TUESDAY, AUGUST 05, 2008
Nicaragua Network Hotline (August 5, 2008)
1. Enormous fire burns Eastern Market2. “Conditions do not exist” to destroy SAM-7 missiles Ortega says
3. Political rhetoric escalates to violence
4. Inter-American Development Bank to provide funds
5. Foreign investment expected to rise
Topic 1: Enormous fire burns Eastern Market
Managua's sprawling Eastern Market, Central America's biggest, which covers an area of 50 square blocks began to burn on the night of July 31. By the time the fire was extinguished the next day, the National System for the Prevention and Remediation of Disasters (SINAPRED) said it had devoured eight square blocks and damaged others. There was no loss of life but 17 people were injured. Losses calculated at over US$100 million. The fire reportedly destroyed 1,502 stalls of which 676 sold clothing, 680 general merchandise and 146 shoes. Over 2,000 people fought the fire, including personnel from the Fire Department, the Army, the National Police, the Mayor's Office, National Water and Sewerage Company (ENACAL), and volunteers
President Daniel Ortega, who visited the fire in progress, emphasized that when rebuilding takes place it must follow all safety standards. He emphasized that the cost of the recovery from this tragedy should be shared by the national and local governments.
Col. Mario Perezcassar, head of Army Civil Defense, said that “For five years we have been warning of this situation in Eastern Market” adding that electrical systems in the market are improperly installed, there are almost no fire hydrants, and the streets have no easy access for fire trucks. It was confirmed that an electrical short caused the fire. Ruth Herrera, head of ENACAL, told a local television station that “unscrupulous persons” had stolen the fire hydrants in the area.
Neri Leiva Orochena, vice mayor of Managua, noted that the majority of those who lost their livelihoods in the fire were women. Two banks, the Nicaraguan Development Financer (Findesa) and the Procredit Bank, announced that they would be available to renegotiate the debt of each one of their borrowers who had lost merchandise and infrastructure in the fire.
Topic 2: “Conditions do not exist” to destroy SAM-7 missiles Ortega says
President Daniel Ortega, in a speech celebrating the 29th anniversary of the founding of the Sandinista Air Force, said conditions do not exist for the destruction of 1,000 SAM-7 surface-to-air missiles in Nicaragua's arsenal. He called US Ambassador Paul Trivelli's claim that Nicaragua had already agreed to destroy the missiles “irresponsible.” Ortega told the gathering which included military officers and guests, "The North American ambassador said in passing that a proposal on the disarmament of the defensive missiles was now in our hands, implying that this was resolved, but we must study it and we will respond in time but I do not see conditions at the moment."
Ortega noted that Nicaragua has legitimate rights to defend the disputed islands of San Andres, Santa Catalina and adjacent islands from possible attack by Colombia which has not removed its warships from the area. "We have to depend on the security of the Sam 7 and antiaircraft artillery as the only defensive weapons that we have with regard to Colombia because we do not have fighter planes," Ortega told the military brass.
Last year, Ortega conditioned the destruction of 600 Sam-7 missiles on an exchange for medicines and medical technology such as dialysis and X-ray machines. He said that Nicaragua would keep 400 missiles for defense. Destruction of the SAM-7s has been a high priority for the United States. President Enrique Bolaños (2001-2006) ordered the army to begin destroying its stockpile and promised US Secretary of Defense Donald Rumsfeld, during a visit to Nicaragua, that they would all be destroyed. But, the National Assembly passed a law requiring its authorization through a favorable vote of at least 57 deputies, so the last 1,000 missiles remained in the arsenal. The missiles were supplied by the Soviet Union to Nicaragua for defense against the US-backed contras.
Topic 3: Political rhetoric escalates to violence
On July 30, Channel 4 reporter Antenor Peña Solano was shot in the leg during an incident that occurred when nine police officers tried to arrest Sandinista activists who El Nuevo Diario reported were throwing stones at a van carrying sympathizers of the Sandinista Renovation Movement (MRS) near the Ruben Dario traffic circle. [Channel 4 sympathizes with the current administration of President Daniel Ortega. El Nuevo Diario sympathizes with the MRS.] The Puente Group, a youth organization which had planned a demonstration at that spot to protest what members considered the extravagance of giant billboards supporting government policies, had left when they saw the Sandinista Youth. Shortly thereafter the van with MRS supporters stopped nearby and the interaction turned violent. When police were unable to arrest the stone throwers, they fired into the air. It is not certain who fired the shot that wounded Peña.
National Police Commissioner Aminta Granera arrived on the scene shortly after it happened and said that a full investigation would be made. She asked for tranquility among those who participate in political demonstrations. La Nueva Radio Ya, a Sandinista station, noted that this was the third time Channel 4 has been a victim of violence in politically charged situations. In June a car belonging to the station was overturned; next, journalist Nelson Hurtado was kicked by Carlos Mejia Godoy at a rally, and now Antenor Peña has been shot in the leg.
The day after the incident, numerous groups and individuals repeated the same call for an end to political violence. Human Rights Ombudsman Omar Cabezas said at a press conference that he was greatly concerned and stated, “I call on political leaders for prudence and responsibility” at a time when the electoral campaign was “heating up tempers.” Bayardo Izaba, director of the Nicaraguan Center for Human Rights (CENIDH), said, “This situation of violence is very worrisome and it is of particular concern that one of the persons wounded is a journalist.” Jose Aguerri, head of the Superior Council of Private Enterprise (COSEP), said that “violence must not be permitted to flourish” because if “the tone continues to rise what will happen is that the economy will be affected and we are already in a slowdown.”
Topic 4: Inter-American Development Bank to provide funds
On August 3, Luis Alberto Moreno, president of the Inter-American Development Bank (IDB), announced that his institution would be providing a loan of US$250,000 to help get the Nicaraguan Development Bank up and running and would also provide funding to help those affected by the Eastern Market fire. This year the IDB has allotted US$80 million for projects including connecting Nicaragua to the Central American electricity grid and for projects in geothermal, wind and hydroelectric energy. Other projects include a sewage treatment plant for Managua and potable water plants, support for programs aiding the rural and urban poor including small scale agricultural production to resolve the food crisis and urban micro-credit. At the end of the year, the IDB will also approve a loan of US$20 million for Nicaragua to use to support the national budget.
The IDB has cancelled more than US$500 million of Nicaragua's foreign debt as part of the Heavily Indebted Poor Countries (HIPC) Initiative. However, a report from the Central Bank of Nicaragua states that since Nicaragua reached the culmination point for debt relief under HIPC in 2004 US$5.1 billion, 78% of the total, has been cancelled. The remaining 22%, approximately US$1.7 billion remains to be officially cancelled by Costa Rica (US$598 million), Honduras (US$203 million), Libya (US$282 million), Iran (US$150 million), Algeria (US$134 million), and Taiwan (US$187 million).
Economist Nestor Avendaño explained that if cancellation of all the HIPC debt could be achieved, it would bring the total foreign debt down to US$1.9 billion, equivalent to 33% of GDP, which he called a “decent number.” It now stands at 50.5% he said.
Topic 5: Foreign investment expected to rise
General Alvaro Baltodano (Ret.), executive secretary of the government Corporation of Free Trade Zones, announced on July 29 the arrival of 13 foreign companies interested in investing in different areas of production. "We have grown in the area of agro-industry. Nicaragua is the best country for this and offers the best conditions for investors," Baltodano said. He emphasized that for 2008 the Free Trade Corporation is looking to achieve new investments of US$104 million in agro-industry which he said was a qualitative jump from 2007 when new investments amounted to only US$43 million.
This good economic news follows on the heels of a report that 9,000 textile jobs have been saved by a Mexican investor who bought three of the five factories closed by the Taiwanese textile giant Nien Hsing which moved its manufacturing operation to Asia. “This has us very excited,” Baltodano said, “because it was a concern and a challenge that we had ahead.” Baltodano said that he hopes the official announcement will be made in August although “already it is a fact that they bought it.” Baltodano also said that they are about to sign contracts with cloth weaving manufacturers that would represent investments around US$50 million dollars. Currently all cloth used in Nicaragua's clothing manufacturing is imported.
Baltodano also made reference to an expansion of call centers which employ university students and graduates. He has received applications from three well-known companies, one Mexican, one US, and one Spanish. “This has positive repercussions for young people because they can earn over US$200 a month and can, in some cases, reach US$300 or US$350 a month,” he said. However, on July 31, employees at one of the call centers, Telmark, staged a sit-in when the company failed to pay them for the past six weeks. Employees have occupied the premises and are refusing to work but company intimidation and management locking them on the second floor prevented reporters from talking to them. A company spokesperson claimed that the Mexican government has been slow in paying for the contractual services, but promised that the employees would be paid by the end of the day, a promise which was not kept. Workers who telephoned El Nuevo Diario said that they were considering filing a complaint with the Ministry of Labor.
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