Nicaragua Network

1. Canal environmental study released to Canal Commission
2. Former Nicaraguan soccer official charged in FIFA scandal
3. Economic news: rice, oil exploration, World Bank
4. Caribbean Coast news: Indio Maiz Reserve, Paso Real Bridge, USAID projects, Palace of Caribbean Culture, lobster divers
5. Another poll shows Ortega government with high ratings
6. Wikileaks releases State Department documents on Nicaragua from 1978

1. Canal environmental study released to Canal Commission

On the evening of May 31, the HKND Group, which holds the concession to build a shipping canal across Nicaragua, turned over to the Nicaraguan Canal Commission the fourteen volume environmental and social impact study prepared by the British firm Environmental Resources Management (ERM). Present at the gathering were Manuel Coronel Kautz, president of the Canal Authority; Manuel Roman Lacayo, principal investigator for ERM; Xu Changbao, HKND general manager in Nicaragua; Juana Argeñal, Minister of the Environment; Laureano Ortega, member of the Canal Commission; and National Assembly Deputy Edwin Castro.  Roman said, “ERM is not in favor or against the project. In the study we establish what the challenges are that the project could confront; but the final decision belongs to the government of Nicaragua in conjunction with HKND.”

Canal Commission spokesperson Telemaco Talavera said that the studies will be analyzed by an inter-institutional commission headed by the Ministry for the Environment and Natural Resources (MARENA) during the month of June, then submitted to public consultation, with a government decision issued in July. He added, “ERM does not recommend building or not building the project; that’s not within its purview.” In contrast to the statements by Roman and Talavera, Informe Pastran said it had been told by a source that “the study recommends the construction of the canal considering it a viable project, saying that the chosen route is the best one and that the environmental impact can be remedied, making specific recommendations, specifically related to Lake Cocibolca [Lake Nicaragua].”

Minister of the Environment Juana Argeñal said that, during the period of review by the commission, MARENA will decide if it complies with the Terms of Reference (ToR) issued by her ministry which specified that the research team had to be made up of scientists from certain disciplines including biology, geology, anthropology, and environmental law, among numerous others. She added that the ToR also mandated that the study be available for public review in the MARENA library and in the municipal offices of MARENA along the canal route, and that public consultations must be held in the sites and towns located in the areas that would be influenced by the project.

Monica Lopez, director of the Popol Na Foundation, one of the groups opposing the canal, said that the delay in public distribution of the study violates the law on access to public information. She said it was a “national humiliation to note that, two years after turning over to Wang Jing [president of the HKND Group] in an irresponsible fashion our most precious strategic resources, the authorities are going to begin to read, if in fact they do read, the report contracted for and paid for by the company itself.”

Meanwhile, speculation continued in the international media about the possible financing of the canal project. An article on the web site of Radio Free Asia, a US government funded outlet, quotes Panama Canal official Francisco Miguez as saying that the Panama Canal currently can accommodate 98-99% of all vessels built in the world. Miguez added, “We are not catering to 100% of the sizes; we are catering to those that require to use this route. So, if the Nicaragua Canal or somebody else wants to do bigger locks for that extra one percent, well, that’s their decision. I don’t know how they are going to make money on it.” The article goes on to quote Robert Daly of the Kissinger Institute on China and the United States as saying that it is “unimaginable” that the Chinese government is not behind the Nicaraguan canal project. He said, “It couldn’t have gone forward on this scale, if it is going forward, without an OK and without a buy-in from the Chinese government because the implications of the project, not so much financially but in terms of trade relations and power projections, strategic relations are simply too great for the Chinese government to let it go forward simply because there’s a businessman in Hong Kong who wants to make the investment.”

An article in Foreign Policy noted that Wang Jing “has close ties to the Chinese political apparatus and has promised that Chinese firms will take the lead on construction.” The article says, “Wherever it is that the money is coming from, it appears that finance will not be a concern.” It goes on to note that if acceptable returns are needed by investors that would imply toll fees double those of the Panama Canal making the Nicaraguan canal uncompetitive but, “if the investors aren’t looking for a market return, all bets are off.” (La Prensa, June 1,2; El Nuevo Diario, June 1,2; Radio La Primerisima, June 1, 2; Informe Pastran, May 29, June 1; Radio Free Asia, May 26; Foreign Policy, May 26)

2. Former Nicaraguan soccer official charged in FIFA scandal

Julio Rocha, a development officer for the International Football Federation (FIFA), who was formerly president of the Central American Football Union (UNCAF) and president of the Nicaraguan Football Federation (FENIFUT), was among the 14 current and former FIFA officials indicted by the US Department of Justice on May 27 and was one of the seven arrested by Swiss officials at the request of the United States. They are facing extradition to the US and criminal prosecution for corrupt activities using the US banking system. Rocha was president of FENIFUT for 26 years before becoming director for Mexico, Central America, the Dominican Republic, Cuba and Puerto Rico of the FIFA development office in 2012.

In the indictment, the US Justice Department accuses Rocha of transferring money that was the product of illegal bribes related to media rights to World Cup games to bank accounts in the United States. According to the indictment, Rocha participated in the bribery scheme in 2011 when he was president of the Nicaraguan federation, selling rights to broadcast the 2018 World Cup. In May of 2011, he received a first payment of US$150,000 which he deposited in Banco Itaú in Brazil and later to an account in Miami. His charges include, besides bribery and extortion, conspiracy, money laundering, and fraud. (Informe Pastran, May 27, 28; El Nuevo Diario, May 29)

3. Economic news: rice, oil exploration, World Bank

Rice farmers in Nicaragua confront two problems for the 2015-16 planting cycle. The first is the uncertainty about the weather and climate changes. The second is possibly more serious—the beginning of the slow elimination of import tariffs for the importing of rice from the United States under the rules of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). Tariffs on US rice imported into Nicaragua will go down this year and will be fully eliminated in 2024. Around 180 rice farmers met on May 29 to discuss issues such as new management technologies and also to learn about the upcoming lowering of tariffs on US rice. Ulises Espinoza, president of the Nicaraguan Association of Rice Farmers, said that Nicaragua produces a better quality rice than that imported from the US and that Nicaraguan rice farming is now more mechanized than in the past, both factors that improve the chances for Nicaraguan rice to stand up to competition from US rice farmers who receive substantial government subsidies. Rice farmer Anibal Mejia said average production of rice per manzana (1.7 acres) has grown in recent years from 60 hundredweights to 100 hundredweights. He added, “We have to look for efficiencies in our production and I believe that we can achieve them.” Farmer German Benavides added that nine years ago Nicaragua only produced 40% of the rice consumed in the country while now 70% of national consumption is produced in the country. Nicaragua produced of 59,151 manzanas of irrigated or paddy field rice and 40,719 manzanas of upland or dry land rice. (El Nuevo Diario, May 30)

The Nicaragua Oil Company (PETRONIC) and the Norwegian Company STATOIL signed four contracts to explore for oil in a 16,000 square kilometer area in Nicaragua waters of the Pacific Ocean. PETRONIC President, Francisco López, said STATOIL is investing US$20 million with a total investment estimated at US$100 million over six years in Nicaragua and has expressed great optimism about the results of the exploration. Nick Maden of STATOIL said that explorations will begin shortly. President Daniel Ortega said that the contracts with the Norwegian company come at a time when Nicaragua is stable and has as its goal the struggle against poverty.  (Nicaragua News, May 29; Informe Pastran, June 1; El Nuevo Diario, May 30)

Luis Constantino, World Bank representative in Nicaragua said that Nicaragua is one of the countries with the best records Latin America for carrying out projects funded with World Bank loans which then are able to generate economic benefits that cover the costs of the projects. He said that “Nicaragua is preparing to receive loans with a lesser degree of concessionality,” meaning that the terms will be less favorable as Nicaragua graduates to a better position among the world’s economies. After July 1 of this year, he explained that the development assistance from the Bank will not include donations “but the loan conditions will still be very favorable.” (Informe Pastran, May 28)

4. Caribbean Coast news: Indio Maiz Reserve, Paso Real Bridge, USAID projects, Palace of Caribbean Culture, lobster divers

A group of environmental and citizens groups from the municipalities of San Juan de Nicaragua, Bluefields and El Castillo called on the government to save the Indio Maiz Biological Reserve which they said confronts serious problems because of the advance of the agricultural frontier and from increasing monoculture, particularly the planting of African Palm. Members of the Del Rio Foundation said that they did not have definite figures about the number of square kilometers that have been affected by the invasions but during their patrolling of the region they have discovered new access routes into the reserve made by the colonizers. They called on the Ministry of the Environment to carry out a study to determine the extent of the damage to the reserve. (La Prensa, June 2)

The first stone was laid last week of the new Paso Real Bridge which will improve the links between communities of the North and South Caribbean Regions with the rest of Nicaragua. The bridge crosses the Rio Grande de Matagalpa between Muy Muy and Matiguas. Presidential spokesperson Rosario Murillo thanked the people and government of Japan for financing the bridge “for the families and the communities of those regions.” The project will cost US$10.4 million and is expected to be completed by October of 2016.  The original bridge was destroyed by Hurricane Mitch in 1998 and was replaced with a now much deteriorated temporary bridge. (Informe Pastran, May 28)

The Nicaragua government with support from the Embassy of Spain inaugurated this week the new Palace of Caribbean Culture in Bluefields. The new facility is a part of the efforts undertaken by the government to recognize and promote the cultural and ethnic diversity of Nicaragua. With an US$8.4 million investment, the Palace of Caribbean Culture seeks to honor the cultural heritage of Creoles, Garifunas, Ramas, Miskitos, Ulwas and mestizos. Also attending the inauguration of the center were representatives of the United Nations. (Nicaragua News, May 28, Informe Pastran, May 28)

The United States Agency for International Development is donating US$900,000 for three projects in the Caribbean regions of Nicaragua, including a project for teaching reading to children in Bluefields, Laguna de Perlas, Kukra Hill, and Corn Island, another project for secondary students in Rama Cay, and a water filtration and purification project in several other communities of the region. Present at the inauguration of the efforts in Bluefields will be representatives of the US Embassy, Nicaraguan government officials, and regional education leaders and non-profit organizations that will carry out the projects. (Informe Pastran, June 1)

Enforcement of the Law for the Protection of Divers, which was supposed begin on June 15, will be postponed again until December of this year according to National Assembly Deputy Maritza Espinales, to give the lobster fishers more time to convert to a modern form of fishing. Danilo Rosales, vice-president of the Nicaraguan Fisheries Institute (INPESCA), said that of the 4,000 artisanal lobster fishers, some 1,200 have converted to traps or other methods that do not involve deep sea free diving that subjects the divers to decompression sickness, commonly known as “the bends,” which all too frequently results in paralysis or death. Espinales said that the new postponement has the support of the Council of Fisheries Ministers of the Central American Integration System (SICA) but she said the government will insist that the fishers continue with the process of converting to methods that do not endanger lives. (El Nuevo Diario, May 27)

5. Another poll shows Ortega government with high ratings

The polling firm CID Gallup released the results of its latest survey last week which was carried out between May 6 and 12. The CID Gallup analysis stated that “Today the political scenario for Daniel Ortega is favorable. From his wide personal support to the indicators of the evaluation of his presidency, all show satisfaction with his performance and many of those polled believe that he should run in the presidential elections next year.” But the CID Gallup analysis goes on to say, “The shortage of jobs and the rise in price of consumer goods are concerns for the majority of families and produce concern among those polled about the country’s macroeconomic conditions. But, in spite of this, those surveyed said they were hopeful that conditions would improve next year.” The analysis also said, “If the elections were held today, President Ortega would win by a wide margin.”

Fifty-two percent of those polled sympathize with the Sandinista Party; 39% said that they support no party, were undecided or independent; 4% support the Constitutional Liberal Party; and 3% the Independent Liberal Party. Forty percent said that Ortega should run for another term as president next year while 57% said that he would leave the country in “very good” conditions at the end of this term. While 60% listed economic difficulties as “the principal current problem in Nicaragua,” the number saying they were concerned about drug use and trafficking grew compared to last year and was noted by three in ten respondents.  (Informe Pastran, May 26)

6. Wikileaks releases State Department documents on Nicaragua from 1978

On May 27, Wikileaks released 3,422 State Department cables on Nicaragua from 1978. According to the press release from Julian Assange, “1978 was an unusually important year in geopolitics” which included “the Sandinista Revolution in Nicaragua and the subsequent conflict with US proxies (1978-1990).” The description of the Nicaraguan cables says: “A number of cables give insight to an ongoing conflict between the Sandinistas and the ruling Somoza regime. The conflict erupted when the editor of an opposition newspaper, Pedro Joaquín Chamorro Cardenal, was assassinated on 10 January. After his murder an estimated 30,000 people rioted in Managua, and the government responded with violence and martial law. In the following two years the Sandinista National Liberation Front (FSLN) took over the country until President Somoza resigned in July 1979, leaving the revolutionaries in power.” (https://www.wikileaks.org/plusd/pressrelease/; Informe Pastran, May 29)