TUESDAY, JANUARY 27, 2009

Nicaragua Network Hotline (January 27, 2009)

1. Government announces measures to confront world economic crisis
2. National Assembly approves loans but battles over committee chairs
3. Santos optimistic about renewal of aid; numerous donations still coming through
4. RAAN elections: Ethics & Transparency says fewer problems
5. School retention at record level

Topic 1: Government announces measures to confront world economic crisis

On Jan. 20, President Daniel Ortega spoke to the nation about measures to confront the international economic crisis. He said that the Bolivarian Alternative for the Americas (ALBA) and the Central American Integration System offer powerful instruments. While developed countries have been hardest hit, Nicaragua exports are being hurt as well. For instance, the Nicaraguan lobster industry has lost its secure market in the US and is now looking elsewhere. He said that Nicaragua should increase its production of beans which have a market in El Salvador and increasingly in Venezuela.

Ortega said Nicaragua would work with the IMF and other financial institutions. “We have to continue to work with them and search for resources that belong to the people, to the world community, for the types of programs that mobilize productive forces, generate jobs, and guarantee services for the Nicaraguan people such as health and education which we aren't going to sacrifice,” he stated. Ortega laid out guidelines for government agencies that included cuts in spending on goods and services, vehicles, travel, and a freeze on the hiring of new employees to fill vacancies. He said that the government would seek US$500 million in loans from the Central American Bank for Economic Integration and other lenders in order to continue infrastructure programs such water, sewage, and other projects, including the national food program.

Ortega said that the government will make foreign and internal debt payments and urged private citizens and micro-lenders to renegotiate debts because, if citizens default, he said, the microfinance organizations would not have funds to make new loans. He also encouraged financial institutions to invest in agriculture, industry and housing rather than in extending “plastic credit” in a reference to credit cards.
Presidential economic advisor Bayardo Arce said that the government is not counting on the budget support funds from the European Union and other countries that have suspended aid to Nicaragua. He said that the government would sell US$20 million in bonds on the international market.

Independent economist Nestor Avendaño suggested that the government should reform taxes instead of going further into debt. He also urged the President to resolve differences with donor/lender nations and to move forward quickly with the long promised National Development Bank, which he said would support the majority of food producers who are not able to obtain credit from conventional banks.

Topic 2: National Assembly approves loans but battles over committee chairs

In its first session of the legislative year, the National Assembly approved six loans from donor countries and international financial institutions for a total of US$108.5 million. The money will be used for a number of projects, among them potable water and street paving for Juigalpa, and support for technical schools. This was the first meeting after two months in which the Assembly did not meet, and several more months of paralysis, because the opposition to the governing Sandinista Party (FSLN) refused to attend. The meeting came after an apparent agreement which gave former President and leader of the Constitutional Liberal Party (PLC) Arnoldo Aleman his freedom after his conviction for fraud against the state was annulled and gave the principal leadership posts in the Assembly to the FSLN.

Nominations of four new members of the board of directors of the Central Bank were also approved by the Assembly in its first session. The latter was among the requirements of the International Monetary Fund before it would release 2009 money. These measures were passed without the votes of the Nicaraguan Democratic Bench (BDN) which includes deputies from Let's Go with Eduardo Movement (MVE) and the Sandinista Renovation Movement (MRS).

On Jan. 23, PLC leaders Ramon Gonzalez and Wilfredo Navarro accused the FSLN and its ally, the Nicaraguan Liberal Alliance (ALN) of trying to take three committee chairmanships away from the PLC. La Prensa pointed out that “last week the PLC permitted [the FSLN] to control the leadership in exchange for the exoneration of former President Arnoldo Aleman and now it is paying the price.” If you are confused because you thought the ALN was formed because it opposed the so-called “pact” between the PLC and FSLN, then you have every right to be. Nicaragua's right-wing parties have never been known to long stand on “principle.”

Also on Jan. 23, Adolfo Martinez Cole, head of the Nicaraguan Democratic Bench, protested what he alleged was an attempt to keep members of his bench from chairing any of the 15 committees of the National Assembly during the next two years. He accused the FSLN, the PLC and the ALN of dividing the committee chairmanships among themselves, leaving the members of his small bench on the sidelines.

On Jan. 20, Prosecutor General Hernan Estrada criticized the decision of the Supreme Court to reverse the conviction of Aleman on several counts of fraud and money laundering and he said there were four other counts pending for which the former president could still be charged. Aleman also has charges pending against him in Panama and the United States. The Panamanian government turned over to the Nicaraguan government a condominium that Aleman had bought with allegedly stolen funds and the US has returned US$3 million the former president invested in the United States.

Topic 3: Santos optimistic about renewal of aid; numerous donations still coming through

Nicaraguan Foreign Minister Samuel Santos said last week that he was optimistic that foreign donors will continue their aid to Nicaragua and that suspended funding will be renewed. He said that “negative exaggerations” had been “cleared up” by presenting concrete facts about the electoral process of Nov. 9. Santos said that the challenges were minimal and that electoral law was followed. However, Peter Kent, a Canadian foreign ministry official, after meeting with Ortega and Santos, said that he was still concerned about “credible reports” of irregularities during the municipal elections. US Ambassador Robert Callahan insisted that the Ortega government should clear up the doubts about the elections.

Meanwhile, numerous donations are still coming in. The World Bank on Jan. 22 approved a US$7 million grant to help Nicaragua confront the impact of high food prices with a study of nutrition and expansion of the supply of agricultural products. The donation will add money to the Fund to Answer the Food Crisis that was established by the World Bank in May 2008 and to the Integral Program for School Nutrition (PINE) which feeds 263,000 pre-school and primary students in 52 municipalities.

It will also provide funding for the Agro-Food Seed Program (PAS), a Ministry of Agriculture program that works with more than 30,000 small producers. PAS distributes certified seeds, fertilizer, training and technical assistance to the beneficiaries in the form of credit that can be paid back in cash or with crops at the end of the harvest season.

Japan will donate notebooks to students in 66 schools to benefit 4,800 students in the poorest regions of the country. Donations from Japan have helped in the construction of 25 schools and Japan plans to help finance construction or rehabilitation of an additional 26 schools between 2009 and 2011. The UN World Food Program plans to continue its support of meals for an estimated 450,000 students even in the face of the current economic crisis which has meant smaller contributions from member nations. Japan will also finance the construction of the Santa Fe Bridge over the San Juan River with Costa Rica. The Minister of Transportation and Infrastructure, Pablo Fernando Martinez, said that the project will open the country up to new trade opportunities with its neighbor. The bridge will also facilitate tourism.

With support from US Agency for International Development (USAID), the Regional Hospital of the South Atlantic Autonomous Region (RAAS) has reduced maternal deaths by hemorrhages after childbirth from 31 cases in 2007 to 11 in the 2008. Personnel have been trained in obstetric emergencies, new born care, HIV-AIDS counseling and in the fight against hospital-acquired infections. US ambassador Callahan vowed to continue this aid.

The Ambassador of the Netherlands to the US, Renee Jones-Bos responded to a letter from the Nicaragua Network urging resumption of aid. In a letter dated Jan. 26, 2009 Ambassador Jones-Bos wrote, “I appreciate and understand your concern about the situation in Nicaragua. I can assure you that my Minister is aware of this situation, and the possible consequences as mentioned in your letter.” He went on to say that the aid suspension involves only US$7.98 in budget support while US$26.6 million in aid for “the health and education sector, good governance and gender equality” will continue.

On Jan. 23 Santos received a “Manifesto in Defense of Nicaragua” signed by more than 1,400 individuals and organizations from 54 countries in support of the efforts of the Ortega government to eradicate poverty and recover Nicaragua's dignity and national sovereignty. Present at the ceremony were Walter Castillo Sandino, a grandson of Augusto C. Sandino, and Carlos Fonseca Teran, son of Carlos Fonseca Amador, founder of the FSLN. Santos said in receiving the document that, “When we have the opportunity, when some members of the media open their doors to us, and we can inform them what the government has done in such a short time, the list is truly impressive.” Tony Solo said, “We are against the positions of the European governments that they know more about democracy here than the Nicaraguans themselves, which is absurd.”

Topic 4: RAAN elections: Ethics & Transparency says fewer problems but PLC and Yatama allege fraud

Roberto Courtney, executive director of the national election observation group Ethics and Transparency, which receives funding from the US government, said on Jan. 21 that there were fewer problems in the Jan. 18 elections in the seven municipalities of the North Atlantic Autonomous Region (RAAN) which held delayed elections due to damage from Hurricane Felix than there were in the Nov. 9 elections in the rest of the country. Nevertheless, he said that electoral authorities should resolve the challenges by the indigenous Yatama Party to eliminate any doubt about the elections. Florentino Padilla Solano, head of the Yatama Party in the Rio Coco area, said that his party lost in the RAAN because of bad administration of its past municipal governments. He called on Yatama leaders not to resort to violence and to accept their electoral defeat. Yatama leader Brooklyn Rivera, however, remained adamant about contesting the results and the PLC is also challenging the result in Bilwi where it previously held the mayorship.

Topic 5: School retention at record level

Nicaragua reached its highest level of school retention ever last year, Minister of Education Miguel de Castilla announced on Jan. 20. He said that in the 2008 school year, 94% of students who began the year finished it, the highest figure in Nicaraguan history. De Castilla called on parents to register their children for the upcoming 2009 school year which will begin on Feb. 3, saying that there were no barriers to school attendance since January 2007 when the government issued Decree 116-2007 eliminating fees for public schools.

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.
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