Some say it is just to annoy the United States. In fact, US ambassador Paul Trivelli has even said that Nicaragua’s relations with Iran are “dangerous.” Others say Nicaragua should be able to seek out and receive aid from wherever it can. If it only accepted cooperation from squeaky clean democracies, the list of partner countries would be a very short one indeed.

After a few days of meetings, technical teams from Nicaragua and Iran issued a joint declaration stating their intention to formalize an agreement that would benefit Nicaragua with several infrastructure projects financed with soft loans and donations from the Islamic republic. Cooperation will be spread across the areas of energy, housing, ports, water supply and sanitation, fisheries, agriculture, and forestry.

Authorities presented the Iranians with four separate proposals for developing hydroelectricity that would produce 616 megawatts and cost more than $200 million. By the time of the next round of meetings in November, one of these is to be selected for development, contributing significantly to Nicaragua’s stock of renewable energy resources.

The head of the housing institute was pleased to announce that Iran will provide support for the construction of 10,000 low income homes. Two wharfs will be built at the container port in Corinto on the Pacific and the Iranians are considering sharing in the construction of a deepwater port at Monkey Point in the South Atlantic Autonomous Region, possibly with the participation of Venezuela. Combined with an overland link and pipeline, this would enable that country to supply the new refinery (see above) with crude oil directly, without having to run tankers through the Panama Canal.

An assembly plant for agricultural implements for the local market and export is part of the package, as is the construction of five dairies and a modern slaughterhouse and meat packing plant. Irrigation equipment and the construction of small reservoirs will help boost agricultural production.

The list goes on: Iranian-made tractors financed with cooperation from Venezuela for distribution at a low price to agricultural cooperatives; construction and repair of healthcare facilities; technological training programs and scholarships in laboratory services and high-technology production of pharmaceuticals; launches and tackle for small-scale fishermen; drilling wells in the southeast section of Managua and laying pipe to distribute the water; and, machinery for a plant making plastic goods that would get its raw materials from the new refinery.

On the other side of the coin of this agreement, Nicaragua would export beef, coffee and agricultural produce to Iran.

And how much light will be at the end of it? Rotating four-hour power cuts throughout the land have caused a boom in the sale of candles and portable generators. If you believe what you hear from the president, the shortfall in electricity production is coming to an end, but not any time soon. In his speech at the rally to commemorate the 28th anniversary of the overthrow of dictator Anastasio Somoza in 1979, President Daniel Ortega promised that the problem will be resolved early next year. Such optimism is uncommon here and may be unfounded, but Nicaraguans are well accustomed to hearing bold promises.

Next March is when the Canadian-based geothermal power company PENSA says it will complete four more wells to produce steam for its plant, bringing 37 more megawatts on line. Representatives from Taiwan announced $30 million in aid to build a new 27.2 MW plant that will run on bunker oil. Work on getting it built and running will reportedly start soon and the electricity will be cranked out into the national grid sometime during the first quarter of next year. Iran is looking into providing support for a large hydroelectricity project in the country’s interior, but the construction of a dam and power plant would take quite some time.

Other investors are looking at setting up a wind farm, most likely along the west shore of Lake Nicaragua, and an American company has proposed the construction of a power plant that would burn gasified coal.

The Spanish power distribution firm Union Fenosa, involved in a long-running dispute with the government about its responsibilities, recently signed an agreement with national authorities that would have them invest $33.7 million in the distribution network from now till 2011. Let’s hope they don’t wait until October 2010 to begin.

The company won the bidding process when the country privatized distribution back in the 1990s and now, it may also be permitted to generate electricity. Fenosa wants a review of the rates charged to consumers. Meanwhile, the government promised to move a law through the National Assembly by December that would make it a criminal offense to steal electricity, a not uncommon practice here given the high price charged.

“Why can’t we all just get along?” That plaint is heard often from the country’s Liberals. Split into two main factions (Liberal Constitutionalist Party – PLC and the Nicaraguan Liberal Alliance – ALN), they saw themselves lose to the FSLN’s Daniel Ortega in last year’s presidential election who won with a paltry 38% of the vote.

Talks to unite the two bands never seem to get off the ground and having the two blocs vote on an issue in the National Assembly the same way requires plenty of wrangling. This all works to the benefit of the Sandinistas who artfully play the split that runs along the lines of the egos of liberal leaders. The PLCers are divided among themselves as well, differing over the role that former president Arnoldo Alemán is playing. Some want to cut ties with the convicted felon, while others remain steadfastly loyal to him.

Those loyalists in the Assembly use their votes to support some FSLN proposals in a covert exchange that keeps Alemán out of jail and under a surreal form of “house arrest.” This “prisoner” has free run of the whole country in order to conduct his personal business and that of his party, making appearances on TV and radio and speechifying at public gatherings. And he has yet to make a first payment on the millions he was fined.

Billboards of Daniel Ortega standing fist in air proclaiming “Up the poor!” are ubiquitous throughout the land. The President’s showcase program called Zero Hunger is supposedly designed to raise up the poor, but it may apply to only some of them. There is ongoing criticism and questioning of its mechanisms for giving the poor a leg up. The well-intentioned program consists of distributing hens, pregnant cows, and crop seed to poor country folk throughout the country, along with a “production bond” to be used to finance expanded family farm production. The program does not make use of already-existing organizations and associations that have experience with development work in the countryside. Instead, the giveaways are doled out by FSLN party structures that are the nuclei of a new organizational form called Citizen Power Councils, or CPCs.

The runaway rise in real estate prices in high competition areas in Nicaragua has reached an inevitable plateau. According to Raul Calvet, president of a firm that provides consulting services to tourism and development projects, the local tourism real estate market has suffered a drop in sales of between 60 and 70 percent this year, compared to previous years. This is due to “several factors,” he says, like the image of the country, problems related to property ownership, and concern over mixed messages coming from President Daniel Ortega. But the main reason is that money for investments is more limited than in recent years. The recent increase in the prime lending rate has had a major negative impact on global stock markets.

Over the last few years, owners of residential tourism projects (estimated at close to 125 in the country) were selling up to three or four lots a month, but are now averaging about one sale a month. Another factor is the price asked for the properties. They ran at $17 to $25 a square meter back in 2002 and 2003 and are now in the neighborhood of $200 to $250 in highly-desired coastal areas. On the other hand, there are many relatively inexpensive real estate deals to be made in other parts of the country.

A lot of progress has been made in recent years to resolve the property ownership disputes that tarnished Nicaragua’s image as a country in which to invest in the 1990s. Innovative solutions were found for many that resulted in a settlement between parties fighting to see who actually owned the land being sold to a third party looking to make an investment. Steps have been taken to modernize the system for land surveying and Property Registries throughout the country have undergone a “purging” to eliminate double entries for the same piece of land under different names.

But, as evidenced by recent events on the Pacific coast in Tola, there is still room for improvement. The developers of the Arenas Bay project there went public on a national TV program to denounce an attempt to extort money from them in order to “resolve” a legal dispute with some former members of a cooperative that had sold them the land for their project around the turn of the century.

They presented a recording of a meeting between a representative of Arenas Bay and Gerardo Miranda, the former mayor of San Juan del Sur whose name has become synonymous with shady land dealings. On TV, Miranda first acknowledged having the conversation, but when it got to the part where he comes straight out and asks for four million dollars, his face fell and his eyes began to shift. He tried to squirm his way out of the predicament by claiming that the voice was not his, that they must have hired a voice imitator.

A voice analysis test conducted later by a specialized firm in the United States confirmed that indeed, it was the voice of Gerardo, but not before he had gone on the offensive, charging the developers with slandering his “good” name. The case then went to review by a special parliamentary commission. National authorities were quick to assure investors that their investments in the country are secure. On the other hand, and not so coincidentally, environmental authorities issued a stop work order for the Arenas Bay project, alleging non-compliance with some aspects of their environmental permits.

The taped meeting with the developers was reportedly held in the offices of the Secretariat of the FSLN in Managua, the same building from which Daniel Ortega conducts his presidential affairs. It is a golden opportunity for Ortega to rid himself of someone who has figured in a number of instances of land-related corruption, including the illegal sale of municipal land when he was mayor of San Juan del Sur. That would send a clear signal that the country is still serious about eliminating property problems invented by those who seek to profit by stirring up trouble and manipulating legalities. By mid-August, the National Assembly commission had yet to make a statement on this case.