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Central American University - UCA  
  Number 292 | Noviembre 2005
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Nicaragua

Nicaragua Briefs

Envío team

DRUG MONEY GOES MISSING
A huge scandal involving a Supreme Court justice, various judges and an unnamed notary public—all of them mutual friends and several of them related to the FSLN structures—has further deteriorated the judicial branch’s credibility. It began in April 2004, when a man and a woman, both allegedly drug traffickers, were arrested and ultimately convicted of money laundering and sentenced to 10 years in prison. The $609,000 found in their possession was put in judicial custody. Following a judicial maneuver organized by the judicial branch to get the pair released, some of whose many illegalities and defects were caught by the media, one of the convicts was freed this September. The media stayed on top of the case and soon discovered that the money had disappeared from the judicial coffers, although they have so far not determined where it ended up and in exchange for what. The Supreme Court justices were divided between those who repudiated the deed and those who covered it up. The Court has dragged its feet in the investigation into the collusion and fraud, while the Sandinista leadership in the National Assembly blocked the creation of a legislative commission to conduct its own investigation.

THE IDB AWARDS THE FDL
FOR EXCELLENCE
The Inter-American Development Bank (IDB) awarded its Prize for Excellence in Micro-Finances in Latin America to Nicaragua’s Local Development Fund (FDL), a rural credit organization that originated as a project of the Nitlapán Research Institute of Managua’s Central American University and later acquired its own institutional status. The prize was given at the Inter-American Micro-Enterprise Forum in Santa Cruz, Bolivia, on October 6.

The FDL is currently the largest micro-financing institution in the rural Nicaraguan productive sector. Its loan portfolio is equivalent to US$32 million, 60% of which is placed in the agricultural sector, specifically in productive activities, rural transport and peasant commerce. This is a unique option in that traditional micro-financing institutions mainly lend to urban commercial and service sectors because they present fewer structural challenges than the rural sector. The FDL now has 31 branches and agencies that provide loans to 50,390 families in 14 of Nicaragua’s 15 departments and in the North Atlantic Autonomous region. In addition, 56% of its clients are rural and urban women. In conjunction with Nitlapán, It also offers its clients productive and administrative advisory services . The IDB prize recognizes not only the FDL’s option to prioritize the poorest productive sectors and most outlying communities, but also its sustainability in doing so. The institution does not depend on subsidies and its lending packages and way of working with borrowers has resulted in
very acceptable return rates.

TURTLES REPEAT EGG-LAYING
RITUAL RIGHT ON SCHEDULE
Faithful to their annual ritual, some thirty thousand of the protected Olive Ridley turtles returned to the 800 meters of La Flor beach nature reserve in the department of Rivas to lay their eggs in the sand the last week of October. Successful coordination between the Army of Nicaragua and several national and municipal institutions prevented a repetition of the massive removal of thousands of eggs in the first round of laying to be sold as a delicacy. Each turtle deposits some eighty eggs in the nest she digs in the sand. The baby turtles are born seven weeks later, then scramble for their lives to the sea, facing the threat of swooping birds on the way, and predator fish once in the water. The army and other institutions will guarantee protection of another two waves of turtles expected at La Flor before the end of the year.

ALEMÁN’S TRIAL IN PANAMA:
WILL IT HAPPEN AS SCHEDULED?
Panama set November 23 for the preliminary hearing in the trial against former President Arnoldo Alemán, his wife, one of his daughters, his father-in-law and several top officials from his government—including Byron Jerez, Alemán’s tax director and former PLC treasurer—accused of laundering over US$75 million of Nicaragua’s public resources through paper companies and Panamanian financial institutions. As of November 9, when this issue of envió went to press, the Nicaraguan authorities had not yet notified Alemán of the trial. If the formal subpoena is not served, the trial could be postponed or suspended. Nicaragua’s Supreme Court declared itself incompetent to notify him, claiming that the task corresponds to the Public Prosecutor’s Office, which in turn studied the case “in depth” and came up with some legal ruse for not notifying Alemán.

Panamanian lawyer and anti-corruption activist Miguel Antonio Bernal told Managua’s El Nuevo Diario a month before the hearing that “there are very sizable interests at stake” in this case, adding that the Panamanian judicial system is also “extremely corrupt.” “As an observer,” he said, “I think it would be a bit difficult for them to find Alemán guilty. We don’t only have Alemán here, we also have the Montesinos, the Fujimoris. This is paradise. Don’t be surprised if one day Alemán has to flee Nicaragua and shows up in Panama. This is where all the putrefaction of Latin American politics comes.”

NICARAGUA’S DOMESTIC DEBT:
A HUGE CHUNK OF THE BUDGET
The issue of the domestic debt reemerged as a central issue during negotiations over the structural laws the IMF is demanding
in exchange for renewing its program with Nicaragua. This debt, which now stands at over US$1.5 billion, has become the greatest single drag on the national economy. Nicaragua currently pays only a small amount of interest on its foreign debt following the pardoning of 80% of it through the Highly Indebted Poor Countries (HIPC) initiative. Nonetheless, next year’s budget bill earmarks a full 20% of the country’s spending to service the overall public debt, the bulk of which is a prioritized annual payment to the national banks that snapped up the Central Bank bonds issued to cover the liabilities of several private banks that fraudulently went under in 1999-2000. The government announced that it is working on a plan with the banks to buy back 20% of that debt.

The Civil Coordinator, which represents hundreds of Nicaraguan nongovernmental organizations, will present a bill to the National Assembly to legalize and restructure the domestic debt, accompanied by the signatures of some fifty thousand Nicaraguan citizens. For some years the Coordinator has been working to provide information and raise awareness on this extremely important issue. It proposes restructuring the domestic debt over a 30-year period with bonds whose interest rates are in line with the country’s limited capacity and the unstable international economic situation rather than the juicy interest rates the current bonds carry.

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