Nicanet - The Nicaragua Network

Nicaragua Network Hotlines for May 16, 2007

News topics covered in this Hotline include:

Topic 1: Nicaragua and the IMF finish second round of negotiations


Ten days of negotiation between the Nicaraguan government and the International Monetary Fund (IMF) ended May 12 without an agreement. Both sides described the second round of negotiations as “satisfactory and very constructive.” Nicaragua has been without an agreement with the IMF since shortly before President Daniel Ortega took office in January. Nicaragua relies on international loans and foreign aid to balance its budget. Ultimately, Nicaragua must have an agreement with the IMF to continue to receive foreign aid and loans. Unlike the previous neoliberal governments of Chamorro (1990-1996), Aleman (1997-2001), and Bolaños (2002-2006), the Ortega government is actually negotiating for the right to fund poverty alleviation rather than simply agreeing to IMF structural adjustment orthodoxy.

Vikram Haksar, head of the IMF negotiating team, conceded that the negotiations revolved around creating stronger policies in the fight against poverty as well, he said, as the importance of preserving Nicaragua’s “favorable macroeconomic policies.” However Haksar did not make any mention of being close to reaching an agreement.

Bayardo Arce, economic advisor for the government, stated that they continued to be firm on the need to increase and improve the funding for the social sectors such as health, education, public works (electricity and potable water) and housing. Arce said that the negotiating team will reanalyze some economic figures and send the information to the IMF in order to have a letter of intent ready before the third round of negotiations, which will facilitate the approval of a new economic program.

In what has developed into a predictable pattern, there has been an avalanche of criticism over the last 10 days claiming that the Ortega administration is not being forthright about the negotiations and is holding the meetings in secret in order to manipulate the information. The Sandinista government has not responded to these criticisms.


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Topic 2: Ortega opposes construction of an inter-oceanic canal through Lake Nicaragua

 Environmental issues took the stage this week in Nicaragua when President Daniel Ortega discarded the recommendation by Wilimas Schart, director of the National Forest Institute, to construct an inter-oceanic canal that would cross Lake Nicaragua (Cocibolca) in the southeast part of the country.

Schwart made the recommendation in an exposition about strategies to protect the forests over the next five years. In the presentation, Schwart explained that between 1983 and 2003, Nicaragua’s forests have diminished by 70,000 hectors per year, which, if it continues, will leave the country without forests in less than 50 years. He argued that the construction of the canal would help resolve the problem of deforestation because the company that would construct it will have to agree to invest large sums of money in plans and projects for preserving the forest and for reforestation.

Ortega opposed the idea, stressing that Lake Nicaragua is the largest water reserve in all of Central America and the damage that would be caused by a canal could be catastrophic. Though Ortega supported the possibility of a canal he said that it should be built in some other part of Nicaraguan territory.

Schwart and Ortega said that they were going to work on policies and laws that would zone territories to be used for urban areas, agriculture or national forests. Ortega also recommended that the law obligate investors to dedicate part of their profits to reforestation and protection of the forests.

In a related story, President Ortega, prompted by the recommendation of Juana Argeñal, Minister of the Environment and National Resources, stated that Nicaragua needs fast planes and helicopters to protect what is left of its forests. Nicaragua currently has 76 protected areas accounting for some 3.5 million hectors of forests that these aircraft would be in charge of protecting.

On May 8 Ortega said that the aircraft needed to protect the forests will come from either the US or Russia and that he would be seeking a loan or funding from one of the two countries to facilitate the purchase. On May 11 in Camoapa, however, during the closing ceremonies of a water sanitation project sponsored by the armed forces, Ortega approached Taiwanese Ambassador Ming Ta Hung to solicit economic aid in order to purchase the planes. According to local television news stations the proposal was received by the Ambassador but he has not yet responded.

US Ambassador Paul Trivelli said on May 11 that the idea “is not a bad idea” and that these assets should be used to stabilize the military, prevent drug trafficking and assist in cases of natural disasters.


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Topic 3: Thirteen Banana Workers Get Partial Settlement in Nemagón Lawsuit


Pending the almost-certain approval of a Los Angeles County judge, 13 former Nicaraguan banana workers will receive a total of $300,000 as a result of an out-of-court settlement in their lawsuit for damages caused from being exposed to the pesticide Nemagón (dibromoclorpropane) such as sterility and other health problems. An attorney for the group, Juan Dominguez, made the announcement on April 15, during an activity in Chinandega, where the banana plantations were located. Some 1,500 former workers attended.

Dow Chemical Corporation, Amvac Chemical Corporation and Dole Food Company and other companies produced the chemical or used it for some 30 years on banana plantations in Nicaragua. Dow, Dole and Amvac were named in the lawsuit brought by the Nicaraguan workers. The use and manufacture of Nemagón was prohibited by the U.S. Food and Drug Administration in the late 1970s after studies showed it caused male sterility. However, a number of US companies continued to use the product in Central American countries. Former banana workers, both men and women, are suffering serious health problems including birth defects, tumors, and many are dying early from side effects blamed on poisoning by the banned pesticide.

The out-of-court settlement was only with Amvac, which is located in Newport Beach, CA, and is the smallest of the companies, said attorney Dominguez. Amvac, which is still facing thousands of other lawsuits, did however deny any guilt in the matter, filing the settlement as a “compromise on allegations in dispute.” The cases against Dole and Dow are still in court. "This is just the tip of the iceberg for the rest of the complainants in Nicaragua and the rest of the world. The victories have begun," Domínguez said.


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Topic 4: World Court to begin hearings in case between Nicaragua and Colombia

The International Court of Justice (World Court) announced that on June 4 it will begin preliminary public hearings in the case between Colombia and Nicaragua. The suit was filed by Nicaragua in 2001 in a dispute over maritime boundary lines between the two countries. These hearings, however, are only to determine whether or not the World Court has jurisdiction and is competent to resolve the dispute, something which Colombia has questioned.

On July 21, 2003, Colombia presented before the World Court preliminary objections which put in question the court’s jurisdiction. In dispute is the sovereignty which Nicaragua claims to have over the Providence, San Andrés, and Santa Catalina Islands as well as the Recondor, Serrana, Serranilla and Quitasueño Cays. These islands are off the Caribbean Coast of Nicaragau but Colombia has held them for generations. Nicaragua has also asked that the World Court determine the continental shelf boundary as well as the exclusive commercial boundary rights which correspond to each country. The World Court’s pending decision in the border dispute case between Honduras and Nicaragua, expected for mid June, will impact the outcome of the case between Nicaragua and Colombia if the Court decides that it is competent to receive the case.

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Topic 5: Sugarcane harvest and faulty turbine create yet another energy deficit

Nicaragua continues to face difficulties regarding electricity and the power sector. With the end of the sugarcane harvest scheduled for May, 19 the president of the National Sugar Board, Mario Amador, announced that the San Antonio and Monterrosas sugar refineries will begin to only produce 15 megawatts of electricity instead of the 60 megawatts they had been producing during the harvest causing energy deficiencies in the country once again.

In addition to this deficit, Ernesto Martínez Tífer, president of the Nicaraguan Electric Company, announced that on May 10 one of the electrical turbines at the Planta Nicaragua overheated and was taken offline to be repaired causing two to three hour blackouts for five days in a number of sectors.

Tífer explained that Nicaragua will have to run the energy plants sent by Venezuela at full steam in addition to buying energy from the Central American market in order to minimize the effects of the energy deficit. He said that Nicaragua has a fragile power system with no reserves in cases of emergencies but added that Costa Rica and Guatemala suffer from similar problems.

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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.