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US, Honduras Sign Millennium Challenge Aid Deal

The United States and Honduras Monday signed a five-year $215 million aid deal under the Bush administration's Millennium Challenge program. Honduras became the second country to secure funding under the program, following Madagascar.

The Millennium Challenge aid program, which ties U.S. commitments to recipient-country pledges of good governance and transparency, has drawn criticism for its slow start since President Bush first proposed it in his 2003 State-of-the-Union address.

But officials here say the pace of the program will accelerate and that in addition to Monday's agreement with Honduras, aid pacts have been approved and are likely to be signed next month by Nicaragua and Cape Verde.

Secretary of State Condoleezza Rice joined Honduran President Ricardo Maduro for the signing ceremony for the newest accord, which aims to increase the productivity and business skills of Honduran farmers and cut the costs of moving their goods to market.

Ms. Rice hailed President Maduro for his leadership in developing his country's Millennium Challenge plan, which she said will produce a long-lasting capacity in Honduras to spur growth and economic opportunity in the farm sector:

After consulting all segments of Honduras society, Honduras wisely decided to use this Millennium Challenge grant to improve the productivity of its farmers," Ms. Rice said. "The grant will also be used to upgrade roads, thus reducing transportation costs between farms and manufacturing centers and national, regional and global markets. Better roads will also mean that poor people in rural will have greater access to medical and social services, and that their children can get to school.

President Maduro, for his part, stressed the reforms of his country's economy and legal systems, and commitment to battling official corruption, that are among the criteria for Millennium Challenge awards.

Among other things, he said the country's constitution has been amended to eliminate immunity from prosecution for government officials and members of congress, which he said in the past had produced a climate of impunity for the privileged:

"We delegated to an international institution state purchases in key areas which had traditionally had been subject to corruption, such as telecommunications equipment and medicines, among others," Mr. Maduro said. "We have also strengthened the anti-corruption committee, made up now entirely of civil society members. And we have brought to justice over 80 people allegedly involved in costly financial crimes, including powerful members of the private business community."

President Maduro said despite market reforms, which boosted his country's economic growth to five per cent last year, twice the regional average, most Hondurans have not yet begun to feel positive results from what he termed their bet on democracy.

He said both the Millennium Challenge program and the proposed U.S.-Central American free trade agreement, CAFTA, can help deliver those benefits.

Both have been under political fire in Congress.

Amid resistance, the Bush administration is seeking only three billion dollars in the coming fiscal year for Millennium Challenge, well short of the five billion dollars envisaged two years ago.

CAFTA meanwhile has drawn heavy resistance from Democrats and some members of the President's own Republican party, prompting the administration to put off a Congressional vote on the plan until late summer and perhaps later.