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 considered, some $2 million in FY2008 supplemental assistance for Nicaragua as part of the Administration’s Mérida Initiative to boost the region’s capabilities to interdict the smuggling of drugs, arms, and people, and to support a regional anti-gang strategy. For FY2009, the Administration has requested $38 million for Nicaragua, not including P.L. 480 food aid. Nicaragua could also receive roughly $6.7 million of the $100 million in Mérida Initiative funds for Central America included in the FY2009 budget request. The FY2009 request includes increases in funds for security reform and combating transnational crime, democracy and civil society programs, and trade capacity building programs to help Nicaragua benefit from CAFTA-DR.

Millennium Challenge Account (MCA). In addition to traditional development assistance, Nicaragua benefits from its participation in the MCA, a presidential initiative that increases foreign assistance to countries below a certain income threshold that are pursuing policies to promote democracy, social development, and sustainable economic growth. In 2005, the Bush Administration signed a five-year, $175 million compact with Nicaragua to promote rural development. The compact, which entered into force in May 2006, includes three major projects in the northwestern regions of León and Chinandega. Those projects aim to promote investment by strengthening property rights, boost the competitiveness of farmers and other rural businesses by providing technical and market access assistance, and reduce transportation costs by improving road infrastructure. During a recent visit to Nicaragua, John Danilovich, director of the Millennium Challenge Corporation, asserted that, despite some political differences, he believes that the United States and Nicaragua can work together to combat poverty.

Consolidating Democracy. U.S. democracy programs aim to reform government institutions to make them more transparent, accountable and professional; combat corruption; and promote the rule of law. The United States provided some $13 million to support the November 2006 elections in Nicaragua. Some 18,000 observers monitored the elections. Following the November 2008 municipal elections, USAID is expected to help increase the capacity and transparency of local governments. Other ongoing programs seek to increase citizen advocacy and the role of the media.

Human Rights. U.S. officials have expressed some concerns regarding respect for human rights in Nicaragua. According to the State Department’s March 2008 human rights report on Nicaragua, civilian authorities generally maintained effective control of security forces, but there were some reports of unlawful killings involving the police. Some of the most significant human rights abuses included harsh prison conditions, arbitrary arrests and detentions, and widespread corruption in and politicization of government entities, including the judiciary and the Supreme Electoral Council. Human rights problems related to labor issues include child labor and violation of worker rights in some free trade zones. In October 2007, Human Rights Watch asserted that