Nicaragua Network

TOUCHDOWN DANIEL ORTEGA AND THE FSLN

By: Adolfo Pastran Arancibia (translated by Nicaragua Network staff)

Nicaragua lives an undeniable political reality. You can question, accuse, contradict and be in opposition to the government of Sandinista Daniel Ortega, even at any cost, but the real and tangible facts in the economic and social fields cannot be hidden.

In realpolitik, President Daniel Ortega decided to win a game of strategies this year, and achieved major political, economic and social advances during 2013, consolidating not only the national economy, but also the social policies of his government and the political model, through reforms to the constitution in which the opposition and his adversaries were left behind.

The political opposition claims a lack of institutionalization, of democracy and freedoms, violations of human rights, the closing of political space, and repression, but their rhetoric seems far from that expressed by citizens in various opinion polls carried out in the country by CID Gallup; Borge & Associates and M & R Consultants, where a majority approve of the government’s work.

Opponents of the Sandinista movement accuse the head of state of taking upon himself the powers of the different branches of the state and of the local governments, restricting civil liberties, and putting an end to the institutional framework by promoting constitutional amendments.

To tell the truth, since 2007 the FSLN has sought reforms to the constitution. The FSLN proposed them to the PLI [Independent Liberal Party] and PLC [Liberal Constitutional Party] when that alliance of parties was in the majority in the National Assembly and the amendments were not accepted. By contrast, those parties clung to the Metrocentro II agreement not to choose senior members of the judiciary, electoral authority, and executive agencies whose terms had expired, hoping that in the 2011 elections they would win more legislative seats and force Ortega to relinquish power, a decision which was politically counterproductive.

Constitutional amendments that will be ratified for the required second time in the January 2014 legislative session, would allow Ortega to run for another presidential term in 2016 and to devote the next two years to achieve major infrastructure projects.

"It is the people who have to decide", said Ortega of the possibility of running for his seventh presidential candidacy in search of his fourth victory and third consecutive term in the next election.

Through 2013, the Ortega government's performance has met with high approval by Nicaraguans for its social, economic, political, institutional, and foreign policies, contrary to the discourse of the opposition.

Economic management has been the most popular, according to M & R Consultants, with a 72.5% approval rating.  This trend has remained unchanged in the last year. A majority of 70.5% approve of the institutionality of the Ortega government, and 67.9% consider the Ortega government to be democratic, despite the words of the opposition, which accuses him of being authoritarian.

76.3% say that the government of Ortega unites the country; 74.8% say Ortega leads the country in the right direction; 66.5% approve of his management in general and 74.1% are optimistic.

But not only has Ortega maintained a high level of approval throughout the year, so has the Coordinator of the Council of Communication and Citizenship, Rosario Murillo [Ortega’s wife], who is increasingly popular.

For example, 65.2% of those interviewed approve of her work. From January 2007 to September of 2013, Murillo has had a rise of 37.2% approval, while criticisms fell precipitously. In the ranking of public personalities, Murillo has also had a rebound to position herself with a 77.2% level of popularity.

Under Ortega’s leadership, the FSLN has become the majority party in the country, judging by CID Gallup polls this year, and has consolidated its position as the absolute majority party without a significant opposition.

The General Manager of the prestigious international firm Borge & Associates, Víctor Borge, told INFORME PASTRAN that never before has President Daniel Ortega had such a high level of popular acceptance and positive assessment of his governance.

Borge’s polls show Ortega has reached a 74.7% favorable rating. Comparing the measurements of the past six years, the positive assessment of the President had risen, and today shows his broad popular acceptance.

Speeches, protests, declarations, and accusations by the opposition leadership that Ortega is authoritarian, a dictator, a monarch, among other epithets, do not seem to fit the perception of the Nicaraguan people. On the other hand, the main opposition figures are severely unpopular with Nicaraguans in all the polls.

In the past 23 years, Nicaraguan society has changed, to the degree that there no longer exists as sharp anti-Sandinista movement as in the 1980s and increasingly there is tolerance and acceptance of the Sandinista movement in power in 2013, says Víctor Borge, who pointed out that Nicaraguan society was fractured in the 1980s when there were strong anti-Sandinista and Sandinista movements, but after 1990 the anti-Sandinista movement diminished with the end of the war and today, "the majority have a positive opinion about the Sandinista movement and its leader (Daniel Ortega)."

"The most notable point is that the anti-Sandinista movement has disappeared," said Borge, adding that high levels of approval toward the Ortega government are the product of a combination of factors, in which the opposition has done its part, committing suicide politically, given that they had held absolute majorities of municipalities, branches of government, National Assembly Deputies, and the executive, but quickly turned into a minority.

Rosario Murillo, Coordinator of the Council of Communication and Citizenship, has become a predominant figure in politics and national affairs, according to Víctor Borge, because "she is very intelligent, is a very important strategic thinker".

He admits that President Ortega has accumulated enormous power, which no politician has ever had before in the history of the country. "You can go back to Somocismo [Somoza dictatorship] and farther back to (Jose Santos) Zelaya and farther back to whenever, and no one has even dreamed of such absolute control of the country," said Borge, adding that "the danger of this is that it can favor the authoritarian temptations of government".

He notes that there is no real political opposition, but only small opposition groups in the country.

THE ECONOMY WAS CONSOLIDATED

In 2013, Nicaragua consolidated its macroeconomic stability and reinforced its social safety net with prudent management of finances, while increasing public spending on socio-productive programs to reduce poverty, as cited by international bodies, which were quoted in Prensa Latina.

According to the Economic Commission for Latin America and the Caribbean (ECLAC), Nicaragua’s predicted 2014 GDP growth rate will put it among the five fastest growing countries in the region, despite the complexities of the world situation and the inevitable external shocks suffered by a nation not producing oil, whose exports of goods, mainly agricultural commodities, suffer the effects of a fall in prices.

Estimates from the Central Bank of Nicaragua (BCN) agree that the rise of GDP in 2013 will be close to five points and accumulated inflation will be below that forecast, between 5.5 and six percent, below the 6.62 percent of 2012.

During the last three years GDP maintained an average increase of five percent and for 2013 the initial calculation was of around four points, which will be surpassed despite the decline in the international prices of export products and the increase in oil prices.

Inflation remained in single digits.

Preliminary estimates indicate that the foreign direct investment (FDI) in 2013 exceeded US$1.5 billion compared to US$1.24 billion last year. In addition, capital flows entering the country will show growth on the order of 20 percent, with the Free Trade Zones’ performance standing out, the evolution of which is advancing from the traditional concepts of simple maquiladoras [assembly plants, aka sweatshops].

FDI has increased in the energy sector, with emphasis on the use of renewable sources, petrochemicals, telecommunications, tourism, oil exploration, textile and footwear manufacturing, and the automotive parts sectors.

REDUCING GAPS

According to ECLAC, Nicaragua ranks second in Latin America and the Caribbean after Venezuela as the country that most reduced the gap between rich and poor in recent years, as cited in Prensa Latina.

Almost 300,000 inhabitants rose out of extreme poverty in the period from 2007-2012, through the combining of private initiatives and government plans to promote employment and to finance small producers, diversify exports and investment, as indicated by data from the Ministry of Finance and Public Credit.

In the productive sector, one of the flagship projects is called the bono productivo orproduction package that channels resources to finance micro and small producers engaged in agricultural work.

During the past seven years, agricultural workers income and wages grew, showing the effectiveness of programs for the rural sector, which is where there are higher rates of poverty and malnutrition.

Nicaragua is the only country in Central America that managed to return to the pace of economic growth that it had before the international crisis of 2008-2009, even if we still have the lowest level of productivity in the region. This not only has been recognized by ECLAC, but also by the International Monetary Fund in its latest assessment of article IV.

A study [IMF] of the State of the Region, stressed that the economic boom of Nicaragua is explained largely by a significant increase in foreign direct investment, a greater dynamism of foreign trade, and greater participation of the agricultural sector in production.

NICARAGUA TRANSCENDED

One of the most relevant aspects developed by the government was the summit meeting with capitalists and big business on September 4, where it outlined the broad lines of action for the economic and social development of Nicaragua over the next three years, assuming a projected growth of 5.2% in 2013 and record levels of foreign direct investment and remittances, growing public investment, and inflation under control.

Meanwhile some political parties and organizations of civil society regrouped to confront the FSLN, accusing Ortega of being an authoritarian dictator and criticizing the private sector of being focused only on economically developing the country together with the government as a facilitator, but not putting institutional issues on the table.

"We must look out for Nicaragua, and that means that the private sector and the government have to go hand in hand," said businessman Carlos Pellas. Employers, for example, have endorsed the construction of the inter-oceanic shipping canal and oil exploration in the Caribbean Sea.

They were seated and shaking hands, all the directors of the Superior Council of Private Enterprise (COSEP), including Carlos Pellas, Alberto Chamorro Chamorro, José Antonio Baltodano, Ernesto Fernández Hollman, Miguel Gomez Cesar, José Ignacio González Hollman, Cesar Augusto Lacayo, Rene Morales Carazo, Ramiro Ortíz Mayorga, Miguel Zavala Navarro, Roberto Zamora Llanes, Jaime Lacayo Montealegre, Juan Bautista Sacasa and Jaime Rosales, who  represent large capital and the country's richest economic groups. Also participating were the Colombian and Panamanian investors of BAC Credomatic, which belongs to the Sarmientos and the ASSA group respectively.

Two things were very clear after the meeting between President Daniel Ortega and the business sector. First, that for the first time in many years, businesspeople were seen as well aware of the need to reduce poverty. Poverty was one of the phrases most expressed by businesspeople in the conclave. And second, the mea culpa of President Ortega when he said that he was breaking with the axiom that says that a human being has to stumble over the same stone two or three times, noting that Nicaragua in the past has stumbled many times, throughout its whole history, on the stone of war and that divided us as a nation and submerged us in backwardness.

"The miracle here is that we have managed to reconnect and transcend this, and not stumble over the same stone," proclaimed the President.

"The words of Ramiro Ortiz have also been very profound, to emphasize this example of understanding that manages to transcend human misery. Or that we, in the middle of our limitations, our poverty, a country with great limitations, are proving that we are capable of transcending human misery; meeting, talking, making agreements, even taking on the challenge of giving a constitutional character to this model we have been using and that we now consolidate by way of the law," Ortega said on that occasion.

Businessman Carlos Pellas, pointed out that with the institutionalization of the Advisory Committee there will be a legal framework that guarantees the permanence of that process over time with the different presidents who may appear in the future.

"We think this is an extraordinary idea because a big reason that economic growth has been generated in Nicaragua is this process of seeking consensus between the private sector and the government.  Let a very clear message go out from here to all the small, medium, and large Nicaraguan and foreign business persons that we are working in a consensual manner, seeking to solve the problems together, where we negotiate most of the establishment of the laws, and where we will reach consensus, and that sends a very clear signal to the other Nicaraguan businesses that we are looking for the way to create the conditions to eliminate poverty," he said.

"And seconding what Ramiro (Ortiz) said, I'm a total believer in this process, I think that it has greatly served to reconcile the Nicaraguan family. Perhaps for friends who come from abroad, and have not lived our process, we must never forget that we had a war that caused the deaths of 40,000 people. This division of the Nicaraguan family cannot ever again be allowed. We have to do everything possible, as Nicaraguans, to avoid the division. We must always work, as I've said throughout my life, on the things that unite us, and not on the things that divide us,” stressed Pellas.

HE WHO HAS EARS LET HIM HEAR

Applauded by big capitalists such as Carlos Pellas, President of the COSEP José Adán Aguerri launched harsh criticisms of those who criticized his dialogues with the Sandinista government, on the very National Day of the Entrepreneur.

"Some voices, accustomed in the past when they were in power to monopolize decisions and be owners of the truth, now criticize us because they say that we are acting in place of the legislature. Let us remember that in our country National Assembly Deputies historically have been chosen by their links with the political leadership of the time and not by their association with citizenry and their problems, including economic and social issues," said Aguerri.

He argued that "for years and years the [National Assembly] deputies decided economic matters without any kind of consultation with our economic sectors and without good knowledge of the issues that they decided. That is why, since 2005, we decided to get involved, as a sector, without being invited, directly in the passage of every law of the economic sphere in the National Assembly."

UNPRECEDENTED ACCOLADES

The third quarter of the year, the Sandinista government of Daniel Ortega received major support from the UN Development Program (UNDP), the World Bank, and the governments of Korea and Japan, which announced millions of dollars of disbursements for programs and projects of social impact for poverty reduction.

Multilateral agencies and Governments seems more interested in the effective implementation of programs that cater to the poor and allow more Nicaraguans to have free access to health and education, than to opposition allegations of violations of human rights and the deterioration of democracy.

The Vice-President of the World Bank for Latin America, Hasan Tuluy, expressed himself "satisfied" with the result of programs that the international agency financed in Nicaragua, one of the best run portfolios of projects in Latin America, and announced guaranteed funding, nothing more and nothing less than US$400 million between 2013-2017 for infrastructure and food security projects. For the fiscal year 2013-2014 the World Bank will disburse some US$60 million, according to Camille Nuamah, representative of the World Bank in Managua.

Both the World Bank and the International Development Bank (IDB) have changed approaches to their aid to the country because now they allocate resources for social programs, which were never allowed during the Liberal Party governments when they imposed unfulfillable conditions [structural adjustment policies].

In an unprecedented event, UNDP announced that it will allocate US$292.5 million in assistance to Nicaragua for the period 2013-2017, aimed at the reduction of poverty and to guarantee the right to food security, health, and education. It is precisely in those areas where the Sandinista government is highly rated in all opinion polls.

Also, the Agency for International Cooperation of Japan (JICA) granted a loan of US$17.1 billion to the country, to finance the National Project of Sustainable Electrification and Energy (PNESER) and to build four small hydroelectric projects.

The government of South Korea signed a Memorandum of Understanding with the government of Nicaragua, for infrastructure works. The exact amount was not specified, however it is expected to be in the millions and linked to projects that are programmed. Since 2007 the South Korean government has financed projects to the tune of US$100 million in Nicaragua, and has declared Nicaragua its "number one partner" in Latin America on issues of development cooperation.

The National Assembly approved a signed loan agreement between the government of Nicaragua and the government of India, through the Indian Export Import Bank (Exim Bank), to finance projects in power transmission, within the framework of the National Program of Sustainable Electrification and Renewable energy (PNESER). The loan is for the amount of US$10 million for the expansion of the La Virgen substation, construction of the San Juan de el Sur substation and a transmission line from San Juan de el Sur to La Virgen, construction of a substation at the Augusto César Sandino international airport in the municipality of Managua, and acquisition of transport and lifting equipment for maintenance of the national electrical grid.

Felipe Jaramillo, director of the World Bank for Central America, came to Managua this year and signed an agreement with the Government to support its education sector strategy with US$33 million that will support strategic education plans, from this year to 2015, and which seeks to advance the quality of education, which includes improved coverage, promotes the completion of basic education in rural areas, construction of more infrastructure, and improvement of more school environments.

The IDB representative in Nicaragua, Carlos Melo, said that the approval of loans and disbursements is a recognition of the ability to formulate, prepare and execute projects by the government of Nicaragua, which is essential to meet the challenge of the magnitude of the project in an efficient manner and to respond to the needs of the Nicaraguan population and that of the region.

The Government signed this month with the Central American Bank for Economic Integration (CABEI) a contract of loan US$100.69 million for the financing of the project to improve and expand the water supply and sanitation systems in 19 cities in Nicaragua.

The project is aimed at restoring the right to potable water to families of Camoapa, Cardenas, Jalapa and Chichigalpa, Chinandega, Masaya; as well as systems of sewage of Acoyapa, Cárdenas, La Trinidad, Larreynaga, Managua and Santo Tomas. With this financing, 17,308 connections will be installed, benefiting a total of 348,384 inhabitants.

The Executive President of ENACAL, Erving Barreda, said that of the US$100 million contributed by the CABEI, US$7 million will be used for the design of feasibility studies of water and sewer projects in another 23 cities in Nicaragua.

WITH A LONG TERM VISION

The Government of President Ortega achieved another breakthrough this year, setting a long-term economic vision with its Economic Financial Program 2013-2016 (PEF), which aims at the economic development of the country through the creation of wealth and poverty reduction.

That program is one of the fundamental pillars of the Nicaraguan economy, together with the National Human Development Program and the General Budget of the Republic.

Among the main macroeconomic goals of the PEF is to achieve economic growth of 4.2% in 2013, although officials from the Central Bank at the end of the year predicted a 5% growth. A 4.5% growth rate in 2014, 4.7% in 2015 and 5.0% in 2016.

The Government of Nicaragua estimates a cumulative inflation rate of 7.2% in 2013, 7.1% in 2014, 7.0% in 2015 and 6.9% in 2016...

Meanwhile, Pablo Mendeville, representative of the UNDP, has said that Nicaragua is striving to achieve the Millennium Development Goals of social policies and could achieve this by the end of 2015.

The representative of UNDP has recognized that the macroeconomic policies pursued by the Sandinista government in recent years, with a human approach, contribute to sustainability and highlighted the efforts of Nicaragua with regard to climate change, calling it one of the leaders in the field, to generate 52 percent of its energy from renewable sources, an increase of over 20 percent from seven years ago.

This year, Nicaragua ranked 93rd in the Human Capital Index  published yesterday by the World Economic Forum, higher than Honduras in Central America and the Dominican Republic, Paraguay, Bolivia and Venezuela in the rest of Latin America.

The index, which evaluates 122 countries, analyzes four areas: education, health and welfare, workers and employment, and enabling environment. In the report, Nicaragua, had its best rating in the area of health and welfare, coming in at 78th, while in employment and workers it managed 89th. On the other hand, the country was in 94^th place in aspects of education and enabling environment. "The strengths of Nicaragua include its workforce," said the World Economic Forum.

The UN Food and Agriculture Organization (FAO) has recognized that Nicaragua is among countries that achieved ahead of time the goals set by the Zero Hunger Challenge and lowered the national poverty level. Official data from the Nicaraguan Institute of Development confirm this: in previous years, the level of "poverty was more than 40%, and that of extreme poverty was 17.2%; today we are calculating extreme poverty at 7.6%."

In addition, Nicaragua recorded indisputable achievements in terms of prevention and health promotion, with a program of immunization which is an example for Latin America, with coverage as high as one hundred percent in children under one year old, and more than 95 percent in general.

It has an effective campaign to prevent 16 serious diseases that can affect the population, such as diarrhea and pneumonia.

In terms of maternal and child health care, there have also been breakthroughs, such as the creation of maternal waiting homes for the attention to women during their pregnancy, a high-impact strategy recognized by the United Nations.

We have also been lowering the maternal mortality rate of 93 per 100 000 live births in 2006 to 50 per 100,000 live births last year, and neonatal mortality has been decreased by 50 percent with respect to what existed in 2007.

As regards education, the effort of the Sandinista government is reflected in the results obtained during the school year 2013, with rates higher than the previous periods and a commitment to increase them more in 2014.

One of the most outstanding results is the school retention rate of approximately 96 percent of the students enrolled. In addition, the government achieved a100 percent coverage of students receiving school meals, thus benefiting students of public preschools, community schools, and subsidized Catholic schools throughout the country.

Along with improving the quality of education, the government also launched the Dignification of School Environments Program, remodeling this year 3,858 classrooms in more than 1,142 centers of studies, as well as constructing 12 new schools.

A BETTER COUNTRY FOR WOMEN

Nicaragua is the country with the most gender equality in Latin America and the Caribbean and tenth worldwide, according to the World Economic Forum (WEF).

This means that Nicaragua is one of the countries where women have greater access to health and education, while they have more political participation and economic inclusion, said the study.

According to a BBC report, citing "The Global Gender Gap Report 2013” by the WEF, gender disparity fell slightly worldwide in 2013, since 86 of the 136 countries studied, representing more than 93% of the world population, showed improvements. But "the change is definitely slow," says one of the authors of the report, Saadia Zahidi.

Of the countries studied, Iceland has the greatest gender equality, followed by Finland, Norway and Sweden. Nicaragua is the country in Latin America with the highest ranking, in the number 10 position. Yemen and Pakistan are located at the bottom of the list.

YEAR OF INFRASTRUCTURE

CEMEX Nicaragua, in consortium with Constructora Meco and llansa Engineers was awarded the first segment of the “Rehabilitation and Improvement of NIC 3 Highway” project, Nejapa - Puerto Sandino comprising 31.43 km also known as Old Leon Highway. This work was recently awarded by the Ministry of Transportation and Infrastructure (MTI) to the consortium formed by CEMEX-Meco-llansa and is considered one of the most significant road infrastructure improvement projects in recent years in the country.

The project is composed of two stretches for a total of 50 km and will have an estimated duration of 18 months with an approximate cost of US$40 million from the Mesoamerica Fund of Mexico and from the Central American Economic Integration Bank (BCIE).

The Inter-American Development Bank (IDB) approved financing of US$91.5 million to support the Third Program of Support to Transportation, intended to expand and improve the network of highways and rural roads in different regions of the country. This funding will be used for the construction and rehabilitation of several road sections including from Malpaisillo to Villa 15 de July, 36.4 km. This project will link to the stretch from La Paz Centro to Malpaisillo, 37.2 km. With this we will have a new route to the border with Honduras at El Guasaule.  Also complementary to the Pacific corridor route will be the rehabilitation of 31.4 km of the road from El Guasaule to Chinandega.

In addition, the road from Muy Muy to Boaco, 24.7 km, and the section Piedrecitas - Nagarote - Empalme Itzapa will receive maintenance so that they are in optimum condition in the coming years.

The government of Spain and the European Union (EU) earmarked US$300 million to fund projects of drinking water in Nicaragua, according to Spanish Ambassador León de la Torre.

Spanish financial assistance will serve to bring drinking water to thousands of households in low-income rural areas of Nicaragua.

Furthermore, the Agency for International Cooperation of Japan (JICA) and the government of Nicaragua signed a loan for US$17.1 million to finance the National Project of Sustainable Electrification and Energy. These funds are intended to promote energy conservation through the construction of four small hydroelectric power stations that will provide renewable energy to isolated communities in Nicaragua, according to the document. They will also stimulate energy efficiency through replacement of street lights and fixtures in residential areas and public facilities with energy-saving devices, such as sodium vapor lights, fluorescent bulbs, and light-emitting diodes.

The government intends to invest US$2.577 billion during the period 2013-2015, nearly double that of 2009- 2012 in transportation infrastructure. It has designated US$623 million for the rehabilitation of inter-city roads, including US$61 million to improve the Nejapa-Santa Rita-Puerto Sandino road, US$24 million for the La Paz-Maipaisillo road and US$23 million for paving 310 km of roads.

In the energy sector, substations and transmission lines in Yali, Ocotal, El Sauce, Terrabona and expansion of substations in Esteli and San Ramon, will be built to extend the coverage of transmission and distribution of energy in rural areas to approximately 304,390 inhabitants.

In addition, the construction of the El Barro hydroelectric project will expand capacity, generating 25 megawatts installed capacity, diversifying the energy matrix. They will also rehabilitate and modernize the Centroamérica and Santa Bárbara hydroelectric plants, which will sustain the generation capacity of existing plants and ensure power already in production."

For water and sewerage an investment of US$291 million is projected, while $219 million will be invested in health.

In the report Climatescope 2012, Nicaragua won second place after Brazil due to its policy of clean energy, the structure of its energy sector, low-carbon business activity, clean energy value chains, as well as the availability of green credits.

Nicaragua also had the most developed green microfinance sector in the region, with a total of ten microfinance institutions concentrated on financing climate and green energy projects.

The government of Nicaragua plans to electrify of 25 to 30 thousand houses next year, after hooking up more than 50,000 poor households lacking service in 2013.

According to the Executive, investments from 2013 to 2016 will raise the national rate of electrification from 76 percent to a little over 87 percent, as part of efforts toward economic development with social inclusion.

During the first half of 2014 electrical service is expected in 45 settlements and another 30 during the second half of the year, mainly in rural areas, to reach a total of 25 to 30 thousand houses.

In 2006 electricity supply barely reached 54 percent of inhabitants and the generating capacity was 570 megawatts (MW), with demand above 400 MW. The nation lived with constant blackouts that came to average 14 hours a day. Investments made in the past seven years made it possible to raise electricity generation above 1,000 MW capacity to meet a demand of about 620 MW.

IMPROVEMENTS IN COMPETITIVENESS

Nicaragua climbed nine rungs in the Global Competitiveness Index due to some improvements in its capacity for innovation. According to a report issued by the WEF, Nicaragua was placed among the 99 most competitive nations out of 148 in the period 2013-2014. Between 2011 and 2013 Nicaragua improved 16 positions and went from the position115th to 99th, according to previous reports of that organization. Together, our country ceased to be the least competitive in Central America to beat Honduras, which was at 111, due in large part to the high levels of insecurity still suffered in that nation, considered the most dangerous in the world by the United Nations.

The document points out that Nicaragua earned a rating of 3.8 from a maximum of seven awarded by the World Economic Forum in the Global Competitiveness Index, calculated from the analysis in three major areas. The first of these areas is basic requirements, which represent 60 percent of importance in the evaluation and include institutions, infrastructure, and macroeconomic environment. The second element relates to efficiency enhancers and makes up 35 percent of the score, while the third is linked to innovation and sophistication factors and represents only five percent.

OTHER ACHIEVEMENTS

The United States Government granted a waiver, known as the "property waiver", for a period of one year until July 29, 2014. From July 2012 to July 2013, the government of Nicaragua resolved a total of 66 pending cases.

CAFTA remained unscathed with [Nicaragua receiving] the greatest trade benefits and overall relations with United States improved despite criticism from the State Department on the amendments to the Constitution.

As far as national security is concerned, the fact that Nicaraguans are not living the same reality as those living in the countries of the Northern Triangle, Honduras, El Salvador and Guatemala, which are increasingly being bled by violence, crime, and drug trafficking, was a great achievement for Nicaragua and the government.

In those countries, gang members and drug traffickers have control in many poor areas. Assaults, extortion and revenge among criminals, dismemberment, and attacks against people left a thousand dead in 22 departments of Guatemala from January to June of 2013, to cite some examples, and in El Salvador and Honduras the situation is similar, in contrast to Nicaragua where the crime rate dropped and the fight against drug trafficking was effective.

COUNTRY MORE ATTRACTIVE FOR INVESTMENTS

Nicaragua tried to boost its development by attracting foreign investment, and take advantage of a good economic moment for capital that flows through the region to strengthen the economy. Spanish companies, such as Repsol and Gamesa, were interested in investing in our country.

Also Mexicans, such as MASECA, LALA and meat exporters and telecommunications companies, have not stayed behind,.

Nicaragua this year authorized Repsol to explore for oil in the Caribbean Sea, with an investment of US$30 million. In recent times, in addition, several companies in the field of renewable energies, such as Gamesa and Biomass Investment have landed in the country. The tourism company Barcelo announced further investments.

THE RUSSIAN BEAR IS BACK

This year, the Nicaraguan government strengthened its diplomatic and trade relations with Russia, which also emerged in the world as an economic and political power.

To strengthen these friendly relations with the people and government of Nicaragua, as well as providing support to the Army of Nicaragua, the crew of the Russian warship "Moskva" and Deputy Chief of the Fleet, Admiral Vladimir Ruban, visited and participated in the 33rd anniversary of the founding of the Air Force of the Nicaraguan Army.

Costa Rica and Colombia were the only countries in the region that were alarmed by the Russian proximity to Managua, to the extent that the Costa Rican Foreign Minister Enrique Castillo, accused us of going back to the Cold War in the 1980s, and requested United States to take sides, arguing that Nicaragua is a regional threat because it is allied with Russia.

“The presence of an extra-continental power, Russia, is also important to the rest of the region. To understand the gravity of Nicaraguan conduct, one must put it this way: these are not little games fighting over tiny bits of territory or done only to mortify the neighbor. There is a country in Central America that is altering the regional balance of power and threatening the peace," he stated, and he revealed that, yes, they [the Costa Ricans] have gone to the United States, because "It seems to us inappropriate that Nicaragua is bringing Russia to the region, because that changes the balance of power."

Also Colombia protested to Russia when jet bombers allegedly violated Colombian airspace when flying from Managua to Caracas, Venezuela, across the Caribbean.

On September 24, 2013, a bilateral meeting was held at the United Nations between Russian Foreign Minister Sergey Lavrov, and Nicaraguan Foreign Minister Samuel Santos López. At that meeting Foreign Minister Lavrov again congratulated Nicaragua for its Independence Day and the significant progress of the Government of National Reconciliation and Unity for its economic and social advances.

Foreign Minister Samuel Santos Lopez thanked the Russian Federation for the donation of wheat this year. Santos expressed appreciation for the donation of buses that are operating in the country. Both foreign ministers talked amicably and broadly about the solidarity and fraternal cooperation that has existed between both peoples in particular on important issues such as the fight against drugs, as well as various issues of international politics and global interests.

This year, Russia gave enormous support to the National Police and the Army of Nicaragua in the fight against drug trafficking and became one of the main donors of both institutions.

NATIONAL UNITY IN INTERNATIONAL POLITICS

The handling of foreign policy towards the conflicts with Colombia and Costa Rica allowed President Daniel Ortega to enjoy broad national support, even by the opposition.

PLI Deputy in the Central American Parliament (PARLACEN), Mauricio Díaz, said Ortega faced voices against domestic policy, "because he attempts to perpetuate himself in power, but Nicaragua’s problems are problems of the Nicaraguan people and Daniel Ortega does not represent all Nicaraguans in the application of his domestic policies. But on international policy, unfortunately, we are with him."

Lawyer Mauricio Herdocia, insisted throughout the year that Nicaragua "has a common position obviously that the ruling [of the World Court in Nov. 2012 against Colombia and favoring Nicaragua] must be carried out in the most harmonious way possible” and "around the fact that Nicaragua has every right in the world to go to the Commission on the Limits of the Continental Shelf to ask for the extension of the continental shelf of Nicaragua to where it extends in accordance with the [UN] Convention and international law" and “on these two points obviously Nicaragua has only one position."

International law was a good ally of Nicaragua, according to analysts. For Eric Tremolada, an expert in international law at the Universidad Externado, "The cases presented by Nicaragua and the rest of the region are nothing less than the best example of how international law should be exercised. What has happened is a legal vindication in which, after many years of proceedings, they ruled in favor of someone.”

According to international analyst Álvaro Villarraga, "Disputes over border issues have been around for a long time and presently any country that believes that its borders are being violated can appeal. So far, Nicaragua’s actions have been correct and have used the appropriate legal and international ways to solve problems."

PRAISE OF NICARAGUA

Various multilateral financial organizations and agencies of the United Nations commended the government of Daniel Ortega for his policies of social impact.

The director of the United Nations Food and Agriculture Organization (FAO), Graziano da Silva, congratulated the government for the effectiveness of programs implemented against poverty and hunger at the end of a visit to the country and after visiting various locations to check the value of plans such as Zero Hunger, Family Gardens and the Production Packages, aimed at promoting the development of the agricultural sector and guaranteeing the security of national food consumption.

Graziano Da Silva said that school meals is the best investment in a country, because it opens up spaces for school retention, and therefore, greatly improves the quality of education, because a hungry child cannot learn. For Da Silva, it is a pleasure to see that the programs implemented in recent years by the government of Daniel Ortega have given good results quickly, which indicates that this nation is going in the right direction. He said that Nicaragua is little by little turning into the granary for Central America, an example of how to promote food security and support small family agriculture

"It is a great satisfaction for FAO to collaborate with the government of Nicaragua, since it has become an example of how to promote food security policies and support to family farming," said Graziano.

THE GRAND CANAL

There is no doubt that construction of the inter-oceanic Grand [shipping] Canal not only was the news of the year, but also the most emblematic project of the government, in which the HKND company and Wang Jing assume the investment risks, according to what he has stated.

In the concession to Wang Jing, Nicaragua received 1% ownership upon signing the agreement and will receive US$100 million dollars in ten payments, after the first ship passes through, but after the tenth year, Nicaragua will receive 10% ownership, at 20 years 20%, and 30 years 30%. Upon reaching age of 50, Nicaragua will have 50% of the profits and from then there will increase to 99% ownership.

The largest construction company in China, CRCC, has already done feasibility studies in Nicaragua. They are already working with the state-owned China Ocean Shipping Group Company, known as COSCO, one of the major shipping companies in the world and a state-owned company. In addition, the Chinese companies CIMC, expert in maritime transport and containers,  XCMG, a construction machinery expert, CNBM another Chinese company dedicated to building materials with experience in mega projects, and the supervisory company of the Chinese Three Gorges hydroelectric mega project. These are the crème de la crème of Chinese construction companies.

THE LARGEST REFINERY IN CENTRAL AMERICA

Nicaragua is currently building what will be the largest oil refinery in Central America, "The Supreme Dream of Bolivar", although the political opposition’s economic analysts and civil society leaders have called into question this project and allege that it has never taken off.

Abelardo Antonio Barrios, manager of the Miramar project, explained that the first phase is a plant called "Miramar" to store and distribute fuels such as fuel oil, diesel, Jet A1, gasoline and LPG, with a total capacity of 1,080,000 barrels that will be used to supply the Nicaraguan and regional markets. The second phase includes the refinery and the ability to produce petrochemicals for raw materials for plastics.

Two Venezuelan-born technicians with Techno Consult, the company constructing the refinery in Miramar, Gustavo Argüello and Hernando Buitrago, explained that they are working on the design, construction and management of the projects and have extensive experience in oil companies. Arguello stressed that the construction of the refinery is in the charge of a Chinese company, CAMC Engineering, which has much global experience in manufacture of tanks and the placing of pipes, and will bring special welding machines. They have already retained the Piedras Blancas plant to construct the infrastructure at Miramar. The tanks are being built by Nicaraguan contractor Lacayo Fiallos.

CAMC Engineering will build the first phase of the refinery in Puerto Sandino with an initial investment of US$233 million financed with the help of the Venezuelan government. US$183 million will be allocated to a fuel storage tank terminal (diesel, gasoline, aircraft fuel, and gas). The other US$50 million will be utilized for the construction of 3.8 kilometers of offshore pipeline for the transport of fuel to the refinery storage tanks.

THE MAJOR OUTSTANDING ISSUES

The release of feasibility studies and presentation of the route chosen for construction of the Grand Canal, the financial support achieved so far, and who will be potential investors in the project, will all be crucial at the beginning of the year to give credibility to the project.

If the Chinese businessman, Wang Jing, delays this information further, (it was already postponed in December), it will begin to generate uncertainty and real doubts about the project and optimistic skeptics will become negative skeptics. Uncertainty around the canal would generate negative impact in attracting more investment in 2014.

Everyone wants to know if the government and the military of China are behind the project and whether it will be possible or not. Further delay of these clarifications would result in loss of credibility.

In addition, Wang Jing has the enormous challenge with his Xinwei Telecommunications Company of starting the TELCOR concession this year that he received a year ago to operate a third telephone service in Nicaragua. That also raises questions about the possibility and capacity of his company to build a Nicaragua canal, because Xinwei has planned to begin installing the telecommunications infrastructure in April 2013 and none of that happened. Xinwei is obliged to start the project this year or TELCOR must have the concession removed for breach of contract.

On the other hand, another great debt remains on the Brazilian mega project, the construction of the Tumarín hydroelectric power plant, in the municipality of La Cruz de Río Grande, in the South Atlantic Autonomous Region (RAAS), which will have an installed capacity of 253 megawatts, but has not started as expected.

Hydroelectric Central of Nicaragua (CHN), created by the state-owned Brazilian company Eletrobras and the Brazilian conglomerate Queiroz Galvão, has made dozens of excuses over the year, despite the fact that it received tax benefits that no other company of the electric power industry has ever received in the country.

The Brazilian firm has said that it would begin to generate power in Nicaragua in the second half of 2016, at the Tumarín project, with an investment of US$1.1 billion. The National Bank of Economic and Social Development (BNDES), the main development entity of the government of Brazil, granted Nicaragua a loan of US$342 million for the construction of Tumarín, which also received a loan of US$242 million from the Central American Bank for Economic Integration (CABEI). But the project did not start and now it has been announced that there will be a definitive solution in January of 2014, when a Brazilian mission visits Nicaragua.

No doubt we will be watching the [National Assembly] election of officials [whose terms have expired] in all the branches of government and institutions of the nation, where the Liberals will be tested in their ability and willingness to negotiate with the FSLN.

And also, [we’ll be watching] the expected formal meeting between the government and the Nicaraguan Catholic Bishops Conference.