VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #0834 2362222
ZNR UUUUU ZZH
R 242222Z AUG 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4482
INFO RUEHCV/AMEMBASSY CARACAS 1367
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS MANAGUA 000834 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON EFIN PGOV PREL NU VZ
SUBJECT: NICARAGUA: RESPONSE TO BUDGET TRANSPARENCY DEMARCHE 
 
REF: A) STATE 81177 B) MANAGUA 571 
 
¶1. (U) In response to Ref A demarche on budget transparency, 
Ovidio Reyes, Director of Fiscal and Economic Affairs, GON 
Ministry of Finance and Public Credit, told econoffs on 
August 13 that the national budget of Nicaragua is available 
on the Finance Ministry's website and is published in the 
Nicaraguan equivalent of the U.S. Federal Register (La 
Gaceta).  Normally, the GON,s executive branch submits its 
annual budget request to the National Assembly by October 15 
for the following fiscal year (which in Nicaragua is the same 
as the calendar year).  Reyes stressed that the GON strives 
to provide timely information on its budget process, but that 
the Ministry of Finance's antiquated information technology 
infrastructure limits public access.  He said that the World 
Bank and Inter-American Development Bank are both funding 
improvements in this area. 
 
¶2. (U) Regarding so-called "off-budget" funds donated or lent 
to Nicaragua (including Venezuelan funds and other bilateral 
donor projects such as the Millennium Challenge Account (MCA) 
compact), Reyes stated emphatically that such proceeds fall 
outside of the Ministry of Finance's control.  He added that 
in some cases donors choose to provide funds "off-budget" in 
order to avoid the GON's mandatory 6% levy for national 
universities and 4% for the court system.  Reyes concluded 
that it is up to each donor to provide information on how 
funds are spent.
 
Comment: 

¶3.  (SBU) Reyes views all "off-budget" assistance to 
Nicaragua in the same light, from our MCA compact to 
Venezuelan funds.  What Reyes naturally omits from his 
analysis is the fact that MCA funds, unlike those from Chavez 
(Ref B), are easily scrutinized via a transparent, publicly 
available process. 
CALLAHAN