Nicaragua Network Hotline (September 29, 2009)

1. “No Pay” Movement blamed for Nicaraguan credit crisis
2. Honduran coup freezes Central American trade; Halleslevens says no troop movements
3. Nicaragua-US diplomatic and military relations move forward
4. Awas Tigni leaders clarify land sale accusation
5. Construction of 1,450 “Houses for the People” advances
6. Meeting in Matagalpa on legalization of therapeutic abortion

Topic 1: “No Pay” Movement blamed for Nicaraguan credit crisis

Fitch Ratings released a report last week that said that the difficult situation caused by the world economic crisis and Nicaragua’s high level of poverty, small financial markets, lowered remittances from citizens living abroad, decreased foreign aid, and large numbers of people working in the informal sector, was made worse by increased risk in the microfinance arena due to the call of the “No Pay” Movement for a moratorium on microfinance debt payments. The report also condemned acts of vandalism against some microfinance institutions.

Since the movement of large capital into micro lending, microfinance has moved well beyond the Grameen Bank model of US$50-100 loans to women in solidarity groups to mid-sized farms and businesses which take loans of thousands of dollars, using their land or business as collateral and often paying what the “No Pay” movement terms usurious interest rates. Last week 25 such international financial institutions expressed their concern about instability in the country’s microfinance market. Douglas Young of Micro Vest said that the demand of the “No Pay” Movement that interest rates be reduced to 8% was “impossible” claiming that the international financial organizations obtain funds at rates higher than 8% and they then must cover the costs of evaluating each credit applicant. Juan Carlos Pereira, director of Omtrix, Inc., said that Nicaragua occupies first place in the number of past due borrowers with more than 12% in arrears compared to most countries where the rate was around 4%. He said his institution has lowered its investment in Nicaragua to US$2 million from US$5 million.

Meanwhile, Omar Vilchez, leader of the “No Pay” Movement, announced that his group has allied with the highly respected Consumer Defense Network which is working in support of credit card borrowers. He noted that farmers have lost properties worth US$50,000 because of an initial debt of US$5,000. The Consumer Defense Network reported that at least 400 credit card holders have been sued by the credit card companies and are before the courts in Managua. The Economy Committee of the National Assembly is studying a series of proposals in the hope of resolving the micro-finance crisis.

Topic 2: Honduran coup freezes Central American trade; Halleslevens says no troop movements

The Federation of Chambers and Associations of Exporters of Central America, Panama and the Caribbean (FECAESCA), meeting in Nicaragua, asked Honduran authorities for an immediate solution to the political crisis affecting that country since the overthrow of President Manuel Zelaya, and for the return of normal commercial travel across the land borders of that country in order to avert “shortages of all goods and services in the Central American region” and “an unnecessary rise in prices.”

Monica Araya, FECAESCA president, said that the recurring curfews and closures of land borders decreed by the coup government are causing substantial economic losses to the other countries of the region and will affect supplies of “food, energy, fuel and medicines.” She explained that at this time so-called multi-modal (ship, train, truck) transportation does not exist between Mexico and Panama, rather goods have to travel through each country by truck. Carlos Amador of the Guatemalan Chamber of Exporters said that Honduran internal consumption has collapsed and that this has affected the already distressed economies of Central America. Honduras purchases 8% of Nicaragua’s total exports, for example. Enrique Miselem, president of the Federation of Agro-Exporters of Honduras, claimed that the political crisis had nothing to do with the trade situation and condemned the interference of the international community in the internal affairs of his country.

In separate news, the recurring curfew in Honduras is causing million dollar losses to the region, according to Eliecer Trillos, president of the Nicaraguan Association of Cargo Agencies. The closure on Sept. 21 meant a bottleneck of hundreds of trucks at the borders. Since the end of June, the number of trucks crossing the Nicaragua-Honduras border has dropped to half the number before that date.

Meanwhile, General Omar Halleslevens, head of the Nicaraguan Army said there has been no movement of troops to the country’s northern border. He stated, “The president has said and we continue to repeat: the Army of Nicaragua has not mobilized even one man, not even a small unit, toward the border with Honduras, not even to take care of any internal issues of our institution and certainly not with the thought of doing anything related to our sister country.” He said the coup government has claimed Nicaragua is fortifying the border with the intent to intervene. Halleslevens said, “What we have is normality, the same posts with the same number of men that each post had before this situation in Honduras began

Topic 3: Nicaragua-US diplomatic and military relations move forward

It is possible that the government of President Daniel Ortega will not name a new ambassador to the United States, a position that has been vacant since Arturo Cruz resigned near the end of the Bush administration. Nicaraguan Consul in Miami Luis Alberto Martinez recently said that maintaining bilateral relations at the highest level has functioned well. Martinez stated, “As the policy of Nicaragua and the US is being handled [directly by President Ortega and Foreign Minister Samuel Santos], I see it working very well. An ambassador would retard the direct bilateral relations.” Santos, while traveling abroad, said only that an ambassador has not been named, but added nothing further.

In other bilateral news, the Nicaraguan National Assembly authorized the entry of US navy personnel, and those of Venezuela to participate in joint training interchanges after President Daniel Ortega sent the authorization request as “urgent” to the Assembly. Ten US Special Forces members will train with a unit of Nicaraguan army special forces from Oct. 1-Dec. 31. The Assembly also approved entrance of a US war ship to carry out a training exercise with the Nicaraguan navy from Nov. 5-30, and five officers from the US Naval Academy for an interchange with Nicaragua’s navy from Dec. 1-5. The Assembly also authorized a rotating force of 30 officers, ships and planes from Venezuela for joint training operations on response to humanitarian crises with the Nicaraguan army from Nov. 1-April 10, 2010.

Topic 4: Awas Tigni leaders clarify land sale accusation

Indigenous leaders of the Awas Tigni community of the North Atlantic Autonomous Region (RAAN) denied the allegations made several weeks ago by Modesto Frank that the community was ceding 85,000 acres of their communal land to a timber company owned by a French company, MAPINIIC, S.A. The Awas Tigni leaders said that Frank does not belong to their community. Derome Sebastian said that the Mayangnas have always defended their ancestral right to their land and would not sell it or lease it. A letter presented by the indigenous leaders said that the community has signed a covenant with MAPINIIC for the extraction of downed timber and its sale at market prices along with reforestation and tree plantings. In December 2008, the members of the Awas Tigni community received communal title to their land from the office of the Attorney General of Nicaragua—title that covers 281 square miles in the municipalities of Bonanza, Rosita and Waspam.

Topic 5: Construction of 1,450 “Houses for the People” advances

South of Managua, just off the new highway to Leon, a new urban community named Sandino Valley, with 1,450 new Houses for the People, is being constructed. The project is a response by the Ortega government, in collaboration with public and private entities, to the persistent housing shortage in the country. To date, 83 houses have been constructed with dimensions of 43, 46, and 56 square meters. [The largest is just under 603 sq. ft.] The first phase is 335 houses, but the project will eventually provide houses for 1,500 families, many of whom now only rent a room, a situation that negatively affects their lives and jobs.

The first houses are made of reinforced concrete with two bedrooms, a living room, kitchen and bathroom, at a cost of approximately $12,500. In addition to providing homes, the project has created 450 construction jobs and generated additional economic activity including providing food for the workers, transportation and construction materials. Most of the workers for the first phase, which is 60% complete, are hired from the surrounding communities with only a few skilled professionals coming from Managua.

High demand has already sold out the first phase of houses. The second phase, with houses of 46 and 56 sq. meters, will also have affordable prices. When the project is complete it will include potable water, electricity, paved streets, sidewalks, curbs, a park, green spaces and a walled shopping center on the nearly 100 acre development. In order to make the prices affordable, the Ortega government negotiated an arrangement with the cement company CEMEX to get the cement at cost.

Topic 6: Meeting in Matagalpa on legalization of therapeutic abortion

The strategic group for the legalization of therapeutic abortion, in conjunction with the Nicaraguan Center for Human Rights (CENIDH), held a meeting in Matagalpa with other human and women’s rights organizations that are working for the reform of the law that criminalized ending a woman’s pregnancy in order to save her life.

Marta Maria Blandon emphasized that the whole campaign to criminalize therapeutic abortion during the 2006 election campaign had bad intentions because it is important to distinguish between elective abortion, when a woman chooses to end her pregnancy for her own reasons, and therapeutic abortion, a medical procedure decided upon by the doctor and patient when the woman has an illness that is not compatible with the pregnancy or an illness that cannot be treated during the pregnancy. These may include cancer, HIV, diabetes, hypertension, and other illnesses that if treated will affect the fetus.

Blandón added that the strategic group for the legalization of therapeutic abortion has been knocking on doors everywhere and protesting before the justices of the Supreme Court, the deputies of the National Assembly and the civil servants of the Ministry of Health, exposing the tragedies that occur when doctors know what they have to do to save a woman’s life but don’t do it because there is a law that prevents it. The objective of holding the meetings outside the capital is to search for support in other departments to reach the ultimate goal of legalizing therapeutic abortion, said the leaders.

This hotline is prepared from the Nicaragua News Service and other sources. To receive a more extensive weekly summary of the news from Nicaragua by e-mail or postal service, send a check for $60.00 to Nicaragua Network, 1247 E St., SE, Washington, DC 20003. We can be reached by phone at 202-544-9355. Our web site is: To subscribe to the Hotline, send an e-mail to [email protected]