Nicanet - The Nicaragua Network

Nicaragua Network Hotlines for January 31, 2007

News topics covered in this Hotline include:

Topic 1: IDB will cancel $984 million of Nicaragua’s debt but warns it may lose next disbursement


The president of the Nicaraguan Central Bank, Antenor Rosales, announced this week that the Inter- American Development Bank (IDB) decided to cancel US$984 million of Nicaragua’s debt. Rosales explained that the cancellation of this debt will be finalized in the Governing Counsel of the IDB meeting in Guatemala March 16-20. The cancellation will take effect from January 1, 2007. He noted that the average annual savings will be about US$26 million from 2007-2044 freeing up close to US$22 million for projects to fight poverty that otherwise would have gone to the IDB. He added that the total debt with the IDB will be reduced from US$1.535 billion to US$749 million, reducing Nicaragua's external debt from US$4.525 billion to US$3.739 billion.

On January 27, Rosales warned that the country is at risk of losing the next US$24.5 million loan disbursement from the IDB due to the Bolaños government's failure to execute previous loans "properly." He added that the Ortega government, which assumed power on January 10, will execute the projects in a way that will maintain the loans granted by the IDB.


Return to top.

Topic 2: The National Port Company (EPN) in Bankruptcy


 The scandal of corruption and looting of state-owned companies during the Bolaños government continued to grow with the revelation that the National Port Company (EPN) is effectively bankrupt with over US$60 million in debt and only a quarter of that in cash. According to Virgilio Silva, Executive President of the EPN, the organization is at a "critical point," since there are not enough resources or capital to invest in the ports or repair the marine equipment and machinery necessary to operate normally in their facilities. "This company has been ransacked and robbed blind, causing this tremendous financial devastation," asserted the head of the EPN. Silva has asked President Daniel Ortega for US$77 million in the form of a loan to continue operations. The incoming authorities of the EPN have denounced the existence of "ghost" employees, whose appointments were ordered by President Bolaños. Filemón Bonilla Abarca, Secretary of the National Federation of Harbor Unions, stated that he had the account numbers to which US$35,000 monthly was transferred from the EPN to Mrs. Amelia Alemán, the late sister of the ex- president Arnoldo Alemán. Silva said that he has put at the disposal of the Attorney General all the evidence of the embezzlement of US$1.8 million perpetrated by ex-executive, Roberto Zelaya Blanco, as well as other company officials. According to Silva, "it is urgent that we recover this money in order to buy new equipment ... as well as finish the audit on the outgoing administration."


Return to top.

Topic 3: Ortega strongly criticizes neoliberal policies but also asks for flexibility from international institutions


On January 26, President Daniel Ortega strongly criticized the neoliberal economic policies imposed over the last 16 years in Nicaragua while speaking before representatives of the international financial institutions and the foreign diplomatic corps during his first official encounter with the delegations of the international community. Ortega, in a speech that lasted almost one hour, especially criticized the economic policies of international financial institutions of the North that are imposed upon poor countries like Nicaragua.

Ortega insisted that the neoliberal policies are neither equitable nor just, and have not provided the results projected over the last 16 years. He asserted that these policies have generated greater indices of poverty and illiteracy and have placed Nicaragua in total desolation, in addition to fomenting corruption in prior governments. The President called for the financial institutions to be flexible regarding his economic policies, that the international community be supportive of Nicaragua, and asked that the diplomatic delegations be receptive to the plans of his government.

Following Ortega’s speech, US Ambassador Paul Trivelli commented, "It would be interesting to hear the plans of the new government on how they want to fight poverty, so that we as donors might contribute." Responding to Ortega’s call for flexibility from the international organizations, he indicated that, "up until now there have not been any programs even mentioned, thus there are no conditions which to make flexible." Trivelli's statement completely ignores the many steps and statements the new Sandinista government has made to lay-out exactly the plans Trivelli complains don't exist. These programs include the Ministry of Education plan to abolish school fees so that all children can receive an education and the new Zero Poverty Program that will address rural poverty and reactivate peasant agriculture. Trivelli has overstayed his welcome in Nicaragua and needs to be replaced by someone who will recognize the democratic will of the Nicaraguan people.

Mirna Liévano, representative of the IDB, made the ridiculous comment that the IDB has more than 50 years of experience in the country accompanying the development of Nicaragua. "Really there is no imposition on the Bank’s part; the projects are always those the government prioritizes and then asks for our collaboration, from this point of view we will give our support according to what is laid on the table." The IDB, like the IMF and World Bank, cut Nicaragua off from international financing during most of the first Sandinista government (1979-1990).

IMF representative Humberto Arbulú stated that any such declaration that comes from the president of a country that forms part of the economic arena of the IMF is troubling; however, he said, "I cannot make any comments as of yet without having read the content thoroughly, because one thing is to hear it in a presentation, and another thing is to read it. I would prefer to read it before making any official comments."

Presidential Economic Advisor Bayardo Arce said Nicaragua has decided to postpone negotiations with the IMF scheduled for late January until mid February, in order to learn more of the results from the IDB meeting in Amsterdam, Holland, regarding debt cancellation for Nicaragua. Arce emphasized that there is no defined agenda, although the Ortega administration will focus in these negotiations on "investment and employment generation." He indicated that if the IMF conditions are in line with these principles, the FSLN will put them in place. He was emphatic in assuring that they are not going to assume the same subservient attitude as the previous governments.


Return to top.

Topic 4: New government proposes initiative to cut mega salaries


A reform of the "Law for wage regulation of the public administration and civil employees of the State," was introduced in the National Assembly last week to adjust downward the mega-salaries instituted in the Chamorro, Aleman, and Bolaños governments. FLSN Assembly member Gustavo Porras explained,, "This proposal will require that all government officials earn a wage more in-line with the economic reality of the country."

According to the proposed law and a recent presidential decree, judges, general directors of agencies, advisors, technical secretaries, managers, mayors, and vice mayors, among others, will not be able to earn in excess of the equivalent of 50 times the minimum wage, or US$3,400. Sandinista Renovation Movement (MRS) Assembly member Mónica Baltodano said that the wage reduction must be adjusted for those National Assembly members from departments outside Managua. She said that they should be assigned fuel rations every month accordingly.

The vice-president of the Supreme Court, Rafael Solís, said that there was a precedent set a year ago by the Supreme Court regarding a Law for Wage Reduction which was declared unconstitutional.

Return to top.

Topic 5: National Assembly gives President more power over military and police


The National Assembly on Jan. 24 approved a bill to amend Law 290, Law of Organization, Competition and Procedure of Executive Authority, that in essence grants more power to President Daniel Ortega, mainly over the Military and the National Police. The reform was first approved in general form with 81 votes in favor, 5 against and 4 abstentions and later as a more detailed bill.

The current reform to Law 290 reduces the authority of the ministries of Interior and Defense, but not as much as originally proposed by President Ortega. In addition it creates new institutions, a Ministry of Energy and Mining, and gives powers to the president to create boards and ministries by decree.

Though the bill received a super majority in the vote, not everyone was happy. "What is the urgency of the present government to crudely emulate Cuba, Venezuela or Iran," questioned Nicaragua Liberal Alliance (ALN) Assembly member Pedro Joaquín Chamorro. "It seems to me that what we have here is an excessive urgency for Nicaragua to digress institutionally, change everything at the roots and align ourselves rapidly with an irresponsible populism that has very unpredictable consequences for the nation."

Return to top.

Topic 6: Therapeutic abortion: taking a second look


While tens of thousands of Nicaraguans took to the streets of Managua on October 6, 2006, to demand the elimination of the possibility of a legal therapeutic abortion (and had their efforts rewarded quickly by the Nicaraguan National Assembly in the middle of a tight presidential election), numerous sectors within Nicaraguan society are now demanding that the decision be revisited. Last week, Cardinal Miguel Obando y Bravo, now retired as Archbishop of Managua, surprised readers of the country’s newspapers by calling for a forum on the subject which would include the best medical and scientific professionals. He said that he had never marched against therapeutic abortion nor was he an organizer of the recent march. He also denied that he had negotiated any agreement on this subject with recently inaugurated President Daniel Ortega.

Reverend Augusto Cesar Marenco, an evangelical leader and one of the organizers of the October march, stated last week that “the measure was eliminated [from the penal code] very quickly and what was lacking was the scientific information to do the proper analysis and debate on the matter.” He added, “We are pastors, not scientists.”

Meanwhile, FSLN deputy in the National Assembly Alba Palacios said that the FSLN maintains its position and subject of therapeutic abortion “should be left as it is for now.” She said, “If society wants to open the debate, then it should be opened. This is a democracy and the majority rules.” She proposed that in the case of a “delicate” pregnancy, the woman, her family and medical specialists should get together to decide what is best, a suggestion of doubtful legality.

Medical organizations have highlighted figures from Nicaragua’s Ministry of Health which have obviously opened the eyes of many Nicaraguans to the reality of the loss of therapeutic abortion as a health option. Obstetrician Oscar Flores, with thirty years experience in the field, said that in 2005 and the first half of 2006, the Health Ministry reported 500 cases in the country of ectopic pregnancies, where the fertilized egg implants outside the uterus. This is a fatal condition if not treated.

The new Minister of Health, Maritza Cuan, has spoken publicly in favor of revisiting the law and reinstating therapeutic abortion, in spite of the official position of the FSLN. She said that the correct route would be to “see how we change the law and see how our colleagues--the specialists in attention to women’s health--can provide orientation to decision makers; that is the most important thing in this case.”


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.