[NYTr] Nicaragua defies US with Iran trade deal

[All the News That Doesn't Fit]

sent by Steven L. Robinson (activ-l)

The Guardian - Aug 6, 2007
http://www.guardian.co.uk/international/story/0,,2142308,00.html

Nicaragua defies US with Iran trade deal

Tehran to fund projects in exchange for coffee, meat;
Washington warns of 'dangerous partner'

Rory Carroll, Latin America correspondent

Nicaragua has signed contracts with Iran worth hundreds of millions of
pounds in defiance of warnings from the United States. President Daniel
Ortega brushed aside Washington's concerns by agreeing to trade bananas,
coffee and meat in exchange for Iranian help with infrastructure
projects.

Mr Ortega and Iran's energy minister, Hamid Chitchian, signed the
accords in Nicaragua's capital, Managua, on Saturday, cementing
Tehran's toehold in what the US considers its backyard.

In return for Nicaraguan agricultural goods, Iran is to help fund a farm
equipment factory, 4,000 tractors, five milk-processing plants, a health
clinic, 10,000 houses and a deep-water port.

In November Iran is also expected to choose a site for a #59m
hydroelectric power station, with another three plants potentially to
follow. As the head of a small, impoverished central American state
lacking military might, and with his approval ratings slumping, Mr
Ortega hardly poses a strategic threat to the US. However, the
Sandinista leader has shown a willingness to defy and irritate the
superpower. He has upgraded ties with Cuba and North Korea, and in June
visited Iran, Algeria, Libya and Cuba in a jet lent by Libya's Muammar
Gadafy.

The Iranian deal was the boldest move yet. Just last week the US
ambassador to Nicaragua, Paul Trivelli, made a typically blunt warning:
"Iran can be a dangerous partner."

The Bush administration has labelled Tehran part of an "axis of evil"
and expressed alarm over its nuclear programme and alleged support for
Shia militias in Iraq.

Mr Ortega was also in Washington's bad books in the 1980s when he led a
Marxist Sandinista government and fought a civil war against Contra
rebels, who were sponsored by the US government under Ronald Reagan. A
clandestine programme in which US administration officials sold weapons
to Iran and illegally used the profits to fund the rebels became known
as the Iran-Contra scandal.

Two decades later the Iranian link is boosting, not undermining, the
Sandinistas. Mr Ortega badly needs the help. Ousted from power in 1990,
he made an electoral comeback last year after ditching Marxism and
embracing moderation.

However, his electoral honeymoon has evaporated amid continuing poverty,
joblessness and electricity blackouts, with 57% of Nicaraguans
complaining that he has failed to keep campaign promises, according to
a June opinion poll. The Iran projects address some of those concerns.

Venezuela's radical left-wing president, Hugo Chavez, opened Latin
America to Iran by signing multiple accords with President Mahmoud
Ahmadinejad, including bilateral deals on oil, tractors and bicycles.

"The Chavez-Ahmadinejad relationship is what drives Iran's role in Latin
America, which is fundamentally geopolitical rather than economic," said
Michael Shifter, of the Washington-based Inter-American Dialogue
thinktank.

Mr Chavez has billed the accords as an "axis of unity" against the US,
which he terms the "empire", and has encouraged allies such as Mr
Ortega to follow suit.