by Nick Cooke
Cross-country pipeline and railway
Foreign investors are eager to get going with a joint project to lay a pipeline across Nicaragua and build a railway from sea to shining sea. The railway consortium, SIT-Global, and the Canada-US Phoenix Group that is behind the pipeline proposal, are ready to lay several millions of their money on the line to carry out the necessary environmental and engineering feasibility studies.
The pipeline would carry oil from Venezuela, known for its “sweet” quality or low sulfur content, to the west coast, where it would then be shipped to northern markets along the Pacific coast. The railway, also known as the “dry canal”, would facilitate container transport between the Atlantic and Pacific.
Estimates put the cost of the joint project at over $2 billion and, in theory, it would create about 26,000 temporary and 1,500 permanent jobs. The proposed route passes through the lands of the Rama Indians and rainforest country. Environmental concerns have been expressed and questions have been raised about whether the project will benefit the zone’s natives.
Oil, Black Gold, Texas Tea
On October 31, the Nicaraguan government made available the documents for the public bidding process for oil exploration concessions. Petro-companies have to tender their offer on selected parcels by January 31, 2003.
At stake are claims to possibly oil-rich zones of the Pacific and Atlantic offshore and most of the landmass of Rivas, the southwestern-most department of Nicaragua. Exploration in the 1960s and 1970s resulted in shows of potential in all these areas.
Concession privileges include the right to explore for fossil fuel resources, mainly oil and perhaps some natural gas. If the fruits of exploration bear fruit, companies would then have to negotiate a contract with the government in order to begin pumping.
Should oil be found onshore, legal conflicts will inevitably result since the government retains all subsoil rights. So it is unlikely that there will someday be a Nicaraguan Jed Clampett who become a Beverly Hillbilly when he finds crude bubbling up from the ground while out hunting for some food.
As is usual with development, the environment is a potential and probable victim. Part of the concession map offered up for tendering includes the Miskito Keys off Nicaragua’s northeast Caribbean coast, an area important as a natural reserve and breeding ground for many varieties of seafood.
Regional conflict will also be on the agenda given that Honduras, with Colombia’s backing, lays claim to a sizeable chunk of Nicaragua’s Caribbean offshore.
New transport links
Soon, there will be a faster way to get from Granada on Lake Nicaragua, aka Lake Cocibolca, to the small city of San Carlos, where the lake drains into the San Juan River. In October, the firm Román Lake Lines launched a catamaran-style craft powered by twin 375 horsepower motors and claims that it will only take five hours to cover the distance, instead of the 15 hours it takes presently.
The craft will have reclining seats, television, and a bar-cafeteria. “We are making the San Juan River closer for tourists and the rest of the country at a much more economic cost and with greater comfort,” company president Leonel Román told the daily La Prensa. The higher fare charged for the route is more than made up for by the time saved.
Meanwhile in the northwest, the government officials said that feasibility studies for a ferry service between Nicaragua and El Salvador have been completed. The proposed ferry would run between the Port of Corinto, due west of León, in Nicaragua and Cutuco in El Salvador.
This link between the two countries will shorten the time it takes for trailer transport trucks to move their cargo. Currently, it takes about 30 hours for one to make it from El Salvador to Nicaragua because of customs, bad roads, and other problems. With the ferry service, it would only take five hours to get from one port to the other.
Corruption fight continues
The efforts of the Administration of President Enrique Bolaños to act against corruption have been gathering steam in recent months and many are getting scalded. Charges have been filed against former president Arnoldo Alemán, leader of the Liberal Constitutionalist Party (PLC) and other PLC leaders and parliamentarians, including some of Alemán’s relatives, for alleged misappropriation of public funds.
Nevertheless, Alemán and many of his political cohorts enjoy immunity from prosecution because they hold elected office. This immunity could be stripped through an act of the National Assembly; however, deputies are definitely divided on the issue. A good number of deputies not charged in this round of anti-corruption charges are somewhat reluctant to take a stand against other deputies for fear of losing their own immunity that is protecting them from prosecution in other legal actions related, for example, to child support.
Bolaños has publicly presented some evidence of the money trail left behind from a number of illicit transactions involving government monies and a number of banks and financial agencies from Nicaragua to Grand Cayman Island to Panama and back to Nicaragua. Funds flowing along this route were used to finance the 2001 election campaign, among other things.
Dr. Julio Centeno, the chief government prosecutor and an Alemán loyalist, followed the trail and concluded that 30 winning candidates, including the President and Vice-President, made use of these illicit funds in the campaign, effectively tarring the nation’s leaders with the same brush he used to lambaste Alemán et al. Campaign funding from Taiwan is another ingredient that may be added to this political soup for good measure.
Speculation as to what could happen with this case dominates the local scene. If Bolaños did win “unfairly”, does that mean that Sandinista presidential candidate Daniel Ortega, who came in second, should be the president instead? Or would it be necessary to move towards a Constituent Assembly? And what of legislation passed in 2002? Legal or not?
The investigation by Centeno was ordered by Judge Juana Méndez in August. That Méndez is politically aligned with the FSLN, the Sandinista party, has led some Liberal leaders to conclude that it is a plot to destabilize the system. Such concerns about opening up this can of worms have led many, including his own lawyers, to call on President Bolaños to not give up his immunity from prosecution.
Bolaños has stated publicly that he will renounce his immunity in order to face charges, an open challenge to those sheltering themselves behind that shield. Should legal proceedings actually be launched, the country will be witness to how the legal system actually functions, or not.
The country’s justice system has been questioned for its politically partisan nature, and there have been literally thousands of denunciations of breach of faith and influence peddling made against judges and lawyers since 1996, the year Alemán took office. The Supreme Court’s Disciplinary Commission, recently restructured under Magistrate Rafael Solis, will have its hands full for the foreseeable future.
In a classic example of the “crabs-in-a-bucket” syndrome, Nicaraguan politicians are dragging one another back down into the morass. Spicing up this recipe for political indigestion is the evidence presented that the Catholic Church benefited from allegedly illicit actions of former president Alemán while he was in power. Press reports have it that an organization pertaining to the Catholic Church leadership benefited from an inordinate number of exonerations on vehicles imported during the years that Alemán was in power.
Economic forecast cloudy
Last quarter estimates project that Nicaragua’s economy will only grow by about 1% in 2002 while the population is growing at a rate of over 3% a year.
Signs of recession have been obvious for some time now. Clientele is down at many formerly popular nightspots in the capital and bar/restaurant owners are feeling the pinch.
The government is taking steps to obtain debt relief and fresh funds for investment in infrastructure and social services. This aid, however, is conditioned in part on efforts to establish clear ground rules in the country in order to attract both foreign and national investment. The ongoing fight against corruption is an encouraging sign along these lines.
The Presidency hinges hopes on developing economic “clusters” in a number of branches of the economy, including agribusiness, food processing, textile manufacture, and tourism. In particular, tourism is promising. Figures for this year from the government tourism agency INTUR show a marked upswing in tourist activity. Tax breaks granted under recent legislation for the tourist industry are stimulating investment in the sector and new projects to provide services are getting underway.
Hampering prospects for economic growth are the country’s commitments to servicing its international debt. This restricts the availability of public capital for making investments in order to facilitate investment.
Meanwhile, half the population lives on less than a dollar day and another 35% lives on less than two. The government’s war on poverty continues with a longer-range outlook of improving educational opportunities for the nation’s youth, thereby increasing the country’s social capital and hopefully making it possible for these youth to earn more in the future.
Thirsty work (hic)
In mid-October, the National Assembly sent the Ministry of Treasury and Public Credit a proposal for the 2003 budget. Noteworthy among its many proposals is the allocation of almost 60,000 córdobas for 662 bottles of rum and 429 bottles of wine for the different activities of the country’s lawmakers, an average expenditure of almost 5,000 córdobas a month.
