Nicanet - The Nicaragua Network

Nicaragua Network Hotlines for January 16, 2007

News topics covered in this Hotline include:

Topic 1: Ortega inaugurated President and signs ALBA as one of first acts


At 6pm on Jan. 10 Daniel Ortega Saavedra was sworn in as President of Nicaragua at a ceremony attended by thousands of public officials, diplomats, statesmen and journalists from all over the world. It was the moment for which FSLN supporters had been waiting for over a decade, and a moment that many political leaders and analysts both within and without Nicaragua had thought would never happen.

The official ceremony started almost two hours late because the Venezuelan President Hugo Chávez, who himself had been sworn in for a second term in office that morning, was delayed. Security at the event was provided by 7,000 police officers and soldiers, an unprecedented number of public security officials for a political event in Nicaragua’s recent history.

After receiving the presidential sash and swearing in his cabinet Ortega left the Omar Torrijos Non-Aligned Nations Plaza for the nearby John Paul II Plaza of Faith where between 300-400,000 supporters awaited him, eager to hear his first presidential address. Over 500 buses had brought FSLN supporters to Managua that morning from all over Nicaragua.

Ortega was accompanied on stage by Chávez, Bolivian President Evo Morales, Cuban Vice President José Ramon Machado and several members of his cabinet. Chávez spoke first to the elated crowd saying “I have come to Nicaragua today, my heart overflowing with joy.” After shorter speeches from Morales and Machado, Ortega addressed the crowd promising to work with the poor majority so as to reduce poverty, combat corruption and maintain national unity. “This presidential sash belongs to the peasants, workers, women and young people,” said Ortega.

On Jan. 11 Ortega, Chávez, Morales and Machado took part in a ceremony to celebrate Nicaragua’s joining the Bolivarian Alternative for the Americas (ALBA), the trade agreement set up by the Venezuelan and Cuban governments in 2005 as an alternative to the Free Trade Area of the Americas (FTAA) promoted by the US. The event, which was attended by FSLN party members and supporters, took place at the Rubén Darío National Theater. Nicaragua is the fourth country to sign ALBA (Bolivia signed in 2006).

According to Ortega ALBA “represents the American peoples’ aspirations of independence” and their rejection of the neoliberal policies, promoted by the US, which have created a “social emergency” in Nicaragua and across Latin America by denying access to education, healthcare and employment.

After the ceremony Chávez and Ortega held a meeting at which they signed a number of bilateral agreements between Venezuela and Nicaragua. In total Chávez has promised US$600 million of financial aid a year to Nicaragua. Currently Nicaraguan receives between US$300 and 400 million a year in financial aid from the international community. The money from Venezuela will be used for social programs which aim to reduce poverty, provide housing for poor families, improve the health and education systems and strengthen the Nicaraguan economy by improving basic infrastructure such as roads, ports, airports and the energy sector. Venezuelan Ambassador in Managua Miguel Gómez also confirmed that the Venezuelan Economic and Social Development Bank (BANDES) will open a branch in Managua in the near future.

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Topic 2: World Bank bills Nicaragua US$55million to enforce neoliberal agenda

In an example of the pressure the Ortega government will face against its "aspirations of independence” and rejection of neoliberal policies, the World Bank's Multilateral Investment Guarantee Agency (MIGA) has sent a bill for US$55 million to recover the money it recently paid to Union Fenosa, the Spanish company which bought Nicaragua's electricity distribution grid when the World Bank forced Nicaragua to privatize the state-owned electric company in the 1990s. Union Fenosa took out an insurance policy with MIGA in 2004 to protect its investment in Nicaragua. Union Fenosa made a claim for US$55 million last year, the amount it claims to have lost over three years.

Nicaragua has suffered electricity shortages for the past year while Union Fenosa has failed to pay electricity producers on top of its long term failure to make the investments in infrastructure guaranteed in its purchase agreement. Courts have rolled back illegal rate increases by the company and in August 2005 the Comptroller General declared Union Fenosa’s contract to be nullified. While that declaration doesn't actually end the contract, it is thought that the new government is likely to cancel Union Fenosa's contract "for cause" as part of addressing the energy crisis.

Director of the Nicaraguan Energy Institute (INE) David Castillo reacted to the news on Jan. 12 saying the Nicaraguan government is not obliged to make any payments to MIGA because no financial commitment was ever signed with the agency. He went on to say that as long as Unión Fenosa continues to fail to provide the service it was contracted for, it “does not deserve one cent from the government.” Castillo went on to say that he has spoken to the new Minister of Public Finance, Alberto José Guevara Obregón, about the MIGA claim and has explained to him that neither Unión Fenosa, nor the World Bank, nor MIGA “have any legal foundation upon which to claim this money [from the Nicaraguan government] because no financial commitment of insurance was ever signed.”

Consumer Defense Network Coordinator Gonzalo Salgado reacted to the news saying he felt “disgusted.” According to Salgado this claim is part of a plan to pressure the government into dropping the legal action against Unión Fenosa in Nicaragua. Salgado believes that Fenosa plans to leave the country as soon as possible without responding in the Nicaraguan courts to the cases being brought against the company. “Fenosa must respond” to the questions about the damage the company has caused to the Nicaraguan economy and infrastructure, says Salgado. “The Supreme Court must show diligence and belligerence” and issue verdicts on the more than 60 cases against Fenosa waiting to be processed. By refusing to process these cases the Supreme Court has converted itself into an “accomplice” of the multinational, according to Salgado. Comptroller Lino Hernández agrees that MIGA’s claim is part of a plan to “blackmail” the government into letting Fenosa off the hook for the damage the company has caused as a result of its failure to provide the service for which it was contracted.

Meanwhile, former Consumer Defense Network President Ruth Herrera, who was appointed by Ortega to head the state water company ENACAL, announced that she will review all contracts and commitments of the company over the next 15 days. Particular attention will be given to the "modernization" contract given to a Chilean company which Herrera warned at the time was a precursor to privatization. The contract was forced on Nicaragua by the Inter-American Development Bank (IDB), another multilateral enforcer of neoliberal orthodoxy. In October 2006 the IDB loaned Nicaragua US$30 million to pay for the "modernization" study. Ruling on a case brought by the Consumer Defense Network, the Managua Court of Appeals suspended the contract but ENACAL and the Chilean company ignored the court ruling.

The agreement with the Chilean firm involves “extremely well-paid consultants who come to make diagnoses of the company and to make proposals for its ‘modernization,’” said Herrera. She also indicated that there were other subcontracts with South American companies to buy and install meters. Those companies subcontracted Nicaraguans at low wages to install the meters. Herrera has been a strong opponent of privatization of government services.



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Topic 3: New National Assembly leadership voted in for two year period

National Assembly deputies voted in the seven members of the new leadership body on Jan. 9. The recently passed Legislative Branch Organic Law changes the terms from one year to two. Sandinista (FSLN) deputy René Nuñez Téllez was elected president of the National Assembly. In the 1980s Nuñez served as secretary to the National Directorate until the death of his brother Comandante Carlos Nuñez, at which time he was elevated to the National Directorate. Nuñez more recently served as Assembly president in 2005 and Assembly vice president in 2006.

The first vice presidency went to the Nicaraguan Liberal Alliance’s (ALN) Luís Callejos, a former contra. The second vice presidency was won by the Constitutional Liberal Party’s (PLC) Oscar Moncada, while the third vice presidency went to Juan Ramón Jiménez of the Sandinista Renovation Movement (MRS). That last position was not according to plan. MRS deputy Mario Valle, who announced after the election that he will vote with the FSLN bench, nominated Jimenez in place of the MRS leadership's candidate Enrique Saenz. Jimenez won 64-26 resulting in MRS deputies Victor Hugo Tinoco, Mónica Baltodano and Saénz storming out of the legislative session saying the other parties had not respected the pre election agreement to support the candidates put forward by the leadership of each political alliance. With such a small bench the MRS will probably see its wishes trampled on in the future as well.

The first, second and third secretaries of the National Assembly went to the PLC’s Wilfredo Navarro, Alba Palacios of the FSLN and the ALN’s Javier Vallejos respectively.

The FSLN, which did not win an overall majority in the National Assembly in the November elections, will be forced to negotiate with the two right wing parties (PLC and ALN) in order to push through the party’s agenda of laws and reforms. Political analysts agree, however, that distrust between the ALN and the PLC will allow the FSLN to continue to work together with the PLC as the two parties did during the 2002 - 2007 Legislative term. The National Assembly’s first session of this Legislative term took place on Jan. 12.



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Topic 4: Mahmud Ahmadinejad visits Ortega to express Iran’s “solidarity” with Nicaragua


On Jan. 13 the Iranian President Mahmoud Ahmadinejad arrived in Nicaragua on a two day official visit. On Jan. 14 Ahmadinejad and President Daniel Ortega visited a number of poor neighborhoods in Managua, a traditional Sandinista party stronghold. In one of the neighborhoods the two men attended a community cultural event at which Ahmadinejad was treated to traditional musical and dance acts from local youth and children groups. Pictures of the Iranian president kissing a small girl who had danced at the event appeared in the Nicaraguan newspapers on Jan. 15. Ahmadinejad addressed the crowd saying he felt very pleased to be able to show Iran’s “solidarity” with Nicaragua. He went on to say that the two countries have much in common in that both are struggling to “resist imperialist pressures.”

On the afternoon of Jan. 14 Ortega and Ahmadinejad held a private meeting at the new "Olof Palme" presidential office at which they signed an agreement of mutual cooperation. Foreign Minister Samuel Santos said that as part of the agreement Ahmadinejad promised to provide assistance to the Nicaraguan government in several areas, including infrastructural development. Among the programs to be carried out with Iranian support and assistance is the construction of dams, the development of ports, a social housing program and the construction of a car making factory, as well as a study into the energy needs of Nicaragua. Few details as to how or when the programs will be carried out, or of what Nicaragua has promised in return for the Iranian assistance, were given by Santos, Ortega and Ahmadinejad at the press conference which followed the meeting.

The meeting also brought about a decision to reinstate normal diplomatic relations between the two countries with the installation of embassies in Managua and Tehran. Ahmadinejad also said he would “consider” Ortega’s request for Nicaragua’s US$152 million debt with Iran to be cancelled. Ortega said of the agreement signed with his Iranian counterpart “we are expressing our will to work towards the eradication of poverty, inequality and hunger.” Ahmadinejad described Ortega as a “symbol of justice” in Nicaragua and said “today we are not alone: Iran, Nicaragua, Venezuela and other revolutionary countries are together, we will stand together and resist together.”

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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.