[NYTr] Nicaragua Network Hotline - August 8, 2007

[All the News That Doesn't Fit]

Nicaragua Network Hotline 
http://www.nicanet.org
August 8, 2007

Topics covered in this hotline include:

1. Union Fenosa and government sign a partial agreement of understanding
2. Ortega offers Washington missiles in exchange for medicine
3. Iran to finance multimillion dollar projects proposed by Nicaraguan
4. Aleman maintains his grip over the PLC, for the moment
5. Nicaraguan exports are up in first six months of year
6. Fifty-nine newly minted doctors return from training in Cuba


1. Union Fenosa and government sign a partial agreement of understanding

On Aug. 2, after more than two weeks of negotiations, representatives
of the Nicaraguan government and the Spanish multinational company
Union Fenosa signed what was described as a partial agreement of
understanding. The President and Vice President of Union Fenosa,
Pedro Lopez Jimenez and Honorato Lopez Islas respectively, arrived
in Managua from Spain on Aug. 1 so as to take part in the negotiations.
Strangely, however, it was Lopez Islas not Lopez Jimenez that signed
the agreement. Nicaraguan Energy and Mining Minister Emilio Rappaccioli
and President of Union Fenosa in Nicaragua Danilo Lacayo Rappaccioli
also signed the document.

As part of the agreement, which is intended as a first step towards
a solution to the ongoing energy crisis, Union Fenosa promised to
invest US$33.7 million between now and 2011. During his comments
to the press Lopez Islas made clear what the company hopes to achieve
as part of the final agreement with the government: "Now we must
all collaborate and broach the subject of the rate deficit...

A procedure which establishes how the cost of producing energy is
appropriately translated into the electricity rate must be established."

The government, meanwhile, promised to introduce an Anti Fraud Law
before November 30, 2007, which would penalize energy theft.

(According to Fenosa, the company suffers million dollar losses
each year as a result of energy theft.) The promotion of the Anti
Fraud Law was the only concrete commitment made by the government
in the partial agreement.

The signing of the agreement came as a blow to consumer defense
groups and other civil society organizations which demand that Union
Fenosa be forced to leave the country immediately.


2. Ortega offers Washington missiles in exchange for medicine

During his speech at the 28th anniversary of the founding of the
Nicaraguan Air Force, President Daniel Ortega made an unofficial
proposal to the US government to trade 651 of the 1,051 SAM-7
missiles currently under possession of the Nicaraguan Army for
medical equipment and medicines. "Let's find a way to bring an end
to this issue which has caused so much tension [between Nicaragua
and the US]," he said.

According to Ortega, his government recently proposed that the US
government trade helicopters and airplanes for the Nicaraguan Air
Force in exchange for 651 SAM-7 missiles, but has received no
response from Washington.

Despite requests from the US authorities for the Nicaraguan government
to takes steps to strengthen the Nicaraguan armed forces so as to
increase the effectiveness of the fight against drug trafficking,
said Ortega, the US government is not willing to take him up on
this previous proposal.

The existence of the SAM-7 missiles has been a bone of contention
between the US government and the Sandinista Party (FSLN) for the
last several years. While the US authorities insist that the weapons
represent a threat to regional security as they could fall into the
hands of terrorist organizations, the FSLN and other groups opposed
to US intervention say the weapons are necessary for the defense
of national sovereignty.


3. Iran to finance multimillion dollar projects proposed by Nicaraguan
government

A five day official visit of a delegation of 21 Iranian government
officials and businessmen led by the Iranian Energy Minister resulted
in an agreement of bilateral cooperation. During its time in Managua
the Iranian delegation held meetings with the Nicaraguan ministers
and government officials responsible for agriculture, energy, health,
water, housing and infrastructure and with President Daniel Ortega.

At a press conference on Aug. 4 the Iranian government officials
and representatives of the Iranian private sector made numerous
commitments of financial and other support for over 20 social,
economic and energy development projects in Nicaragua, all of which
had been previously presented to the delegation by the Ortega
administration.

Among the commitments made by the Iranians are: to invest in the
construction of an agricultural machinery assembly plant, a slaughter
house and meat packaging plant, five milk processing plants and ten
milk storage plants; the sale of agricultural equipment and machinery
at preferential prices to cooperatives and small and medium producers;
financial and technical support for the construction of four
hydroelectric projects; financial support for the construction of
two new piers in Port Corinto (Pacific Coast) and the construction
of a deep water port on the Caribbean Coast (there is currently no
international port on Nicaragua's Caribbean Coast); to provide the
funds for the construction of 10,000 homes with long term low
interest mortgages for poor families; the construction of a multi
service health clinic in Managua; and the reconstruction of several
health centers. The Iranian delegation also expressed interest in
importing a number of Nicaraguan products including coffee, plantains
and meat.

During a cultural political event in Condega on Aug. 5, President
Ortega announced that Venezuelan President Hugo Chavez has promised
to collaborate financially so as to ensure the projects are successful.


4. Aleman maintains his grip over the PLC, for the moment

On Aug. 3 the 25 deputies of the Constitutional Liberal Party (PLC)
and the members of the PLC National Executive Committee elected
Maximino Rodriguez as Coordinator of the PLC bench in the National
Assembly. Some saw this victory for Rodriguez as a defeat for the
PLC Honorary President Arnoldo Aleman, who is both former president
of Nicaragua and a convicted criminal.

(Rodriguez has openly criticized Aleman's leadership of the party
describing him as a "tyrant.") Others believe, however, that the
election result demonstrates that Aleman maintains a firm grip over
the party and continues to impose decisions. A "body of advisers"
to "support" Rodriguez in his position was suggested by Aleman and
adopted.

Although the names have not been released, anonymous source said
that "they are all loyal Aleman followers and, as a result, Rodriguez
will have no real power in his position.

Undeniably there is strong opposition to Aleman's leadership from
within the PLC.

There is a strong and increasingly outspoken contingency, including
several influential members of the party, which believes that Aleman
only serves to divide the Nicaraguan Liberals. This contingency,
led by Rodriguez, former PLC presidential candidate Jose Rizo, and
former coordinator of the PLC bench Enrique Quiqonez, took part in
a meeting led by the leader of the Nicaraguan Liberal Alliance (ALN)
Eduardo Montealegre, former presidential candidate and arch enemy
of Aleman, on Jul. 31. At this meeting, which was also attended by
several PLC deputies and local government officials, Montealegre
called on the PLC representatives to opt for Liberal party unity
in time to guarantee a Liberal victory in the 2008 municipal
elections. According to Montealegre the Nicaraguan people want a
united Liberal alliance to stand together in the 2008 elections and
to win "over 100 local governments including Managua. ... [And] if
necessary," he went on, "I am willing to stand as Mayor of Managua."

While it is difficult to measure how strong the anti Aleman contingency
within the PLC is, it would appear that ALN and PLC unity is still
not something which will be happening any time soon. A more likely
scenario would be that a number of deputies and other party members
break away from the PLC thus weakening the party significantly but
not achieving the principal objective of creating one united Liberal
front. Of course, wily politician Aleman should never be counted
out and the defections could go the other way as well.


5. Nicaraguan exports are up in first six months of year

Nicaragua's exports increased 19.75% during the first six months
of 2007 as compared with the first half of 2006, according to the
Center for Export Procedures (CETREX), a government agency.  Exports
for 2007 totaled US$752.4 million while the total for the first six
months of 2006 was US$628.3 million.  Coffee continued to be the
country's principal export product, in spite of lower yields during
the previous harvest (part of the natural cycle of coffee production).
Coffee produced US$125.8 million in 2007 as opposed to US$154.7
million the previous year.

According to CETREX, the next most important export products, after
coffee, were beef, with a value of US$105.2 million, up from US$79.1
million last year.  After beef, the other important exports were
sugar, dairy products, gold, peanuts, beans, cattle on the hoof,
alcoholic beverages, lobsters, farmed shrimp, fish and tobacco.

A rise in world market prices for coffee, gold, beef, sugar and sea
food along with higher productivity for some crops helps to explain
the increase in exports this year.


6. Fifty-nine newly minted doctors return from training in Cuba

Fifty-nine young doctors arrived in Managua from Cuba on August 4
and prepared to travel to communities in the North and South Atlantic
Autonomous Regions and the Department of Rio San Juan for a year
of internship and social service.  Health Minister Maritza Cuan,
who met the new doctors at the airport, said that this is the fourth
generation of medical graduates since 1999 who have returned from
training in Cuba.

After completing their year of internship in community medicine
under the supervision of Cuban doctors, the 59 will receive their
degrees as general practice doctors and can specialize in Family
Medicine in a two year program on the Caribbean Coast under the
auspices of the Latin American School of Cuba.

Cuan said that there are presently 1,500 Nicaraguans studying
medicine in Cuba.  She noted that this is the first group of doctors
to do their internships in government clinics in their own country.


This hotline is prepared from the Nicaragua News Service and other
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