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Central American University - UCA  
  Number 469 | Agosto 2020
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Nicaragua

“I want Nicaraguan society to see COSEP with fresh eyes”

This lawyer and businesswoman reflects on the present and future of Nicaragua’s Superior Council of Private Enterprise (COSEP), which was founded in 1978 as a coordinating body for the diverse business associations and think tanks, She argues for its democratization and a turnover of leaders.

Carmen Hilleprandt

Independent of the results of COSEP’s elections last September, a desire for change can be felt in this umbrella organization. And I’m pleased to have contributed to it. I’m not anyone’s token; I’m an independent professional. I worked for two transnationals and am the first woman in 128 years to direct one of the most important business associations in Nicaragua, the Chamber of Commerce and Services, which generates nearly 54% of this country’s gross domestic product. In that post I have put a lot of effort into achieving change in COSEP, with the conviction that changing the guard would send a good message for Nicaragua. I want society to see COSEP with fresh eyes, to see businesses and businesspeople as feeling responsible for the country and the citizenry because Nicaragua belongs to everyone.

I was only 32 years old and a woman


Let me introduce myself a little more fully. I’m a lawyer with a Master’s in business administration. I cut my teeth at British American Tobacco Nicaragua, where I worked for 13 years. It was with the backing of that corporation that I first served on the board of directors of Nicaragua’s Chamber of Commerce and Services, where I began to learn the work, the relationship between the chamber and COSEP. I was 32 years old and a woman. You can imagine the challenges for me in a world run by men.

One of my mentors advised me that even though I was among so many older men, I use the familiar verb form with them, otherwise a hierarchy would be established with them at the top and me lower down. I always treated those older men with respect but also maintained my independent thinking, earning my space. I come from a family in which what one says matters, is valued highly. I think we bring our family values with us, and in mine I learned not to be afraid of saying what I thought.

As there haven’t been many women in the business associations, there haven’t been many in COSEP either. Women’s limited participation has been a constant in almost all spheres of Nicaraguan society. Although women are half the population, and nowadays have more education, the positions they occupy aren’t usually the relevant and decision-making ones.

When I entered COSEP, there were only three women, and that was a record at the time. We were always the critical ones and viewed as being impulsive and headstrong. After a time two of them left and I was alone on the Chamber’s board. There are now a lot more of us on the boards. Eight women are currently on COSEP’s board of directors because they chair eight associations (the Chambers of Commerce, Tourism, Construction, Urbanizers, Pharmaceutical Distributors, Microfinancing and Professionals, as well as INDE, the Nicaraguan Development Institute). There have never been so many of us in executive posts.

My years as a board member


I first started with the Chamber of Commerce during the government of Enrique Bolaños (2002-2006). One of the first things I did was participate in a committee to review and analyze the tax laws affecting the tobacco industry. Tax burdens are always very sensitive for an industry since their local and international competitiveness depends on them. So it was important to be on this committee to establish our points of view.

I quickly learned that the Chamber of Commerce had many relations with government institutions (the Treasury Ministry, the General Revenue Division), and also with the legislative branch, the National Assembly. At that time, whenever there was a problem, the industries and companies were invited to the Assembly to present our positions and exchange opinions with the legislators about the effects of the laws, as should happen in a democracy where the government branches are independent and each fulfills its particular role. Although I was a board member and didn’t hold one of the Chamber’s main executive positions, I participated and began to make a space for myself and gain the trust of my peers. I held that position for four consecutive years. I left the Chamber when my company sent me on a temporary assignment to Costa Rica.

Business was glad
Daniel was back


I returned to Nicaragua in 2006, the year Daniel Ortega won the presidency for the Sandinista National Liberation Front. I immediately realized the majority of business sectors wanted him to win. They believed he would guarantee the stability the country needed and trusted him because they said he had repented for everything he had done to the economy during the years of the revolution. I recall hearing in a social gathering that they expected to work with him. Daniel was the “strong man.”

Our country’s history shows that we always opt for the quickest path, always thinking in the short term. Daniel Ortega took office again in January 2007 and by 2009 had already created the “COSEP model,” a.k.a. the “dialogue and consensus model” that within a few more years had even made its way into the Constitution. The shortest path is always easy. The longer one always involves more participation, more effort, more debate, more search for consensus, more discrepancies… and also more grief, but in the long run it guarantees more stability and strengthening of institutionality.

The “COSEP model”


I was no longer n the Chamber of Comerica and Services when the “COSEP model” was agreed to. But I knew its general lines and it seemed inappropriate to me. Until then the business associations or chambers had had their own life, their own development and their own motor, each performing its proper role of looking out for the rights of its members. With José Adán Aguerri as COSEP’s president since 2008 and with Daniel Ortega heading the government, everything began to change. There’s a lot I don’t know about how these changes got hammered out, and I’m not alone in that. Everything was decided by a very small, closed circle.

I never agreed with the COSEP model. As a lawyer I couldn’t do so because laws and institutions are the underpinnings of the Republic. In a democracy an institution must attend to any person or business. A democracy is about respecting rights, not giving favors. The “model” of top-down unilateral relations that centralized everything around the government and COSEP’s president was yet again about taking the shortest and easiest path, but in time that always becomes a path that favors dodgy practices. When things are done that way, they don’t end up well. It’s the longer road, which requires processes, that builds democracy.

The COSEP president
became a “super-minister”


As the model advanced, we could see how the COSEP president was grabbing more and more power and the private business associations were losing it. The right of the chambers and their members to debate and resolve their problems with the governmental institutions was deteriorating… It was now out of the question for a company to go directly to any institution, and if it did, the directive was to send it to COSEP.

COSEP’s president was the only interlocutor with the institutions. All bills were funneled directly to COSEP then sent on to a given chamber to see if it had any comments, but it had virtually no decision-making role; it had to ask for favors. I saw the chambers’ loss of independence as a huge problem, something that was wrong and was going to boomerang.

Obviously, that model made things easier for the government. It also challenged and even eliminated the authority of the ministries, where the COSEP president was seen as a super-minister.

We need debate to develop


Everything was centralized. But we really need debate in his country. There are lots of paths we still need to go down and we have to discuss how to do it. On environmental issues, for example. We keep on producing and exporting the same things we always have: sugar, beef, coffee… We are such a poor country that the easiest thing is to keep on doing what we’ve always done: take the shortest path… But the only way the country will not only grow economically but also develop itself is by diversifying our exports and adding value to them, always watching out for the environment. The pandemic has finally sounded the alarm that we shouldn’t keep going down the short and easy road. We have devastated the environment and are killing the planet, and now we can see that the planet has found some breathing space as people have had to go into lockdown.

We need to lean from what happens in other countries that have pulled themselves out of poverty and developed. Asian countries have done so by diversifying their production and adding value to what they were already producing. We’ll never develop if we take the shortest path again, going back to doing the same thing we’ve always done and know how to do, without becoming environmentally friendly. As a society we’ve always been shortsighted, and the environmental path is a long one. There should be a forum for businesses to debate what to do environmentally in the short and medium run and to ensure the government plays its role of supporting environmental commitments by facilitating incentives and resources.

Things like this aren’t resolved without debate or through a unilateral business elite-government relationship because each chamber knows its own particular needs and has to offer proposals. It’s good to approve laws by consensus, but that doesn’t mean just rubber-stamping what comes to us or what works for one sector, but rather what works for the great majority. The chambers must propose their own agendas, learning from what happens in other countries.

We have no critical mass
of responsible politicians


The interoceanic canal project was unveiled in 2013. I was also opposed to it, but knew it would never go anywhere; never actually be built. Such enormous projects are never viable, particularly in this case since it was never discussed, and much less in a country as poor as Nicaragua. Sometimes we want to run when we haven’t even started crawling, let alone taken our first step. That’s why I was so surprised when I saw that the business sector had such expectations. They promised the canal would generate a lot of employment and additional projects for the country. Some even traveled to China to learn more about the other projects of the great Chinese company that got the concession…

I think there’s a lack of political maturity in Nicaragua. Unlike in other countries, there’s no political career here creating a critical mass of responsible politicians.

The same year the canal project was announced, I went to work in banking as a legal and compliance manager. Although I had no experience in this field, I did know a lot about how multinationals functioned and this was very attractive for the banking entity in question. I also created a consultancy corporation, CEJ Consulting, that year to provide legal services and also consultancies on governance and regulatory compliance in general. This company has given me the economic freedom to become independent. I don’t work directly for any group; I have to seek out my own client portfolio and develop my business.

The April surprises


Even before 2018 tension surfaced in the COSEP model when COSEP balked at government efforts to push through laws to control Internet. But the consensus didn’t shatter until April 2018, when the business sector opposed the government’s proposed social security reforms and the latter simply published them unilaterally. That was the first unexpected step that April. Did it surprise me? As someone said, there were no surprises in April, just surprised people.

I didn’t expect the magnitude of what happened, such a large protest by society. Nor did I expect a government response and involution of that magnitude. We suddenly realized that the youth, who had seemed asleep, was actually a moral reserve in the country. I work with a young woman who was studying in the university at the time, and I would ask her if the university students ever talked about what was happening in the country, if they were concerned, if they wanted change… In my time, when Violeta Chamorro was President, we knew the country wasn’t on the right path and we talked about it. But that girl told me nobody in the university was discussing what was going on in the country. That’s why I wasn’t expecting what happened in April.

The right thing would
have been to resign


I feel it was something that had been brewing. The fact is that people get fed up. All things aside, I do believe there was a before and an after, a watershed, in what happened in April 2018.

I also think that when the “model” collapsed, the COSEP president should have immediately resigned. It’s what I would have done. And if he had, he would have seemed like a figure on a white horse, a responsible person who accepted that things weren’t working, even if his intentions had been good. A real leader has to know when to step down to make way for other ideas.

It can’t be said that everything he had done up to then was bad and he also couldn’t have done everything he did and has been criticized for alone. He could only do it with a support group in the chambers, because many of them benefited from that model.

Sin of omission
or of commission?


I recall that COSEP didn’t say a word in 2016 when Daniel Ortega stripped the Independent Liberal Party of its legal status so it couldn’t run against him in the elections that year, then forced out of the National Assembly all its representatives who had won their seats in 2011. The US government was losing its patience and already beginning to talk about the NICA Act given everything that was going on at the time. In early 2018, we in the business sector already knew US Embassy officials were unhappy with our sector’s posture and were warning that worse things were in store for the country if business leaders didn’t show more backbone.

There’s a principle in law that says one sins not only by commission but also by omission. In the years of the COSEP model many of us sinned by omission. Some chambers just kept quiet because they figured the model worked for them. When I was working for companies, I didn’t say anything either because businesses don’t like employees to go around making unauthorized declarations, particularly about issues that could cause political friction.

As president of the Chamber of Commerce and Services, I began to be part of COSEP only a year and five months ago, in 2019, after the model had already collapsed. Today, a lot of people see businesspeople as responsible for everything that happened in the country. I think the model’s goal was to establish economic stability for the country and a period of peace. I don’t believe people do things with bad intentions. But even the best intentions aren’t enough if it’s forgotten that our country is for everyone, not just a few. It wasn’t just that the model was unsustainable and failed to ensure institutionality; there were also inequalities in the benefits.

Personal cronyism over
associative representation


The government’s role is to be a facilitator, but what is the role of the chambers? As the president of one, if its members tell me they have problems with the tax concertation law, for example, or with customs, it’s my job to seek out the government to see how we can solve it. But the model meant the chambers were losing their reason for being. So, what’s the point of belonging to one?

As a lawyer who understands governance compliance, I could also see how the model favored a lack of transparency. The important thing wasn’t to have the backing of an association: it was to have “connections,” a relationship with an important person who could open doors, make a call… Our Latin American culture leans a lot in that direction. If you know someone and you want to resolve your problem the quick and easy way, you just say I’m going to call so-and-so to take care of it. But does this happen sporadically or is it institutionalized and for personal benefit? As the chambers began to shrink and collapse, the model ended up benefiting only a handful, and with such a weak underbelly it completely fell apart in 2018.

Time for a change:
Back to COSEP’s roots


Given all this, we decided to work for a change in COSEP. We’ve had 13 years in which only José Adán has put himself forward as candidate for the presidency of COSEP. It’s time for him to hand on the baton. The economy is the country’s driving force and the business sector is the economy’s driving force. That motor is supposed to generate a bonanza, but it has to do it both responsibly and intelligently. Changes in COSEP are good for the country and the whole population. They’re even good for José Adán. We can’t deny he’s been a good operator who has made important regional-level contacts, but in these times our leaders need to be catalyzers of change. The business sector should celebrate that we’re talking about new leadership.

One always has to go back to the roots. And if we return to COSEP’s roots, we’ll discover its role. Originally called COSIP, it was the brainchild of the INDE think tank in 1972 as the business sectors’ response to the economic crisis that had devastated the country after the earthquake in Managua. Several business chambers joined together at that time, wondering what to do. They had a future vision and a sense of mission to move the country forward, aware that they were the economy’s driving force and had to be fueled with the energy of social consciousness and social responsibility. Today, the country has again been devastated, so during this health emergency I would have liked to see what I saw in Mexico: big businesses speaking out about the pandemic. They haven’t done that here, but I’m sure that their leadership could do a great deal for the country and the citizenry.

What needs to be changed


COSEP has several advisers who are big Nicaraguan capitalists, but they aren’t part of COSEP’s governing structure and don’t figure in the bylaws; they are above its entire functioning structure. I personally see this as a bit of a weakness and would prefer them to participate in at least some meetings of the executive committee so it could debate with them about national issues, rather than just have them as interlocutors who talk about this at their discretion. It would be very important and valuable given that all the chamber presidents are on the executive committee.

We have to begin to decentralize COSEP, since the power of this institution, like that of any institution or a government, can be concentrated in a single person. The chambers have the role of representing and defending their members, which are the businesses. Thirteen years of centralized power in a single person has led to a loss of muscle. Of course, there was a bonanza in those years, but it was a relative bonanza because now we’re in the red and that bonanza wasn’t sustainable.

In April 2018, the government began to see COSEP as an enemy, a traitor, and engaged in an all-out campaign against it that tarred all the business sectors, all the chambers with the same brush. We have now been immersed in this for two years, while the country is in a profound economic crisis that is dragging us all down. All that will be left to a new government will be ashes. We believe that if the youth and civil society have now awakened, the business sector and its leadership have to contribute with a more democratic model based on ethical standards, social development and also on care of the environment. We need to recognize that we haven’t addressed the latter, particularly in the current period when the country is prioritizing the search for survival.

The business chambers have to review why the “model” collapsed. Even though it happened two years ago, we still haven’t had an internal dialogue about this and it’s our responsibility to do so.

Mixed views about change


When some in COSEP hear about changes, about analyzing the collapse and discussing leadership replacement, they feel it’s like plotting a coup d’état against José Adán. They say COSEP is a private entity, not the national government, so there’s no need to hold elections and replace people. But COSEP is the political arm of the business sector, so what we really want is to strengthen the chambers and their associativity, and by doing so strengthen the business sector as a whole. We must provide an example, leaving reelection out and accepting a change of guard.

I’m speaking in plural because upon seeing that nothing was moving in COSEP even though so many things were moving in the country, INDE initiated a campaign promoting voting, democracy and passing on leadership in COSEP. We began with that. Some welcomed the idea and others were irritated, asking why we were bringing this issue out into the public light. I think that if we hadn’t done it that way, with the campaign and declarations, there would have been no change in COSEP. I’m convinced that there has been a change only because we spoke out. It’s true that socially there has been a lot of pressure on José Adán, but when we wanted to bring up the issue inside COSEP he just kept changing the subject. It was so ignored that in the end it was bound to burst out into the open.

I think things really took off recently when Sergio Maltez, president of the Chamber of Industry, stepped down in the latest board meeting saying he was grateful for the four years he had headed the chamber and had decided to make way for a new president. He then turned to José Adán and said: “I invite you not to run for president again because that would leave a great example.” José Adán did not respond. In the next board meeting we asked him what he was going to do. After we talked, he just said “Have you finished?” then went on with the meeting with no comment on the subject. But the minute the meeting ended he rushed out to the media to tell them the COSEP presidency was not an elected post like the presidency of the government...

Nicaragua has no tradition
of democracy or debate


The INDE campaign promoting voting and democracy in COSEP emerged because the chambers have had so little participation in COSEP, whether for reasons of comfort or ease, and this facilitated the creation of a relatively non-participatory internal structure. The campaign understands democracy as any COSEP member being able to run for the presidency. Up to now, if someone showed an interest they were sent to the end of the line, which has even happened to people who have been in COSEP for many years. Now there are winds of change: whoever wins is going to have to unite the business sector and give COSEP a new image in society’s eyes.

I think all these ways of acting, these procedures, feel normal because no one talks about or practices democracy in Nicaragua, whether in families or schools. We need to be able to express ourselves in both places, to debate, discuss, offer opinions, express dissent and listen to each other to come to an agreement or even remain in disagreement …

Small businesses tend
to favor the changes


The chamber I head has a thousand members, half of which are small and medium-sized businesses. More than 40% of Nicaragua’s businesses are small and medium-sized. I’ve received a lot of support from the members. I polled them about a turnover of COSEP leadership and 88% of those who responded considered it a good idea. In surveys I’ve done before, typically only some 40 of the 1,000 members answer over the course of a month, because people aren’t used to participating in written surveys. This time 100 responded in 3 days and 63 of them added negative comments about what they had seen COSEP turn into in recent years. That reaction by the members made me feel a lot easier and confident about what we were doing.

Some of them asked why I wasn’t running for the COSEP presidency. I never made it clear that I wasn’t interested, instead saying I was qualified for the post and could make a contribution. But when I thought more about it, I decided against it, first because I haven’t even been head of the Chamber of Commerce for a year and a half yet, although I have 17 years’ experience in business associations in general. I also decided I can do more to strengthen the Chamber of Commerce, which is the oldest and strongest one in COSEP. I love that chamber and am at its service. I’m also a member through my consultancy business, a small service company. I feel satisfied that we have helped achieve change. I don’t need to be president of COSEP to push for changes in it.

We need reconciliation and
recognition of responsibility


I think we should present a list of 10 commitments the new COSEP president should assume. And once s/he wins, we should promptly start debating how to fully implement those points. Change is healthy: it’s not what the government wants, but what we want as COSEP. The government is going to have to meet with each chamber. What we did through the model that collapsed made things easy for the government, and by doing so we weakened the institutions and ministries. We distorted the entire country’s model. It was obviously easier for the government to deal with a single person, but it wasn’t healthy. I just hope the model that collapsed in 2018 won’t be revived. Rather, I hope it will end up being an experience that shows us things have to have good foundations to remain stable over time.

I don’t think José Adán should run again although I believe it won’t be more of the same whoever wins, because there has been a rupture. We’ll support the candidate who wins with emotional intelligence. The mere fact that two candidates have stepped up leaves me satisfied that I’ve helped achieve this change.

And it won’t mean tossing out all the old and starting anew, as I feel some people believe today. When they speak of political change, they mean there will no longer be Sandinistas in the country. That attitude is too simplistic. What we need in society is reconciliation, accepting responsibility for what we didn’t do well, seeing what we can do better, and setting out each day to do more. Because we can all do more and do it better each and every day.

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