Nicaragua Network Hotline (October 6, 2009)

1. Committee approves bill to benefit micro-finance debtors
3. Yota wins telephone contract
3. Bishop Mata mediates another attempt at Liberal unity
4. Civil society groups call for tax reform
5. Government finances businesses and employment in San Juan de Limay
6. Two children die of hemorrhagic dengue as toll reaches eight

Topic 1: Committee approves bill to benefit micro-finance debtors

On Oct. 1, the Economy Committee of the National Assembly approved a bill for the renegotiation of debt owed to micro-lending institutions. The bill is in response to the “No Pay” movement of small and medium agricultural producers in Northern Nicaragua who have organized to stop foreclosures of farms by international commercial micro-lenders.

Sandinista Deputy Walmaro Gutierrez, chair of the committee, explained that the bill sets a limit of 12% interest on the debts to be restructured with a grace period of six months. Debts under US$10,000 would be repaid over four years while borrowers with debts of over US$10,000 would have five years to repay them. Penalties and legal costs would be waived. Extra charges for early repayment would be abolished. The bill puts enforcement in the hands of the Ministry of Trade and Industry in an attempt to prevent a recurrence of what happened in July of 2008 when the two sides signed an agreement with which neither side complied.

Liberal Deputy Francisco Aguirre said he was satisfied with the bill and said that it may be that the finance institutions will not be satisfied with an interest rate of 12% but “it is much better than what they are receiving now which is the sacking of their offices in the rural north and zero payments!” Victor Hugo Tinoco, of the Sandinista Renovation Movement (MRS), noted that the committee approval marks a big step toward resolving a difficult problem that affects thousands of debtors throughout the country. The bill still has to be approved by a final vote in the National Assembly.

Accion Network, which includes 26 microfinance institutions from 15 countries in Latin America and the United States, expressed the organization’s “concern and solidarity around the difficult situation facing the Nicaraguan microfinance sector.” Accion Network urged the population to “honor your obligations by coming forward to meet with the micro financial institutions that have opened their doors to help find a solution to this problem.”

Topic 2: Yota wins telephone contract

Yota Mobile Wimax, owned by the Russian corporation Rostejnologuii will won a government concession to provide fixed line and wireless phone and internet service in Nicaragua. According to Guillermo Valdivia of Nicaraguan Telecommunications and Telephone (TELCOR), the company will bring services to communities far from the capital at a lower price than is currently available. Valdivia said that what tipped the balance in favor of Yota was that Yota offered latest generation technology and could be installed in regions where other companies had not wanted to offer service because of high cost.

Valdivia said, “The committee reviewing the bids stuck to the law and looked for the company that was the best economically for Nicaragua.” The other companies entering bids were Enitel-Claro (owned by the Mexican company America Movil), Movistar (of Telefonica de España) and Amnet (of the Central American company Amnet Newcom) but they had reportedly backed out by the end of the process. There has not been a growth in telephone land lines in Nicaragua for 15 years.

Opposition media rushed to denounce the awarding of the license to Yota alleging that the company was linked directly to the governing Sandinista Party (FSLN) and that the process was “plagued with irregularities,” as the daily La Prensa phrased it. “It was all set up for Yota to win,” According to El Nuevo Diario, when asked how much the decision makers were influenced by the fact that Yota partners were close to President Ortega, TELCOR president Orlando Castillo said, “We don’t ask about that. We haven’t asked Carlos Slim [majority owner of] Enitel-Claro who his partners are.” He added, “We’re not interested in who the partners are; what we are interested in is whether the company is strong, can pay its taxes, can pay TELCOR 2.5% of its profits.” He said that YOTA had promised to lower prices by 20% for basic telephone and internet service.

Topic 3: Bishop Mata mediates another attempt at Liberal unity

On Sept. 30, Esteli Bishop Abelardo Mata abandoned his clerical duties to host a political meeting between former President Arnoldo Aleman, head of the Constitutional Liberal Party (PLC), and Eduardo Montealegre, former candidate for president and mayor of Managua and leader of the “Let’s Go with Eduardo” Movement (MVCE). It was part of Mata’s continuing attempt to bring Liberal factions together in unity against the governing Sandinista Party (FSLN). After the meeting the two men gave separate statements, not seen as a positive sign by the local media.

Aleman, the first to speak, said that the two had discussed introducing a bill in the National Assembly asking for the nullification of the nearly year-old municipal elections of Nov. 2008. The Nicaraguan Liberal Alliance, which Montealegre founded and which later expelled him, has refused to support constitutionally suspect nullification efforts because it is afraid it would lose the four mayor’s races it won in 2008. Montealegre said they had reached consensus on three items: working for the nullification of the Nov. ’08 elections, rejection of changes to the law governing the judicial branch, and rejection of consecutive presidential reelection.

Mata said about his failed attempts at unity, “They don’t believe each other; they always think that the other side has a hidden agenda so there is a lack of confidence and where there is no confidence there is nothing.” He added, “There was an effort to move forward; we can hope that it is achieved; words are one thing and actions are another.” Sandinista media called the meeting a “prisoners’ chat” noting that Aleman has served time for defrauding the government and has charges pending while Montealegre has been indicted for fraud for his role in the issuing and renegotiation of government bonds covering the losses of four private banks.

Topic 4: Civil society groups call for tax reform

Several union confederations and other civil society groups called last week for a reform of the tax system that will permit expansion of social programs. Representatives of the National Workers Front (FNT), the National Union of Employees (UNE), and the Social Coordinator, all released separate statements calling for changes to the nation’s tax law. Gustavo Porras, an FSLN deputy in the National Assembly and head of the FNT, said, “This is the moment when the business sectors need to do their part.” He added, “The workers have always been against the policies of the International Monetary Fund (IMF), but when we have an agreement that doesn’t affect the pensions of the retired people, and that doesn’t put more tax on 90% of salaried folks, for us that’s an achievement and that’s why we support these reforms.” He said that he expected the business sector to support the reforms because approval by the IMF and the release of US$90 million depends on it. The FSLN needs 47 votes to pass the reforms and Sandinista leaders expected to meet on Oct. 5 with representatives of the ALN and other deputies to see if the necessary coalition could be cobbled together.

Topic 5: Government finances businesses and employment in San Juan de Limay

Four associations of producers and service providers in San Juan de Limay, Esteli, received grants from the Nicaraguan government through the Rural Development Institute (IDR) to push forward business plans and creation of jobs. The associations which received US$50,000 are Beauty Shop Businesswomen, Seamstress Businesswomen, United Communities of Portillo del Limon, and Platanal Beekeepers. The government of President Daniel Ortega is investing $108,250 in social and productive projects that benefit 136 families of limited resources, according to Estanislao Valdivia, coordinator of the Dry Zone Economic Development Program in the north. In total, nine groups in San Juan de Limay are receiving financial grants for training and the tools needed to form small businesses and create jobs

“We are 12 families that have initiated a beekeeping project. We hope soon to produce honey thanks to this help from the government that is providing 90% of the financing and we the other 10%,” said Ronald Perez of the Platanal Association of Beekeepers. Helem Quintero and Maribel Osorio, part of a women’s sewing group, appreciate the government’s support. “This project of ours is going to benefit all the women, especially those who are alone and because of a lack of funds, could not study,” said Osorio. Speaking for a group of 19 women, Vilsa Parrales said, “In San Juan de Limay we don’t have a beauty salon so that women can fix themselves up and look pretty. For that reason we want to learn and take advantage of this opportunity that the government and IDR has given us.”

Topic 6: Two children die of hemorrhagic dengue as toll reaches eight

Doctor María Dolores Pérez Jiménez, who is responsible for the Program of Vector-Borne Diseases under the Minister of Health (MINSA), announced the death of two additional victims of hemorrhagic dengue. With the deaths of the two minors, from Leon and Boaco, the total number of fatalities reached eight for the current year. Doctor Pérez explained that the statistics reflect more than 1,000 confirmed cases of the illness, as well as some 3,000 suspected cases. Managua has registered 596 cases of classic dengue and 19 cases of hemorrhagic dengue. She added that the majority of the country’s population is being affected by dengue type three, a variety that was not noted until 1985, when a major outbreak of the disease occurred.

It is troublesome then, that thousands of residents have turned away the health brigades which have been working through the neighborhoods conducting mosquito eradication and water abatement efforts to reduce the prevalence of the insect which carries the illness. The government urged citizens to allow the entrance of health brigades and members of the police and army, who carry proper identification, when they arrive at their doors with a dose of abatement chemicals. The head of the Local System of Integral Attention in Health (SILAIS), Maritza Cuan, emphasized that it is necessary that the population collaborate because just one unvisited house can allow the epidemic to continue.

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