Nicanet - The Nicaragua Network

Nicaragua Network Hotlines for May 01, 2007

News topics covered in this Hotline include:

Topic 1: ALBA Summit advocates structural changes in member countries


Nicaraguan President Daniel Ortega attended the Bolivarian Alternative for the Americas (ALBA) Presidents’ Summit on April 28 and 29 in Barquisimeto, Venezuela. Those attending the summit evaluated projects created and executed in 2006 in Bolivia, Nicaragua and Caribbean countries under the first "ALBA strategic plan."

An official document released by the member countries (Cuba, Venezuela, Bolivia and Nicaragua) advocated for structural changes in Latin American countries that would, "put politics and the economy at the service of the people." This political document also included the promotion of nationalized companies and government programs in sectors such as food and health, education, energy, communications, roads and transportation and housing among others.

On the final day of the conference, Bolivia, Venezuela and Nicaragua announced that they are withdrawing from the International Center for the Settlement of Investment Disputes (ICSID). This is the secretive trade court within the World Bank which Bechtel used to sue Bolivia for $50 million when the US multinational was thrown out by the people of Cochabamba after it bought the city’s privatized water system. Member countries of the ALBA have emphatically rejected legal, diplomatic and media pressure exercised by some multinational companies. ICSID decisions overrule nation’s constitutional rules, national laws, contractual obligations, and environmental and labor regulations.

Venezuelan President Hugo Chavez also proposed that the ALBA countries and Haiti incorporate into their national agendas government programs such as Venezuela's health and education missions that have had amazing success. Venezuela, through these missions, currently provides free health care to millions of inhabitants in marginalized and economically deprived areas and also has eliminated illiteracy (recognized by UNESCO in 2006).

Ortega while addressing the members of the summit stated that the Free Trade Agreements promoted by the United States, more specifically referring to the Free Trade Areas of the Americas (FTAA) agreement, “exist to continue the domination and oppression of the people. They are forms of colonization. Uniting Latin America and the Caribbean is fundamental to achieving freedom and complete sovereignty from imperialist hegemony. At present the ALBA is the only viable alternative that advocates the advancement of just and fair trade, with solidarity as a fundamental principal."

Present at the summit, in addition to Chavez and Ortega, were Bolivian President Evo Moralez and Cuban Vice-president Carlos Lage. A number of observer countries with intentions to form part of the ALBA trade bloc were also present such as Haitian President Rene Preval, Ecuador's Foreign Minister Mara Fernanda Espinosa, Uruguay's Housing and Economics Minister Danilo Astori, as well as representatives from several Caribbean countries.


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Topic 2: US denies US$17 billion debt with Nicaragua for damages caused by the war

US Ambassador to Nicaragua Paul Trivelli denied that the US owes Nicaragua US$17 billion for damages caused during the war financed by the US in the 1980s. He maintained that the issue is, "a moot issue and nonexistent" because the US "never accepted the jurisdiction of the International Court of Justice (ICJ) in the Hague, also known as the World Court. He did point out however that the petition of the Sandinista government was not for US$17 billion, but rather US$370 million.

On a number of occasions Nicaraguan President, Daniel Ortega has stated that the US was ordered by the World Court in 1986 to pay a compensation for the damages caused by the US-funded contra war. Recently Ortega went as far as to claim that at present his government accepts the current US foreign aid as ''a contribution or payment" towards the reparations demanded by the World Court.

In an interview however, Trivelli stated that former President Violeta Barrios de Chamorro withdrew the demand against the US. Trivelli stated that the US accepts the actions of Chamorro and that the US is willing to continue to offer aid to Nicaragua, which to date has a calculated total of close to US$1.8 billion since 1990. Chamorro’s dropping of the World Court decision against the United States was widely seen at the time as a pay-off for US funding of her campaign and the political arm twisting that united the fragmented anti-Sandinista opposition behind her. It was openly portrayed as the price of a renewal of U.S. foreign aid to Nicaragua.

The Nicaragua Network believes that the US government has a moral obligation to pay Nicaragua for the devastating effects of its illegal war against the Sandinista revolution. At a modest 5% interest, that debt today stands at over $47 billion. The less than $2 billion in US aid over the last 17 years is a paltry sum in comparison.


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Topic 3: Government austerity program could result in savings of US$19 million annually


On the day he was inaugurated president, Daniel Ortega issued a decree lowering the salaries of the highest paid officials in the executive branch. The National Assembly is considering a bill that would reduce public spending by making salaries in the other branches commensurate with those of the executive branch. Economist Néstor Avendaño praised the initiative and said that it was the first step toward the elimination of the high salaries that have been an offense to the Nicaraguan people, the majority of whom live on less than US$2.00 per day.

Georgina Muñoz, of the Civil Coordinator, said that “Reducing the megasalaries is one of the most positive steps that the government has taken because it shows a sensitivity to the extreme poverty of the country.... We urge the other branches of government to follow this example, given that we’ve heard that the legislative, judicial and electoral branches are turning a deaf ear to this plan.”

The amount that will be saved by lowering salaries is still uncertain. The Treasury Ministry calculates a savings of US$790,000 yearly which would be applied to poverty reduction through the Zero Hunger Program. Avendaño, however, calculates that the monthly savings could amount to US$2.5 million, just from salary reductions. Then, to that amount Avendaño would add money saved by austerity policies that are reducing spending on credit cards, cell phones, housing allowances, body guards, etc. The total savings could amount to US$19 million annually.

A list of some of the reduced monthly salaries follows:
President: US$3,200; Vice-President: US$3,100; National Assembly Deputies, Justices of the Supreme Court, Comptrollers, Human Rights Ombudsman, Attorney General, Chief Prosecutor: US$3,000; Ministers, Presidential Secretaries, presidents and directors of autonomous agencies: US$2,900; Vice-Ministers, Superintendent of Banks, and others: US$2,800.

All signs indicate that the president will continue with further austerity measures, especially since the issue of highly-paid consultants has not been tackled yet. Treasury Ministry official Denis Silva estimated that there are more than 2,000 consultants, most of whom earn as much as US$10,000 monthly.

Avendaño blamed the international financial institutions for mandating these “juicy salaries,” giving as an example the case of Luis Duran who “fought poverty” during the administration of Violeta Chamorro earning a salary of US$25,000 per month. “The corruption is in the international organizations,” said Avendaño, adding that “This payroll is financed with further foreign indebtedness which goes to pay consultants who aren’t even thirty years old. This is unacceptable; these consultants should be experienced, not recent university graduates.”


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Topic 4: Cuban doctors and health care aid under the ALBA arrive in Nicaragua

On April 28 a group of Cuban doctors arrived in Nicaragua as part of the cooperation agreement under the Bolivarian Alternative for the Americas (ALBA). The group consists of 16 specialists in integral health and general medicine. Leader Luis Carlos Avila confirmed that the group has already begun providing services in the Northern Atlantic Autonomous Region (RAAN) with the mission to reduce maternal mortality rates in the region.

Cuban doctors are required to spend two years serving in poor countries of the Global South before they can practice in Cuba. Millions of poor people around the world have benefitted from Cuban health care for decades. Many Cuban doctors served in Nicaragua in the 1980s until Chamorro, under US pressure, kicked them out in 1990. It is unknown how many Nicaraguans have died over the last 17 years as a result of that political decision and the privatization of health care mandated by the International Monetary Fund and the World Bank.

Nicaragua, with Cuba's assistance, will also create an extension of the Cuban-based Latin American School of Medicine in the RAAN. More than 200 Nicaraguan medical students studying in Cuba will spend their last year in the extension school with the Cuban doctors that form the ALBA medical brigades as their professors.

In other health related ALBA cooperation projects with Cuba, on April 26 the first of three ophthalmology clinics began to function with equipment and resources donated by Cuba. The clinic located in Ciudad Sandino in the municipality of Managua expects to carry out a minimum of 60 operations daily for things such as cataracts and other similar eye complications.

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Topic 5: Minimum wage negotiations come to a standstill


The seventh round of negotiations to establish the minimum wage came to a close on the 26 of April without reaching a consensus between the social, governmental or business sectors. The last scheduled round of negotiations will commence on Wednesday May 2.

While the business sector has proposed a flat 10 percent increase, the government has proposed a 10.4 percent increase with the commitment to readjust within six months. The unions however are demanding a 25 percent increase and threatening to protest and hold a strike in the construction sector and textile industries on May 1.

The government and business sector argue that more than a 10 percent rise will jeopardize the macroeconomic stability of the country. The labor unions however argue that both proposals are unacceptable for the simple fact that even with the raise the salaries do not cover the basic cost of living, which in Nicaragua is the cost of the “basic basket” of 53 essential products for a family of four. According to the labor unions the cost of these products is US$167 per month while the current minimum wage in Nicaragua is only US$77 per month. To create a new minimum wage at least two of the three sectors have to reach an agreement according to Nicaraguan law.

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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.