People" and "Economic Freedom". Its board of directors is chaired by
the U.S. Secretary of State and includes cabinet officials such as the
Treasury Secretary and the U.S. Trade Representative, who oversee
stewardship of the MCA.   

The brief notes that the MCC froze all assistance to Nicaragua
following alleged irregularities in its November 9, 2008 elections.
Secretary of State Hillary Clinton then announced in June that the MCC
would terminate all but one of the Nicaragua programs, costing
Nicaragua $62 million.

The full issue brief can be found here.

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The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.

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