US pulls additional aid from post-coup Honduras

Sep 10, 2009, 4:44 GMT

Washington - The US State Department's Millennium Challenge Corporation late Wednesday yanked financing from two projects in Honduras to protest the June ouster of elected President Manuel Zelaya.

Since his expulsion from the country by the Honduran military, the regime that replaced Zelaya's government has refused to reinstate him or even to allow him back into Honduras, despite unanimous demands from governments across the Western hemisphere.

The United States had already suspended several aid programmes to Honduras, and the Millennium Challenge Corporation's action on Wednesday pulled 11 million dollars from two projects planned in the transportation sector. Another 4-million-dollar contribution toward an additional road project was frozen.

A statement after the agency's meeting, which was led by Secretary of State Hillary Rodham Clinton, cited 'recent events in Honduras that are inconsistent with a commitment to democratic governance.'

The agency issues poverty reduction grants around the world.

Wednesday's action was 'a reminder that MCC funds are earned and not automatic,' said Darius Mans, acting chief of the Millennium Challenge Corporation.

'Our country partners propose projects that matter to them because they matter to their people, but there is an ongoing responsibility that rests with country leaders,' he said.

'Good governance and accountability are at the heart of our poverty reduction programs, and governments that are inconsistent in these areas jeopardize not only MCC funding but also the long-term impact that good policies can have on growth in their local economies.'