Identifier
Created
Classification
Origin
06SANSALVADOR2996
2006-12-22 15:24:00
UNCLASSIFIED
Embassy San Salvador
Cable title:  

LEGISLATURE UNANIMOUSLY PASSES MCC COMPACT

Tags:  EAID PREL ECON PGOV KMCA MCC ES 
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VZCZCXYZ0008
PP RUEHWEB

DE RUEHSN #2996 3561524
ZNR UUUAA ZZH
P 221524Z DEC 06
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC PRIORITY 4711
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS SAN SALVADOR 002996 

SIPDIS

SIPDIS

PASS TO MCC

E.O. 12958: N/A
TAGS: EAID PREL ECON PGOV KMCA MCC ES
SUBJECT: LEGISLATURE UNANIMOUSLY PASSES MCC COMPACT

UNCLAS SAN SALVADOR 002996

SIPDIS

SIPDIS

PASS TO MCC

E.O. 12958: N/A
TAGS: EAID PREL ECON PGOV KMCA MCC ES
SUBJECT: LEGISLATURE UNANIMOUSLY PASSES MCC COMPACT


1. Summary. The Salvadoran Legislative Assembly unanimously
approved December 20 the nearly $461 million Millennium
Challenge Corporation Compact and its implementing
legislation. FMLN Legislative Deputies supported the Compact
but had expressed concerns about parts of the implementing
legislation that established the Fondo de Milenio
(FOMILENIO),which will be charged with implementing the
Compact. The FMLN Deputies met with their legislative
counterparts, Saca administration officials and the
Ambassador. Their concerns were listened to and addressed.
The unanimous support for the MCC is, unfortunately, one of
the few times recently that ARENA and the FMLN have been able
to reach a consensus on any legislative issue. End Summary.

Working Together ) For a Change
--------------


2. At the request of FMLN Deputy Sigfrido Reyes, the
Ambassador and Emboffs met December 18 with three FMLN
Deputies, including Reyes, regarding the pending legislative
approval of the $460.8 million MCC Compact and implementing
legislation. The deputies said they supported the MCC
Compact. Deputy Humberto Centeno said it was the best
international assistance agreement he had seen, noting that
the provisions to ensure that the money was properly and well
spent were particularly commendable. Still, they were
concerned that some of the provisions in the Compact were not
sufficiently spelled out in the implementing legislation.
While admitting that the Compact would control, they argued
that it would be better to make the law more clear to avoid
any confusion in implementation. In addition, they wanted
the maximum number of members (11) to sit on the FOMILENIO
board and that mayoral and civil society representatives from
the northern region were included as members of the board.


3. The FMLN asked the Ambassador to consider their proposals
and relay USG support to the Saca administration. The
Ambassador listened to their concerns and reiterated his
strong support and backing for the MCC Compact. Reyes said
they had already discussed their proposals, which they also
provided in writing to the Ambassador, with their colleagues
in the legislature. The next step would be to discuss them
with the Saca administration. The GOES Millennium Challenge
Account (MCA) coordinator, Roberto Siman confirmed to
EconCoun that the FMLN and Saca administration officials met
on December 19. Siman said it would be up to the legislature
to decide, but he thought that some of the FMLN proposals
would be accepted.


4. During the Legislative Assembly session on December 20,
the deputies unanimously approved the MCC Compact. They went
through chapter-by-chapter the MCC implementing legislation
that established FOMILENIO and made some changes that,
according to ARENA Deputy Julio Gamero, did not change the
MCC Compact in any way. The legislature did, however, reject
the FMLN proposed change regarding the composition of the MCC
board. Later, FMLN Deputy Humberto Centeno commented to the
press that &There were points in the implementing law that
we (the FMLN) did not think were in harmony with the Compact.
We presented our proposals and they were accepted.8

Comment
--------------


5. This is a rare instance when all of the political parties
were able to vote together on an issue. It was much easier
to reach consensus because the issue was a major injection of
$461 million in non-reimbursable funds. In addition, the
FMLN leadership was feeling the pressure to vote for the
Compact from the mayors in the northern region, many of whom
are from the FMLN and would be the major beneficiaries of the
MCC Compact. Still, the FMLN presented coherent,
non-politicized arguments for changes in the law and the
ruling party listened and adopted some, but not all of those
changes. The result was a unanimous vote in favor of what
was already a well-designed project that was itself the
product of a comprehensive and inclusive consultative
process.
Kennedy-Iraheta