A wave of consternation swept through the ranks of free trade zone (zona franca) workers in early February. Labor union officials had issued a statement protesting a reported threat from eight multinational textile firms to pull out of Nicaragua, affecting more than 8500 workers. Álvaro Baltodano, the President of the Free Trade Zone Corporation (government agency in charge of overseeing these operations throughout the country) quickly tried to assuage such fears, saying that only a thousand jobs are at stake at present.
The labor unionists claim that the clothing companies want to pull out because things have changed since the Sandinistas came back into power. Others point out that demand in the United States may have declined because of the burgeoning economic crisis there, though it is doubtful that the impact of that would be felt so quickly, especially when Nicaragua won a large quota for textile product imports to the USA in the negotiations of the regional free trade agreement (CAFTA).
Some in the know say it all has to do with the 10-year income tax shelter granted to such industries for setting up here, which in some cases is about to expire. Free trade zone enterprises are always on the lookout for the best conditions for maximizing profits, and paying more taxes is not one of them. They would also like the government to be more predictable with its announcements of increases in the minimum wage so that they can factor that increased cost into the bids they make for production contracts. Look for negotiations between the government and these companies to resolve the situation in such a way that US customers can continue to be supplied with different clothing lines.

Couch potatoes rejoice! Nicaragua is a paradise for television viewers. The main local cable provider Estesa is expanding throughout the country, taking over small mom-and-pop cable operations in different towns, offering more than 80 channels. DirectTV has been supplanted by SkyNet with its different packages and DishNet has entered the fray, offering even US network channels along with hundreds of others.
If you like watching DVDs, there are plenty of rental shops and bootleg versions of even the newest movies are available along the streets or in parking lots for a dollar or two. A word of warning though for those of you who may use English-language movies with Spanish subtitles to help learn the language. Those subtitles may be somewhat misleading. For example, in the film 3:10 to Yuma, when Russell Crowe’s character says upstairs in the hotel room, “Discretion is the better part of valor,” the Spanish subtext says, “Por eso usted es maricón,” or literally, “That’s why you’re a fag.”

Investment in tourism continues apace in different parts of Nicaragua. A new $2 million boutique hotel is going up on the Masaya Highway just outside of the capital. Construction at the Gran Pacifica oceanfront project one hour west of Managua continues. In San Juan del Sur, the Pelican Eyes – Piedras y Olas complex recently joined forces with Paradise Developments and they have announced a new project called Marea Alta (High Tide). Designed to be a luxurious residential and hotel destination with world-class restaurants, it will have a tramway connecting the development on the hills overlooking the ocean with a seafront boardwalk. Just north of that tourism hotspot, the owners of another project, Cala Azul, have begun earthmoving work.
The famous coastal highway was in the news again, though it will still be a while before work actually begins and no one is holding their breath. The projected investment for 131 kilometers running north from the Costa Rican border is between 105 and 120 million dollars. It will likely be a toll road. Ten US cents per kilometer has been proposed.
Meanwhile, government roadway contracts are being executed and key stretches for tourism are in the process of being rehabilitated and upgraded, including the highway going west out of Granada and the stretch from the Pan-American Highway to San Juan del Sur.
Some have argued that the money for these highways would be better spent on roads to support agricultural production in the interior of the country. But with tourism having replaced coffee as the number one earner of foreign exchange (even with the currently high price for coffee), the economics speak for themselves. According to the government, the country earned $244.8 million from tourism, and that does not include the boosts to local economies from the construction of hotel projects.

The National Police have been recognized by the US Drug Enforcement Administration (DEA) for their outstanding work in recent years against the drug trade, including numerous busts totaling several tons of cocaine. Top DEA officials recently met with President Daniel Ortega, who has been critical of the work of the agency here.
Ortega took the opportunity to propose further joint cooperation with patrols in the Caribbean, including the waters that Nicaragua was awarded in a World Court ruling on a long-running territorial dispute with Colombia. This poses a conundrum for the United States. It brokered the treaty back in the early 20th Century to divide the sea at the 82nd meridian, slicing off a large portion of Nicaragua’s offshore holdings, including the archipelago of San Andrés, occupied by Columbia since 1822. The DEA also has a cooperation program with that government to stem the flow of coke.
The Colombian Foreign Minister was quick to respond to Ortega’s proposal, calling it a provocation that could lead to chaos and threatening to extend Colombia’s control in the Caribbean to Nicaragua’s shores. So which way will the US lean? Towards the country that produces much of the cocaine or towards the one that is intercepting tons of it on its way to the US consumers?

It was a classic set-up for Third World confrontation: a feisty populist government faces off against a multinational oil company that owns the only refinery in the country. Last century, it would have been resolved with a military coup as happened in Iran (1953), Guatemala (1954), and Chile (1973). But in Nicaragua in the 21st Century, negotiations and the signing of a business deal were the order of the day.
Last year, a company called Albanisa, made up by the State-owned oil companies of Nicaragua and Venezuela (Petronic and Petróleos de Venezuela, respectively), wanted to use some tank farm storage facilities at the Port of Corinto in Nicaragua, owned by Esso Standard Oil, for importing Venezuelan crude. Talks dragged on with little progress. National customs authorities got involved and embargoed the tank farm, alleging certain failures to pay some taxes.
A showdown would have had major repercussions for the country since Esso also owns the only refinery in the country. Instead, negotiations intensified and a deal was finally brokered. Petronic will rent out the facilities till end-2008 and will then proceed to purchase them outright. No details were released about prices.
Each year, Esso imports about seven million barrels of crude that are then processed into gasoline, diesel, and other petroleum products at its refinery in Managua. According to Nicaraguan energy authorities, this represents about 70% of local fuel demand. Imports have been coming from several countries: Mexico, the USA, Ecuador, Canada, Trinidad and Tobago, and others. The plan now is to import 10 million barrels just from Venezuela, which is offering a sweet deal that allows Nicaragua to pay half the bill within 90 days and the rest over 25 years at 1% annual interest.
The arrangement is criticized by the opposition, claiming that President Ortega is simply saddling the next generation with a massive debt tomorrow in exchange for energy today. Ortega, on the other hand, speaks wholeheartedly in favor of this cooperation relation with Venezuela within the framework of the recently-formed Bolivarian Alliance or ALBA, an initiative started by Venezuela’s Hugo Chávez in order to promote regional independence in Latin America and the Caribbean.
Apparently, part of the bill is to be paid off in kind, with Nicaragua shipping beef, beans, and corn to Venezuela, as well as providing technical advice in the field of geothermal energy to that country.

Work has begun at the Piedras Blancas plant near Nagorote west of Managua to expand the tank farm for storing oil. The Venezuelan government approved $250 million last December for this first phase of construction leading up to the installation of a new refinery, for a total investment of $4.5 billion. That refinery will be able to process 150,000 barrels of crude a day, far more than the 27,000 Nicaragua presently consumes. This would mean the country can become an exporter of petroleum derivatives to the rest of Central America and possibly the United States, bringing in an estimated $700 million a year.
Venezuela is also contributing to solving Nicaragua’s crisis with electricity that wracked the country’s economy last year by supplying several power plants that run on bunker fuel oil. An additional 180 megawatts will be coming on line in different stages over the year as the plants arrive and are installed. Some have pointed out that this increases the country’s dependence on petroleum; however, Venezuelan President Hugo Chávez has said, “All the energy resources Nicaragua needs for this whole century are in Venezuela and we make them available to the people of Nicaragua.”

Venezuela’s Hugo Chávez has been actively promoting an alliance of countries in Latin America and the Caribbean, including Nicaragua, to counteract the overbearing influence of the USA in the Americas. Trade, economic cooperation, sporting events, a movie industry, and a regional development bank have all been put forward, along with, of course, arrangements for distributing and refining Venezuela’s plentiful reserves of oil.
All of it falls within what is called the ALBA or the Bolivarian Alternative. “What would Simon do?” appears to be the question. Simon Bolivar was the famous Venezuelan patriot who championed independence from Spain and Latin American unity in the 19th Century.
A recent proposal to further this budding alliance of nations has raised more than a few hackles, not to mention eyebrows. An idea is now being floated of forging a military alliance among the different countries in the ALBA. It came shortly after Chávez denounced pretensions by his neighbor Colombia to provoke a conflict in obeisance to Washington’s desires to destabilize his rule in Venezuela. As has been done in many countries in the past, one way to distract attention from problems at home is to rattle sabers in response to a supposed outside threat. Despite their petro-wealth, Venezuelans are beginning to face some domestic economic woes like shortages of some basic goods and the resultant speculation and profiteering.
In late January, Nicaraguan President Daniel Ortega promised Chávez that he would not stand alone against any aggression by the USA or its allies. This, not so coincidentally, comes at a time when this country is challenging Colombian dominance of its Caribbean continental shelf in the wake of a World Court verdict that gives Nicaragua rule over those seas. Is Ortega thinking that this dispute over fisheries and offshore oil rights could be resolved in Nicaragua’s favor with a little help from his friends?
Ortega says that such a military alliance is in keeping with the ideals of Latin American unity espoused and embodied by Bolivar and Nicaraguan national resistance hero Augusto César Sandino. Local opposition politicians decried what they called a misinterpretation of those ideals; that such unity is for strengthening the region and was not put forward in a militaristic sense. They also warned it would mean the reinstituting of obligatory military service for Nicaragua’s youth.
Mid-level FSLN leaders tried to assuage these concerns, saying a national draft and militarism is not on the agenda. Such an alliance, they said, would allow for military personnel from other nations to come to Nicaragua to help in the aftermath of a natural disaster, for example, without having to get approval from the Legislature first.
Ortega has referred directly to a military alliance to defend sovereignty and peace. “It’s normal,” he said, reminding everyone that the United States has its NATO. He also said that the only time Nicaragua has sent troops abroad was during the last administration when Enrique Bolaños sent military personnel to “a war that is senseless” in Iraq.
The President says this kind of alliance is permitted by the Constitution; the opposition says that the National Assembly has to approve such a move. Constitutional lawyers are sharpening pencils and arguments.
Politicking and legal arguments aside, the possibility exists that Ortega is simply readying excuses for any possible economic troubles his government might face in the future. In the 1980s during the low-intensity war waged by the contras with support from the USA in order to destabilize his regime, Daniel could blame the daily problems here on that conflict. Having Nicaragua militarily allied to Venezuela in possible times of trouble and strife would give him a fresh opportunity to try to do the same. Perhaps some of his advisors feel it is easier to manage a crisis than it is to run a country.

A switch is being made at the recently-finished new US Embassy in Nicaragua. After doing his stint here as ambassador since September 2005, Paul Trivelli has been recalled to Washington. As per usual with US ambassadors, his mission has received mixed reviews.
Trivelli’s approval rating is high among most Liberals and Conservatives, with the notable exception of former president and convicted felon Arnoldo Alemán.
Trivelli was no fan of the Liberal Constitutionalist Party – PLC figurehead and he made his disdain public in rather un-statesmanlike fashion on a number of occasions. This is because Alemán is one of the architects of a PLC-Sandinista “pact” to divvy up power in the country. Normally, the role of the US representative here is to unite what the US considers “democratic” political forces in a bid to stave off “anti-democratic” influences, which in this case, as it has been for several decades, are represented by the Sandinistas. Alemán did not fit into either side of that equation.
The ambassador’s sense of humor led him to make offhand remarks from time to time. One made during the lead-up to the 2006 presidential elections turned into an in-your-face gaffe. In reference whether PLC candidate José Rizo was nothing more than a point man for Alemán (under house arrest and awaiting a pardon should Rizo win that election), he quipped, “If it walks like a duck and it talks like a duck, then it’s probably a duck.” Despite the ambassador’s command of the loving tongue, he had failed to consider that the word for duck in Spanish (pato) is slang for “homosexual,” although other words enjoy more common usage in Nicaraguan-speak for the same sexual orientation. This ruffled the feathers of many a Liberal.
As naturally as rain falls down and the sun rises in the morning, most Sandinistas considered Trivelli yet another in a long line of US-empire proconsuls interfering in domestic affairs. Nicaraguan history abounds with examples of US ambassadors wielding their power and influence to get Nicaragua to try to shape up into a semblance of what their government wants here.
The new appointee is Robert Callahan. Anyone hoping for a normalization of relations between Washington and Managua might well yearn for the times of Trivelli. Callahan has been a right-hand man or flak for John Negroponte throughout his career as a hot-spot ambassador (Honduras back in 80s and recently, Iraq). Negroponte is now the US intelligence service’s top dog.
From 1981 to 1985 when the ground-work was being laid for the contra war, Negroponte was ambassador to Honduras with Callahan as his press secretary, crafting the words of every denial and declaration related to the contra war preliminaries. Covert operations, slush funds, and clandestine meetings were the order of the day under Negroponte. He turned a blind eye to human rights violations by the Honduran military in exchange for the loan of that country in order to establish a staging ground for US-sponsored operations against the Sandinista regime.
Quite a clique was formed then, including Eliot Abrams (still in the State Department with a purview of Latin America) and several others who did not survive the Iran-Contragate revelations. That scandal, which played tricks with Ronald Reagan’s memory and kicked in his Alzheimer’s, showed the scorn that band had for their country’s own laws and for this region.
An example of the complete lack of respect of Negroponte-Abrams et al for Central America, and their dark sense of humor, was the appointment of a career diplomat named William Walker as Deputy Assistant Secretary of State in charge of relations with Central America from 1985 to 1988. Then he was made ambassador to El Salvador from 1988 to 1992. His mid-19th century namesake was a US expansionist mercenary who attempted a takeover of Central America on behalf of the slave states.
The contra war is long over and times have changed, but with the appointment of Callahan the question is whether or not those in charge of US regional policy have. Or are they too suffering from the effects of the recent Screen Actors’ Guild writers’ strike. Is the stage being set for a re-run?

It’s unheard of, but then again this is Nicaragua where the anvil floats and the cork sinks. Where else would the legislature actually be discussing a proposal for a sweeping amnesty to let off anyone who was a public servant from March 14, 1990 to January 7, 2007 who has been charged or mentioned in relation to cases of corruption, embezzlement, or any misdeed? The measure would also end any processes against spouses and blood or family relatives of public officials. One way to hide ill-gotten gains or the properties purchased with them is to stash them away in bank accounts or title deeds under someone else’s name.
It’s a get-out-of-jail-free card for the people who ran the country for 17 years and benefited from various lootings of the State that occurred over that period. It would create a credibility gap between legislators and the population so large as to make the Grand Canyon look like a bean field furrow in comparison.
The legislators pushing the amnesty say it is essential to clear the slate so that the politicians can get down to the business of running the country and stop focusing so much on who took how much when. It is a tacit admission that there was quite a bit of thievery that went unpunished. Quite conveniently, it would also set a precedent so that any future larceny by public officials could be excused by another amnesty.
It all started with the conviction of former president Arnoldo Alemán on charges related to some of what he scooped out the country’s coffers while in office. The issue of how he serves his time has been used by Daniel Ortega and the FSLN to wring concessions from Alemán’s Constitutional Liberal Party (PLC) while in opposition and now while in government.
Alemán started doing time in a remodeled 2-room private suite in the Tipitapa Penitentiary with air-conditioning and cable TV. He was soon moved to a private hospital room where he spent several months because of supposed health problems. Then the convalescent convict was put under house arrest. His “house” later grew to include the whole Department of Managua, thereby allowing him to attend party meetings. He was being cooperative, having his party work out political deals with the Sandinistas.
Some Liberals opposed this open cooperation between Alemán and the FSLN and they broke ranks, forming a new party, the Nicaraguan Liberal Alliance. Subsequently, Alemán’s “house” covered the whole of Nicaragua so he could move about the country and rally his PLC against the ALN. That kept Liberals divided and allowed the Sandinistas to walk away with a victory in the November 2006 presidential elections.
Towards the end of 2007, President Daniel Ortega wanted to push a bill through the National Assembly for the creation of Citizen Power Councils or CPCs that would receive government funding in order to organize the grassroots of the country so that they can participate in governing. The entire opposition, including Alemán’s PLC, united against this proposal since the CPCs are essentially another wing of the FSLN.
Punishment was swift. The Managua Appeals Court voted two-to-one (2 Sandinista magistrate, one from the PLC) to shrink his house down to its original size. They also changed the original sentencing, making the times for five separate counts against him run consecutively, rather than concurrently. A change was made recently to the criminal code (which still has to be ratified) that reduces the sentence for money laundering to five years, which would mean Alemán would be let out once the code reforms enter into effect because he has already served the maximum sentence for that crime. But now he still has to serve two more five-year sentences, one four-year, and a one-year sentence for the other crimes he was convicted of.
More screws were put to Alemán when he was finally served the papers in relation to a warrant for him, his wife, his father-in-law, and former finance minister Byron Jerez to appear in Panama to face charges of money laundering involving $58.2 million.
At the same time, the PLC and ALN Liberals were getting ready to sign a unification agreement leading into next November’s municipal elections. So, just like a yo-yo, he was given the run of the country again so that he could attend that meeting in hopes that his presence would torpedo that coming together. It didn’t, at least for the time being.
It’s as obvious as the waistline on the former president, that he is allowing himself to be used as a tool by the Sandinistas who control the courts overseeing his situation in exchange for quasi-freedom. Diehard Alemán supporters gripe that he is a “political prisoner” being held “hostage” by the FSLN and so an amnesty is necessary. Commenting on this, US Ambassador Paul Trivelli said laughingly, “If Arnoldo Alemán is a hostage, he has the most serious case of Stockholm Syndrome in the history of the world.”
The all-encompassing amnesty proposal is designed to cover up the possible freeing of Alemán. Proponents of the bill argue that it benefits many people, including ALN leader Eduardo Montealegre and Liberal candidate for Mayor of Managua who is being investigated for possible wrongdoings related to the renegotiation of a series of government bonds issued during the Alemán administration. Another would-be beneficiary is former president Enrique Bolaños who faces trumped up charges about irregularities in granting Nicaraguan passports.
The courts, the State oversight institution, and the Prosecutor’s Office are being artfully used to keep Alemán in line and go after Montealegre and Bolaños so that they and their followers are more amenable to making deals favorable to the governing Sandinistas.
The FSLN is taking the moral high ground and opposes the amnesty proposal. So the question is whether the legal system will continue to be used to exact political cooperation from opposition Liberals or whether people who are guilty of defrauding the State while in public office will get off scot free.

Despite a law putting a permanent closed season on sea turtle eggs, several National Assembly deputies were caught late last year in León enjoying platters stacked high with the round leathery-skinned delicacies. A photo of some of them digging into a pile of parboiled eggs made the front page of local newspapers. Once again, lawmakers were caught breaking laws they expect others to obey.
In response to swift criticism, some deputies quickly apologized. Three FSLN Assembly representatives went on a photo op to the La Flor Wildlife Refuge on the Pacific with Environment Ministry officials to witness the spectacle of these reptiles depositing their eggs in the sands of the beach there. Evertz Cárcamo, an aspirant for the FSLN candidacy for the Mayor of Managua in the upcoming elections, said there, “We don’t suck eggs anymore; we must set the example.”
They must also pay a fine reportedly equivalent to paying for 10 signs carrying a message that would raise awareness among the population. He and another deputy on the FSLN side of the Assembly, Agustín Jarquín, acknowledged their guilt and came through with the fine. The other deputies caught with egg on their face are probably waiting for the proposed amnesty bill to be passed.