TUESDAY, OCTOBER 16, 2007
Nicaragua Network Hotline (October 16, 2007)
Topics covered in this hotline include:1. Government takes measures to increase access to credit and World Bank approves loan
2. Reactions to the World Court ruling on maritime dispute
3. People's Tribunal recommends cancellation of Union Fenosa's contract
4. Another Nemagon victim dies while California case against Dow and Dole goes to jury
5. Torrential rains cause extensive damage in north Pacific regions
Topic 1: Government takes measures to increase access to credit and World Bank approves loan
On Oct. 10 President of the Nicaraguan Central Bank Antenor Rosales announced that, as of Oct. 15, the legal reserve amount would be reduced from 19.25% to 16.25% in order to free up funds to increase credit for small and medium producers. It is not clear whether Nicaragua's decrease to 16.25% level was done with the approval of the World Bank, but in the same week the World Bank approved $240 million in loans to Nicaragua for 2007-2012.
The reduction in reserves frees up US$69 million which Rosales expects to not only increase available credit but also reduce inflation. “We must promote credit in order to increase productive capacity, maximize economic development and increase harvests,” he said. Rosales is confident that the planned reduction will not negatively affect economic growth or inflation rates.
On Oct. 14 the National Assembly approved the creation of a Development Bank (Banfopro), with 84 votes in favor and zero against. The creation of Banfopro, which is expected to benefit over 240,000 small and medium producers who currently have no access to credit, was one of President Daniel Ortega's principal electoral promises and a demand of the agricultural and productive sectors for more than a decade. It shows what can be done by a government with the will to assist small and medium producers can do. Nicaragua's agricultural production has always been driven by the small and medium producers who were ignored by the neoliberal governments of the last 16 years.
The semi public bank will be inaugurated with US$8 million. The initial fund will be increased with a further US$60.3 million from other state institutions in the near future, according to Sandinista National Assembly Economic Committee member Walmaro Gutierrez. Deputy Agustin Jarquin said Banfopro will help reduce usury.
In commenting on the $240 million loan approval, World Bank representative in Nicaragua Jane Armitage said that “given its trajectory of solid macro-economic policies, Nicaragua has the potential and the resources to work itself out of poverty with economic growth.” According to a statement issued by the World Bank, the funds will be used to improve the competitiveness of the country, “improve social equality,” develop infrastructure and modernize public institutions.
Also on Oct. 11, Manager of the World Bank in Nicaragua Joseph Owen announced that the international financial institution had agreed to loan US$17 million to the Nicaraguan government for the reconstruction and rehabilitation effort in the Northern Atlantic Autonomous Region (RAAN) after the damage caused by Hurricane Felix at the beginning of September.
Topic 2: Reactions to the World Court ruling on maritime dispute
On Oct. 8 the Foreign Ministry issued a statement expressing the Nicaraguan government's “satisfaction” with the International Court of Justice, also known as the World Court, ruling on the maritime border dispute between Nicaragua and Honduras in the Caribbean. The World Court ruled that the four islands in dispute (Babel, Savanna, Port Royal and Sur) belonged to Honduras but created a new maritime border between the two countries which increases significantly Nicaragua's maritime space. It was generally agreed that the ruling favored neither country explicitly, but that Nicaragua gains more than Honduras as a result of the new border.
The presidents of the two countries, Daniel Ortega of Nicaragua and Manuel Zelaya of Honduras, welcomed the ruling, promising to faithfully obey its limitations, and saying that it will serve to promote Central American unity. Vice President Jaime Morales Carazo said that the ruling “knocked the expansionist, colonialist and imperialist objectives of Colombia to the floor” by indirectly disqualifying the bilateral Ramirez Lopez treaty between Honduras and Colombia which aimed to impose unfair maritime borders on Nicaragua. It was after Honduras ratified this treaty in 1999 that Nicaragua took the case to the international court. A ruling from the World Court on the ongoing maritime dispute between Nicaragua and Colombia is scheduled to be announced at the end of the year.
The dispute between Nicaragua and Honduras was significant because of the possible presence of oil and natural gas beneath the sea bed.
Topic 3: People's Tribunal recommends cancellation of Union Fenosa's contract
On Oct. 13 the Permanent People's Tribunal condemned the Spanish multinational company Union Fenosa for the extensive damage caused to individuals, businesses and the country as a whole for the bad service provided by the company. The Tribunal went on to recommend that Union Fenosa's contract with the Nicaraguan government be cancelled and the company be forced to leave the country. Among other things the Tribunal found Union Fenosa guilty of charging for services which are not provided, disrespecting court rulings, failing to make the necessary investments in electrical infrastructure and causing loss of human life as a result of negligence.
Hundreds of individuals from across the country took part in the two day hearing which was held at the National Autonomous University of Nicaragua in Managua (UNAN-Managua) with representatives of dozens of neighborhoods and communities where, among other problems, persistent power cuts have caused serious damage to the local economy, interrupted school and university schedules, caused health centers and hospitals to close for hours at a time and increased citizen insecurity.
The ruling is not binding for either the Nicaraguan government or the Spanish company. Nevertheless, leader of the Nicaraguan Community Movement Enrique Picado said he was pleased with the ruling which will strengthen the popular struggle to force Union Fenosa out of the country. The Ortega government is between a rock and a hard place on the issue, caught between the anger of the people due to the persistent black-outs and the economic power of the Pellas economic bloc which is linked to Union Fenosa and the diplomatic support for Fenosa by the Spanish government.
Oct. 11 President Ortega said a solution to the problems being created by Union Fenosa must be found because the company's debt is “unsustainable” and “growing.” According to Ortega, Fenosa owes a total of US$85 million, US$35 million of which is owed to the Nicaraguan generating companies while the rest of the debt is owed to the state. Because of Union Fenosa's failure to make payments to the state on its US$50 million debt, the government is unable to invest in critical sectors such as education and health.
Ortega also said that a number of international companies interested in investing in hydro electric generation in Nicaragua have been put off by Union Fenosa's tendency not to pay generators for electricity provided. He criticized the Spanish company for requesting further electricity rate hikes for all clients. Ortega announced an imminent rate hike for electricity customers who use over 150,000 kilowatt hours, which amounts to 20% of Union Fenosa's clients.
Topic 4: Another Nemagon victim dies while California case against Dow and Dole goes to jury
On Oct. 12 in the makeshift camp outside the National Assembly a 40 year-old former banana plantation worker, Vidal Valentin Rios, died of illnesses related to exposure to the deadly pesticide Nemagon in the 1970s. Valentin “died this morning from liver cancer,” confirmed his sister Angela Rios. His situation was complicated “by kidney problems and diabetes,” she said.
2,000 former banana workers have been living in the camp outside the National Assembly for the last four months as part of a permanent protest to demand that the government support their claims against the US multinational companies responsible for their state of ill health. The leader of the Association of Former Banana Workers Affected by Nemagon, Victoriano Espinales, said that Rios is the eleventh former worker to have died from illnesses related to exposure to Nemagon since the camp was set up in June.
Meanwhile in California a jury is deliberating on the claim made by twelve Nicaraguans that they were left sterile after exposure to Nemagon on a banana plantation owned by Dole Foods Company in the 1970s. The plaintiffs' lawyer, Duane Miller, said that verdict may not be announced for a week due to the “nature” of the case. This is the first of numerous similar cases representing sterility claims of over 5,000 former banana workers from Central America.
Topic 5: Torrential rains caused extensive damage in north Pacific regions
Thirteen of the fifteen departments in the Pacific region of Nicaragua have experienced torrential and persistent rain which has caused extensive flooding as well as “considerable” damage to infrastructure and loss of crops, according to the National System of Prevention and Mitigation of Disasters (SINAPRED). The rains were caused by an area of low pressure which has affected almost all of northern Central America.
On average 11.8 inches of rain fell over the thirteen departments affected between Oct. 11 and Oct. 13. The department worst affected was Chinandega, where over 23 inches of rain fell during the same period. So far no loss of life has been reported, though the authorities have still not made contact with dozens of communities which have been cut off after rivers overflowed and bridges were destroyed.
On Oct. 14 the military's civil defense arm reported that so far 9,072 people affected and 6,217 are currently in temporary refuges (in Chinandega, Esteli, Leon, Granada, Managua and Matagalpa). At this point no official estimation as to loss of crops has been given, though SINAPRED warned that the damage has been “considerable.” It has also been estimated that the rains have caused “extensive” damage to rural roads. Traffic on the Pan American highway was been interrupted after the highway was damaged 59 kilometers north of Managua. The traffic on the highway from Chinandega to El Guasaule (on the Honduran border) has also been interrupted after extensive stretches of the highway were flooded.
**********
This hotline is prepared from the Nicaragua News Service and other sources. To receive a more extensive weekly summary of the news from Nicaragua by e-mail or postal service, send a check for $60.00 to Nicaragua Network, 1247 E St., SE, Washington, DC 20003. We can be reached by phone at 202-544-9355. Our web site is: www.nicanet.org. To subscribe to the Hotline, send an e-mail to nicanet@afgj.org
Labels: Archives Hotline