Nicaragua Network Hotlines for April 3, 2007
News topics covered in this Hotline include:
- Ortega issues ultimatum to Union Fenosa
- Nicaraguan National Assembly ratifies the ALBA
- Poland cancels debt; EU offers aid in exchange for free trade
- European Union praises election, calls for reforms
- Activists
take back the beaches
Topic 1: Ortega issues ultimatum to Union
Fenosa
President Daniel Ortega gave an ultimatum to the Spanish electric company,
Union Fenosa; "invest in Nicaragua or else the government will take
measures to guarantee services to the people of Nicaragua." Ortega
once again accused Fenosa of failing to fulfill contractual obligations
including the points recently agreed upon during a meeting between his advisor
Bayardo Arce and top executives of the Spanish transnational in Madrid the
week of March 18. He stated that his administration will continue to exhaust
all methods of communication and dialogue before taking, "more drastic
measures," signaling the strong possibility of canceling the concession
given to the Spanish transnational.
The arbitration process and dialogue returned to ground zero after the Ministry
of Economy and Development received an official letter from the Multilateral
Investment Guarantee Agency (MIGA), underwriter for the World Bank, officially
initiating the process to settle differences and proceed with the collection
of a US$54 million insurance policy held by Fenosa. If the Nicaraguan government
cancels the contract with Fenosa, the American Chamber of Commerce of Nicaragua
calculates that Nicaragua will have to pay a total of close to US$200 million
to reemburse the payout on the policy as well as pay "damages"
for supposed loses that Fenosa would suffer for early termination of the
contract. It is outrageous that Nicaragua would have to pay anything if
the concession with Union Fenosa were cancelled because the company has
failed to abide by the terms of the concession. Nicaragua was forced to
privatize the distribution of electricity by the World Bank and International
Monetary Fund. Once again we see who the international financial institutions
really serve.
Union Fenosa stated its intention to continue investing in Nicaragua as
well as its interest in remaining in the country. Its statement claimed
that its investments have been concentrated in network improvements and
bettering the services for its clients although no specifics were given
to show where the investments have gone. Nicaragua has been suffering rolling
blackouts for the past year due to Union Fenosa’s failure to buy enough
electricity to meet demand.
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Topic 2: Nicaraguan National Assembly ratifies
the ALBA
On March 27, Nicaragua officially joined the Bolivarian Alternative
for the Americas (ALBA) after 78 of the 92 Members of the National Assembly
voted in favor of the initiative. The association was created by Venezuela
and Cuba as an alternative to the US proposed Free Trade Area of the Americas
agreement (FTAA). The ALBA, a cooperation model that favors social benefits
over economic gain, includes Venezuela, Cuba, Bolivia, and Nicaragua. Nicaraguan
papers reported that Antigua and Barbuda, Dominican Republic, San Vicente
and the Grenadines have also joined the ALBA.
Nicaraguan President Daniel Ortega and Venezuela President Hugo Chavez signed
a memorandum of understanding on Jan. 11 that Nicaragua would be a part
of the ALBA. Only a day later both presidents signed fifteen cooperation
agreements for different sectors, three of which were political, one dealing
with the provision of ten million barrels of fuel annually at special prices,
and another for the canceling by Venezuela of US$31.8 million in debt owed
by Nicaragua, among others.
More recently Chavez, in his Latin American "counter Bush" tour,
signed a letter of intent to construct a refinery in Nicaragua as well as
analyze the possibility of constructing an oil pipeline, two aluminum processing
plants and open an office for the National Economic and Social Development
Bank of Venezuela, which opened in Managua the second week of March. All
these agreements under the auspices of the ALBA were signed by the two presidents
and put in motion before the National Assembly had a chance to approve or
reject the trade agreement.
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Topic 3: Poland cancels debt; EU offers aid
in exchange for free trade
Nicaragua received further generous debt relief when Poland, on
March 30, officially canceled US$30.6 million in debt acquired by Nicaragua
in the 1980s during the first Sandinista government. These loans were used
to import Polish goods such as airplanes for fumigation along with their
engines and spare parts, water pumps, diesel engines, galvanized zinc sheets
and tire rims, and steel for construction, among other things.
The Polish ambassador for Central America said that his government made
the decision to reduce Nicaragua's debt as a gesture of solidarity under
the Heavily Indebted Poor Countries (HIPC) initiative. The decision occurs
at a historical moment as the European Union and Central America begin negotiations
to reach an "Agreement of Association," that will open new perspectives
for all the participating countries. Nicaragua’s foreign debt is now
reported to be $US3.74 billion.
Francesca Mosca, the European Commission representative for Central America,
in a presentation to the Central American Parliament (PARLACEN), on March
28, announced the European Union's (EU) plans for bilateral trade agreements
as well as cooperation projects for Central American countries which include
close to US$1.336 billion for 2007-2013. In other consultations Mosca had
previously stated that Nicaragua would receive US$284.9 million of the amount
earmarked for Central America to be used in the fight against poverty as
well as for other social programs. Spread over six years, the EU’s
commitment is less than that of a number of single countries. And before
that will be transferred the EU requires that an “Agreement of Political,
Commercial and Cooperation Association” must be negotiated, essentially
a free trade agreement between Central America and Europe.
If Mosca is telling the truth, the difference between a free trade agreement
with Europe compared to one with the United States is that the European
agreement will be negotiated "always taking into account the existing
asymmetries between the two regions, so that the relationships that are
developed are both balanced and consensual, yet at the same time with stronger
commitments."
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Topic 4: European Union praises election,
calls for reforms
Claudius Fava, leader for the European Union (UE) electoral observation
commission in Nicaragua, stated in a press conference that "deep reforms
are necessary" in order to fortify the independence of electoral administration
and the participation of all political parties and forces in future elections.
His observation commission was made up of 150 experts in electoral issues,
and was present in Nicaragua from September 23 to December 10, 2006, in
order to follow the whole electoral process including the results phase
and the publication of the final results.
Fava emphasized the need for the Supreme Electoral Council (CSE) to establish
mechanisms to control the financing received by political parties. He also
recommended reducing the number of magistrates as well as a selection process
that guarantees impartiality and an independence from all political parties.
Currently there are seven magistrates all of which are connected to the
Sandinista or Constitutional Liberal Party and the rules for choosing these
magistrates continue to favor these two parties.
According to the final report on the Nov. 5, 2007, elections, the electoral
process "was managed appropriately, giving rise to competitive elections."
Fava stated that the electoral process, won by Daniel Ortega, "was
a significant achievement for the people of Nicaraguan, with massive participation,
and peaceful unfolding. Nicaragua ratified its commitment to democracy,”
he said.
Topic 5: Activists take back the
beaches
Sandinista militant Gerald Miranda Obregon led a direct action
on the beach at San Juan del Sur, knocking down the fences of private property
owners that prohibited free public access to beaches. Attorney General Hernan
Estrada confirmed yesterday that all beaches in Nicaragua are public, and
neither private businessmen nor municipal governments can deny the poorer
population the benefit of free access.
Many of the so-called private beaches are lots or extensions that have been
rented out by the municipal governments to private individuals or owners
of tourist businesses. Municipal officials have also issued titles or supplementary
documents, misusing land reform laws, with boundary lines that include the
beach. Estrada made a commitment to support free access to all beaches.
He will review property titles which have denied fishermen and poor people
access to some of the best beaches in Nicaragua for the last 17 years.
This hotline is prepared from the Nicaragua News Service and other sources. To receive a more extensive weekly summary of the news from Nicaragua by e-mail or postal service, send a check for $60.00 to Nicaragua Network, 1247 E St., SE, Washington, DC 20003. We can be reached by phone at 202-544-9355.