The Millennium Challenge Agreement - International Law Office

On April 5 2006 the National Assembly approved the subscription to the Millennium Challenge Agreement between Nicaragua and the Millennium Challenge Corporation (as representative of the US government).

The agreement aims to achieve the following goals through the improvement of property rights, infrastructure and the competitiveness of enterprises:

• boost income;
  
  
• reduce poverty;
  
  
• increase investment through the regulation of property;
  
  
• reduce transport costs; and
  
  
• improve the development of rural enterprises in the region.

The Millennium Challenge Corporation is an independent corporation of the US government established by President George Bush on January 23 2004 to administer the Millennium Challenge Account, which is an innovative programme of foreign assistance designed to reduce poverty through economic growth in some of the poorest countries in the world. The corporation promotes reforms to the economy and rewards the countries that comply with its requirements with recourses complementing other US bilateral development programmes.

The Millennium Challenge Account has $1 billion at its disposal to support the following programmes:

• economic development;
  
  
• human development;
  
  
• strengthening of democracy; and
  
  
• promotion of free enterprise.

The Millennium Challenge Corporation (through the agreement entered into with the government of Nicaragua) has put $175 million at the disposal of the government to achieve the objectives of the agreement.

The duration of the agreement is five years.

In order to implement the agreement, the government proceeded to create the Millennium Challenge Foundation. The foundation is in charge of performing studies to find key projects in which to invest the resources and is responsible for the management of the resources.

The resources are assigned as follows:

• $92.8 million to improve the road infrastructure, which will contribute to improving the access to markets and social services;
  
  
• $26.5 million to strengthen property rights; and
  
  
• $30 million for business development.

For further information on this topic please contact Alfonso Sandino Granera at Consortium Taboada & Asociados by telephone (+505 2 683 839) or by fax (+505 2 668 088) or by email (asandino@consortiumlegal.com).