Nicaragua News Bulletin: March 5, 2013

March 5, 2013

The Nicaragua Network notes with great sadness the death today of President Hugo Chavez of Venezuela. We will miss his ebullient personality, his concern for the marginalized, his commitment to grassroots democracy, and his Bolivarian dream which expanded his vision beyond Venezuela to the rest of Latin America through ALBA. We note the World Bank statistics that under his government, the number of Venezuelans living in poverty was lowered from 62% in 2003 to 29% in 2009. We remember with fondness his speech at the United Nations during the Iraq war immediately after W. had spoken when he waved away the smell of sulfur and we remember his response to the needs of poor householders in Boston and other cold northern US cities with free heating oil. But, most of all we mark his assistance to Nicaragua. Through ALBA, the cooperative trade arrangement that was the reflection of Chavez’ Bolivarian dream, President Daniel Ortega was able to resolve Nicaragua’s energy crisis and turn the country toward renewables, fund programs based on special financing of Nicaragua’s oil purchases that have reactivated Nicaragua’s agricultural sector and sent food to Venezuela, provided loans to women entrepreneurs through the Zero Usury program, pigs and chickens to families under Zero Hunger, and galvanized metal sheets for rural dwellings under Plan Roof. President Hugo Chavez will be long remembered!

Katherine Hoyt and Chuck Kaufman

Co-Coordinators, Nicaragua Network

1. Colombia rejects Ortega’s proposal, sends more vessels to San Andres

2. Protests grow over rise in gasoline prices

3. Teacher workshops begin; new family report card released

4. IMF agreement likely this year

5. Housing fair opens with goal of building 40,000 houses

6. Women demandequality in the workforce

7. 2012-13 harvest cycle good for production, bad for prices

8. Rejuvenating Nicaragua’s coffee farms to wait until 2014

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1. Colombia rejects Ortega’s proposal, sends more vessels to San Andres

The government of Colombia did not reply to a proposal that President Daniel Ortega made (in his Feb. 21 speech on the 79th anniversary of the death of Nicaraguan hero Augusto Sandino) that would allow local fishermen of the San Andres archipelago (known as raizales) to fish unimpeded in Nicaragua’s territorial waters around the archipelago. Last November the World Court ruled that, while Colombia retained the islands in the group and waters in their immediate surroundings, the vast continental shelf in that part of the Caribbean was Nicaraguan. Colombia has refused to accept the ruling. While the Colombian Foreign Ministry said that it would release no statement on the subject, Colombian Senator Alexandra Morena said that her country should accept no partial arrangement while Colombia pursued all possible challenges to the Court’s decision. Ortega also proposed a Nicaraguan consular office on the island of San Andres to handle fishing and other issues. But Morena insisted that such an office would indicate that Colombia accepted the ruling.

Then on March 1, the government of Colombia announced that five rapid reaction vessels had been added to its Coast Guard port on San Andres that would continue patrolling “in waters that historically have been Colombian.” The government also announced that it would build a Coast Guard station on the island of Providencia, similar in size to the one on San Andres. Col. Orlando Palacios, head of public relations for the Nicaraguan Armed Forces, told El Nuevo Diario that the Nicaraguan forces had been informed of the arrival of the ships but that he would make no comment except to say that President Ortega had given instructions to remain cautious and calm. He said that Nicaragua would continue to fulfill its missions in the area to safeguard national sovereignty, protect Nicaraguan vessels, and fight drug trafficking. (El Nuevo Diario, Feb. 26, Mar. 2; Radio La Primerisima, Mar. 2; La Prensa, Mar. 1)

2. Protests grow over rise in gasoline prices

 

There was generalized protest in Nicaragua last week about outsized rises in the price of gasoline and cooking gas giving Nicaragua the highest prices for regular unleaded gasoline in the region and there was much discussion about whether the government should take action and if so what action. Taxis automatically raised their fares. Opposition politicians declared that the Venezuelan-Nicaraguan company ALBA de Nicaragua, S.A. (ALBANISA) was benefitting from the price hike and demanded changes in the Law on Hydrocarbons. Cesar Zamora, who heads the energy company AEI in Nicaragua, said that Venezuelan oil has helped Nicaragua greatly, especially with subsidies for low-income households’ electricity bills and for public transportation. He stated that ALBANISA had invested US$80 million in electricity generation that will save the country $50 million in petroleum import costs.

 

Economist Nestor Avendaño said that the price of petroleum products was influenced by factors that were local and international, economic and political. He said that President Daniel Ortega, “without losing sight of the free and competitive market in the whole chain of providing fuel, should establish appropriate government regulation with cooperation between the public sector and the private business oligopoly, as has been done with propane, while at the same time providing incentives for the purchase of fuel-efficient vehicles.” But National Assembly Deputy Eduardo Montealegre said, “I don’t believe in price controls,” and added that fuel prices “don’t drop by law; they drop by supply and demand.” Avendaño retorted that Montealegre evidently did not learn the difference between price regulation and price control as Minister of the Treasury under President Enrique Bolaños and didn’t notice that the Wall Street crash of 2008 occurred because of the lack of regulation “which brought the world to the economic recession that we have still not recovered from in 2013.”

 

The director of the National Institute for the Defense of the Consumer, Marvin Pomares, said that he supported the National Assembly’s amending the Law on Hydrocarbons to create an agency to regulate prices which he said are now determined by the Esso refinery [recently sold by ExxonMobil to Puma Energy]. Enrique Zamora, president of the Nicaraguan Association of Exporters (APEN), said that the increased cost of petroleum products has had a negative effect on the costs of production of agricultural products and on that part of the country’s energy generation which is still based on burning diesel.

 

By Sunday, the prices of diesel and gasoline had dropped several cents. (Informe Pastran, Feb. 26, 27, 28; Radio La Primerisima, Feb. 27, Mar. 2, 3; La Prensa, Feb. 27, Mar. 3)

3. Teacher workshops begin; new family report card released

 

Weekend workshops designed to advance the professionalism of Nicaragua’s teachers began on Mar. 2 in Managua with a lecture by the head of the National System for Attention to Disasters (SINAPRED), Dr. Guillermo Gonzalez, on prevention and mitigation of disasters. Communications coordinator and First Lady Rosario Murillo said that the workshops had 70% attendance, noting that 10% had asked to be excused to attend other classes. She said that the Education Ministry would work with the remaining 20% to help them to understand that this is part of a nationally agreed upon plan to raise standards while learning to adopt the values of shared community responsibility that the plan proposes. Education Vice-Minister Jose Treminio said that the workshops will be held every weekend and for this coming Saturday the subject will be grading students’ progress. Another session will be on rights and duties of the family.

 

The newspaper La Prensa called the classes “indoctrination” in the government’s Vivir Bonito Campaignand opposition teachers unions said the requirement to attend workshops on Saturday without extra pay violated Article 62 of the Labor Code. However, ANDEN, the Sandinista teachers’ union, called on teachers to participate in the workshops saying that they would help to improve education throughout the country.

 

Treminio announced that a new document is being distributed to schools around the country that will keep a record of parents’ or guardians’ participation in their children’s health and in school activities, such as preparation of the school meal, school cleanup campaigns, parents’ meetings, etc. Treminio said, “This report card will permit us to evaluate the participation of students and families in these activities.” He added that, in this way, more parents will be involved in the “integral process of their student’s formation.” However, members of opposition teachers unions objected to the new report cards. Lesbia Rodriguez of the Unity Teachers Union (USM) said that requiring so much information about the parents “is as if everybody has to know what is going on inside each family.”

 

At the same time, Cuban education researchers began taking a survey throughout Nicaragua to compile the concerns of teachers and to enumerate the major problems in the Nicaraguan education system. In Matagalpa and Jinotega, teachers told them of the long distances many children have to walk to get to the nearest school and the time lost each year when many parents take their children out of school to work in the coffee harvest. (Radio La Primerisima, Feb. 27, Mar. 3, 4; El Nuevo Diario, Feb. 28; La Prensa, Mar. 1)

4. IMF agreement likely this year

The new representative of the International Monetary Fund (IMF) in Nicaragua, Juan Zalduendo, said last week that he believes it is possible that his institution will reach an accord with Nicaragua on a medium term program that will help reduce poverty in the country. He said, “Our intention is to continue with this dialogue and we believe that it is only a matter of time, this year, that we will be able to arrive at a program.” Zanduendo, who replaces Gabriel Di Bella, said that Nicaragua has a “very important” economic stability and has “effectively confronted” the international economic crisis.

Meeting with President Daniel Ortega’s national policy advisor Paul Oquist and the leadership of the Superior Council on Private Enterprise (COSEP), Di Bella said that the IMF was finishing its evaluation of Nicaragua’s economic performance during 2012 and the country’s Gross Domestic Product may have grown more than 4% last year. “What is clear,” he said, “is that last year was a good year even in the complicated global context and Nicaragua has reasons to be happy because the macroeconomic evolution was evidently good.” Oquist explained the government’s Human Development Plan for 2012-2016 which projects a growth rate of 5% and above, promotes investment, the transforming of the agricultural economy, food security, and incentives for small and medium scale production.

The IMF has recommended a gradual reduction in Nicaragua’s balance of payments deficit, a reduction in the nation’s debt, strengthening the government’s budgeting system, increasing currency reserves to cover 3.8 months of imports by 2016, and lowering the percentage of the work force in the informal sector. More controversial is the IMF’s insistence that the Social Security system be changed, raising the age of retirement from 60 to 65 and doubling the number of work years needed to receive a full pension. Both have been rejected by Nicaragua’s labor unions. (El Nuevo Diario, Feb. 26; Informe Pastran, Feb. 26, 27; Radio La Primerisima, Feb. 27)

5. Housing fair opens with goal of building 40,000 houses

Expocasa 2013, a housing fair held each year by the Chamber of Builders of Nicaragua (CADUR), opened on Mar. 1 with the president of the organization, Ricardo Melendez, stating that his goal was to find investors from abroad to finance housing projects in Nicaragua to the tune of US$200 million each year in order to build 15,000 houses per year. Currently only between 4,000 and 5,000 houses are built in the attempt to address Nicaragua’s estimated deficit of 500,000 houses — houses that are inadequate or in disrepair. Melendez said that Nicaragua is attractive for investors because it has an “excellent Housing Law” and a good business climate. Maria Emilia Rizo, head of the government Institute for Urban and Rural Housing (INVUR), said that this year the government has available interest rate subsidies for 5,000 units of affordable housing. This allows lower income families to buy houses costing between US$18,000 and US$20,000 with payments adjusted to their incomes. CADUR wants the government to increase the subsidy to cover houses costing between US$24,000 and US$26,000 so that the housing industry can build affordable houses of 650 square feet rather than the smaller houses they offer currently at US$20,000. (El Nuevo Diario, Mar. 2)

6. Women demandequality in the workforce

United Nations Coordinator for Women in Nicaragua Isolde Espinoza said Sunday during a conference organized by the María Elena Cuadra Women’s Movement (MEC), that the “main gap” women have to overcome before entering the labor market are “socially assigned gender roles.” She continued, “Although more and more women have been fighting to open spaces in the labor market, there are still many women who cannot enter the workforce.” The Economic Commission for Latin America and the Caribbean (ECLAC) indicated that 70% of men are employed in Nicaragua, but only 40% of women. Espinoza said that one problem is that women do not get hired into the trades, positions that are “usually given to men.”

Sandra Ramos, MEC’s executive director, said labor inequalities between men and women still exist. She called on the government to implement employment policies for women and said, “We all need to fight for equal pay for equal work.” She said, “We cannot limit women to the bakery, the kitchen and the beauty shop.” She described cases of women who have gone to study technical courses such as welding and their own teachers told them, “This is for men.”

Ramos applauded the Zero Hunger program, which gives seeds, animals, and training to rural women, understanding that putting production into women’s hands can have a profound effect on lowering poverty rates. (El Nuevo Diario, March 4)

 

7. 2012-13 harvest cycle good for production, bad for prices

 

With the 2012-2013 harvest cycle drawing to a close in April, farmers’ organizations are projecting a 10% rise in production, mostly of basic grains. However, some international market prices have been depressed affecting farmers’ incomes. Two dark spots in the report are coffee (which is suffering from coffee rust disease) and rice, where international competition is hurting the national rice industry. [Rice was projected to be the first national crop hurt by dropping trade barriers with the US under CAFTA.]

 

The Ministry of Agriculture and Forestry (MAGFOR) said production was up for peanuts, sugar, rice, beans, sorghum, corn, and tubers. Figures for the third harvest (apante) are not in yet, but indications are that the harvest will be good. Union of Farmers and Ranchers (UNAG) President Alvaro Fiallos said that there has been an almost unprecedented collapse in the international price for beans, which although good for consumers, has been bad for farmers. Red beans have very little international market but are a staple of the Nicaraguan diet. Farmers who grow black beans are growing them for the international market.

 

Fiallos said the corn market is strong but called on the government to coordinate rice imports so they are not hitting the local market at the same time as national production. [Rice was a crop predicted to be affected by US imports under CAFTA.] Manuel Alvarez, president of the National Association of Sorghum Producers, said that sorghum has set a production record this year. The crop is purchased mainly by the poultry industry. The problem, he said, is that poultry producers are not buying the 250 million pounds of excess sorghum, saying that they will buy imported yellow corn instead. [It was US agro-industry-produced yellow corn which destroyed white corn production in Mexico under NAFTA.]

 

Tubers and roots were the main products purchased at the last Export Fair according to Azucena Castillo, general manager of the Association of Producers and Exporters (APEN). Growers produced a bumper crop of tubers and roots this year but Castillo said there was a need to invest in technology to assure the quality of the production. International prices were good for peanuts and Nicaragua produced its largest crop in 25 years this year. According to the recent Agriculture Census, there are 262,546 farmers and ranchers in Nicaragua, 38,680 of whom receive financing. (La Prensa, Feb. 20)

8. Rejuvenating Nicaragua’s coffee farms to wait until 2014

 

Nicaragua will not begin replanting coffee groves affected by coffee rust disease until 2014 according to Juan Ramon Obregon, executive director of the National Coffee Council (CONACAFE). Nicaraguan coffee production has been hit hard by the disease, Hemileia vastatrix,as has the production of Nicaragua’s Central American neighbors. Obregon said it is too late this year because the coffee bushes are already in bloom so the only thing that can be done is pruning and basic remediation. Agricultural authorities from the region are meeting this week in San Pedro Sula, Honduras to discuss a unified plan to combat the infestation. Some analysts say 53% of the coffee growing areas of Central America are affected by the disease causing a US$600 million regional loss. Nicaraguan Agriculture Minister Ariel Bucardo has estimated that 37% of Nicaraguan coffee growing areas have been affected.

 

Meanwhile, a trade delegation representing 11 Taiwanese coffee companies is arriving in Nicaragua to discuss importing Nicaraguan beans, roasted and unroasted, as well as ground, instant and gourmet varieties. The trade mission is also interested in selling Nicaraguan processing and packing equipment and other technologies. Taiwanese investment in Nicaragua totals US$131million and generates 7,000 jobs. (Radio La Primerisima, Mar. 4; El Nuevo Diario, Feb. 26, Mar. 4; Informe Pastran, Feb. 27)