Nicaragua Network

1. Russian defense minister visits Nicaragua
2. International relations briefs: Japan, Germany, HSBC, drug trafficking, EU
3. Poetry Festival begins in Granada
4. Economic shorts: 2014 growth, another dam, CAFTA impact
5. Cooperatives changing the face of Nicaragua
6. Utility improvements around Nicaragua: internet, water, electricity

1. Russian defense minister visits Nicaragua

On Feb. 11, Russian Defense Minister Sergei Shoigu arrived in Nicaragua on the second stop of a three nation trip that included Venezuela, Nicaragua, and Cuba. He was met at the airport by Nicaraguan Defense Minister Martha Ruiz, Army Inspector General Gen. Adolfo Zepeda, officials of the Nicaraguan Foreign Ministry and Russian Ambassador to Nicaragua Nikolay Vladimr. The next day, Thursday, Shoigu placed a wreath at the Monument to the Soldier of the Homeland in Managua and later met with President Daniel Ortega. Ortega praised Russia’s new efforts for peace in Ukraine and decorated Shoigu with the Grand Cross Medal of the Army, which carries the name of Sandino’s General Francisco Estrada.

Also on Thursday, Shoigu and head of the Nicaraguan Army Gen. Julio Cesar Aviles signed a series of agreements that, among other things, will strengthen Nicaragua’s ability to fight drug trafficking and organized crime. Shoigu said, “These accords will permit us to substantially widen the framework of our military and technical cooperation and interchange of information.” He confirmed that his country would continue to support Nicaragua in its struggle against drug trafficking, strengthening it as a barrier to such trafficking in the region. The agreements will also permit Nicaraguan Army cadets and officers to train in Russia.

No mention was made by Shoigu of the announcement by Gen. Zepeda on the day of his (Shoigu’s) arrival that Nicaragua “had taken some steps” to obtain defensive jet airplanes, Mig-29 or similar aircraft, from Russia to help fight trafficking in its newly acquired territorial waters in the Caribbean. Zepeda said the planes would be entirely defensive, adding, “We are a peaceful country, respectful of international order.” He explained, “This is a subject that we are moving forward; we have nothing definitive.” The previous week Army spokesman Col. Manuel Guevara had said that such aircraft were not in the Army’s plans. (Radio La Primerisima, Feb. 11, 12; La Prensa, Feb. 11, 12, 13; Informe Pastran, Feb. 12, 13)

2. International relations briefs: Japan, Germany, HSBC, drug trafficking, EU

On Feb. 10, Nicaragua and Japan marked the 80th anniversary of the establishment of diplomatic relations between them with an exchange of messages between Japan’s Prime Minister Shinzo Abe and Nicaragua’s President Daniel Ortega. Ortega wrote, “In the name of the people of Nicaragua, the government of national reconciliation and national unity, and from myself, I extend our thanks for your fraternal and friendly bilateral cooperation in this year of the 80^th anniversary.” He added, “Both of our countries are highly vulnerable to the effects of climate change and to the events it provokes” such as the tragic earthquake and tsunami of 2011 in Japan.  Ortega thanked the people and government of Japan for help at the times of natural disasters in Nicaragua.  Abe said, “On the 80^th anniversary of the establishment of diplomatic relations between Japan and Nicaragua, united hand in hand, I hope we can strengthen economic relations and collaborate on diverse global challenges.” (La Prensa, Feb. 11; Radio La Primerisima, Feb. 11; Informe Pastran, Feb. 11)

On Feb. 12, members of the German parliament Georg Kippels and Johannes Selle, accompanied by German Ambassador to Nicaragua Karl-Otto Konig, visited the Nicaraguan National Assembly and met with President Daniel Ortega. Kippels stated that the reason for the visit to Managua was to define 2015 goals for relations between the two countries which he said would be centered on the fight against poverty and include other areas such as forest conservation, changing the energy matrix to renewables, and sanitation. Sandinista Deputy Jacinto Suarez, chair of the Foreign Affairs Committee, said that interest in investing in Nicaragua and in the possibility of the canal has led to more visits from officials from European and other countries.  (El Nuevo Diario, Feb. 13; Radio La Primerisima, Feb. 12; La Prensa, Feb. 12)

The French newspaper Le Monde and the British paper The Guardian published information last week about how the Swiss operations of the British bank HSBC hid billions of dollars from tax authorities in numerous countries, assuring clients they would not report details to their home nations and discussing ways they could avoid paying taxes. Among the thousands of clients were famous names of Hollywood stars, business people, heirs to European fortunes, arms dealers, and government officials, including high officials of the government of Bashar al Assad of Syria, former president of Egypt Hosni Mubarak, former prime minister of China Li Peng, King Mohammed VI of Morocco, and five unnamed Nicaraguans. The newspaper La Nacion of Argentina promised to publish the whole list with first and last names. However, in Nicaragua, Informe Pastran notes, the major media outlets are silent, the tax authorities are silent and Informe Pastran asks, “Who are those tax evaders? Who will bell the cat?”  (Informe Pastran, Feb. 10, 11, 13)

Bloomberg Business published on Feb. 13 an article which highlighted, “Daniel Ortega, the Nicaraguan leader who overthrew a U.S.-backed dictatorship and then bore the wrath of rebels funded by American weapons sales to Iran, isn’t so bad after all, at least according to drug-policy experts.” The article quotes William Brownfield, Assistant Secretary of State for the Bureau of International Narcotics and Law Enforcement, as saying, “The efforts of the government of Nicaragua to protect their territory and their people from the activities of drug traffickers have been quite positive.” An analyst at the Wilson Center’s Latin America Program noted, “Nicaragua has been a very good partner on counter-narcotics efforts,” adding that trafficking routes might be shifting. “Nicaraguan police are less corrupt and more capable of carrying out counter-narcotics missions than security forces in other Central American countries,” he added. The article notes Nicaragua’s economic growth and low crime rate. However, it says, “If the positive comments from U.S. officials are softening up the former Sandinista rebel, it’s hard to tell from his rhetoric,” and quotes Ortega’s rhetoric at the recent CELAC summit in San Jose where he said that the US was plotting a bloody, brutal coup in Venezuela.(Bloomberg Business, Feb. 13; Informe Pastran, Feb. 13; La Prensa, Feb. 14)

Javier Sandomingo, European Union representative for Central America, announced last week that the EU has allocated €204 million (US$232 million) for aid to Nicaragua over the next five years. He said, “2015 is an important year for our cooperation with Nicaragua. We are working to define our priorities for the 2014-2020 cycle which include education in preparation for employment, support for the productive sector, and adaption to climate change as well as its prevention.” He also said that the upcoming Eurofair scheduled for Managua will bring together 50 European and Central American companies to exchange views on improving trade relations. (Radio La Primerisima, Feb. 11; Informe Pastran, Feb. 11)

3. Poetry Festival begins in Granada

The Eleventh International Poetry Festival began on Sunday, Feb. 15, in the colonial city of Granada, founded 1524, with a gala gathering that evening. Bayardo Martinez of the organizing committee said that 65 foreign poets and more than 40 Nicaraguan poets had arrived of 115 poets from 50 countries (including Brazil, Argentina, France, Italy, and Germany) registered. Magda Zavala of the Costa Rican Association of Writers said that eleven poets from her country had arrived. The week-long festival this year is celebrating Central American integration and its poetry, honoring the memories of Nicaraguan painter and poet Enrique Fernandez Morales and Costa Rican poet Eunice Odio. Programed for the festival are recitations, including open microphone recitations, round table discussions, new book presentations, and concerts. Around the city are handicraft fairs, book sellers, and other attractions while side trips to other parts of Nicaragua are offered to foreign guests.

Aracely Peña, owner of Kathy’s Waffle House, said that while many foreigners come for the festival, there are also large numbers of Nicaraguans who attend the festival “to live the poetry.” Granada Chamber of Commerce Vice-President Oscar Rufino Gonzalez said, “The festival has been beneficial for the economy because tourism was just beginning eleven years ago and this event has motivated a lot of investors to take advantage of the city’s potential.” He said that since the first festival, 100 formal sector businesses have been launched. The head of Granada’s tourist police, Capitan Amaru Alfaro, said that he will have 80 officers on duty every day to manage an expected 50,000 visitors. He said the officers will wear “tourism police uniforms to give a friendly impression.” (El Nuevo Diario, Feb. 16; Radio La Primerisima, Feb. 15)

4. Economic shorts: 2014 growth, another dam, CAFTA impact

Final figures for 2014 released by the Central Bank last week showed that the Nicaraguan economy grew by 4.3%. That fell within the 4 to 5% range predicted by analysts at the International Monetary Fund. The commerce and services sectors recuperated at the end of the year and there was strong investment in the hotel and restaurant sector which gave a push to the economy. Hotel and restaurant activity grew by 11.7% in 2014, helped by the visits of 1.3 million tourists.  (La Prensa, Feb. 13; Informe Pastran, Feb. 12)

Alvaro Baltodano, presidential delegate for investments, and Mette Gonggrijp, ambassador of the Netherlands to Nicaragua and Costa Rica, announced the launching of feasibility studies for another hydroelectric dam project in the Department of Matagalpa on the Rio Grande de Matagalpa. The project is projected to cost US$330 million, and if built would provide 85 megawatts of electricity, 10% of Nicaragua’s energy needs, and lift the country’s percentage of electricity from renewable sources to 80% in 2020. That percentage is currently around 50%, with energy coming from geothermal, wind, hydroelectric, and biomass sources. (Informe Pastran, Feb. 12; Radio La Primerisima, Feb. 12)

The government and the private sector will reactivate the Commission for the Analysis of Free Trade Agreements, according to presidential economic advisor Bayardo Arce. Both the Superior Council on Private Enterprise (COSEP) and the American-Nicaraguan Chamber of Commerce (AMCHAM) will be represented. Beginning Jan. 1, 2015, thirty-two products from the United States have been able to enter Nicaragua without paying any duties under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). Among them are wood furniture and leather goods such as suitcases, bags, purses, school back packs, and belts, all products also produced in Nicaragua. Arce said that AMCHAM could offer its expertise in business relations with the United States and “They can help us measure the impact that the removal of tariff protections will have on our markets and the measures that we will have to take so that this sector doesn’t lose its importance for the development of our country.” (La Prensa, Feb. 11; El Nuevo Diario, Feb. 10)

5. Cooperatives changing the face of Nicaragua

Thousands of agricultural and other productive and service cooperatives are changing Nicaragua’s economy and establishing a new model, what political economist Orlando Nuñez Soto calls the “social economy.” There are 5,000 registered cooperatives with 389,000 members in all branches of the economy, including dairy, beef, basic grains, vegetables, transportation, housing, tourism, savings and loans, and others. Many cooperatives join with others to form federations of cooperatives. Nuñez Soto, who is the director of CIPRES, told Informe Pastran that the National Council of Cooperatives has been very active in 2015 in all of the meetings organized by the Central Bank, sitting alongside big business representatives.

“Small farmers associations and cooperatives,” Nuñez said, “contribute the greater part of national food production including corn, beans, sorghum, upland rice, fruit, and vegetables; they export 25% of Nicaragua’s coffee, including 90% of the organic and fair trade coffee, and they grow, process and export 80% of the sesame seeds produced in Nicaragua.” Cooperatives collect a million gallons of milk daily while 60% of the country’s beef is raised by small ranchers organized in associations such as cooperatives or in UNAG (the Union of Farmers and Ranchers).  Transportation cooperatives control 95% of the public transportation sector composed of buses, taxis, motorcycle-taxis, and bicycle-taxis.  Credit and service cooperatives along with microcredit associations offer 60% of the credit for small businesses and small farmers including, Nuñez Soto said, the revolving funds of the women who have benefited from the Zero Hunger and Zero Usury programs.

Nuñez Soto said that the big business sector of Nicaragua’s economy may be reaching its limits of growth.  The organized and unorganized “popular economy sector” is precarious, in spite of producing most of the country’s food and a large part of its exports. Therefore, he said, “We must improve the income of families in this sector, helping them add value to their production and promote public policies that assist them.” Cooperatives are organized and working to promote such policies through the National Association of Cooperatives (CONACOOP), Departmental Councils of Cooperatives (CODECOOP), and the many federations of cooperatives in the country. Members of the councils and their officers are elected democratically in assemblies at all levels. Ariel Bucardo, formerly minister of agriculture, is the president of the national council. Nuñez Soto explained that, while a number of ministries collaborate and support their work, the cooperative movement is overseen by the Ministry of the Family, Community, Cooperative, and Associative Economy.

In recent months, CONACOOP has been involved in lobbying the National Assembly on tax reform and on amendments to the general law on cooperatives, making proposals for the formation of a national fund for dairy and beef cattle, setting up meetings between departmental councils and ministerial offices in Managua, and designing a national census of cooperatives to be completed by the end of 2015. (Informe Pastran, Feb. 10; Radio La Primerisima, Feb. 10)

6. Utility improvements around Nicaragua: internet, water, electricity

The Sandinista government, along with municipal governments, is spending almost US$2 million to install free internet in city parks in 90 of Nicaragua’s 153 municipalities. The investment will bring the world of the web to anyone with access to WiFi capable electronic devices. The effort follows an announcement in July 2014 by the government of President Daniel Ortega to bring free internet to parks in the capitals of all 15 departments. (El Nuevo Diario, Feb. 13; Radio La Primerisima, Feb. 13)

ENACAL, the public water and sewer company, announced that ithas put in operation two new water tanks with the capacity to deliver two million gallons of water at higher pressure to 80 neighborhoods on the eastern side of Managua. Water is pumped up to the tanks from Asososca crater lake. Previously the water went directly from the lake which resulted in poor water pressure for the farthest neighborhoods. The US$30 million project was financed by the World Bank to meet the goal of providing potable water to all the neighborhoods of Managua.

In related news, two electricity service expansions were also announced last week, both with funding from Germany to the tune of US$200,000. Eighty homes in the El Tamarindo community of San Rafael del Sur and 450 homes in the municipality of Boaco are now wired for electricity for the first time. (Radio La Primerisima, Feb. 13; Informe Pastran, Feb. 13)