THURSDAY, DECEMBER 13, 2007
Nicaragua Network Hotline (December 11, 2007)
Topics covered in this Hotline include:1. Opposition parties form “Block against the Dictatorship” to disrupt government plans
2. Ortega calls for oil import nationalization; Fenosa debt threatens to renew power outages
3. Central Bank announces purchase of foreign commercial debt
4. Attorney General gives property titles to 16 Mayangna communities
Topic 1: Opposition parties form “Block against the Dictatorship” to disrupt government plans
The power struggle between the Sandinista government and the opposition parties based around the legality of the Councils of Citizen Power (CPCs) intensified this week when leaders of the four opposition benches in the National Assembly announced the creation of a "Block against the Dictatorship" of Daniel Ortega's administration. The Constitutional Liberal Party (PLC), the Nicaraguan Liberal Alliance (ALN), the Bench for Unity and the Sandinista Renovation Movement (MRS) claim events of the last few weeks have demonstrated Ortega's "totalitarian vocation." The opposition parties took the decision to form the antigovernment block after six Sandinista justices of the Supreme Court issued a ruling affirming the legality of the CPCs on Dec. 5. Apparently they've forgotten what a real dictatorship looks like. What is particularly troubling is that the MRS joined the right-wing parties in threatening to derail not only Ortega's popular democracy initiative, but also to cut funding to the Zero Hunger and other anti-poverty programs.
On Dec. 5, after threats by the opposition parties to remove National Assembly President Rene Nuñez (FSLN) from his position, the National Assembly leadership agreed to publish the law banning the CPC's which the Assembly had passed over Ortega's veto only to have Appeals Court order that the law not be published. Laws don't take effect until they are published. That move prompted the President of the Constitutional Court panel of the Supreme Court, Francisco Rosales (FSLN), to call a special session to rule on the legal status of the decision. The three PLC members of the court refused to attend, which provoked Rosales to invite three Sandinista Supreme Court justices to attend the session in order to validate the resulting judgment.
At 9pm the six Sandinista justices declared the CPCs to be legal and law 630, which banned them, "unconstitutional." According to the Supreme Court resolution, the Nicaraguan Constitution establishes the right of Nicaraguan citizens to organize themselves and to participate directly in decision making about national public affairs. Justice Rosales pointed out that during the government of Enrique Bolaños' administration a number of councils were created by presidential decree and the legislative branch had no problem with those decisions.
President of the Supreme Court Manuel Martinez (PLC) had a very different take on the matter, however. "I am alarmed by the coup they are trying to carry out in the Supreme Court," said Martinez, "the FSLN is assaulting the Supreme Court." According to Martinez, Rosales did not call the Liberal members of the Constitutional court to the session but simply replaced them with three Sandinista justices and, as a result, the resolution issued by the court is invalid.
Leaders of the opposition parties were outraged by the Supreme Court ruling and met on Dec. 6 to discuss their options. On Dec. 7 the creation of the “Block against the Dictatorship” was announced. The claim of this block is that they are defending the institutionality of the National Assembly and the Supreme Court.
The block said the institutional crisis is exacerbated by threats voiced by "Sandinista officials against the democratic forces, social sectors, the trade sector, private enterprise and civil society." According to the declaration, FSLN officials have even threatened to "militarize the country, to carry out confiscations of the property of private enterprise and put the principal leaders of the opposition in jail." No evidence of such claims was given. “Democratic forces” is a term coined by the US government when it was working to unite right-wing parties against the Sandinista government in the 1980's. For the MRS to sign a declaration using that phrase raises serious questions about what are the current politics of this Sandinista splinter group. The Block Against the Dictatorship, said the statement, "condemns President Ortega's totalitarian vocation," saying that "anxious to consolidate so-called popular democracy, Ortega is destroying the nation's democratic institutions."
Among the measures the block threatened to take are: 1) suspend passage of the 2008 National Budget, 2) cut funding to key government programs such as Zero Hunger and Zero Usury, 3) sue any public official who works with the CPCs or allows the CPCs to manage public funds or resources, and 4) invoke the Democratic Charter of the Organization of American States (OAS) which would allow OAS members to militarily intervene in order to “restore democracy.”
During a speech at a political event on Dec. 8 President Ortega described the members of the “Block against the Dictatorship” as "senators of the Empire."
"What a campaign they've got now," he said, "those who call themselves the democratic forces ... but who are really the Somocistas, are all uniting, the PLC, the ALN and the MRS are uniting in order to combat what they call the Sandinista dictatorship. And it's all because we don't govern to make the rich richer, [because] we are committed to govern in favor of the poor." "They're beating the war drum," Ortega went on, "What a Christmas they are offering, beating war drums. But what war? ... They're crazy, totally crazy ... they don't realize that we are living in a Nicaragua of peace.”
Topic 2: Ortega calls for oil import nationalization; Fenosa debt threatens to renew power outages
On Dec. 6 President Daniel Ortega announced that he had ordered Minister of Energy Emilio Rapacciolli and the directors of the Nicaraguan Energy Institute (INE) and the Nicaraguan Electricity Company (ENEL) to work on a proposal for the nationalization oil imports. Ortega explained that the proposal is to make possible the importation of 100% of the 10 million barrels of oil which the Venezuelan government has offered to sell to Nicaragua under preferential payment conditions under the Bolivarian Alternative for the Americas (ALBA). During 2007 only 2 million barrels of oil have been imported from Venezuela because the government does not have sufficient storage facilities or the means to refine a larger quantity of oil. The US multinational, Exxon Mobil, which owns the only oil refinery and imports 80% of oil in Nicaragua, refuses to rent out its unused storage tanks to the government or to refine the Venezuelan oil. Exxon Mobil was one of only two oil companies to leave Venezuela when Venezuela demanded majority ownership of operations extracting Venezuelan oil.
The agreement with Venezuela allows the Nicaraguan national oil company PETRONIC to import 10 million barrels of oil a year (100% of Nicaragua's annual demand) paying 50% within ninety days of importation and the other 50% over a period of 25 years with 1% interest. This year the importation of two million barrels of Venezuelan oil has allowed the government to subsidize public transportation in Managua and to make long term loans to the electrical generating companies for the purchase of oil so that the companies can continue to generate electricity despite the financial crisis within the electrical sector. In order for the energy sector in Nicaragua to be sustained long term, however, the government needs to be able to enjoy the full benefits of the agreement with Venezuela.
Ortega said that the energy crisis has now reached the stage where it is "a matter of national security" and "decisions must be made." He criticized Exxon Mobil for failing to "demonstrate the will to contribute to a solution to the national crisis," saying the company has been acting like a "true mercenary, a spectator."
Adding to the energy setbacks, the crippling blackouts which were ended only two weeks ago might resume because of a dispute between Corinto Energy Company, a private electricity generating company, and Union Fenosa, which distributes electricity in Nicaragua. On Dec. 4 Corinto threatened to suspend operations as of this week unless the Spanish multinational Union Fenosa pays the US$9 million it owes the company. Should Corinto suspend operations the daily power cuts Union Fenosa clients have been experiencing for over a year would begin again.
The IMF-mandated sale of Nicaragua's electricity grid during the Aleman government has been an unmitigated disaster for Nicaragua. The Spanish transnational has failed to invest in needed infrastructure, has failed to pay electricity producers for the power it distributes, and has fraudulently billed customers. The Consumer Defense Network and other organizations of civil society have called for Union Fenosa's contract to be voided and for the company to be expelled from the country. Juan Carlos II, King of Spain, angrily walked out of a meeting with Latin American leaders recently when Ortega criticized the Spanish company's performance.
Topic 3: Central Bank announces repurchase of foreign commercial debt
On Dec. 5 the Minister of Public Finance Alberto Guevara announced that the Central Bank will buy US$1.326 billion (94%) of Nicaragua's foreign commercial debt as part of a plan to reduce the burden of the country's external debt. That amounts to 94% of Nicaragua's foreign commercial debt. Payments will be made to 118 creditors for debt contracted principally by the Somoza government of the 1970s. The debt was bought back at a price of 4.5 cents on the dollar.
Guevara said that as a result of the operation Nicaragua's financial situation will be considered technically sustainable by the international financial institutions, thus creating more stable macro economic conditions and attracting more foreign and local investment. President of the Nicaraguan Central Bank Antenor Rosales said that as a result of the repurchase of the commercial debt Nicaragua's foreign public foreign debt will be reduced from US$3.456 billion to US$3.259 billion.
The buyback of this debt contracted mainly by the brutal Somoza dictatorship was brokered by the World Bank which also donated US$61 million toward the deal. Pamela Cox, Vice President of the World Bank in Latin America and the Caribbean described the operation as "an important step towards the stabilization of the financial relations between Nicaragua and the international community of investors." She said that the donation made to Nicaragua is part of the World Bank's "commitment to help indebted poor countries to eliminate their commercial debt." One has to hope that the US$84.6 million remaining debt does not fall into the hands of so-called vulture funds which buy previously unpayable debt and sue in U.S. or British courts for full payment.
Topic 4: Attorney General gives property titles to 16 Mayangna communities
The Attorney General Office awarded title deeds to the residents of 16 indigenous communities in Musawas, the capital of the Mayangna people in Bonanza, North Atlantic Autonomous Region (RAAN) in a ceremony which took place in Musawas on Dec. 4 and attended by numerous officials. The title deeds were presented to Mayangna community leader Coleman Rufo. Rufo said the deed makes his community stronger and reflects the government's good will to support the indigenous communities. "I am grateful for this deed because [the earth] is our mother, and the mother of all of you, and it is up to us to care for her and to defend her."
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