Nicaragua Network

1. National Assembly passes 2013 budget
2. Nicaraguan exports show major growth
3. Costa Rica takes over SICA presidency; San Juan River controversy continues
4. IDB increases loans for 2013-2014
5. TELEVISA narco trial begins
6. Nicaragua prepares for Christmas and 40th anniversary of earthquake
7. Three children die of dengue
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1. National Assembly passes 2013 budget

On Dec. 11, the National Assembly passed the government’s 2013 budget with a vote of 84 in favor, three against, and three abstentions (out of 92 deputies). Budgeted are US$1.99 billion in expenditures and US$1.88 billion in revenues with the US$110 million deficit expected to be covered by foreign assistance in the form of donations and loans. Walmaro Gutierrez, chair of the Production, Economy and Budget Committee, said that health, education, armed forces, and police were the areas receiving the most funds in the budget. Deputy Enrique Saenz of the opposition Sandinista Renovation Movement (MRS) said that the budget was “more of the same, following the same neo-liberal ideas of previous governments.” He demanded better salaries for teachers. Former Vice-President and current National Assembly Deputy Jaime Morales Carazo, however, said that the budget guarantees the economic and financial stability of the country while prioritizing health, education, infrastructure and the fight against poverty as well as allocating funds to confront climate change.

Treasury Minister Ivan Acosta projected growth above 4% for 2013 and he commended the National Assembly for passing a budget that privileges social investment that will improve basic services such as health, education, electricity and potable water. Fifty-six percent of public expenditures, he noted, will be devoted to social spending, a 19% increase. Priorities in 2013 will include development of road infrastructure, energy, education, health, and security. The budget will also be directed to strengthening the family economy, communal and associative enterprises, small and medium businesses, cooperatives, and the self-employed. These areas represent 70% of country’s economic activity and 40% of its exports.

Acosta said that the growth in the GDP in recent years, reduction in poverty and social inequality, have created conditions for political stability. He acknowledged that economic problems in the US and Europe, as well as China’s growing economic power, could impact Nicaragua’s economy in the future.

Acosta reported that about 300,000 people have risen out of poverty during the last five years thanks to Sandinista government social programs, investment in public infrastructure, job growth and export diversification. According to the UN’s Economic Commission for Latin America and the Caribbean (ECLAC), Nicaragua will close out 2012 with about a 4% growth in its Gross Domestic Product (GDP). Some Nicaraguan economists put the estimate higher. ECLAC rates Nicaragua as among the top countries in the region based on its economic performance and its reduction of the gap between rich and poor. (Radio La Primerisima, Dec. 11, 12; El Nuevo Diario, Dec. 11; Informe Pastran, Dec. 11,12)

2. Nicaraguan exports show major growth

Nicaraguan non-free trade zone exports to date this year have grown to US$2.67 billion, a 19.27% growth over the same period last year. Coffee, gold, beef, and sugar continue as the leading export products. Nicaragua’s biggest markets have also remained the same: United States, Venezuela, Canada and El Salvador being the top four. Exports within the Bolivarian Alliance for the Peoples of Our Americas (ALBA) continue to grow in importance for Nicaragua’s economy. The Sucre, the virtual money of ALBA countries recently approved by the National Assembly for use in inter-ALBA trade, will make those cooperative trade transactions even easier in 2013.

This year’s sugar harvest is expected to exceed 775,000 tons, an increase of 16% over last year harvest of 665,000 tons, according to Mario Amador, managing director of the National Committee of Sugar Producers (CNPA). Amador said, however, that the four leading sugar mills—Montelimar, San Antonio, Benjamin Zeledon, and Monte Rosa—have to deal with a low world price for sugar which he noted had closed at US$18.54 per hundredweight on Dec. 13. This, he said was close to or below the costs of production. In an interesting side business, the sugar mills produce more electricity by burning sugar cane waste than they use in the refining process, selling 64 megawatts to the national grid.

This season’s coffee harvest is expected to drop by 20% due to the impact of the coffee rust fungus Hemileia vastatrix. The rust is hitting coffee farms particularly hard in the Departments of Jinotega and Nueva Segovia with approximately half of Jinotega’s farms affected. The world price for coffee has also dropped to US$143 per hundredweight from US$300 last year. The Union of Agricultural Producers of Nicaragua (UPANIC) said that between 75 and 80% of Nicaragua’s coffee production is in the hands of medium and small scale producers and called on the government to speed up its promised response to the crisis.

In free trade zone news, Millennium Knitting (Millknit), a US manufacturer of knit fabric, announced it will invest US$25 million in opening a plant in Nicaragua in the first half of 2013. The intention is to sell the knit fabric to Free Trade Zone clothing manufacturers. Nicaragua’s only previous cloth manufacturer, Cone Denim, closed in 2009 after less than a year in operation. Having a local source of fabric will reduce costs for clothing manufacturers. (Radio La Primerisima, Dec. 14, 17; Informe Pastran, Dec. 17; El Nuevo Diario, Dec. 15, 17; La Prensa, Dec. 16)

3. Costa Rica takes over SICA presidency; San Juan River controversy continues

Nicaraguan President Daniel Ortega completed his half year as president of the Central American Integration System (SICA) last week, handing the baton to Costa Rica at a gathering of Central American presidents in Managua. However, Costa Rican President Laura Chinchilla did not attend the gathering sending instead her Foreign Minister Enrique Castillo. Castillo said that Chinchilla was not rebuffing Central American integration but rather that Ortega had rebuffed Costa Rica by sending rotating contingents of young environmentalists to Harbour Head, a small triangle of land at the mouth of the San Juan River in dispute between the two countries. The dispute, which began when Nicaragua decided to act on its legal right to dredge the river to improve navigation, is before the International Court of Justice at The Hague and both parties are vowing to accept the Court’s ruling when it is handed down.

Also before the World Court is Nicaragua’s demand concerning environmental damage from Costa Rica’s construction of a road along the south bank which has resulted in the erosion of tons of sediment into the river. With relation to the sediment, Castillo said his government had contracted with a company to repair the damage, which he claimed was minimal. The political fallout inside Costa Rica has not been “minimal” however. Six people were detained last week under suspicion of corruption in the building of the highway. Among the arrested were the former head of the National Road Council, the two engineers in charge of the project, and four businessmen accused of theft.

Castillo’s apparently conflicting statements about a possible dialogue with Nicaragua about the San Juan River conflict were in the news last week. Some days ago, Castillo told a Costa Rican media outlet that a dialogue “is possible and desirable, as other presidents and governments have offered their good offices [as mediators].” He added, “We have been moving progressively closer to the ALBA countries and we hope that they could, if it came to that, intercede in a dialogue with Nicaragua.” However, on Dec. 13 in Managua, he said, “Costa Rica has not proposed any dialogue; in reality it has been Nicaragua that has proposed several times that we negotiate.” Then he added, “Nicaragua has consistently violated the precautionary measures [of the Court not to send personnel to the zone in dispute] and, under those conditions, Costa Rica cannot negotiate.”

On a more positive note, Castillo, on taking over the presidency of SICA for Chinchilla, praised “the efficient, professional, and elegant manner” in which Nicaragua had performed the office, vowing to follow the same path for the strengthening and growth of SICA. (La Prensa, Dec. 14; Radio La Primerisima, Dec. 12, 13; Informe Pastran, Dec. 13; El Nuevo Diario, Dec. 13)

4. IDB increases loans for 2013-2014

The Inter American Development Bank (IDB) has approved development loans of US$383 million for 2013-2014, US$40.6 million or 12% more than in 2011-2012, according to Rosario Murillo, coordinator of Communications and Citizenship for the Sandinista government. Murillo said the loans would contribute to the development of “all our potential, all our capacity, all our productive talent.” Last month the IDB approved loans of US$39.2 million to improve roads in the Pacific and northern parts of the country and US$35 million for the sustainability and expansion of electric service nationally. Over the past five years, the IDB has loaned Nicaragua US$192.7 million for energy projects, US$171.9 for transportation, US$140.9 million for modernization of the State, US$115.2 million for social investment, and US$70 for health. Carlos Melo, IDB’s Nicaragua representative, stated that the Nicaraguan economy is well positioned for growth regardless of what happens to the US economy. (Radio La Primerisima, Dec. 17; Informe Pastran, Dec. 17; El Nuevo Diario, Dec. 17; La Prensa, Dec. 12)

5. TELEVISA narco trial begins

The trial began of the 18 Mexicans who entered Nicaragua in August with US$9.2 million hidden in nine vans marked with logos of the Mexican network TELEVISA. The 18 stand accused of money laundering, drug trafficking, and organized crime. The prosecution said they made many trips between Costa Rica and Mexico carrying “large quantities” of drugs. Security measures were strict and the witnesses who identified the defendants as those who had entered Nicaragua in the vans dressed in shirts and jackets with the TELEVISA logo had their faces covered to hide their identities. The second day of the trial was marked by the introduction in evidence of a letter listing the audio visual equipment in the vans signed by Amador Narcia, vice-president for national information at TELEVISA. The network has denied any involvement with the drug trafficking operation but suspicions have remained.

The Mexican consul in Nicaragua German Murguia Mier observed the trial and the Mexican Prosecutor General of the Republic is demanding the extradition of Raquel Alatorre, the leader of the band of 18. On the third day of the trial, the prosecution asked for a recess in order to process new evidence relating to telephone calls made by Alatorre and tests of the passports of the accused to determine if they are valid or forged. The Mexican government has not clarified that matter. The judge granted a recess until Dec. 18.

Other matters that have not been clarified are the real names of some of the accused, which of Mexico’s drug families the group belongs to, and who were the recipients of the 249 telephone calls Alatorre made from her cell phone which was taken by police. El Nuevo Diario reported that the greatest number of calls were to a number in Mexico registered in the name of Amador Narcia, the TELEVISA executive. (Informe Pastran, Dec. 11, 14; El Nuevo Diario, Dec. 11; 13, 15; La Prensa, Dec. 12; Radio La Primerisima, Dec. 16, 17)

6. Nicaragua prepares for Christmas and 40th anniversary of earthquake

1885, 1931, 1972. Approximately every 40-45 years Managua has been destroyed by a major earthquake and rebuilt in the same place. The disastrous quake in 1972 came on Dec. 23rd, just two days before Christmas. Next week will be the 40th anniversary of that quake. Many Managuans remember the 1972 quake and some even remember the 1931 trembler and believe that the earthquakes are cyclical and that another one is coming. El Nuevo Diario asked Dionisio Rodriguez, director of the Institute for Geology and Geophysics at the National Autonomous University of Nicaragua (UNAN) if that is a myth. He said that the geological conditions for another earthquake are there and this time the population of the city is greater. Nicaragua has small tremblers every day, he said, but there is no scientific proof that the powerful ones occur with any particular periodicity. He pointed out that Managua has 28 identified fault lines, 18 of which are very active, “and the others aren’t sleeping.”

Meanwhile, people are preparing for the holidays. Costa Rican migration authorities expect 150,000 Nicaraguans who live and work in Costa Rica to return home for Christmas and New Years and are staffing the border crossings with extra personnel between December 15 and January 15. The crossing at Peñas Blancas is usually the most transited. Last year, 103, 117 people crossed into Nicaragua for the holidays and a similar number returned to their jobs in Costa Rica after New Year’s Day.

Government communications coordinator and First Lady Rosario Murillo announced that a life-sized Nativity scene would be erected in Managua for the enjoyment of children and adults by volunteers from the Managua mayor’s office and the July 19 Sandinista Youth Organization. Complex, multi-figured nativity scenes are an old tradition in Nicaragua, predating by many generations Christmas trees and Santa Clauses. Murillo promised that this Nativity scene would be open for visitors on Dec. 19 at a location in Managua that remained secret as of Dec. 17.

The coordinator of the Sandinista Youth for Carazo, Mario Cruz, announced that 7,696 piñatas were ready for holiday activities in the Department of Carazo, enough for one piñata for every twelve children in all the towns of the department. Toys, music, and games for children are also planned by the organization. (El Nuevo Diario, Dec. 17; Radio La Primerisima, Dec. 17; La Prensa, Dec. 16)

7. Three children die of dengue

The Ministry of Health confirmed the third death on Dec. 14 from the ongoing dengue fever epidemic. It was a twelve year old boy in Managua who Health Minister Dr. Maritza Cuan said had been taken to the German-Nicaraguan Hospital the night of Dec. 12. “We were constantly with the family,” she said, “and he died at six in the morning.” According to Carlos Saenz, director of epidemiology, 56 people are presently hospitalized with the illness and a total of 4,744 cases have been reported this year. The other deaths were of children aged twelve and eight from Managua and Granada respectively.

Dengue is a viral disease which causes high fever, intense headaches, muscle pain, digestive complications and skin rashes. The Ministry of Health has not said how many people have had the common variant of the disease and how many have had the more dangerous hemorrhagic dengue fever. (El Nuevo Diario, Dec. 15; La Prensa, Dec. 14; Informe Pastran, Dec. 14; Radio La Primerisima, Dec. 13)