Nicaragua Network

1. Twenty miners rescued from collapsed gold mine; search suspended for seven still trapped
2. National Assembly approves budget reforms
3. Nicaraguan business sees little prospect US Congress will renew TPL this year
4. Exports on track to exceed record set in 2012
5. Census and Environmental study of canal route in progress
6. Drug traffickers arrested in region-wide operation
7. Drug trafficking has impact on south Caribbean Coast
8. Japanese financed border bridge inaugurated

1. Twenty miners rescued from collapsed gold mine; search suspended for seven still trapped

On Sept. 2, the government announced that it was suspending the search for seven miners still trapped in an old mine near Bonanza that collapsed on them on Thursday, Aug. 28, after heavy rainfall in the region. Two miners were able to get out of the mine the same night of the collapse and twenty more were rescued on Aug. 29. After being trapped for 34 hours, they emerged dehydrated, exhausted, and covered with mud. By Sunday, Aug. 31, only one of the rescued miners, who suffered a broken arm, was still hospitalized. With the price of gold so high in recent years, small scale or artisanal miners have found that they can make a living exploring for gold in mines long abandoned by the big mining companies.

Government spokeswoman Rosario Murillo said that the search had continued until the experts and guides from among the miners themselves recognized that they could not go on: “They told us how dangerous it was and how they continued to struggle until it was impossible because they had cave-in after cave-in and time after time the wood supports that they built collapsed.” She went on to say, “I am sure that many Nicaraguans upon hearing their declarations, upon seeing their faces, those images of sorrow, will realize that the last thing that one loses is hope and when one realizes one cannot go on, one has to accept it. We understand their pain and we share it.”

On Sept. 1, Vice-Minister of Governance Carlos Najar said that the rescuers were working in adverse conditions in the “El Comal” gold mine, noting that the wet ground made further cave-ins possible. Government delegate for the Caribbean Coast Lumberto Campbell said that one of the rescued miners had been able to explain to the teams where some of his comrades were located and they were working in that direction. Thirty-four members of national fire-rescue teams were pairing with miners to go down 200 feet into the mine to search for the trapped men. Fire chief Javier Amaya said that teams of eight miners and two firemen had made 25 incursions into the mine. He said that there were frequent landslides, high temperatures, and nearly 100% humidity in the mine. The area above ground near the mine was unstable and police restricted access but nearby the government set up a camp to keep family members informed about progress in the search for their trapped relatives.

Manuel Simmons, the miner with the broken arm, told La Prensa that on Aug. 28 a number of miners had been working together and suddenly they felt cold air and then a loud noise and wind like a hurricane. He said that they began to run when what seemed like “fifty truckloads of earth fell around us.” They thought that they would not get out alive and began to cry out for their families. “We were there for three hours and some wanted to climb out through the chimney but we decided that no one would move alone,” he said, adding, “If we were to die we were going to die together and if we got out we would get out together.” He said that they then worked to move rocks and mud with their hands for hours until they were able to make a hole through which air came in and they began to call out for help. He said that when they heard shouts, “we were overcome with happiness.”

Murillo identified five of the miners who were not found as Juan Carlos Barrera Rodríguez, 25, from Bonanza; José Eliel Amador, 25, from Siuna; José González Flores, 18, from Tipitapa; Jairo Ariel Méndez López, 19, from Río Blanco; and Álvaro Pérez, 29, from Bonanza. (Radio La Primerisima, Sept. 1, 2; El Nuevo Diario, Sept. 1; La Prensa, Aug. 31)

2. National Assembly approves budget reforms

On Aug. 28, the National Assembly passed reforms to the 2014 national budget with 64 votes in favor and 21 votes against. The bill lowers the budget by US$118.3 million based on lowered expectations of revenue as a result of a series of setbacks sent by Mother Nature, including the coffee rust, a long series of earthquakes in April and May, and the current drought. Walmaro Gutierrez, chairman of the Economy and Budget Committee of the Assembly that reported the bill out favorably on Aug. 26, explained that the original 2014 budget totaled US$2 billion while the new budget is US$1.88 billion.

Opposition deputies in the National Assembly criticized the reforms, blaming the lowered revenues on the tax reform bill that passed the Assembly at the end of 2012 and saying that repairs to 36 high schools would be delayed while the budget of the Supreme Electoral Council (CSE) was preserved virtually intact. Gutierrez answered that the repairs to the school buildings could begin in 2014 as long as the costs were reflected in 2015 and said that revenues this year will still grow by 11.3%, although this is substantially less than last year’s 18.2% growth. He said that no teacher, nurse or doctor will have to be laid off and that the cuts in expenditures are just for the last four months of this year. (Radio La Primerisima, Aug. 28; El Nuevo Diario, Aug. 26; La Prensa, Aug. 29)

3. Nicaraguan business sees little prospect US Congress will renew TPL this year

Dean Garcia, executive director of the Nicaraguan Association of Textile and Clothing Industries said that all indications are that the US Congress will not discuss extending Tariff Preference Level (TPL) legislation during the remainder of 2014. He said that there are a number of products produced in Nicaragua’s free trade zones that will not be able to be produced if the law is not extended. The TPL allows garments assembled in Nicaragua to be exported to the US duty free even if they are made with cloth or thread imported from countries outside of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). The TPL will expire Dec. 31 unless Congress extends it. Garcia said that there are a few brands who will assume the extra cost for six months but new contracts with US buyers are generally for a year and the price is based on the current duty free costs. If the TPL is not extended, that cost will be borne by the manufacturer, not the US importer.

Jose Adan Aguerri, head of the Superior Council of Private Enterprise (COSEP), said free trade zone companies are preparing as much as possible for the loss of tariff preference, but there could be a loss of 14,000-15,000 jobs in 2015 from the current 70,000 jobs in the textile industry if the TPL is not renewed. Aguerri did hold out hope that Congress could take action in 2015. The tariff on clothing made from cloth produced outside the DR-CAFTA countries would be 30-40%. Half of Nicaragua’s US$5 billion in annual exports comes from the nation’s free trade zones. FTZ special regime factories provide jobs but no tax revenue for the government. (El Nuevo Diario, Aug. 28; Informe Pastran, Aug. 27)

4. Exports on track to exceed record set in 2012

Nicaraguan [non-free trade zone] exports so far this year have exceeded by US$10 million that of 2012 which was the previous high year for Nicaraguan exports. In 2013, the value of exports was down compared to 2012, making this year’s figure all the more impressive. Through Aug. 20, exports brought in US$1.778 billion. Center for Export Statistics (CETREX) Executive Director Jorge Molina said, “Yes, we have a record.” Despite a fall in international prices, Nicaragua produced a greater volume of exports to set the record. Volume increased by 11.87% while the value of the exports grew by only 7.67%. Molina expressed hope that the increase would hold for the rest of the year but refused to predict that it will. He said that beef exports may be the top export product in 2014. In 2013, coffee returned to the number one position after being displaced by gold in 2012. Enrique Zamora, president of the Association of Producers and Exporters (APEN) also said it is a good sign that exports increased in the first half of the year and hoped that they would continue. But he cautioned that exports are also affected by the severe drought Nicaragua is suffering (as is the whole Pacific Coast from Panama through California). According to CETREX in the first half of 2014 coffee exports led the way with US$312.64 million; beef followed at US$266.96 million; gold at US$251.96 million; followed by sugar and peanuts at US$124.21 million and US$78.89 million respectively.  (El Nuevo Diario, Aug. 26)

5. Environmental study and census of canal route in progress

David Blaha of the British firm Environmental Resources Management (ERM) told the publication Oil & Gas Journal that ERM had been hired by the HKND Company, which has the concession to build a shipping canal across Nicaragua, to do an independent evaluation of the environmental and social impacts of the canal and to advise HKND on international social and environmental norms. He said that, in the two meetings that ERM has carried out so far, they have shared information about the project and gotten feedback from local residents including their concerns about the effects of the project on their communities and their ecosystems. It is premature, he said, to speak about details of the evaluation, but ERM intends to carry out a rigorous and transparent evaluation of the environmental and social impacts and will make public all the studies and reports when they are complete. ERM is holding focus groups with community leaders, agricultural cooperative members, religious leaders, and private sector representatives. The focus groups began on Aug. 25 in Rivas and are continuing in El Tule, San Miguelito, Nueva Guinea, ending in Bluefields on Sept. 5.

At the same time, HKND, along with the Office of the Attorney General, the Nicaraguan Institute for Territorial Studies (INETER), and the General Directorate of Revenue, has begun a census of the population as well as a classification of the land along the canal route.  The census was first reported as being in preparation for the compensation and relocation of land owners but a later clarification from HKND said it was to learn in a general way about the situation of the population and not to evaluate properties. HKND stated that the technical aspects of the census are being carried out by the Changjiang Institute of Survey, Planning, Design and Research Co., Ltd., a Chinese company that specializes in engineering, planning, design, and supervision of construction.  Some residents expressed concern about the census. Miguel Angel Espinoza, 75, said that the census team came to his house and he is fearful of what the future might bring because, although he has lived there in El Pochote for 50 years, “I have no papers for this property.”

Paul Oquist, policy advisor to President Daniel Ortega, said last week that Nicaragua has signed a covenant with the UN Economic Commission for Latin America and the Caribbean (ECLAC) for a study of the impact of the canal on the economy of Nicaragua, Central America, and all of Latin America. The ECLAC study will begin after the release of the environmental and social impact by ERM in October. (Informe Pastran, Sept. 1; El Nuevo Diario, Aug. 28; Radio La Primerisima, Aug. 28; La Prensa, Aug. 27)

6. Drug traffickers arrested in region-wide operation

Head of the National Police Aminta Granera announced on Aug. 29 that, as part of the Central America-wide “Operation Diamond,” half a ton of cocaine was recovered and 11 people arrested. Homes in the city of Managua were searched along with hotels and farms in the departments of Chinandega, Nueva Segovia, Matagalpa, and Esteli. “Operation Diamond is a simultaneous operation and it continues in all of Central America as part of the regional plans of the heads of police of the Central American countries,” Granera said. The cocaine was found in Sebaco in the Department of Matagalpa. In Chinandega, Salvadoran Hector Martinez and his Nicaraguan wife Heizel Bustillo were arrested and their six boats confiscated. Known marijuana trafficker Hector Castro Reyes, known as “The Boa” was captured in Somotillo in the Department of Chinandega. Residents of the area said that they often see drug traffickers in their double cabin pickups who appear to be cattle ranchers or merchants but in reality are members of the Honduran cartel known as “Los Copanecos.”

On Aug. 31, more suspected traffickers were arrested, including five Salvadorans while arrest warrants were issued for three Guatemalans. According to the prosecutor’s office, the National Police have been following their organization since 2011 when it was discovered that they had been moving drugs from Costa Rica to Honduras through Nicaragua by land and sea. One of the arrested Salvadorans, Maria Cruz, said that the US$9,232 and C36,900 cordobas found in her house came from her home appliance store and tobacco farm, however, the prosecutor’s office said that she and Hector Escobar were in charge of communications with the Sinaloa cartel in Mexico. (Radio La Primerisima, Aug. 29; El Nuevo Diario, Aug. 30; La Prensa, Aug. 31)

7. Drug trafficking has impact on south Caribbean Coast

Drugs dropped overboard by traffickers in the Caribbean when they are approached by law enforcement vessels end up on the southeastern coast of Nicaragua, driven by the prevailing winds and currents. Fisherman “Jose” told reporter Matilde Cordoba of El Nuevo Diario, “We fishermen run into sacks of cocaine and like fools we grab them. … It is on the coasts; it’s in the sea—that stuff floats!” The drugs began appearing in the 1990s. Donald Byers of the Center for Research and Documentation of the Atlantic Coast (CIDCA) remembered, “I know a teacher, I won’t mention names, but in Pearl Lagoon he found a packet. He sold it and bought a hotel and a store but he never went into the drug trade.” But Ray Hooker of the Foundation for the Autonomy and Development of the Atlantic Coast of Nicaragua (FADCANIC) said that with the passage of time the “blessing” that came from the sea turned into something much more destructive. “Now,” he explained, “it wasn’t just having the luck of finding a load floating in that could be exchanged for US$20,000 or US$50,000; one had to provide services.” They needed fuel; they needed information; they needed hiding places, Hooker said. Ted Hayman of Tasba Pauni created a network and was the “king of the drugs” until he was arrested in 2012 and sentenced to 30 years.

Between 2004 and 2009, the crime rate of Bluefields was 424 crimes per 100,000 inhabitants while in the rest of the country it was 236. In 2012, the National Police revealed that the homicide rate in Bluefields matched that of Guatemala (42.7 per 100,000 people) while for the country as a whole it was 12 per 100,000 inhabitants. Francisco Bautista Lara believes that drug trafficking has put down roots in the region but “only as a passage way, a necessary route, because the region lacks the logistic conditions that would permit this complex crime, the objective of which is to reach the North.” Johnny Hodgson maintains that, after the arrests of 2012, the situation in Bluefields has improved. But others say that the shortage of jobs has driven many of the youth to drugs. The fisherman “Jose” said, “It’s too much. The youth are being ruined. We taught them to destroy themselves. Can’t we now teach them to stop?”  (El Nuevo Diario, Aug. 28)

8. Japanese financed border bridge inaugurated

Minister of Transportation Fernando Martinez, accompanied by Ambassador of Japan Masaharu Satoand Japanese diplomats, walked across the new Santa Fe Bridge which spans the San Juan River. The bridge was built with a US$30 million donation by Japan. The 362 meter bridge is the largest to span the San Juan River and Martinez hopes it will soon be the primary route for Pan-American trade and will unify the people of Nicaragua and Costa Rica. The group also inspected Nicaragua’s modernized Customs facility which contrasts with a simple Border Police station on the Costa Rican side of the river. The delegation was met by a delegation of Costa Ricans who expressed support for the new border crossing. No mention was made of any Costa Rican government officials being part of the Tica delegation. (El Nuevo Diario, Aug. 30; La Prensa, Aug. 31)