Nicaragua Network Hotline--April 2, 2008
 
Resent-Date: Wed, 2 Apr 2008 23:29:10 -0500 (CDT)


Nicaragua Network Hotline www.nicanet.org April 2, 2008 Topics
included in this hotline are:

1. Advances of FSLN government's social programs reported

2. Foreign investment up by 15.5%, exports to US up by 35.5%

3. Opposition threatens to cause institutional crisis if elections
in RAAN are suspended

4. US State Department warns citizens about rapid increase in violent
crime in Nicaragua

5. Investigation into CENIS scandal concluded

Topic 1: Advances of FSLN government's social programs reported

On Mar. 27 during the weekly meeting "El Pueblo Presidente," hosted
by President Daniel Ortega, members of Ortega's cabinet gave details
about the advances of the government's social programs.

Judith Silva, president of the Institute of Urban and Rural Housing
(INVUR), gave details of the government funded housing projects.
Since the Sandinista (FSLN) government came to power in Jan.

2007 INVUR has funded the construction of 641 houses, benefiting
3,205 people and creating over 6,000 jobs. INVUR is currently
coordinating 57 housing projects in 14 departments of the country
which will build a total of 5,365 houses benefiting 27,030 people
and creating 77,442 direct and indirect jobs.

Transport and Infrastructure Minister Fernando Martinez announced
that work on the "Streets for the People" program would begin during
the week of Mar.

31 - Apr. 4 with the paving of eight streets in two of the poorest
sectors of the Batahola Sur neighborhood.

This program is funded by Venezuela as part of the Bolivarian
Alternative for the People of Our America (ALBA).

Agriculture Minister Ariel Bucardo said the government program "Zero
Hunger" has given out 12,000 food production packages to campesina
(female) heads of households over the last fifteen months in rural
areas across the country. As a result, said Bucardo, 19,300 direct
jobs and 60,000 indirect jobs have been created. The Ministry of
Agriculture and Forestation (MAGFOR) aims to give out another 14,547
food production packages to campesina heads of households during
the rest of 2008.

Gustavo Moreno, director of program, explained in a separate press
interview that the food production package usually consists of a
pregnant cow, a sow and piglets, chickens and a rooster, materials
to build a chicken house and a pig sty, seeds, fruit trees, tools
and a biodigester [which uses animal manure to produce methane gas
for cooking]. The program aims specifically to empower women,
therefore the package is given directly to the female head of the
family.  Access to credit at low interest rates and regular technical
support and training on subjects as diverse as gender issues, health,
animal nutrition, the formation of cooperatives, environmental
issues and commercialization of their production round out the
program.

The Food Production Package is valued at US$2,000.

Due to a lack of suitable sows and cows, however, not all the
families benefited in 2007 received the full package. Beneficiary
families must own between 1 - 5 manzanas of land (between 1.7 and
8.5 acres).

They must commit to receive training, to produce food, not to sell
the materials given to them as part of the production package and
to put back 20% of the value of the original package into a local
rural fund which will benefit other families as part of the same
program.  The short term aim of the program is for the families
benefited to dramatically improve the nutrition of the family. The
medium term aim is for the local economies in rural areas to be
reactivated.

In 2007 the program had a total budget of US$9.2 million. This year
the National Assembly has approved a total budget of US$12 million
and there is also the possibility that the Inter American Development
Bank will approve a loan for an US$5 million to be used for the
same program. Already MAGFOR has identified 14,547 families who
will receive the Food Production Package during 2008.

The Zero Hunger program follows the model developed by the NGO
CIPRES headed by Orlando Nuqez Soto, an internationally recognized
authority on food security and peasant agriculture.

Topic 2: Foreign investment up by 15.5%, exports to US up by 35.5%

President of the state agency Pro-Nicaragua which promotes foreign
investment, Javier Chamorro, announced on Mar. 25 that foreign
investment in Nicaragua increased 15.5% during 2007 compared to
2006. While in 2006 foreign investment in the country totaled US$290
million, this figure grew to US$335 million in 2007. Chamorro went
on to say that Pro- Nicaragua expects a further 18% increase in
foreign investment during 2008 with companies from countries as
diverse as Brazil, Mexico, Taiwan, Venezuela and Iran planning to
invest in Nicaragua. "Contrary to the claims of opposition forces,"
said Chamorro, "there is a stable climate [for investment] in
Nicaragua."

Most of the new investments are being made in the free trade textile
and manufacturing industries whose only advantage to the economy
is low wage jobs since the companies neither pay taxes nor sell
their products in Nicaragua. Industrial agricultural production is
another beneficiary of foreign investment.  The Nicaragua Network
will attempt to learn more about the growth of corporate agribusiness
in Nicaragua since it normally is accompanied by concentration of
land ownership and environmental degradation.

Reportedly, in the two years since the Central American Free Trade
Agreement (CAFTA) came into force in Nicaragua on Apr. 1, 2006,
Nicaraguan exports to the US have increased by 35.5% (from US$243.4
million in 2005 to US$328.3 million in 2007) according to the
independent Center of Promotion of Investment and Exports (CEI).
The majority of products Nicaragua exports to the US are food
products such as coffee, beef, prawns, fruit, vegetables, peanuts,
dairy products, beans and rum.

According to Dominican Republic Trade Minister Melanio Paredes,
Nicaragua, along with the Dominican Republic, has registered a
minimal increase in imports from the US, while Guatemala and El
Salvador have experienced no increase and Honduras has experienced
a decrease in imports from the US since DR-CAFTA came into force
two years ago.

Domingo Frixione, an analyst with a doctorate in business, warned
that Nicaragua's economic and financial dependence on the US will
be a severe disadvantage over the coming months and years with
recession building in the US. Frixione called on the Nicaraguan
authorities to take steps towards diversifying the destination and
origin markets for Nicaragua's exports and imports in order to
reduce the impact of an increasingly weak US dollar.  Frixione and
Nicaraguan economist Rene Vallecillo agree that Nicaragua's
participation in the Latin American integrationist program the
Bolivarian Alternative for the People of Our America (ALBA) and the
signing of a trade agreement with the European Union will help to
reduce Nicaragua's dependence on the US.

Topic 3: Opposition threatens to cause institutional crisis if
elections in RAAN are suspended

Opposition political parties threaten to paralyze the National
Assembly like they did in December and January over the installation
of the Councils of Citizen Power (CPCs), if the Supreme Electoral
Council (CSE) decides to suspend the municipal elections in three
municipalities of the North Atlantic Autonomous Region (RAAN). On
Feb. 27 the council of the regional government in the RAAN asked
the CSE to suspend the municipal elections in Bilwi (Puerto Cabezas),
Prinzapolka and Waspam because of destruction and population
displacement from Hurricane Felix would not allow an election process
to take place smoothly.

On Mar. 7 the Ecumenical Council of the RAAN issued a public letter
in which it stated that public opinion in the region as to whether
or not the municipal elections should go ahead is "very divided."

The CSE is yet to rule, but President Daniel Ortega has openly
expressed his agreement with the RAAN authorities that the appropriate
conditions to carry out an electoral process do not exist. Ortega
argued that entire communities were destroyed by the hurricane and
that there are still areas where there are no houses, schools or
churches despite relief efforts.

Ortega went on to say that the Atlantic Coast Autonomy Law establishes
that it is the RAAN regional government, not the President, nor the
National Assembly, nor the CSE that will decide whether or not the
elections go ahead.

The opposition parties claim that Ortega does not want to hold
elections in these municipalities because he fears the Sandinista
(FSLN) led alliance [which includes the indigenous party Yatama]
will lose. The Constitutional Liberal Party (PLC) has made a complaint
about the situation to the Organization of American States (OAS)
while opposition leader Eduardo Montealegre said that the opposition
parties plan to reactivate the Block against the Dictatorship, the
legislative grouping which included the PLC, the Nicaragua Liberal
Alliance (ALN) and the Sandinista Renovation Movement (MRS) and
which boycotted the National Assembly in December. Opposition parties
are also threatening not to approve the Anti Fraud Law which is
required by the International Monetary Fund (IMF) before disbursing
millions of dollars to the government as part of a three year
economic program.

Topic 4: US State Department warns citizens about rapid increase
in violent crime in Nicaragua

The US State Department issued a report on Mar. 28 claiming that
the level of violent crime in Nicaragua has dramatically increased
during the last six months. "Violent crime in Managua and other
cities is increasing and street crime is common," reads the State
Department travel alert.

The US Consul in Managua Mare J. Meznar said the matter was of
"great concern" for the US and the Nicaraguan authorities had been
informed. "During the last year the [US] Embassy has observed a
gradual increase in the use of armed violence against US residents
and US citizens visiting the country."

Given that the previous State Department report issued on Aug. 7,
2007, presented a different scenario in line with the Nicaraguan
police authorities and others' perception that Nicaragua is the
safest country in the region, it is not clear what prompted the
current negative assessment.  Nicaragua is a very poor country and
when rich and poor interact there will be property crimes whether
it be on the streets of Washington, DC, or Managua, Nicaragua.
Violent street crime in Nicaragua though is a rare occurrence,
certainly less frequent than in any big city in the United States.
The Nicaragua Network urges travelers to Nicaragua to use good sense
and caution, but knows of no reason that US residents or anyone
else should alter their travel plans.

Topic 5: Investigation into CENIS scandal concluded

Special Prosecutor Armando Juarez announced on March 31 that the
investigation into the fraud related to the issuing of Negotiated
Investment Certificates (CENIS) in 2000 and 2001 when several banks
failed had concluded. He said there is sufficient evidence to indict
those implicated in the scandal. Although Juarez didn't mention the
names, it is assumed that former Finance Minister and presidential
candidate Eduardo Montealegre, who is currently running for mayor
of Managua, will be charged.

Juarez went on to announce that the results of the investigation
are so conclusive that the Attorney General plans to request, for
the second time, that the government suspend all payments on this
"illicit debt, originating from the abuse ... and enrichment of
groups who are bleeding the country dry." Earlier in the year Juarez
had made a similar request. Judge Julio Cesar Arias ordered all
payments to be suspended. President of the Central Bank Antenor
Rosales questioned the legitimacy of Arias' ruling and announced
that the government would continue to honor the debt. On Mar. 31
Juarez said the Attorney General plans to appeal that decision to
the Supreme Court. According to the Comptroller General's Office,
the CENIS fraud cost the nation US$492 million.

Independent economists believe this figure could be as high as
US$600 million.

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