US will not extend Millennium aid in Honduras

The U.S. has decided against renewing a $215 million aid program for farming and infrastructure in Honduras, a decision the government of President Porfirio Lobo said it lamented.

The U.S. Embassy did not give a reason in a statement announcing the decision, but Honduran officials claimed Thursday it was because of corruption that occurred under the government of former President Manuel Zelaya, who was ousted in June 2009 coup.

The five-year program managed by the U.S.-funded Millennium Challenge Corporation trained 17,000 farmers, created 31,396 rural jobs and improved a key highway and 500 kilometers (310 miles) of rural roads. It ended in 2010.

The U.S. temporarily suspended the program in 2009 to protest the coup, but restored it after Lobo's government took office in January 2010, replacing an interim government that took after soldiers forced Zelaya into exile in a dispute over changing the Honduran constitution. Lobo was elected in regular November 2009 elections that has been scheduled before the coup.

The embassy said in a statement sent late Wednesday that the Millennium Corporation board members would meet in December 2010 to consider signing a new agreement with Honduras.

"We lament this decision because it was based on an evaluation of the perception of corruption levels in the country. And it affects the people the most," said Maria Guillen, Lobo's chief Cabinet minister.

Guillen told reporters that the decision was "due to corruption detected in 2007, 2008 and 2009," though she did not elaborate.

Foreign Minister Mario Canahuati blamed "the previous government" and said "now Lobo has to taken on this burden (even though) he acted transparently."

The embassy statement did not mention any corruption. Instead, it praised "the many positive steps that the government of President Lobo has taken in his brief administration." The statement called the implementation of the Millennium program in Honduras a success, calling it one of the "best in the world."

The embassy also emphasized that the U.S. would continue to provide considerable aid to Honduras through other programs for education, nutrition and agriculture. The U.S. Treasury Department is also helping Honduras develop a more transparent government budget.

U.S. Embassy officials did not immediately return calls seeking further comment.