by Nick Cooke
Two Towers for San Juan
Not since the California Gold Rush of 1848 has the fishing port town of San Juan del Sur seen such a boom. Multiple housing development and hotel projects are already underway, and then … !!??
“San Juan del Sur Resort” has been announced by a Canadian developer. It will be sited towards the north-ish curve of the bay and along the south bank of the estuary, which along with the beachfront, will be remodeled with dining facilities and a marina for mooring small seagoing craft. Four hundred condos and 175 hotel rooms will fit into two 25-story towers and a number of low-rises. It has to be mentioned that in all Nicaragua, there is only one building that comes even close to the stature of one of the proposed “twin towers,” the former Bank of America where downtown Managua used to be.
This proposed $70 million investment will be spread out over eight years. One estimate is that more than 4000 jobs are to be created by the end of that period, starting with just under a thousand during the first year.
Not everyone, however, is thrilled with this announcement. Some say it will irremediably change the nature and character of this town, partially because of the arrival of many skilled workers from elsewhere thirsty for jobs and salaries. Apart from the question of where these people will live, there is also the question of where the necessary water will come from. The present supply system for the town is already strained. Word is that a pipeline will be built over the narrow continental divide to bring it in from Lake Nicaragua.
Full speed ahead along the Pacific Coast
Investment and construction of tourism facilities continues to pick up the pace along Nicaragua’s southern Pacific Coast. The multi-million dollar Gran Pacifica project in the Municipality of Villa El Carmen (west of Managua) had been idling along in its planning stages for the past four years, but now is gaining momentum.
Construction is well underway and will, over the course of 20 years according to Gran Pacifica’s executive president Michael Cobb, include apartment buildings, condominiums, houses, golf courses, and a 150-room hotel under the logo of the Marriot chain.
So far, 85% of the venture capital has come from US and Canadian investors, with Nicaraguans making up the remaining 15%. The consortium has also purchased land in Belize, Costa Rica, and South America with the idea of making Nicaragua its operations center for regional development of what is known as “resident tourism.”
Meanwhile, around $50 million has already been invested in different projects along the Pacific shoreline in the Municipality of Tola. The recently-formed developers’ association there is also making a push to attract resident tourists who live to surf. Due to almost unnaturally ideal conditions, those shores offer something available nowhere else.
Projectors in both portions of the seaboard seek further governmental incentives through new legislation for State subsidization of tourism development, in other words, tax breaks. Yet there are some willing to make a stake in this field with or without.
Separating wheat from chaff
The surge in project potential along the Pacific coast and elsewhere in Nicaragua is a tempting fruit, waiting to be plucked. At least that’s the hype on websites everywhere. Google “nicaragua real estate” and you will get almost one and a half million search results.
Many developers come to do their thing in an environmentally-friendly fashion, but there are always a few that can be compared to the bad apple in the barrel. For example, those who shaved the hills overlooking the El Flor Turtle Nesting Preserve south of the town of San Juan del Sur, prior to marketing condo and residential sites.
When environmental authorities attempt to rein in unconscientious developers for having violated common sense norms for such developments, such land-rapers are prone to scoff at the miniscule fine levied for their depredation of the natural surroundings. The amount of the penalty is a zero or two short of the sum of their profit projections and, therefore, does not serve as much of a deterrent. Some go so far as to say there were no trees there to begin with.
If all investors and national authorities ever treated this land with the respect it is due, results would make the pages of periodicals published around the planet.
Bio-energy cropping
Bio-diesel and ethanol are heralded as fuels of the future in light of ever-rising petroleum prices and Nicaragua is getting on the bandwagon. An expansion of the area planted with African Palm is proposed for the Atlantic Coast and areas of the southern department of Río San Juan. There are vast areas of former rainforest that have been cleared for inefficient cattle ranching that could be converted into palm plantations. However, with potential government incentives for bio-diesel production it is possible if not probable that fresh areas of virgin forest will fall under the axe, as is happening now in Indonesia.
Meanwhile on the Pacific Coast, a Korean firm expressed interest recently to Agriculture Minister Ariel Bucardo in investing $100 million to plant African Palm and other crops for bio-diesel production in the western plains. Sugarcane for ethanol production has long been proposed for the Pacific regions. Furthermore, the Interamerican Development Bank recently launched an initiative to form a commission to promote ethanol production throughout the Americas.
Bio-fuels do not have to come just from plant products, however, as seen by an announcement in the United States of a process that would create fuel from the fat residues left after performing liposuction on that country’s numerous obese citizens. Since Nicaragua does not have such a massive resource of overweight people, a more practical option has been proposed by a researcher at a local university: bio-diesel from pigs that would be bred and raised for this purpose. One would have to check with a rabbinical council in order to determine the kosher-ness of such fuel. Meanwhile, some wags have suggested that one place to begin looking for a supply could be the National Assembly, popularly known as La Chanchera, or the pigpen.
Bull in a Chinas Hop?
In 1985, the government of Daniel Ortega broke off relations with China Taiwan and opened them with mainland China. In 1990, the Violeta Chamorro administration broke off relations with mainland China and reestablished them with China Taiwan.
Since then, that country has invested $240 million in Nicaragua, resulting in the creation of 25,000 to 30,000 jobs. Taiwan also financed the construction of the new Presidential Palace and the building that houses the Ministry of Foreign Affairs. Taiwanese President Chen Shui-bian attended Ortega’s re-inauguration as President of the Republic and brought a delegation of 200 businessmen interested in investing here. Last November shortly after Ortega was elected, a delegation from Taiwan pledged to invest another $108 million in various projects.
On the other hand, Nicaragua is courting investors for the long-desired inter-oceanic canal –a project with an estimated cost of up to $20 billion– and mainland China is mentioned as a distinct possibility. That country has a huge potential when it comes to possible investments in Nicaragua.
Ideally, Nicaragua would like to receive benefits from both countries, but politically, the prickly question of diplomatic recognition needs resolution. With Ortega back in the saddle, the question is whether he will have the country change horses in midstream and look the Tapei gift horse in the mouth and then ride off into the sunset with Beijing?
Investors: Bring ‘em on!
Judging from the response of by investors, it appears that uncertainty about the new government is waning. A cautious, wait-and-see attitude was prevalent leading into the elections last November and during the interim period up to the re-inauguration of Daniel Ortega as president in January. Now, with yet another peaceful transition of power in a democratic framework, rays of investment sunshine are breaking through the clouds of doubt.
The US firm International Textile Group and its subsidiary Nicaragua Cone Denim led the pack with their announcement that they would continue with plans to invest in the construction of a new industrial park in the Ciudad Sandino to the west of Managua. Once up and running by the projected date of March 2008, the company would employ 800 people and produce 30 million yards of fabric a year.
Gulf King Seafood of the USA, declared its intention to invest $3.5 million in packing facilities in El Bluff and Bluefields on the Atlantic Coast in order to have the capacity to pack its product not just in 5-pound boxes, but also in sizes that suit the needs of clients. The plant will be able to process 4.5 million pounds of shrimp a year and fishermen will no longer have to go to Corn Island or outside the country to have their catch processed.
National capital is also gearing up to invest further in the country. Piero Coen Ubilla of the Coen Group announced another industrial park for textile and clothing production in the Department of Chinandega, along with the construction of 2500 houses in a company town for those who work there.
Another energy-related project is currently under study. The Giant Group Holding Company of Hong Kong & China, together with Petromex Fox of Mexico are studying a $600 million investment for building an oil pipeline across the country from Monkey Point on the Caribbean side to the Port of Corinto on the Pacific. When complete it would be able to move about 480,000 barrels of Venezuelan crude a day while providing employment for about 1200 people.
The Nicaraguan investment promotion agency, ProNicaragua, also announced late last year that they have a portfolio of new investments in the country for 2007 totaling $340 million. Almost all economic sectors are involved, but the most significant investments would be in free trade zones, forestry, agro-industry, and tourism.
Last year, total direct foreign investment was $265 million, a $24 million or 9% increase over what flowed into the country in 2005.
Electricity supply:
Light at the end of the tunnel
Knock on wood, but the problems with power supply that plagued the country last year appear to have been solved, at least as of February, though no one is talking about just how this came to be. The fact is that the country must work on generating more and more in order to meet future demand for the electricity needed to power economic activity in all branches of the economy. Some projects are underway, while others are at the drawing board stage.
Taking advantage of Nicaragua’s geological setting, Polaris Energy Nicaragua (PENSA), a subsidiary of the Canadian firm Polaris Geothermal Inc., recently announced it will invest $30 million to drill 12 new geothermal wells in the field at San Jacinto-Tezate in western Nicaragua. Assuming success in tapping the superheated groundwater to produce steam that would make turbines spin, electricity production there would increase from the present level of 10 to 31 megawatts.
Another idea from the times of Somoza was dusted off and trial balloons were put up to see if people will accept it. The mega-project known as Copalar proposes damming the Río Grande in central Nicaragua. The area to be flooded includes the modest-sized town of Paiwás and would affect more than 10,000 people now living in the proposed reservoir site. Critics have attacked this idea from different angles, principally in regards to the effect on the more than 10,000 people now living in the proposed reservoir site, along with environmental concerns. Some express doubts about the need for such a grandiose endeavor, while others raise questions about what economic interests lay behind it all.
Cha-cha-cha Chávez
The inauguration, well re-inauguration, of Daniel Ortega as President of Nicaragua on January 10 went off without a hitch, well almost anyway. Representatives from more than a score of countries (including several presidents from Latin America and the Caribbean, along with the Crown Prince of Spain and the President of Taiwan) had to wait a little more than hour in the heat of the late afternoon for the ceremony to start. The arrival of the plane bringing in the Venezuelan delegation, headed by President Hugo Chávez, had been delayed. When he finally made it, and after obligatory handshaking all round, the Venezuelan leader took his place near center stage.
After the formalities, Ortega and most of the dignitaries went over to the large plaza on the shore of Lake Managua to address the throng of 10s of 1000s of people waiting to hear from their new president. He worked the crowd well with some vague populist phrasings, not saying anything of real substance that he could be held accountable for later on. Daniel then called for a voice vote from the multitude. The issue: whether Nicaragua should join in with the regional political-economic initiative led by Chávez known as ALBA (Bolivarian Alternative for the Americas). As expected, the crowd responded loudly in the affirmative.
The following day, Ortega, Chávez, President Evo Morales of Bolivia, and Cuban vice-president José Ramón Machado in representation of the ailing Fidel Castro all signed copies of this “treaty” at a ceremony in the Rubén Darío National Theater. There has been some questioning of what exactly it implies for the country, since by law, such international agreements must be discussed and approved by the National Assembly.
Nevertheless, some details of the future Venezuelan cooperation with Nicaragua have been reported. A deal to provide oil and fertilizer at favorable prices, payable in kind and not necessarily with cash, figures into it, and Venezuelan army engineers are to play a leading role in the construction of a paved highway out to the Atlantic Coast city of Puerto Cabezas in northeast Nicaragua.
The United States has so far remained remarkably calm about all this activity in its “backyard.” If you think “Chavista” army personnel building a strategic infrastructure project here might raise their hackles, wait for whatever may happen when cooperation arrangements with Iran are concretized. Iranian President Mahmoud Ahmadinejad visited the country the week after Ortega’s re-inauguration. Apart from opening the respective embassies in each country, one possibility mentioned is for Iranian support to upgrade the runway at the Augusto César Sandino International Airport in Managua.
A spooky palace?
Ostensibly as part of remaking the image of the presidency so it is people-friendly and more accessible, the office of President Ortega will not be in the Presidential Palace built during the administration of former president and convicted felon Arnoldo Alemán. Instead, the executive branch will operate from the former Olaf Palme Convention Center near the National Assembly building.
Right away, some claimed that the move was an indication of a chill in relations with China Taiwan since it had financed the construction of the lakeshore palace. Denials and clarifications were quickly made. The palatial structure is quite imposing and does not fit in with the aspirations of the new government embodied in its slogan, “The people are president.”
Others, still skeptical about the move, suggested that it was because the outgoing president Enrique Bolaños had his spooks bug the rooms of the palace in order to listen in on Ortega et al. Yet perhaps the most farfetched explanation is a rumored concern in Ortega’s inner circle about a curse hovering over the building. Eerily, both Alemán and Bolaños lost members of their immediate family while in those very offices. Is the real reason for the move posted on OuijaBoard.com?
Cardinal in the news
A core theme in Daniel Ortega’s presidential campaign was peace and reconciliation, a reasonable proposal considering some issues still smoldering beneath the relative calm here. On taking office, one of the first actions he took was to declare the formation of a National Commission that would meet to work around that theme.
Given the recent rapprochement between Ortega and Cardinal Miguel Obando y Bravo, it was no surprise that the former proposed the latter to preside over this commission. The Cardinal has stated his willingness to occupy the post, not surprising given his penchant for appearing in the limelight of local politics. He has appeared infrequently in front of the media since his retirement when Monsignor Leopoldo Brenes replaced him as head of the Nicaraguan Church.
In the past, Obando had been a sharp critic of Ortega, even going so far as to compare him to a serpent in the Garden of Eden on the eve of the 1996 presidential elections. Yet, with the winds of reconciliation in the air, such bygones became bygones and the Cardinal even officiated at the mass to marry Daniel to his life-long companion Rosario Murillo.
A problem arose, however. Church policy is that no clergy hold public office. That policy was put into effect by the late Pope John Paul II in the mid-1980s, not coincidentally at a time when three Catholic priests were part of Ortega’s Sandinista government.
Until bad ratings do us part…?
First lady Rosario Murillo may not sing, but she certainly will be directing the choir. Her husband, the President, appointed her as Coordinator of Communications and Citizenry, a newly created position in the governing apparatus. Not only is she the equivalent of a spokesperson for Ortega, Rosario has been handed control over the portion of each government ministry’s budget that is spent on social communication: billboards extolling progress made, newsletters and bulletins, etc. Expect some colorful displays on the various blank billboards still standing in the aftermath of the election campaign.
Apart from this overarching sweeping control over much government publicity, a problem of legality has been pointed out. In order to prevent nepotism, the law says a president cannot appoint close relatives, like his wife and children, to public posts. A unique “legal” spin was put on this when Supreme Court Vice-President Rafael Solis explained that there is no problem in this case since Daniel and Rosario are one and the same person.
