TUESDAY, MAY 03, 2011
Nicaragua News Bulletin (May 3, 2011)
1. May 1st celebrated2. Employment levels recovered
3. IMF approves disbursement
4. Privatization of ENACAL?
5. Malnutrition down 30%; 19% still suffer
6. Illegal logging continues
7. Millennium Challenge concludes
1. May 1st celebrated
With May 1st, International Workers' Day, falling on a Sunday this year, workers in Nicaragua were given Friday, April 29, off and thousands attended a march and rally in Managua called by the National Workers Federation (FNT). Gustavo Porras, FNT General Secretary, said that the slogan for the May Day rally was “With the Sandinista Front and with Daniel, we have work and peace; Long Live May First!” He added, “We need to make that slogan felt and to remember that after this mobilization we are committed to guarantee the victory of the Sandinista Front and of Comandante Daniel,” referring to the November elections in which President Daniel Ortega is running for reelection.
In her speech at the rally, Rosario Murillo, coordinator of the Council of Communication and First Lady, congratulated workers on their efforts and dedication that have contributed to the development of a new Nicaragua. She said, “I want the Nicaraguan people to feel supported and secure with this government, reaffirmed as people, accompanied every day in the process of regaining their rights.”
In his speech, Ortega announced that his government will continue to expand the social programs that have helped the economy to grow, increase productivity, and generate jobs. He said that the “solidarity payment” received by 155,000 low wage government workers will be increased to 700 córdobas (the equivalent of US$32, up from US$25). He announced that, in May, 250 busses will begin to arrive from Russia and help to resolve shortages in public transportation. He added that the bus fare in Managua would remain the same at 2.5 córdobas (about 11 cents). The president awarded the medal of the newly-created Order of the Heroes of Labor to two electrical workers who died in an on-the-job accident on April 24.
Ortega condemned the continued NATO bombing of Libya, citing Pope Benedict XVI's repeated requests for peaceful negotiation of that conflict. “The Pope has preached that the bombing of the Libyan people should end and that negotiations should begin,” he said. He answered criticism from some business people about the closing down of traffic in the area around the Plaza of Victories (Masaya Highway) noting that traffic was rerouted for a workers' rally, not for a royal wedding as in London. He said that monarchies should be long buried “because they are full of blood” and added, “Here the princes and the kings are the workers, the peasants, and the people, who have the right to celebrate this day.”
Unions opposed to the Sandinista government belonging to the General Confederation of Independent Workers of Nicaragua celebrated on May 1 at the headquarters of one of the construction unions. Veteran trade unionist Alejandro Solorzano said that he believed the principal problem for the opposition unions was their lack of unity, noting that many of them have succumbed to political pressures to join the FNT and to lack of funding. Jose Espinoza, general secretary of the Confederation of Union Unification (CUS), said, “In some sectors the government has done something, like in the maquila sector, in the countryside; but, in others, such as in industry, commerce and construction, there are many tasks pending because growth has contracted. Summing up what has been done and what is lacking, one could say that this government has failed to provide rule of law.”
Arnoldo Aleman, former president and current presidential candidate of the Constitutional Liberal Party (PLC), spoke at the event and promised one million new jobs if he were elected. He criticized Ortega's solidarity payment to government workers saying that it was mere “crumbs” from “the millions from [Hugo] Chavez.” He added, “Why doesn't he have the valor, the manliness, to say he will be transparent with what comes from Chavez?” He said, however, that he would continue the payments. Fabio Gadea, a coalition candidate for president running on the ticket of the Independent Liberal Party, also saluted workers on May 1st. He said that “open unemployment has doubled in the last four years and the real wage has deteriorated.” He added, “The government of Ortega is an enormous failure that must end.” (Radio La Primerisima, Apr. 29; El Nuevo Diario, Apr. 30, May 2; La Prensa, Apr. 28)
2. Employment levels recovered
According to Jeannette Chavez, minister of labor, 160,000 new jobs were created under the Sandinista government in 2010 and another 50,000 in the first four months of 2011. She credited the growth in employment to the labor stability agreements negotiated between the government, unions, and businesses. Those agreements have resulted in a 95% increase in the minimum wage since 2007, freedom of workers to form unions, a decrease in labor rights violations, and growth in the number of negotiated collective bargaining agreements. These, she noted, are conditions which do not exist in other countries of the region which have fared less well than Nicaragua during the global financial crisis. She said unions closed 2010 with 52 new collective bargaining agreements and another 20 have been signed in 2011.
Chavez's claims were confirmed by Jose Adan Aguerri, president of the Superior Council of Private Enterprise, the trade association of Nicaragua's largest businesses. He too credited the tripartite agreements between the government, labor and business for the recovery of the jobs lost during the global financial crisis which began in January 2008. He said that the 20,000 jobs that were lost between Jan. and Jun. 2008 were recovered by Apr. 2011, adding, “We are exactly where we were in Jan. 2008; this is very good news….” He credited labor stability with drawing foreign investment, particularly from Asia. While expressing concern about the high cost on global markets of oil and other manufacturing inputs, he praised the “certainty and predictability” that the consensus agreements on the minimum wage have created which he noted were unlike conditions in neighboring countries.
The Social Security Institute has signed up 20,000 new employees in the Free Trade Zones (FTZs) and 40,000 from other sectors, especially small and medium businesses. Aguerri said that the recovery has “breathed oxygen” into the construction industry permitting a 15% rise in wages in that sector. He also noted that sportswear giant Nike is considering manufacturing shoes in Nicaragua which will add thousands of additional jobs. There are currently over 89,000 people employed in the Free Trade Zones.
Miguel Ruiz of the Sandinista-affiliated CST-JBE union confederation said that during the last quarter, 15,000 new jobs have been generated in the FTZs, 10,000 in construction and 5,000 new jobs are expected to be generated in the tourism industry in the next few months. He noted that there are two large projects which should result in the creation of even more jobs: the Tumarin hydroelectric project and the Guacalito Island tourism project, in Tola, Rivas. But, Ruiz said that in the FTZs there are companies that are violating workers' rights. “Hansae and SAE Tecnotex are a couple of the companies that have … fired union leaders and there are cases against them that have gone on for two years. Also there is a Brazilian shoe company that has fired workers and union leaders,” he stated. He added that other companies in the fishing, transportation, mining, and sugar industries violate workers' rights.
Members of an opposition union federation declared themselves in mourning on International Workers' Day, May 1. Alvaro Leiva of the Democratic Federation of Public Service Workers denounced as electoral populism the recent 15% wage increase for construction workers saying that it still did not cover the basic basket of consumer goods for a family. He said the government has laid off 21,000 state workers since it took office and decertified 120 unions because they did not agree with government directives.
In related news, the International Labor Organization (ILO) announced on Apr. 29 that the purchasing power of the minimum wage in Latin America grew by 3.5% between Jan. and Sept. of 2010, with the greatest gains coming in Nicaragua at 14.5%, followed by Argentina with a 10.4% gain. The ILO said, “If it is true that the real minimum wage rose in practically all the countries of the region during the decade of the 2000, levels are still far from satisfying the basic needs of workers and their families.” (Radio La Primerísima, Apr. 26, 29; El Nuevo Diario, May 2)
3. IMF approves disbursement
On Apr. 27, the International Monetary Fund (IMF) completed its sixth review of Nicaragua's economic performance under its Extended Credit Facility and approved the immediate disbursement of US$8.95 million. The Fund considered the country's economic performance “satisfactory” with a growth of 4.5% in gross domestic product (GDP) and fiscal performance “stronger than envisioned.” The IMF expressed concern that the increase in the prices of petroleum and other products on the world market could put inflationary pressure on the Nicaraguan economy, but Central Bank President Antenor Rosales said that the government would continue with economic and monetary policies directed toward keeping the inflation for 2011 in single digits.
The IMF press release noted, “The [Nicaraguan] authorities' economic program seeks to strike a balance between mitigating the effects of higher fuel and food prices on the poor and taking advantage of the strong revenue prospects to deepen fiscal consolidation.” In layperson's terms, this appears to mean that the government will use the revenue resulting from high prices on the world market for Nicaragua's coffee, gold, and other export products to 1) mitigate the effects of higher fuel and food prices on the poor and 2) keep the public sector deficit low and control inflation. The IMF also noted that the government promised to adopt a legal framework for the microfinance sector, enhance transparency in the management of foreign assistance, and continue improving public financial management. (Radio La Primerisima, Apr. 27; La Prensa, Apr. 27, May 1; El Nuevo Diario, Apr. 28)
4. Privatization of ENACAL?
One of the requirements of the International Monetary Fund (IMF) for Nicaragua's continued participation in the Fund's Extended Credit Facility was the strengthening of the finances of the state-run Nicaraguan Water and Sewerage Company (ENACAL) with the goal of making it a profitable business. This demand and the introduction in the National Assembly of a law to further regulate ENACAL led to immediate accusations that the government wanted to privatize the delivery of water to the population. Central Bank President Antenor Rosales said that water privatization is not being contemplated, but that ENACAL must adopt measures to make itself financially sustainable. He said that the water regulatory agency, the Nicaraguan Institute for Water and Sewerage (INAA), must review the schedule of rates that ENACAL charges consumers and make sure that the rates are rational so that decisions about water use are made rationally. Consumers who are behind must put themselves up-to-date in their payments so that ENACAL can pay its debts and afford to expand water and sewer services to a greater number of people.
Ruth Herrera, former president of ENACAL, said that the risk of privatization exists. She said that the National Assembly is “cooking up something” in the changes it is proposing to the law. She recalled that, during her administration of the agency, she asked for funding of US$13 million in order to maintain a subsidy for the poorer sectors of the population, which she said included 70% of ENACAL's customers. Environmentalist Felipe Ortiz agreed that the reforms being considered in the Assembly could lead to the privatization of water delivery. But, he said that there were numerous laws on the books establishing that water could not be privatized and, he said, “That gives us a leg to stand on [to oppose it].” Another environmentalist, Kamilo Lara, said that the constitution itself prohibited the privatization of water.
Meanwhile, in the National Assembly, Deputy Miguel Melendez of the Constitutional Liberal Party (PLC) rejected the accusations that legislators were considering privatizing ENACAL, saying that the goals of the reforms were the harmonizing of regulations and assuring that INAA was effectively regulating ENACAL.
In related news, ENACAL announced that it will drill four new wells in the city of Leon which the company said will strengthen the supply system for the city. The project will cost US$590,000 of which ENACAL will provide US$364,000 and the city of Leon US$227,000. Each well will pump 1,000 gallons per minute and the project is expected to benefit 40,000 families. Ana Maria Solis of the southwest part of the city welcomed the project saying she was tired of getting up before dawn to fill jugs of water before the service was cut off. (La Prensa, Apr. 28; Radio La Primerisima, Apr. 27; El Nuevo Diario, May 2)
5. Malnutrition down 30%; 19% still suffer
The United Nations Food and Agriculture Organization's (FAO) statistics reveal that malnutrition still affects more than a million Nicaraguans, or 19% of the population. Despite this high rate and an increased cost of a basket of basic goods, Nicaragua has reduced the rate of malnutrition by 30% over the last 22 years. In 1990, approximately half the population suffered from malnutrition.
Nicaragua is the only Latin American nation to accomplish the feat of reducing its malnutrition levels so significantly. Officials are attributing the country's success to the emphasis both the private and public sector have placed on the theme of food security. Officials are confident that Nicaragua is well on its way to meeting the Millennium Development Goals in 2015. The FAO has slated US$28 million for food security projects in Nicaragua over the next year to help meet the goals. (La Prensa, May 1; Radio La Primerisima, Apr. 29)
6. Illegal logging continues
Illegal timber extraction continued in 2010 to outpace the cooperative efforts of the army, police and environmental authorities to control it under the Natural Resources Protection Plan. Concentrating their efforts on the Bosawas Nature Preserve and Ometepe Island, the joint enforcement effort undertook 16,589 actions that resulted in the seizure of 511,121 board feet of illegally harvested timber, 9,911 logs, and 20 transport vehicles. All were turned over to civilian authorities for criminal prosecution of the responsible parties. To increase enforcement, the Army has created a 500 member Ecological Battalion that will deploy to 76 nature preserves across the country in the second half of this year.
Environmental scientist Kamilo Lara called the actions “significant” but said the results “don't reflect the magnitude of the environmental destruction drama.” He said, “The data demonstrates that there is a strong movement of wood traffickers and predators that take advantage of the lack of controls to remove the forests for economic gain.” Presidential environmental advisor and father of Nicaragua's environmental movement Jaime Incer Barquero stated that Nicaragua has lost 50% of its forests in the past 50 years and that has resulted in the drying up of 60% of the principal rivers of the country. He called the environmental future of the country “exceptionally frightening.” (El Nuevo Diario, May 2)
7. Millennium Challenge concludes
The US government's 5-year Millennium Challenge Fund projects in Nicaragua will conclude May 26, after having spent US$113.5 million to build 74 kilometers of roads, helping with the titling of 40,000 properties, developing businesses and cooperatives in the sectors of agriculture, forestry, cattle ranching, and in other sectors, and the creation of 14,000 jobs within the departments of Chinandega and Leon. It is estimated that 120,000 people benefited from the projects including 8,000 farmers. At the request of the United States, the program funds did not form a part of the Nicaraguan budget and were managed separately [similar to some ALBA funds from Venezuela]. At the end of 2008 the US canceled US$62 million in additional projects when opposition parties claimed fraud in that year's municipal elections. Venezuela promised aid of US$50 million to carry out the canceled projects. The scientific studies and data gathered will be available for another five years on the Millennium Challenge web page and the vehicles, computers and other office equipment are being donated to cooperatives and municipal governments in the region. (Radio La Primerisima, Apr. 26; La Prensa, Apr. 26)
Labels: Archives