Cablegate: Nicaragua: Response to Budget Transparency Demarche

VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #0834 2362222
ZNR UUUUU ZZH
R 242222Z AUG 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4482
INFO RUEHCV/AMEMBASSY CARACAS 1367
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS MANAGUA 000834

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON EFIN PGOV PREL NU VZ
SUBJECT: NICARAGUA: RESPONSE TO BUDGET TRANSPARENCY DEMARCHE

REF: A) STATE 81177 B) MANAGUA 571

1. (U) In response to Ref A demarche on budget transparency,
Ovidio Reyes, Director of Fiscal and Economic Affairs, GON
Ministry of Finance and Public Credit, told econoffs on
August 13 that the national budget of Nicaragua is available
on the Finance Ministry's website and is published in the
Nicaraguan equivalent of the U.S. Federal Register (La
Gaceta). Normally, the GON,s executive branch submits its
annual budget request to the National Assembly by October 15
for the following fiscal year (which in Nicaragua is the same
as the calendar year). Reyes stressed that the GON strives
to provide timely information on its budget process, but that
the Ministry of Finance's antiquated information technology
infrastructure limits public access. He said that the World
Bank and Inter-American Development Bank are both funding
improvements in this area.

2. (U) Regarding so-called "off-budget" funds donated or lent
to Nicaragua (including Venezuelan funds and other bilateral
donor projects such as the Millennium Challenge Account (MCA)
compact), Reyes stated emphatically that such proceeds fall
outside of the Ministry of Finance's control. He added that
in some cases donors choose to provide funds "off-budget" in
order to avoid the GON's mandatory 6% levy for national
universities and 4% for the court system. Reyes concluded
that it is up to each donor to provide information on how
funds are spent.

Comment:

3. (SBU) Reyes views all "off-budget" assistance to
Nicaragua in the same light, from our MCA compact to
Venezuelan funds. What Reyes naturally omits from his
analysis is the fact that MCA funds, unlike those from Chavez
(Ref B), are easily scrutinized via a transparent, publicly
available process.
CALLAHAN

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