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  Number 360 | Julio 2011
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Nicaragua

Mysteries, times, fears and challenges

The approaching elections are heightening the uncertainties that have laced this event for months. Many mysteries remain to be cleared up; many time limits are passing without answers; and many new fears taunt from the horizon.

Envío team

According to the governing party’s official electoral campaign document, the Sandinista National Liberation Front (FSLN) believes it is reaching the November 6 elections at a very positive stage. It deduces this, to quote the text, because the “Lord, our God, has His Mysteries and His Times.”

“Mysteries” and “times” are indeed lacing the process leading to the ballot box on Sunday, November 6. So are fears, the latest of which, Venezuelan President Hugo Chávez’s unexpected serious illness, has only added to the many uncertainties strewn along the road leading the electorate as well as all the candidates to that date.

“A national project”

Ever since Daniel Ortega’s inauguration in January 2007, President Chávez has been an omnipresent referent of the FSLN government. Within days, Nicaragua joined both the Bolivarian Alternative for the Peoples of America (ALBA) and Petrocaribe. The latter groups together Latin American and Caribbean countries that receive Venezuelan oil with soft payment conditions. The conditions Chávez granted Nicaragua were particularly favorable.

Albanisa, a mixed Venezuelan-Nicaragua company, was born of this oil agreement. Nicaragua’s state oil company, Petronic, owns 49% of the shares and the other 51% are in the hands of Petróleos de Venezuela (PDVSA). Even though both owners are public companies, Albanisa is managed like a private business.

Other state-owned but privately administered businesses dedicated to various projects in Nicaragua have also been created under the Albanisa seal (Alba-Alimentos, Alba-Caruna, Alba-Forestal, Alba-Generación, Alba-Transporte, etc.). Then there’s the multi-million dollar project to build an oil refinery in Nicaragua to process up to 150,000 barrels a day. It’s to be called “Bolívar’s Supreme Dream.”

All of this inspired Albanisa’s general manager, Venezuelan Rafael Paniagua, to admit publicly in January of last year that the governing party had bought Channel 8, a national TV channel, with ALBA money, extending the ALBA businesses in Nicaragua into the field of mass media. At the time, Paniagua frankly acknowledged to El Nuevo Diario that “we are doing our job and the only thing I can assure is that ALBA is here to stay, because our project in Nicaragua is a national project. And building a country is no small thing.” These declarations earned him harsh criticism from all sectors of Nicaragua, including governmental officials. He was immediately relieved of his post.

But his words hit the mark: ALBA began occupying more and more spaces and its economic resources put the FSLN’s governing circle well on its way to being a powerful economic group. Not long after the FSLN bought Channel 8, allegedly with ALBA money, a new TV channel (Channel 13) in the hands of the presidential family went on the air, adding to the media empire the Ortega-Murillo family has been building in these years. Son Rafael Ortega Murillo, who heads the firm called Nueva Imagen, negotiated the family’s entrance into the Nicaraguan TV spectrum with powerful Mexican businessman Ángel González in 2007. Carlos Enrique and Daniel Edmundo Ortega Murillo now direct Channel 4; Juan Carlos Ortega Murillo directs Canal 8; Maurice Ortega Murillo directs the TV production company RGB Media and, together with sisters Camila and Luciana, also directs the new Channel 13, which is on 24 hours a day. Channel 91 also belongs to the family, although it does not yet have a defined profile. When Channel 13 began broadcasting, Nicaraguan Human Rights Center president Vilma Núñez reminded Nicaraguans that “business monopolies are prohibited by Nicaraguan laws and the Probity Law sanctions public officials who invest in family businesses, but the Comptroller General’s Office sees nothing.” That office was one of the key government institutions whose top executives were hand-selected by Daniel Ortega and Arnoldo Alemán as part of their pact.

“The real mystery”

Ortega, his family and this economic group, which today controls the FSLN, have used the hundreds of millions of dollars coming in from Venezuela and from the sale of its oil in Nicaragua in a totally discretionary manner. Because the ALBA money, which has never been independently audited, is contributing so mightily to the State-Government-Party-Family fusion and confusion, there were widespread demands over the first two years of the Ortega government for transparency regarding how much money was involved, how it was being used, how much was a donation and whose debt the rest was. But since the demands always came up against a wall of secrecy at all levels, it’s now resignedly assumed that everything related to that money is a “mystery” that will never be revealed to the population.

In January 2010, Dionisio Marenco, who had initiated the oil agreement with Venezuela when he was mayor of Managua, acknowledged the immense amount of capital involved in Albanisa and the mystery surrounding it: “No wealthy person in Nicaragua has more than ALBA,” he said. “Not even adding all the banks together will you reach the economic capacity the oil imports provide. How is it being managed? Who’s managing it? Where’s it being invested? How will it be paid for? And that last mystery really has to be resolved for reasons of national interest, because one day it will have to be paid for… And I don’t know how they’re handling that. I’m guessing it’s not being done very efficiently, because no business of that size can be run like a ma and pa grocery store. You have to have a structure and someone to be the public face; you have to know what’s being done; it has to be audited. The way things are now, I understand it’s being managed like a sack full of cash under the table.”

An April 2011 report
offers some numbers

Something of the “mystery” had to be revealed earlier this year. Under pressure from the International Monetary Fund, the Central Bank of Nicaragua presented a report in April on the cooperation Nicaragua receives from Venezuela.

This report, which independent economists consider incomplete and not specific enough, showed US$511 mil¬lion in Venezuelan resources coming in to Nicaragua in 2010, US$69 million more than in 2009. Of that amount, $377 million was the government’s net earnings from the oil deal it signed with Venezuela. Another $163 million was in medium-term bilateral financing lines and the remaining $11 million in Venezuelan investments for Nicaragua. The Central Bank reported that the oil earnings and bilateral aid were allocated to social and productive projects.

With ALBA resources

Venezuela sends Nicaragua enough crude oil to cover its annual needs. By administering it, the governing party has become the country’s main fuel importer and is now also the main generator of thermal energy, which it then sells to the electricity distributors in a highly lucrative business.

The governing party has indeed used ALBA resources to finance some of its social programs, not to mention its perks. And it has fed the coffers of the Alba-Caruna lending cooperative and subsidized electrical energy and public transport in Managua. Since May 2010, it has also been using the money to top up the salaries of some 150,000 low-paid public employees with a $30 monthly bonus. President Ortega isn’t wrong when he says that ALBA has allowed Nicaragua to dodge the kind of crises that get triggered in its fragile economy.

Ortega has expressed his gratitude to ALBA and Chávez innumerable times over the more than four years of his government, repeating it in virtually every speech: Thanks to Chávez, Nicaragua no longer has the 8-hour energy blackouts of 2006; thanks to ALBA, we have new solidarity markets with fair prices; thanks to Venezuela, houses and streets are being built for the people, etc., etc. Also recurrent in the presi¬dential rhetoric is the expression “Thank God for ALBA,” when referring to any of the problems afflicting Nicaragua that Chávez has promised to solve.

Although many promises have yet to be concretized, Venezuelan cooperation has already been of such magnitude that no government in Nicaragua has ever had so many extra resources available to it. They have given Ortega an exceptional opportunity to deal with the age-old challenge of significantly helping Nicaragua shake off its poverty, but his first priority for the Venezuelan aid has been to finance the Albanisa business group’s investments and the party’s expenses.

Venezuela will provide

When the opposition documented the governing party’s electoral fraud in the 2008 municipal elections, the European countries that had been helping finance the national budget pulled out of that experimental modality. Later, a number of them stopped financing specific projects as well. Sweden, Denmark, Finland, Norway, Holland and Austria all decided to withdraw from Nicaragua after many years of sustained collaboration. Although the governance crisis expressed in the electoral fraud wasn’t the only reason, it was certainly one of them.

The US Millennium Challenge Account also decided to prematurely conclude its projects in Nicaragua due to the fraud. President Ortega consoled the producers in León and Chinandega targeted by those projects with the promise of an Alba-Solidaria program to continue implementing the economic and social projects the MCA left unfinished. That promise has only been partially concretized.

In the past two decades, Nicaragua has received an average of $300 million annually just as donations. By 2010, those donations had dropped by half, largely due to the governance crisis triggered by the fraud. This has obliged the government to seek loans to balance the budget, which means greater indebtedness. With each new departure of a European donor, the government’s public attitude has been one of good riddance. Stressing the “conditions” imposed on Nicaragua by the United States and Europe in contrast to ALBA’s unconditional generosity, Ortega has made it understood, explicitly or implicitly, that the Venezuelan resources will fill those holes.

Uncertain “times”

With this growing dependence on Venezuelan resources, it’s hard to imagine that Chávez’s illness and its possible future consequences aren’t making the Ortega government more than a little nervous. Chávez has based his rule on personal rather than institutional decisions, which hasn’t helped form replacements. His weakened health, the new priorities and slower pace his doctors are requiring of him and the influence all this could have on the recomposition of power in the Venezuelan government, with presidential elections set for 2012, will surely have repercussions on Ortega and his group.

Sooner or later, someone will demand accountability for the petro-aid Chávez has generously squandered around the world with no controls, including Nicaragua. We may learn only then what part of the enormous amount of money Nicaragua is receiving annually was loaned not donated, and what part of the loan is public and what, if any, is private, details the Ortega government has never made unequivocally clear.

In 2007, when Ortega took office, Chávez and ALBA had a solidity not reflected in today’s Venezuela, immersed as it is in a complex crisis that doesn’t depend only on the President’s health. Whatever happens in Venezuela won’t affect the gifts and perks the FSLN is giving away to win votes in November since the financing for them is already physically in Nicaragua or has already been contracted, but it is clouding Ortega’s future if he’s reelected.

Business uncertainty?

Candidate Ortega and his group probably aren’t the only ones concerned about Chávez’s illness. Similar fears could also be affecting Nicaragua’s business elite, allied to Ortega for now because he has ensured them both macroeconomic and social stability, a good business climate that has largely shielded them from the effects of the international crisis.

Chávez has made this bonanza possible. Venezuela’s resources have allowed the Ortega government to respond to certain social needs without having to tackle the core fiscal reforms—a review of tax exonerations and other exemptions for large capitalist invest¬ors—that Nicaragua desperately needs to bring in more revenue and make its tax system less regressive.

The business elite have also had other advantages. The opening of Venezuela’s market to Nicaraguan products, especially beef and dairy, has helped Nicaragua resist the financial crisis affecting purchasing power in the United States, our main trade partner. In just a few years, Venezuela has become the second market for Nicaraguan exports.

But Venezuela’s alternative “soli-darity” market and “fair prices” have mainly meant more earnings for those traditionally in a position to get them. According to information provided to envío by researcher Francisco Pérez, four industrial slaughterhouses control 89% of beef exports and three companies control 63.7% of dairy exports (see the “Speaking Out” article in our May issue). In this context, Chávez’s illness could generate fear and insecurity among the representatives of big capital, which are currently benefiting so much from ALBA. And those feelings could drive them to rethink their electoral options.

Could Chávez’s health crisis also affect both traditional and new FSLN voters who have been educated to view ALBA as the alternative for Nicaragua’s development, Chávez’s petrodollars as the solution for any crisis and Chávez himself as a sort of rich uncle?

Fear of an altered design

Other, perhaps even greater insecurities in the governing party preceded those triggered by Chávez’s health problems. The FSLN doesn’t seem all that certain of the victory proclaimed by its costly propaganda, because if it is, its actions, which appear for all the world to be guided by a fear of losing, are quite a mystery.

Such fears have their logic. After what happened in the 2008 fraud, and after the questioned and questionable sentence of the Supreme Court in 2009 that enabled Ortega to be reelected, the FSLN drew up a plan to obtain the following election results: in addition Ortega’s victory, the party would get at least a simple majority of 47 legislators in the National Assembly and ideally the qualified majority of 56 that would allow it to reform any legislation it chooses, including the Constitution, without having to cut any deals with another party. Should it fail to get that larger majority, its fallback plan was to ensure that Arnoldo Alemán, running for his Constitutionalist Liberal Party (PLC), would come in second, so they could reactivate their bipartite pact in the legislative body.

The presidential candidacy of Liberal Fabio Gadea, running on a ticket with the Sandinista Renovation Movement’s Edmundo Jarquín, seems to have altered this design. Fielded by a pluralist coalition called the PLI-UNI Alliance, Gadea has slowly and surely made inroads into the PLC support base, reducing Alemán’s support in the polls and correspondingly increasing his own. Just as slowly and also just as surely, the five options for President have been narrowing down to only two: the FSLN and the PLI-UNI Alliance, just as the latter anticipated.

Fear of a massive turnout

A massive anti-Ortega vote in an essentially two-candidate election endangers the victory foreseen by the FSLN because anti-Ortega sentiment—which is greater than the anti-FSLN one—has always been the majority in the country. “If the FSLN can’t break through its ceiling, which has now increased to 45% due to its social programs, and if people who oppose the FSLN get out and vote, particularly if most vote for one candidate, the FSLN can’t win,” suggests Raúl Obregón, director of the M&R polling firm.

Bishops’ Conference members have grasped this perfectly well. For weeks now, the bishops have been urging the population to vote despite all the irregularities surrounding the process, since a high abstention rate favors the FSLN with its disciplined base of support.

“Despite the unconstitutionality and illegality of the candidacy of one of those running, the Supreme Electoral Council’s lack of reliability, the irregularity in the ID/voter card issuing process and the distrust of the political class, which has proven inept at resolving the country’s problems,” insists Silvio Báez, Managua’s auxiliary bishop, “despite all that, you have to vote.”

“If the citizenry doesn’t vote,” adds René Sándigo, bishop of Chontales, “the sector most loyal to a given party will win by a wide margin. But if all the citizenry votes and that party still wins, it will be evidence that there was fraud.” And Rolando Álvarez, the new bishop of Matagalpa, said that “we must vote because under Nicaragua’s current circumstances; not doing so is the same as electing the greater evil.”

The irregularities and illegalities in the government’s organizing of the electoral process, with its fraud in 2008, the continuation of discredited electoral magistrates in their posts, declarations by the Supreme Electoral Council (CSE) president designed to generate rejection and the slow, selective and partisan ID carding, all encourage abstention by a sector of the electorate that considers voting tantamount to participating in a farce and thus legitimizing an illegality-riddled process. The governing party couldn’t be happier with this perception, which feeds straight into the effort to avoid a massive turnout.

Maneuvers growing
out of the fear of losing

This month we’ve seen yet more proof that this could happen. The FSLN, now in virtually full control of the electoral apparatus, has tightened the screws even more in all the electoral structures, from top to bottom and side to side.

On June 3, the CSE appointed the directors of the Caribbean Coast’s Regional Electoral Councils (CERs) and of the Departmental Electoral Councils (CEDs) in the rest of the country, giving the FSLN and its allies more than the law establishes in an attempt to ensure both proportional representation and pluralism in these authorities. Those councils then named the people who would direct the Municipal Electoral Councils (CEMs), employing the same inequity. There is every reason to fear that the chain will remain unbroken and the CEMs will do the same with the nearly 13,000 voting tables.

This is crucial on election day, as any challenges of ballots, tallies and even entire voting tables must be filed at the voting tables themselves; the decision is then approved by the corresponding CEM and ultimately endorsed or overturned by that municipality’s CED. It is along this route that results can be “adjusted,” with virtually all decisions in the hands of governing party people. The only brake will be the opposition monitors observing the process at the voting tables, but they found it very difficult to act in 2008.

The surest paths of a fraud

After further investigating what happened in the 2008 elections, the Ethics and Transparency Civic Group released a report in May identifying 1,284 of the voting tables around the country that are possible targets for these fraudulent procedures. They are areas the FSLN has always lost by a landslide.

President Ortega himself and spokespeople for both his government and the CSE have repeatedly declared that the party monitors are the best observers. Quite probably for that very reason, the CSE refused to accredit the national monitor chiefs Dionisio Palacios and Alejandro Samaniego, respectively proposed by the PLI-UNI and the PLC. Both men are former CSE officials, which gives them the experience, capacity and eye to detect and denounce any irregularities or abuses committed during the electoral process and on voting day. The CSE invented an ad hoc regulation to justify its refusal to accredit them: you can’t be a party monitor if you’ve ever worked in the CSE.

The “mystery” of not
wanting witnesses

Despite the CSE’s strict corseting—or precisely due to the way it could be translated on voting day—the CSE is insisting on hindering electoral observation. If the FSLN believes it will win over 50%, as the governing party’s polling firm Siglo Nuevo is forecasting, the CSE’s initial rejection of both national and international observers and the late date (mid-August) on which it now says it will issue invitations at least to international ones and inform them of the conditions is a mystery.

Why wouldn’t the FSLN want witnesses? Isn’t it listening to people? Since last year polls have consistently showed that three quarters of the population does not want observation impeded.

As for the two national observation groups, IPADE has announced that it will request accreditation from the CSE while Ethics and Transparency has said it will not. The latter will rely on other means of “observation”: it intends to make each voter an observer, with a digital network observation system. It has opened an account and set up a web site and telephone line so it can already receive information about anomalies, particularly at this moment regarding the biased voter/ID carding process, in which all Nicaraguans are supposed to turn in their old card and receive a newly designed replacement.

“It’s already late”

There’s real concern among the inter¬national organizations that have long sent observers to the Nicaraguan elections. A delegation of the Carter Center, which has observed Nicaragua’s election process since 1990, visited Managua in May and again in June, on both occasions requesting a meeting with the top CSE authorities. They were not received either time. For the November 2006 elections, which Ortega won, the Carter Center was invited as early as January, which allowed it to organize itself and have people in the country starting in March. It observed every step of the process the last three months and later certified its transparency.

The European Union representative in Nicaragua, Mendel Goldstein, said it will be “difficult” to observe given the CSE’s late calendar, and US Ambassador Robert Callahan agreed that “it’s already late for a credible observation.” He added that “it’s going to be a little hard for us, and obviously for the world and Nicaraguans themselves, to accept the results without observation, because credible observation gives the election results authenticity…. I can’t figure out why the government is reluctant to have national and international observation; it’s difficult to understand.”

“Bread”…?

In its official document, the governing party defines its electoral campaign as follows: “This is the Campaign of the Common Good. The Campaign of the Multiplication of Bread, in which God works Miracles so that Good will be established.”

The governing party is “multiplying bread” with the gifts it’s giving people in hopes of securing their votes. According to Nelson Artola, director of the government’s Emergency Social Investment Fund (FISE), 1,030,000 sheet metal roofing panels and 206,000 pounds of nails were given away to 103,000 poor families around the country last year, particularly in rural areas, to adequately roof their houses. The goal is similar this year. Some $25 million of ALBA funds fed by the earnings from the oil deal with Venezuela have been invested in this project alone. It is estimated that Plan Techo (Roof Plan) has benefited 618,000 families since Ortega took office.

The 10 roof panels per family are personally given out by Cardinal Obando in many cases. On June 1, in a work session with the expanded government Cabinet, FSLN political secretaries and mayors, First Lady Rosario Murillo, who among her many jobs heads up the Social Cabinet, made the following comment: “Cardinal Miguel, who will celebrate his 85th birthday this year, is traveling from one side of the country to the other because he has been able to identify in this project the Project that preferentially opts for the poor. We have to be grateful and acknowledging and see him as a living example. He doesn’t rest, serving people all the time. We’re going to hold genuine local fiestas when His Eminence arrives, to pay homage to him and give him the keys to the city. He is a world personality and goes to the municipalities; it’s a luxury, an honor and a privilege for a cardinal of the Catholic Church to visit a municipality....”

Last year, 110 families in several Managua districts lost everything as a result of winter’s intense and interminable rains. They have now moved from the shelters in which they lived for nearly a year to Villa Dignidad, a new housing complex in the Sabana Grande area. The government says these 36-square-meter houses, which have two bedrooms, a living-room-kitchen combo and a bathroom, are being built with ALBA funds as well. Another 926 houses will be built in Villa Dignidad, also for people who lost their homes for similar reasons, but even at that, many families remain to be relocated.

…or jobs?

But the “bread” to which the majority of the population aspires is employment. Job generation is one of the issues the government has put off during its administration, even though in the 2006 campaign it promised “Zero Unemployment.” Will this broken promise weigh in voters’ minds?

The road to the elections is strewn not only with fears and mysteries, but also with challenges. Job generation, which is closely linked to education, isn’t a challenge only for the FSLN but for all candidates, and it affects the whole country. Yet there’s no serious debate about it. Presidential candidate Arnoldo Alemán’s swaggering speeches are based on the promise to create a million jobs in agriculture, tourism, free trade zone sweatshops…

Civil Coordinator economist Adolfo Acevedo is trying to make Alemán and all candidates, the whole country in fact, see that the challenge isn’t just generating jobs but generating quality ones. And that requires a long-term commitment to more and better education, which no government has taken up since the early eighties.

Acevedo says: “The poor are poor because they mainly have access only to precarious and informal jobs. The link between economic growth and poverty reduction is the creation of decent, adequately remunerated jobs at the right ages…. Only around 20% of the Nicaraguan labor force, some 500,000 people, has completed high school. It would require at least 15 to 20 years for the national educational system to graduate a million people from high school so those million could get the decent, new, well-paid jobs our candidates are promising.”

The fear of many

Among so many mysteries, late times and fears, the final fear, the one already tormenting many people, is the violence that could occur during the electoral campaign, on voting day and once the results are learned. What happened prior to the 2008 municipal elections and continued happening afterward has shown that the FSLN is willing to do anything to remain in power and has organized shock groups to attack any organized expression of opposition and discontent while police turn a blind eye.

In its official document, which also bears Rosario’s distinctive hallmark, the FSLN is announcing “the Campaign of the Good Heart… A Campaign without Anger, an Anti-Confrontation Campaign… We’ll be ‘where the Sun heats,’ with no offensive words for anyone, because the Lord’s Work in Nicaragua, through this government and its Sandinista servants, is not extraneous or unknown to anyone.”

Let’s hope they live up to that.

Well-wishes with a touch of the Rosario
On July 4, President Ortega sent a message to President Chávez commemorating Venezuela’s Independence Bicentennial that included the following: “We salute you on the eve of July 5, pleased to see you back in Venezuela, in this forthright recovery process that the World’s Loving Motive accompanies with all its heart. We are celebrating doubly, with your health strengthened and happy in your Homeland, the Bicentennial of those formidable Epics and the victorious campaigns of this Epoch, which represent the definitive Independence, not only of Venezuela but of all this Indigenous, Black, Mestizo, Creole America, America-Hope, America-Triumphant, America-Dreams-in-the-Making, America, Brilliance and Splendor of flags and convictions that are growing irrevocable and unrenounceable, Routes marked by so much desire for Justice and Light…

“Comandante-President, Brother, Chief of that transcendental Bolivarian Revolution, we greet you from ALBA, with the Dawn’s Sun already illuminating the destinies of this America that vibrates, dreams, loves, praying to Jesus Christ and already living the New Days of this other Time of Construction, profound and definitive, of Christianity, Socialism and Solidarity.”

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