Nicaragua Network

1. Government to continue electricity subsidy but penalize illegal hookups
2. Ortega government presents annual report
3. Rainy season starts
4. Colombia preparing challenge to World Court decision
5. Nicaragua sells sugar to Venezuela bypassing transnationals
6. Census shows childhood malnutrition is halved
7. Zero Usury loans to double
8. Government launches anti-drug education campaign
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1. Government to continue electricity subsidy but penalize illegal hookups

On May 21 the government announced that President Daniel Ortega would send to the National Assembly his proposal to continue until 2015 the electricity subsidy for private households that use less than 150 kilowatt hours per month.  Communications Coordinator Rosario Murillo said that amounted to 86% of households, a total of 800,000 families; however, El Nuevo Diario reported that the National Energy Institute, a regulatory body, gave the figures as 630,600 households or 82% of total private users.  Murillo said, “The distribution companies will also be required to improve their networks and invest in a manner that will improve and expand service, including service to households.”  The distribution companies, known as Disnorte and Dissur, which after IMF-mandated privatization belonged to the Spanish company Fenosa, were recently sold to two other Spanish firms TSK and Melfosur. 

Treasury Minister Ivan Acosta said that the subsidy reflects the Ortega government’s policy of favoring low income sectors while at the same time encouraging energy conservation because those who use less electricity will have lower bills to pay each month.  He remembered that when the Sandinista Party returned to power in January of 2007, the country was suffering from continuous outages due to lack of generating capacity.  With investment in new plants, blackouts have ended and electrification has expanded from 52% to 72% of households nationally.   

La Prensa noted that it would be the customers who use more than 150 kwh per month who would see an increase in their bills and be providing the funds for the subsidy for low income/low use households.  Informe Pastran, on the other hand, noted that the government appeared to have responded to the most recent CID-Gallup poll which showed that the same majority who said that democracy was the same or stronger with Daniel Ortega in the presidency based those views in large part on the subsidies to electricity, transportation and some food products the government offered as well as free health care services [in other words economic democracy].

Jose Adan Aguerri, president of the Superior Council of Private Enterprise, said that the business and industrial sector, which will see an increase in electricity bills of 7.78%, will pass that increase on to consumers.  He added, however, that the business community did not question the decision of the government to continue the subsidy to low income-low use customers.

Along with the “Energy Stability” bill, the executive branch also sent to the Assembly a measure that would amend the Penal Code to increase penalties for illegal connections to the electricity grid to between one and three years in jail and a fine.  Reaction was swift to this proposal.  Opposition National Assembly Deputy Wilfredo Navarro said, “From my point of view, the distributors have committed many abuses and it would be excessive to give them the power to throw the poor consumer in jail.”  Marvin Pomares, president of the Institute for Consumer Defense, said that penalties should not be imposed until TSK-Melforsur makes its improvements, “because here the responsibilities are shared: there are 250,000 citizens who need meters and who are connected [illegally] and that is because they have asked for service and they never come to install it and that means that 250,000 citizens could go to jail.”  Supreme Court Justice Rafael Solis said that the government would not pursue poor barrio householders but rather the increased penalties would target businesses that have in the past connected illegally, paid the low fines, and then connected again.  He said that the courts had reviewed 400 of these cases and they all concerned “well-to-do people.”

Those who connect illegally to television cable and potable water will also be penalized.  The cable company Claró estimates yearly losses of 30% from illegal connections and consumers owe the state-owned water distribution company ENACAL many millions in unpaid bills which slow down improvements and expansion of services.  Illegal connections to supply water to new neighborhoods that have sprouted up provoke shortages in other established neighborhoods. 

Members of the opposition Independent Liberal Party (PLI) in the National Assembly were scheduled to meet on May 27 to decide if they would vote to increase the penalties for illegal connections to public services.  PLI Alliance coordinator Eduardo Montealegre said that his personal position was that “we should vote against it,” adding “that reform and that penalty could also be used to repress the opposition, journalists, critical media outlets, to wipe out those who raise their voices.”  (Radio La Primerisima, May 21, 22; El Nuevo Diario, May 21, 24; Informe Pastran, May 21, 22, 23; La Prensa, May 22, 23, 27)

2. Ortega government presents annual report

On May 21, President Daniel Ortega sent to the National Assembly the annual report of his government for the year 2012.  According to the report, the Nicaraguan economy grew at an annual rate of 5.2% with the major growth sectors being transportation, construction and telecommunications.  The report also noted that 55.5% of the government’s budget was spent on social and public services, including health care, energy, education, housing, infrastructure, and water and over 95% of projects funded in the budget were completed.

Foreign direct investment (FDI) in 2012 was calculated at more than one billion dollars, an increase of 33% over 2011. The major areas that received foreign investment were industry, telecommunications, mining, commerce, services, free trade zone assembly plants, and energy.  Exports grew 17.7% in 2012 over 2011 with principal exports continuing to be coffee, gold, beef, and sugar. The banking sector also grew with deposits increasing by 9.65% over the previous year.

Edwin Castro, the head of the Sandinista bench in the Assembly, in answer to opposition criticism, said that the report was released in May rather than in January as the constitution mandates because it was impossible to put together an “objective” report and get it out to the public in January.

Of some concern to economists is the drop in world prices for some of Nicaragua’s principle export crops.  It was reported last week that the price of peanuts dropped 40% from US$1.82 per kilo to US$1.11.  Peanuts are currently Nicaragua’s fifth most important export.  Coffee, gold, sugar and beef have all dropped in price recently.  The total value of the country’s exports passed the US$1 billion mark on May 17 and were expected to hit US$3 billion by the end of 2013.  (Radio La Primerisima, May 21; El Nuevo Diario, May 21; Informe Pastran, May 22, 23)

3. Rainy season starts

The first big rainstorm of the 2013 rainy season hit Managua on May 27 with thunder and lightning and a few brief interruptions in electrical service.  Some who were out and about were prepared with umbrellas but the unprepared were completely dowsed in water.  It rained in Rivas several days earlier partially flooding some new affordable housing units that had just been finished at the end of the dry season in December 2012.  The mayor provided a pump to remove the water and the government called the householders to a meeting to analyze the drainage situation in the new neighborhood. 

In the Department of Madriz, the Disaster Prevention Committee has been addressing critical points, especially bridges, which gave problems last year.  The mayor of San Juan de Rio Coco, Acisclo Laguna, said, “We have also repaired the majority of the penetration roads and provided radios to 17 critical rural communities to monitor any emergency situation.”  Las Sabanas Mayor Bismarck Rivera said that this year they have invested US$33,000 in road and drainage improvements with “funds transferred from the central government.”

Dairy farmers and beef cattle ranchers are expressing concern that their animals have become too thin with the extended length of the dry season [traditionally the rainy season begins on May 1] and will have trouble adjusting if the rainy season begins with massive storms.  Salvador Castillo, vice-president of the Association of Cattle Raisers of Nicaragua, said, “The concern is greater because we know that with the beginning of the rainy season the animals get thinner.”  The switch from dry hay to green grass gives them diarrhea and “we fear that many animals will die on us,” he said, adding that the loss could be in the thousands.  Leonel Lopez, president of the Union of Farmers and Ranchers (UNAG), said that it is not until about a month into the rainy season that the grass is good for the cattle to eat. 

Dr. Guillermo Gonzalez, executive secretary of the National System for the Prevention, Mitigation and Attention to Disasters (SINAPRED), said that coastal zones were preparing alert systems for storms and flooding, local municipalities were putting in place measures to reduce the number of people who might be forced to evacuate their homes in heavy or continued rainfall.  According to SINAPRED, there are 10,000 vulnerable points in the country for natural disasters such as flooding, tsunamis, earthquakes and volcanic eruptions.  Marcio Baca, head of meteorology of the National Institute for Territorial Studies (INETER), said that his office is predicting a normal rainy season without any anomalies such as those that result from an El Niño or La Niña phenomenon.  For the Atlantic hurricane season, he said that, beginning June 1, four intense hurricanes, five moderate hurricanes, and nine tropical storms, any of which could hit Nicaragua’s coast, were predicted.

Looking on the positive side, the forest fires that have burned 4,161 hectares of forest in northern Nicaragua during this dry season are being put out by the rains.  The Dipilto-Jalapa Reserve of mainly pine forests on the border with Honduras suffered 54 fires between January and May.  (El Nuevo Diario, May 24, 27; La Prensa, May 22, 26; Radio La Primerisima, May 22, 24)

4. Colombia preparing challenge to World Court decision

 The government of Colombia has received the reports of the British firm Volterra Fietta analyzing the case that was decided by the International Court of Justice in November 2012. That ruling, while it confirmed Colombia’s ownership of the islands in the Archipelago of San Andres, gave most of the surrounding waters of the Central American continental shelf off Nicaragua’s coast to Nicaragua.  The Colombian daily newspaper El Espectador said that the international lawyers at Volterra Fietta and Colombian experts agreed that one possible way to challenge the Court’s ruling would be to argue that the Court did not take into account the Seaflower Biosphere Reserve, a UNESCO site and its ruling would put the 350,000 square kilometer Reserve in danger.  Four hundred species of fish inhabit the zone in interconnected ecosystems, which the Colombians could argue Nicaraguan ships and oil exploration could put at risk.  A Colombian expert also argued that threats to coral reefs near the San Andres Archipelago would be put at even further risk if Nicaragua were to build the proposed inter-oceanic canal and ship traffic through the area were to multiply.  However, Colombian law professor Ricardo Abello said, “One, UNESCO is the one that has to demand care of the Seaflower Reserve [not the World Court], and two, I don’t believe that this is going to change the ruling in any way.”  Other Colombian observers, however, believe that the Chinese judge on the court was influenced by his country’s desire to build the Nicaraguan canal.  (Informe Pastran, May 27)

5. Nicaragua sells sugar to Venezuela bypassing transnationals

Nicaragua is selling 45 metric tons on sugar to Venezuela within the Bolivarian Alliance for the Peoples of Our Americas (ALBA) mechanism. The sugar will be transported from the Port of Corinto on three Venezuela flagged ships carrying 15 tons each over the next week. While Nicaragua has sold sugar to Venezuela at times in the past, this will be the first bilateral sale that does not involve the transnational corporations. It is part of Venezuela’s objective of achieving food sovereignty. (Radio La Primerisima, May 26; La Prensa, May 26)

6. Census shows childhood malnutrition is halved

More than a million children from birth to 12 years of age were measured and weighed in the National Nutrition Census in all 153 municipalities. Rosario Murillo, coordinator of communication and citizenship reported that according to preliminary results, Nicaragua has reduced infant and child malnutrition to 11.6%. Murillo said that previous administrations only surveyed 150-200,000 children. In 1996 childhood malnutrition stood at 23.9%; in 2004 it was 27.21% and in 2009 it was 22%. Murillo said, “We shouldn’t be pleased because we shouldn’t have even one child malnourished, but we have practically halved the number since 2009.” She vowed that the Sandinista government would continue to strengthen school meal programs and infant nutrition programs from the health centers until hunger and poverty are eradicated.  She noted that the census is almost complete, lacking results only from the Caribbean Coast. According to UNICEF, in 2011, Nicaragua had 149,000 malnourished children and ranked 52nd among 81 developing countries. (La Prensa, May 22; Radio La Primerisima, May 21; Informe Pastran, May 21)

7. Zero Usury loans to double

The Nicaraguan government announced that it is going to double, beginning June 3, the amount of money available for loans to women under the Zero Usury program. Zero Usury makes micro loans to solidarity groups of 5-10 women to build their businesses, most of which are in the food and clothing sector.  The 36,200 women “associates” in the program have successfully paid off their original loans plus five percent interest. They are now eligible for larger loans to further build their businesses. The program has reached 146 of the country’s 153 municipalities.  The seven municipalities remaining can be reached only by air or water.  [To be eligible, women must form groups of 5-10 associates and everyone in the group is responsible for all the loans. This methodology helps keep the loan repayment rate high.] The program will now make loans of up to approximately US$400. This week, 3,283 women organized into 642 solidarity groups in 49 municipalities will be receiving new loans.  (Radio La Primerisima, May 23, 27; Informe Pastran, May 24)

8. Government launches anti-drug education campaign

The Nicaraguan government is launching an educational campaign, entitled Drug Free Nicaragua, aimed at removing the “scourge” from the country. The government of President Daniel Ortega has been more successful than other governments of the region in dismantling drug trafficking and organized crime networks moving drugs to the United States. The campaign against drug use by Nicaraguans, which will be launched next week, will include activities of reflection, lectures, training, exchange of experiences, and marches in all 15 departments and 153 municipalities. The campaign will be focused in the school system.  Since 2000, the Nicaraguan army has seized 131,000 kilograms (2.2 lbs) of drugs. [President Ortega has not joined other presidents and ex-presidents of Latin America who are calling for drug legalization to replace the US’s failed Drug War.] (Radio La Primerisima, May 21)