VZCZCXRO0405
RR RUEHLMC
DE RUEHMU #0074/01 0241845
ZNR UUUUU ZZH
R 241845Z JAN 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1953
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC

UNCLAS SECTION 01 OF 02 MANAGUA 000074 
 
SIPDIS 
 
STATE FOR WHA/CEN 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON NU
SUBJECT: NICARAGUA: STAFFDEL JANUARY 9-11 VISIT TO REVIEW MILLENNIUM 
CHALLENGE CORPORATION PROGRAM 
 
REFS: A) 07 MANAGUA 2032 B) 07 MANAGUA 2044 C) 07' MANAGUA 2070 D) 
 
07 MANAGUA 2168 
 
SUMMARY 
------- 
 
¶1. (SBU) Two staff members of the U.S. House of Representatives 
Committee on Foreign Affairs saw first-hand implementation of the 
Millennium Challenge Corporation's (MCC) Program in Nicaragua on 
January 9-11.  The staff members were pleased to learn that a high 
percentage of women are participating in MCC's projects as rural 
entrepreneurs and as staff members of the Millennium Challenge 
Account-Nicaragua Foundation (MCA-N), which is the accountable 
entity for the MCC Program.  MCA-N staff noted that despite the 
initial delays in getting the MCC program up and running in FY 2006, 
they anticipated continued, full budgetary execution for their 
projects in the coming fiscal years.  In addition, prominent 
Nicaraguan intellectuals, business leaders and former Government of 
Nicaragua (GON) ministers said that MCC projects are a critical tool 
to foster Nicaragua's economic development. 
 
EMBASSY AND DONOR BRIEFINGS 
--------------------------- 
 
¶2. (SBU) On January 9-11, Ms. Robin Roizman and Ms. Robyn Wapner, 
professional staff members for the U.S. House of Representatives 
Committee on Foreign Affairs, visited Nicaragua to review project 
implementation of the Millennium Challenge Corporation (MCC).  Upon 
arriving in Managua on January 9, the staff delegation (staffdel) 
met with the Ambassador and Embassy Country Team for a briefing, and 
had an afternoon roundtable discussion on development assistance to 
Nicaragua with bilateral and multilateral donors, including the 
Canadian Embassy, the Inter-American Development Bank, the 
International Monetary Fund, and the United Nations.  The donor 
community felt that cooperation with the Ortega administration 
improved during the latter part of 2007.  They said that initially 
the GON wanted to impose its own way of coordinating donor 
assistance, but Hurricane Felix and the floods required the GON to 
take a more cooperative approach with donors (reftels).  Donors 
remain concerned that the Ortega administration will pursue 
ideologically-driven fiscal and economic policy goals instead of 
prudent economic policies that promote economic growth, attract 
investment and reduce poverty. 
 
SITE VISITS AND MEETINGS IN CHINANDEGA AND LEON 
--------------------------------------------- -- 
 
¶3. (SBU) On January 10, the staffdel met with the Women's Council of 
the Northwest region and conducted site visits to three MCC projects 
in Chinandega and Leon, two departments in western Nicaragua.  The 
staffdel visited a plantain farm/processing plant and a dairy plant 
in Chinandega, and the municipal property registry in Leon.   The 
Staffdel met with the MCA-N staff to understand the Compact's 
disbursement trajectory, including an explanation of plans to 
disburse more rapidly in the coming fiscal year as a result of the 
Infrastructure Project.   Their visit concluded with a discussion on 
Nicaragua's economic and political climate with several prominent 
Nicaraguan economists, business leaders and former GON ministers. 
 
 
LOCAL COMMUNITIES SUPPORTIVE OF MCC ASSISTANCE 
--------------------------------------------- - 
 
¶4. (SBU) During the staffdel visit, a number of themes emerged.  One 
was that beneficiaries of the MCA Program thanked MCC for its 
support and enthusiastically lobbied the staffdel for more 
assistance.  Entrepreneurs, community leaders and citizens said that 
the MCC had helped to provide their communities jobs, business and 
export opportunities for their products, and confidence to expand 
their production for existing and new crops.  One local producer 
from Chinandega told the Staffdel that MCC has provided his 
community with hope for a better future, which was nonexistent 
before the implementation of these projects. 
 
NICARAGUAN WOMEN ACTIVELY INVOLVED IN MCC PROJECTS 
--------------------------------------------- ----- 
 
¶5. (SBU) Another highlight of the visit for the staffdel was to see 
the active participation of Nicaraguan women in MCC programs. 
During their meeting with the Women's Council of the Northwest 
region, the Staffdel was pleased to learn that women represented 20 
percent of the participants in MCC's program as rural business 
entrepreneurs.  Marina Maradiaga, leader of the Indigenous Women's 
Association of Sutiaba Xochilt Acatl (an indigenous community in 
Leon), told the Staffdel that women must become more involved in 
Nicaragua's economic development.  She noted that 52 percent of 
Nicaragua's population are women, and that they and their children 
are disproportionately affected by poverty, lower levels of formal 
education, and a lack of jobs and professional development 
opportunities. 
 
MCC PROJECT IMPLEMENTATION 
-------------------------- 
 
¶6. (SBU) Juan Chamorro, General Manager for MCA-N, briefed the 
staffdel regarding project implementation for MCC programs. 
Chamorro and MCA-N board members told the Staffdel that although 
there were delays in getting the MCC program up and running in FY 
2006, they anticipated continued, full budgetary execution for their 
projects in the coming fiscal years.  He explained that hiring new 
staff, resolving logistical issues such as acquiring office space, 
and fully understanding the procurement process caused delays in 
implementing MCC projects. 
 
NICARAGUANS VOICE CONCERNS ABOUT ECONOMIC DEVELOPMENT 
--------------------------------------------- -------- 
 
¶7. (SBU) Several prominent Nicaraguan economists, business leaders 
and former GON ministers told the staffdel on a number of occasions 
that MCC projects are a critical tool to help foster Nicaragua's 
economic development.  They believed that the MCC's focus on 
infrastructure development, export promotion, small and medium 
enterprise development, and the rule of law (property rights) 
targeted important economic areas that needed assistance, and 
encouraged the United States to invest more money in these areas via 
MCC.  They said the GON must do more to help infrastructure 
development, particularly in the energy sector. 
 
¶8. (SBU) The Staffdel's Nicaraguan interlocutors also expressed 
concerns that Nicaragua's economic growth, estimated at 3.4 percent 
in 2007, must reach 8-10 percent over a sustained period of 10-15 
years to alleviate poverty and create jobs.  They noted that 
investment in the tourism and real estate sectors has declined 
slightly because both foreign and local investors are waiting to see 
what kind of investment climate the Ortega administration will 
promote.  The Nicaraguans agreed that their country has the natural 
resources and labor force to attract significant investment to 
foster Nicaragua's economic development, but they questioned whether 
the Ortega administration will provide the necessary political 
leadership, and macroeconomic, investment, and trade policies to do 
so. 
 
¶9. (U) This cable has been cleared by staffdel. 
 
TRIVELLI