NicaNotes: Sanctions Kill! End US Sanctions on Nicaragua

By Chuck Kaufman

When we hear the word sanctions, most Latin America solidarity activists think immediately of Venezuela. But Nicaragua is also the target of unilateral coercive measures illegally imposed by the US and the most serious sanction, the NICA Act, can’t be blamed on the Trump regime since it was imposed by Congress. Unilateral sanctions are illegal under both the UN and OAS Charters. Alliance for Global Justice is partnering with Friends of Latin America, a local committee in the Washington, DC region, to target both the Trump regime and Congress with a petition and letters to Congress demanding an end to illegal sanctions against Nicaragua.

The Trump regime has sanctioned a number of individuals, such as Vice President Rosario Murillo and functionaries in the Sandinista government, police, and army. These sanctions have an impact beyond the individual sanctioned because banks, importers, and potential investors are worried that any transaction they conduct with Nicaragua could be found to violate US sanctions resulting in loss of business with the world’s largest economy or even multi-million dollar fines.

The Nicaraguan people rejected the US-funded coup attempt in 2018 and the economy is recovering toward pre-coup levels, but US sanctions create uncertainty internationally. From experience we know it is harder to wire money to Nicaragua than it was before the coup and any business has to think twice before investing in new factories or expanding current ones. It is indicative of the US’s fading influence that there is as much post-coup investment as there is!

Nicaragua Investment Conditionality Act (NICA Act) was passed by Congress and signed by the president in 2018 after the US-sponsored coup failed to dislodge the democratically-elected government of President Daniel Ortega. Its purpose was to cut Nicaragua off from loans by the multilateral lending institutions such as the World Bank, International Monetary Fund, Inter-American Development Bank (IDB) and Central America Bank for Economic Integration (CABEI).

The results of the NICA Act have been ambiguous. The Act requires US governors at the multilateral lending institutions to vote against loans or grants to Nicaragua. The US holds effective veto power at the World Bank and IMF which make decisions by consensus. But the IDB, before the NICA Act was passed, changed its procedure to approval by majority vote and it has made several loans for health, technology, and infrastructure to Nicaragua in the past six months, most recently in January 2020. CABEI also has made several loans to Nicaragua.

Since Nicaragua “graduated” from the IMF’s Highly Indebted, Poor Countries Initiative (HIPC) it no longer needs or wants structural adjustment loans from the IMF with their many conditions. However, the IMF continues to monitor Nicaragua’s economy and issues periodic reports. The IMF and other lenders have repeatedly praised Nicaragua for its effective use of international grants and loans to reduce poverty and stabilize the economy. Most recently the IMF staff report included the following statement: “3. Strong buffers and the authorities’ determined macroeconomic policy response to the very difficult circumstances helped avoid a downward economic and financial spiral.”

So the main effect of the NICA Act has been on the World Bank. The effects were not noticeable at first because projects in the pipeline were not impacted by the NICA Act. However, the pipeline has now emptied out and the lack of new projects is outrageous considering that that every lender agrees that Nicaragua has one of the best records in to world for effective use of poverty reduction and infrastructure loans and grants without the corruption that has negatively affected international aid in so many parts of the world. Sources in the World Bank have hinted that there might be new projects in the works for Nicaragua despite the NICA Act. We will keep an eye on those developments.

Sen. Patrick Leahy’s senior Foreign Policy Aide, Tim Rieser, assured us that the NICA Act would actually not cost Nicaragua any lost loans because there was an exemption for “poverty reduction projects” in the Act. Leahy’s support allowed the NICA Act to pass by unanimous consent in the Senate, as it did in the Democrat-controlled House. Rieser’s assurances do not seem to have been valid, although it will be good news if World Bank project grants begin to flow again.

Regardless of how effective US unilateral coercive measures are now against Nicaragua, we can see in the real-time examples of Venezuela, Iran, and North Korea how truly devastating an unrestrained sanctions campaign could be. That is why Alliance for Global Justice is part of the national Sanctions Kill! Coalition and why we created the Manitos Children’s Fund to buy beans and seeds from Nicaraguan cooperative farmers and donate them through the Venezuelan chapter of Via Campesina for food for children and their families affected by US Sanctions.

Friends of Latin America has developed a Petition and Letter Writing Campaign focused on Trump and Congress demanding that unilateral sanctions against Nicaragua be dropped as well as that the State Department withdraw its travel warning discouraging US travelers from visiting what is actually the safest country in Central America, including Costa Rica!

 

You can sign the following petition here!

 

END THE ILLEGAL SANCTIONS AGAINST NICARAGUA!

In 2018 the US Congress imposed sanctions on Nicaragua, blocking development loans from international financial institutions even though the IMF, World Bank, and Inter-American Development Bank were praising Nicaragua’s use of funds and the effectiveness of its programs. The loans that Nicaragua was receiving were improving conditions for ordinary Nicaraguans through poverty reduction, education, health care, infrastructure development, and economic growth during an 11-year period in which GDP grew almost 5% annually. This prosperity was widely shared in the country that has Latin America’s second-most egalitarian economy (World Bank, 2017).

The impact is compounded by additional Trump administration sanctions against Nicaraguan banks, companies, and individuals in an effort to isolate Nicaragua’s economy from the international community. It is part of a U.S. strategy of using its dominance of the international financial system to isolate governments it doesn’t like, thereby punishing one-third of the world’s population. In Nicaragua the initial effect is to discourage direct foreign investment and stifle businesses that use imported components and software.

The sanctions are to remain in place until the U.S. State Department unilaterally determines that the country meets its definition a democratic government.

The United Nations has declared that such “unilateral coercive measures” are illegal because they punish an entire population for disagreements between governments. Sanctions have been proven to cause suffering and death around the world and are a form of warfare.

Finally, the U.S. State Department’s website is wielded as a weapon to discourage travel to Nicaragua and further damage the economy by hitting the tourism industry. Claims that the country is unsafe, particularly for Americans, are not only false and detrimental to Nicaraguans, they also maliciously deceive Americans to deprive them of their right to visit the country and judge it for themselves.

Please sign our petition to tell the U.S. government to end the immoral sanctions against Nicaragua!

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You can also have this letter sent to your Representative and two Senators or substitute your own letter. Go to this link.

Dear Member of Congress:

As an American citizen I condemn the immoral sanctions imposed on Nicaragua and urge Congress and the Trump administration to immediately lift the sanctions against Nicaragua. The United Nations has called these “unilateral coercive measures” illegal.

I challenge the belief that my government can decide what constitutes “democracy” in another country. Punishing an entire population through the blunt instrument of sanctions is morally reprehensible because it disproportionately affects the most vulnerable—children, the sick, and poor people. Nicaragua poses no threat to the United States and the Nicaraguan people are the ones to decide what kind of government they should have.

The U.S. State Department should also correct its website to show that Nicaragua has the lowest violent crime rate in all of Central America, indeed one of the lowest in the Western Hemisphere, as documented by various U.N. agencies.

Sincerely,

 

BRIEFS

By Nan McCurdy

The Economist Predicts Ortega Win in 2021
In a recent report, the Intelligence Unit of the British weekly journal The Economist, predicts that President Daniel Ortega will win the 2021 presidential election and that the fragmented opposition has no chance. The Economist Intelligence Unit says that despite the efforts of the opposition, external pressures will fail because the country is moving towards political and economic normalization, with the economy recovering in 2021. The report cites last month’s CID Gallup poll with approval rating of 58% for Ortega’s government and the FSLN party, while the opposition has collapsed and its most visible faces do not rise above 10% in approval ratings. The perception that the country is improving has had a positive rebound of 12 points. While big businesspeople strive to present a catastrophic and terrifying panorama, the Economist recognizes that small scale tourism is recovering and that the financial system has stabilized, reactivating credit, which, it notes, will help the growth of the macro economy. (Radiolaprimerisima, 2/21/20)

Nicaragua among Biggest Investors in Public Health
Feb. 17 the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) presented a report on the percentage of the Gross Domestic Product (GDP) that each country invests in public health. The report states that Nicaragua is the second highest country in Central American with GDP (7.8%) which puts it in the top ten countries in the continent. (Nicaragua News, 2/18/20)

Major Investment in Energy Production
Nicaragua’s energy distribution company, Disnorte-Dissur and New Fortress Energy LLC, of U.S. capital, contracted for a natural gas-based plant to be built in Puerto Sandino. Salvador Mansell, minister of Energy and Mines said, “This will allow more stability in the national electricity grid by incorporating the 300-megawatt New Fortress plant to the natural gas base, the first of its kind in Nicaragua.” Mansell said that the plant will allow the absorption of wind and solar energy variations to continue transforming Nicaragua’s energy matrix towards renewable sources. Wes Edens, CEO of New Fortress Energy said that Nicaragua has the economic and stability parameters for large-scale investments. “It is the fifth terminal of its kind in the world. It is a sign of our confidence in the country of Nicaragua and in the region that we will build this plant and the terminal. We will also invest in training personnel so that they can manage the plant,” said Edens. The construction will cost US$700 million and take one year. (Informe Pastran, 2/18/20)

Survey: Nicaraguans Feel Safe and Oppose Intervention
In the latest survey by M&R Consultores released Feb. 24th, 75.1% of the population considers Nicaragua to be the safest country in Central America. Eighty-three percent say that Nicaragua stops drug trafficking, organized crime and gangs from coming through the country, which translates into high levels of security. Eighty-six percent believe that Nicaragua’s problems should be resolved by Nicaraguans and not with outside intervention, particularly the United States. In the opinion of nearly 90% of citizens, Nicaragua should not under any circumstances allow itself to be placed under the guardianship of countries or international organizations. Seventy-seven percent of Nicaraguans say that the conflict that began in 2018 is an attempt supported from abroad to destabilize the country and prevent it from living in peace. Ninety-five percent say that Nicaragua does not represent any danger to international peace and security, while 93% are very proud to be Nicaraguan. Seventy-eight percent of the population say that the imposition of sanctions by the US is intervention in Nicaragua’s internal affairs. Ninety-two percent say sanctions harm all Nicaraguans. Seventy-four percent of Nicaraguans disapprove of those who promote sanctions, and 76% oppose the Nica Act.  (Radiolaprimerisima, 2/24/20)

Reducing Violence against Women
The Ministry of Women, the Women’s Police, and the Supreme Court are organizing a series of meetings with merchants in city markets to address concerns about gender-based violence as well as to teach the legal instruments that are available to guarantee the rights of women. The United Nations Economic Commission for Latin America and the Gender Equality Observatory for Latin America and the Caribbean have stated that Nicaragua has the lowest rate of femicides in the Central American region with 0.7 per 100,000 inhabitants and is among the three countries in the American continent with the lowest rates. (Nicaragua News, 2/24/20)

Avilés Begins Third Term as Army Head
General Julio César Avilés urged Nicaraguans on Feb. 21 to be tolerant, to abandon hatred that only brings harm and to understand that the best thing is to live together in harmony and peace. During his inauguration as Chief of the Army, his third consecutive term on the unanimous recommendation of the Military Council to the President of the Republic, General Avilés recalled, “We all belong to this great home, Nicaragua, we are all brothers and sisters and therefore we must know how to abandon the hatred that only brings harm and understand that it is best to live together in harmony and peace.” “General Sandino! We, the members of the Nicaraguan Army, tell you that we are heirs to your historic struggle for the dignity and defense of the sovereignty of the country. We are heirs to your motto of Homeland and Liberty,” proclaimed Avilés. (Radiolaprimerisima, 2/21/20)

Strengthening Property Rights
The Attorney General (PGR) announced that 5,000 new property titles will be presented to Nicaraguan families beginning the week of Feb. 17. The titling project is part of the Legal Certainty and Family Stability Program the government has implemented since 2007. (Nicaragua News, 2/19/20)

Potable Water to Reach 95% of Population by 2023
On Feb.18 the National Company of Aqueducts and Sewerage (ENACAL), announced that the coverage of potable water and sanitation facilities for the year 2023 will reach 95 percent of the population. Currently 90 out of every 100 inhabitants have drinking water and sanitation service, a significant achievement by the Sandinista government. Data show that in 2007, only 65% of inhabitants had drinking water service. The goal for 2023 in sanitary sewerage coverage is 80%. Sewage coverage was only 30% in 2007. In 2020, US$116.8 million is budgeted to achieve 91.5% household coverage for drinking water and 54% for sewer connections in urban areas. (Radiolaprimerisima, 2/18/20)

Research to Protect Bosawas Rainforest
On Feb. 19, Minister of Environment and Natural Resources (MARENA) Sumaya Castillo, announced that US$206,367 will be invested in the installation of a research and conservation center in Waslala, Matagapa Department, to preserve the flora and fauna of the Bosawas Biosphere Reserve. Financing for the project comes from the General Budget and is part of the Bioclimate Project that MARENA is implementing to mitigate deforestation. The Bosawas rainforest has the richest biome on the planet and is estimated to contain 13% of the known flora and fauna species. (Nicaragua News, 2/20/20)

Highway Inaugurated Between Pantasma and Wiwilí
On Feb. 19, Minister of Transportation and Infrastructure (MTI) Oscar Mojica inaugurated the new Pantasma-Wiwilí highway in Jinotega department which cost US$152 million, benefiting 55,700 inhabitants in twelve communities. Funding for the project came from the General Budget of the Republic. (Nicaragua News, 2/20/20)

US$300 Million for Roads in 2020
Nicaragua will allocate more than US$300 million to construct 214 km of rural roads using hydraulic concrete, reported Guiomar Irias, executive president of the Municipal Development Institute, to improve critical points, access and circulation in different areas of the country. Some US$14 million will be invested in rehabilitating 3,862 kilometers of existing roads. The government has invested large sums in roads since 2007; an example is the highway completed in 2019 from Bluefields to Nueva Guinea which for the first time allows road connection between the Atlantic and Pacific. (Informe Pastran, 2/20/20)

Exports Growing
Nicaragua’s exports grew in January by 8.7%, with a total of US$262 million according to the report of the Center for Export Processing (CETREX).  Raw gold led exports with $50.7 million, an increase of 15.8% compared to December 2019; followed by beef with US$49.4 million; coffee with US$43.6 million; sugar, US$20 million; peanuts, US$9.2 million; farmed shrimp US$7.6 million; cheese, US$6.3 million; lobsters, US$4.7 million; beverages, spirits and vinegar, US$2.7 million; other seafood products, US$2.5 million; mozzarella cheese, US$2.2 million; processed coffee, US$1.9 million; oils and fats, US$1.8 million; fish US$1.7 million; cigars US$1.2 million; raw tobacco US$1 million; rum US$0.888 million; bananas US$0.698 million.  (Informe Pastran, 2/21/20)

First International Festival of the Arts Great Success
On February 16, nationals and foreign tourists enjoyed the last day of the first International Festival of the Arts, which took place in Granada, Estelí, Matagalpa, León and Managua. The festival, in which more than 40 countries participated, was in honor of the Nicaraguan poet Rubén Darío. “This has been a great success with children’s theater, art exhibitions, poetry readings and a cultural magazine every night,” said Ramon Rodriguez, who was part of the organization of the Festival. In Granada, the festival had more than 6 stages where the talents of Nicaraguans and internationalists were showcased including the old fortress La Polvora, the Municipal Palace, the House of Culture, Hotel Granada, San Francisco Convent Museum, Casa de los Tres Mundos and the city’s central square. “We have shouted from the depths of our hearts, long live poetry, long live theater, long live music, long live dance, long live the first international festival of the arts,” said Humberto Avilés, part of the organizing committee. The Nicaragua Diseña platform held a catwalk and a permanent exhibition at the San Francisco Convent, where thousands learned about art and fashion. (Canal 8, 2/17/20)

Central American Carnival to take Place in April in Managua
Managua Mayor Reyna Rueda announced the first Central American Carnival, on April 25, which has as its goal to unify the region in a cultural event. “It will be an outpouring of creativity and skill of groups from all of Central America.” said Rueda. Four thousand dancers will showcase their artistic talent: “It is part of the restoration of the right to joy, the right to enjoy and celebrate living in peace in the country, with the right to creativity, to culture, to being promoters of peace and joy,” said Rueda. There will also be a parade of modified cars and motorcycles. (Canal 8, 2/19/20)