The right to the truth and the duty to provide it

The population’s right to know the truth in order to exercise its citizenship is violated just as much with silence and half-truths as with lies. For the past seven years the government has said nothing or lied or provided opaque information about events of major importance for the entire country.

Envío team

The communication strategy for Daniel Ortega’s new stage in government was revealed barely a month after his return to the presidency in 2007. It had been drawn up by First Lady Rosario Murillo, who was also put in charge of implementing it. The document itself bore the seal of secrecy that has identified the strategy right up to today, as it was sent out only to Ortega’s closest circle with this order: “Not for reproduction or distribution.”

“Uncontaminated” information

The strategy, which of course was leaked to the independent media, proposed that official government information, which by definition is supposed to be public, i.e. accessible to all of society, should always be “uncontaminated.” It established that the way to achieve that purity was providing it only via the FSLN’s own media.

At that time the governing party didn’t have many: the TV channel with the smallest audience and a number of radio stations of varying importance, both local and national, including Nueva Radio YA, which has been number one in Managua and other cities for years. Today, however, it owns four TV channels, has shares in two others owned by the powerful Mexican businessman Ángel González, controls more radio stations in the capital with national reach and with diverse strategies, not all of them transparent, has bought dozens of local stations around the country. It also runs several Internet information pages. The only thing it currently lacks is a newspaper.

These “uncontaminated” media offer no explanations for the numerous dismissals and “resignations” of ministers, mayors and other government functionaries; gave us only a questionable interpretation of the criminal attack on the bus caravan carrying FSLN sympathizers home from the July 19 celebrations; have been stupendously non-transparent regarding anything to do with the interoceanic canal project; have kept a tight rein on information about Venezuelan cooperation and have even fed us a uniquely incredible story about an alleged meteorite falling in the country’s capital. Moreover, any researcher or journalist who tries to get what should be public data out of government ministries and institutions will find it as easy as getting gold out of Fort Knox.

The above list is only some of the most recent important “information” that drop by drop, version by version, is undermining the Ortega govern¬ment’s credibility and hence its legitimacy.

The official version of
the mysterious explosion

The meteorite story is perhaps the most astonishing case on that list. At 11:05 pm on Saturday, September 6, the sound of a powerful explosion awoke much of the capital’s population and alarmed those who were still up. The noise, heard for over 12 miles, came from an area near Managua’s international airport and adjacent Air Force installations. Residents of nearby barrios reported a strong gunpowder smell, a viscous liquid residue and the presence of ambulances.

Only after another 14 hours, past midday on Sunday, following a torrent of unanswered questions and rumors in the social networks—not to mention family networks—did officials of the Nicaraguan Institute of Territorial Studies (INETER) announce that they were “convinced” the explosion had been a meteorite crashing to earth. As “proof,” government TV channels showed a crater some 40 feet across and more than 16 feet deep in an empty field the meteorite had kindly picked to land in. No independent journalists were allowed near the site, either that day or any time afterward. Rosario Murillo, coordinator of the governmental Council of Communication and Citizenry, corroborated the “convictions” of the INETER officials and called on the population to remain “calm,” announcing that a commission of scientists had been created to study “the phenomenon.”

By Monday, the meteorite was everyone’s main topic of conversation, and was laced with doubts, skepticism and mockery. National scientists not on the official commission questioned the meteorite version as there was no evidence of its entrance into the atmosphere, including any reported sighting of the bright optical fireball or debris trail it would have left prior to the explosion. Admittedly it was late at night and the sky was cloudy, but on the other hand it was a Saturday night in a densely urban city, so it’s unlikely that no one would have seen a fast-moving fireball as bright as scientists described. Various people who had been out and about at that hour reported hearing the blast and feeling the shockwave but said they saw nothing in the sky either before or after. Many curious non-scientists with access to the social networks shared Internet images of what a meteorite is, what it looks like when moving, and what causes it , expressing doubt about the official version.

NASA casts further doubt

US National Aeronautics and Space Administration (NASA) officials discarded a particularly unscientific suggestion offered Sunday by one of the scientists on Nicaragua’s official commission that it may have been a fragment of an asteroid NASA had announced would pass near Earth’s orbit. With the benefit of mathematical calculations, NASA reported that whatever had happened in Managua had no relation to the hour, location or even trajectory of the asteroid. Undaunted, however, the “information” continued to flow from Murillo’s Communication Council: “There is now interest in reportages and magazine articles and there are scientific bodies that want to come study the phenomenon, because it is worthy of study,” she insisted.

On Tuesday, the two national news dailies, El Nuevo Diario and La Prensa, featured more opinions from NASA experts who were also consulted by other countries as various international media picked up the meteorite story.

Dr. Paul Chodas, an authority on asteroid dynamics and impact probabilities and a member of NASA’s Near-Earth Object Office at the Jet Propulsion Laboratory in Pasadena, California, was skeptical for the same reasons as Nicaragua’s independent scientists: “no reports of a brilliant light typical of the atmospheric clash of a body of the size required to cause the crater observed, nor infrared measurements of the ball’s trajectory.” Bill Cooke, head of the Meteoroid Environment Office at NASA’s Marshall Space Flight Center in Huntsville, Alabama, went further: the energy needed to create such a crater would be equivalent to a ton of dynamite.

With that, the scientists on the official commission nuanced their earlier “conviction,” now calling it only “a hypothesis,” and announced that they would send rock samples extracted from the crater to be analyzed abroad. But the official enthusiasm didn’t wane. One scientist on the official commission said a “strange body” lodged in the crater would provide material for “many doctoral theses in the years to come.” Murillo picked up that refrain in her daily message: “Let the research continue; let the search go on! We welcome the experts who want to come from other countries to do their research work. For us the fact that a meteorite could fall in such a small country as ours is a scientific event we greet and celebrate.”

The Army speaks
then silence reigns

On Wednesday, with the commission of scientists apparently still working on the “meteorite hypothesis,” the Army inspector general spoke up to discard the “bomb hypothesis,” which was how the local news had interpreted Cooke’s statement and which many Nicaraguans found easy to buy. “It was an object that came from the sky,” insisted Brigade General Adolfo Zepeda with military authority, adding that “it is hard to obtain a total conclusion, even from NASA or other special services.”

That declaration was followed by total silence. There was no more official information about the “object that came from the sky” although it remained a topic of conversation on the street and in the social networks for days, fueled by more hypotheses, jokes, rumors upon rumors, a comedy act and even a funny love song by a national singer-songwriter. Any mention of the word “meteorite” still earns a giggle in Nicaragua these days.

Information policy:
A single voice

We will surely never know what happened that night in the Air Force’s field. What we do know is that this episode bears various characteristics of the government’s misguided communication strategy and the information policy of its “citizens’ power” media, more recently tagged media “of the family and community.” The new name would at least be more honest if it referred to the presidential family, as it is communication totally centralized in a single voice that all other government voices must parrot, or at least say nothing that adds to, clarifies or even complements it, much less differs from it. It is communication that should provide public information from the government to society, not just from a party to its militants, but it virtually never flows to any media other than the party-owned “uncontaminated” ones.

This model avoids the press conference format to stay clear of journalists who could ask any incisive or uncomfortable questions. Instead the President alone speaks, and only to captive audiences. Other public officials say next to nothing about issues of public interest, and when they do their body language communicates their fear of saying anything more than they were told to say.

The official version
of the July 19 attacks

Less exotic but far more serious than the meteorite story has been the information/disinformation provided to the population about the bus caravan that was fired on as it was was taking FSLN sympathizers back home after the celebration of the July 19 revolutionary triumph in Managua. The attack left 5 dead and more than 20 wounded.

After some initial contradictory declarations that revealed nervousness about what had happened, four young peasant FSLN militants were captured as suspects. They were accused of a “containment operation” that consisted of throwing rocks at the buses, allegedly to oblige them not to speed up, as logic would dictate, but to slow down so others could shoot at them. The Public Prosecutor General’s office indicted them as “co-authors of conspiracy and solicitation for the commission of organized crimes in conjunction with the crimes of murder and attempted murder.” The judge asked for the maximum sentence of 30 years in prison for them. Days later the driver of one of the buses shot at was added to the accusation as part of the conspiracy.

“Something fishy”

The confusing information received by the once burned twice wary population in those first days after the shooting inevitably sparked all manner of speculations, rumors, hypotheses and worried questions. It also lent itself to a generalized conclusion: “Something’s very fishy here.”

After two weeks of sweeping raids on homes and arrests involving unnecessary violations of the law, Police Chief Aminta Granera announced on August 7 that the assault had been “cleared up” and presented nine men identified as both the shooters and the planners. All were Liberal militants except for a tenth man, a former Sandi¬nista Army officer with a distinguished history, who Granera reported was on the run.

This “clarification” of the crime was presented with great drama (videos in which those held admitted to the shooting and showed how they had done it, a mock-up that looked for all the world like a videogame). That plus Granera’s insistence that it was a “common criminal act” as “no indication has been found that it was a political act” only further eroded the credibility of the official version of an event with such a great national impact.

The most recent survey by the Costa Rican polling firm CID-Gallup, conducted between September 8 and 13, revealed a perfectly divided population: 47% of those surveyed believes the National Police did indeed solve the case and 47% believes it didn’t. A good part of the unconvinced group says it belongs to the governing party or at least sympathizes with it.

“We have the
right to the truth”

With the trial of both the suspected rock throwers and shooters coming up, it was leaked to the independent media that the Public Prosecutor’s Office had set up a meeting with their defense attorneys to propose a negotiation. The lawyers of those accused of doing the shooting were reportedly offered the deal of accepting supposed ballistics tests and other incriminating evidence of prints and gunpowder traces in exchange for speeding up the trial. The offer to the rock throwers’ lawyers was supposedly to let them go free in exchange for confessing that they did meet to plan the massacre.

According to the Nicaraguan Human Rights Center (CENIDH), this juridical corner-cutting to give credibility to the “evidence” related to the crime attributed to these individuals demonstrates “the murky way” the authorities have handled the case and their inclination to muddy it even more. “We have the right to the truth” CENIDH’s legal director, Gonzalo Carrión, told envío, “yet from the very beginning they have failed to tell us what really happened that day.”

The truth in such an
“extremely delicate” issue

So what really did happen? Sandinista Renovation Movement leader Dora María Téllez offered this hypothesis on Carlos Fernando Chamorro’s Esta Noche television news program on September 23: “According to Commissioner Granera’s version, if the assault wasn’t political, there was no political motivation, no one took political credit for it, there was a lot of gunfire and there was a connection with Los Zetas cartel [one of the accused was described as belonging to that criminal group], then gunmen must have been hired to pull it off, because what she described was an operation by hired killers. But what was the motive? Could it have been a drug trafficking operation?”

Téllez also referred to an event in the predawn hours of August 31, when some two dozen armed men attacked the San Pedro del Norte military base in Paiwas in the South Caribbean region, killing one military officer, according to the official version. As on other occasions the Army and Police reported that the armed men belonged to a “criminal group.”

“They say that attack wasn’t political either,” said Téllez, “but what criminals have the firepower to attack a military post for an hour? There are those who say it was a drug trafficking operation. I think the government wants to deceive us on an issue that’s extremely delicate.”

Listed by 20% of those polled, drug use and trafficking has become the second greatest concern in the latest CID Gallup poll, following unemployment with 36%, consistently been the number one concern in all polls. “One of the realities the government wants to keep covered up is everything related to drug trafficking,” commented Téllez. “All information is provided from a political and military perspective; not a single government institution has presented the impact of drug trafficking from the consumption perspective… Through indirect knowledge, that 20% of the population knows that more is going on than the government’s telling us.”

The secrets of the
interoceanic canal

The secretiveness, silences, lack of transparency and controlled doses of information the population has been fed about something as crucial to the entire country as the construction and 100-year lease for an interoceanic canal granted in June 2013 to the Chinese company HKND Group is every bit as serious.
Almost all information about the company and its director, entrepreneur Wang Jing, has been provided by independent Nicaraguan media monitoring of the international media. Were it not for that, we in Nicaragua would know virtually nothing about what HKND, created by Wang in August 2012 precisely for this project, is doing…or not doing…or even have a clue who this man really is.

In July Wang Jing’s team said in Managua that they couldn’t reveal who would invest the US$50 billion the canal will reportedly cost because it is confidential information. Manuel Coronel Kautz, who holds the very important post of head of the State’s Grand Canal Commission, claims he doesn’t know the answer, and without batting an eyelid justified his ignorance this way: “We have no reason to be monitoring it. Once we granted the concession, we were already satisfied that that person [Wang] has the capacity to do the job.”

Is this continental
China’s project?

Lacking any information to the contrary, the conviction is growing that the People’s Republic of China is behind the canal project and that Wang Jing is merely an emissary of the Celestial Empire. But government officials repeatedly speak of him as the highly successful owner of an important private company.

This month the director of Russia’s Social and Political Research Center told a Taiwanese daily newspaper that his government would provide military support to the Nicaraguan government during the canal’s construction. He said both Russia and China are interested in competing with the Panama Canal and “containing the United States.”

According to London School of Economics professor Álvaro Méndez in a report by HISPANTV, “Everything seems to indicate that the Chinese are very interested geopolitically in this project, but I don’t know how genuine their desire for a canal is. It seems they are sending a subliminal message to the United States: if the US meddles in their obit, they’ll do the same.”

An analysis this month by Stratfor, a global geopolitical intelligence firm, argues that the canal project “responds to Beijing’s long-term interests, which is seeking alternative routes not controlled by the West.” It suggests that the Chinese government is less interested in the canal than in the subprojects associated with it, given its “tendency to invest in ports around the world” and recalls the important Chinese presence in huge infrastructure projects all over Latin America.

While the geopolitical implications of the presence of China and Russia in our country are a cause for worry, but no concrete data are available to provide informed underpinnings to such concerns. No Nicaraguan official has mentioned a word about it.

So many jobs and new careers?

In addition to the canal’s legitimacy in Nicaraguans’ self-image over the centuries, what makes this project most attractive to a large sector of the population is the new jobs it will supposedly generate.

Engineer Telémaco Talavera, a key Nicaraguan spokesperson for the project, says that by the projected conclusion of the canal’s construction in 2019, our economy—currently strongly based on informal low-paying and unstable employment—will have two million people in formal jobs thanks to the canal. Talavera, who is also president of the National Council of Universities, further forecasts that the range of careers, from undergraduate to specializations, offered in the country’s universities will double from today’s 361 to 676 in only one year.

Nonetheless, there are growing fears that the majority of both professionals and workers contracted for the construction of the canal will be Chinese. According to Professor Méndez, “The Chinese development model involves importing all workers from China. That’s what it’s doing in Africa. From the woman who cleans the floor to the one who serves the coffee, they all come from China. If the traditional Chinese model we’ve seen in Africa is followed, those who build the canal through Nicaragua will come from China and that construction will benefit China.”

No information even
for those to be evicted

It’s hard to find any official public information sources about the canal megaproject in Nicaragua other than the grandiloquent Talavera. According to the recent CID Gallup poll, the consequence of this communication policy is that 55% of those polled know “little or nothing” about such a vitally important project.

Those who have begun to “know” more about it are the residents of municipalities in the departments of Rivas, Río San Juan and Nueva Guinea, and they know it in their gut and in their lands and houses. They’re no more informed than anybody else, but they are unique in that starting in August they have been visited by groups of Chinese technicians, accompanied by armed Army and Police guards, taking a “census of the population, accessory goods and land classification” that will serve as the basis for HKND to expropriate lands, relocate populations and “indemnify” their owners.

The Canal Law leaves an extensive list of faculties to HKND’s “entire discretion,” including the decision of what properties to expropriate and when. It also establishes that the indemnification will be “equivalent to the cadaster value” of each property. Quite apart from the fact there’s often little correlation between that value and today’s market price, many lands in those areas aren’t even registered in the cadaster. And given that this is a government-controlled institution, even people whose properties are registered and listed at anything like their real resale value don’t feel any security.

“You’ll have to leave here!”

The canal concession allows expropriations not only for the canal but also for various associated subprojects: four tourist resorts, an airport capable of handling more than a million passengers, a free trade zone and export-processing zone, a citadel for 140,000 residents, a 400-km2 artificial lake and a variety of highways. But the people being censused are being kept in the dark about why and for which of these projects they will be thrown off their land and where they will go live. No one is telling them anything, other than that they’ll have to leave the place where they’ve always lived.

Residents of several districts of the municipalities being censused have told the independent media how the Chinese technicians enter their farms and houses without so much as a by your leave, don’t speak Spanish and announce to them through interpreters that they’ll have to sell. They’re also advised not to make any improvements to their properties because their value won’t be recognized. Some say the technicians only measure the house, not the farmland, and complain that if they end up only being paid the cadaster value corresponding to the house it will amount to confiscation rather than expropriation.

Less information =
more uncertainty

By the closing of this issue of envío five peaceful protest marches have already been held by sometimes dozens and sometimes hundreds of residents of the potentially affected districts and municipalities of Rivas, Río San Juan and Nueva Guinea. These local mobilizations are the fruit of both irritation at “the Chinese invasion” of the lands they were born on and love and the total disrespect from local authorities, who don’t receive them, listen to them, explain anything or provide any information.

After the first march, economist and opposition politician Edmundo Jarquín offered the following comment: “Such an extensive license to expropriate provided in the canal concession and the limited or nonexistent information about the terms of compensation for the expropriations are at the root of the protest. It is also obvious that credit and investment activity related to properties at risk of expropriation will react to that risk, adding another factor that will maintain or increase our economy’s vulnerability.”

The lack of information about the subprojects, their scope and location is also causing generalized uncertainty among all the businesses and entrepreneurs linked to the nascent tourist cluster in areas near the canal’s proposed route. This uncertainty is affecting both those who’ve already invested in tourism and those who would like to do so or have begun planning to do so.

The dearth of communication about the canal suggests an extremely high degree of improvisation regarding everything to do with the project and augurs even greater uncertainty for all private investment, not just the kind aimed at tourism. This is intensifying a problem the country has been suffering ever since Daniel Ortega took office in 2007. According to Central Bank figures, overall private investment has fallen from representing 26% of the gross domestic product that year to only 16.2% last year, due to stagnating investment by Nicaragua’s private sector.

Why talk only to the big guys?

On September 23, in an attempt to respond to this growing business uncertainty, HKND manager Bernard Li met with the big business representatives on the board of the Chamber of Tourism, one of the business associations that make up the Supreme Council of Private Enterprise (COSEP). They wanted to clear up doubts about at least one of the three tourist subprojects announced by HKND in July: what is referred to as the San Lorenzo complex (three hotels with 1,400 rooms). Their interest in this particular complex is that its reported location was on lands where tourist projects of various sizes already exist, others are being built and still others are on the drawing boards.

The HKND representative assured them that after meeting with government authorities, his company had decided to relocate the San Lorenzo subproject, but he didn’t specify where. As the meeting didn’t result in any document guaranteeing this, the business members still have doubts about what they call the “fogginess” surrounding everything related to the canal and its subprojects, each of which is a veritable megaproject in its own right, particularly given the scale of the country.

Octavio Ortega, director of the Foundation of Rivas Municipalities (FUNDEMUR), which is accompanying Rivas’ small owners in their rejection of the expropriations, couldn’t help but ask “Why are they only negotiating with the big guys? Why are they only talking to them and not with the humble communities? That’s what bothers us most.”

Perhaps the answer is that it was when the last Somoza began to mess with the “big guys,” elbowing his way into their businesses to compete with them on their established turf, that his alliance with them began to come unglued and the correlation of forces in favor of unseating him grew significantly.

“May God enlighten us all”

Carlos Pellas, Nicaragua’s biggest business magnate, has invested in a super-costly tourist resort in areas near the canal project that is already achieving international fame.

This month, Pellas spoke out about the canal project for the first time, distancing himself somewhat from it by commenting that so far “absolutely nothing has been done other than studies” and expressing hope that it will be a project of “world consensus.” He also urged that the studies be done “in depth and by exports” and even invoked God to “enlighten all Nicaraguans to do it right.”

So far, it’s not being done right. The proper and intelligent thing to do would have been to inform public opinion then engage in some sort of broad consultation, but the government has made clear that it’s not interested in what anybody thinks. Moreover it’s being handled in a clumsy fashion completely lacking in transparency, not sharing what should be substantial and credible public information with society and with the country’s scientists, who have conscientiously presented their economic, environmental and social concerns with all due respect, but have been ignored.

The information surrounding the property issue—absent or “foggy” at best—isn’t being managed correctly either, and that’s the most sensitive issue for thousands and thousands of property owners, whether large, medium or small. Last year when the government deigned to consult at least COSEP, its major ally, on the canal project, that was also its major concern: how will the properties in the path of the canal and its subprojects be handled? It would seem the government didn’t see the handwriting on the wall.

“Make it all as clear as water”

Cardinal Leopoldo Brenes also referred to the offensive and risky lack of information on the canal issue. “I don’t believe those people’s demonstrations should be seen as rejection, but as a demand that they be given better information. We have called for everything to be clear as water, for there to be clarity so no doubt remains, above all on how they are going to be paid for their land, because people in Tumarín haven’t been paid and nothing has been cleared up, even after so many years.”

The cardinal was referring to the huge Tumarín hydroelectric dam project, a private Brazilian investment that, before the canal, was touted as the country’s most important megaproject. It also happens to be one in which the Nicaraguan government has 10% of the shares.

Tumarín’s construction has been “imminent” for seven years now. In this long dragged-out process the government has given the project important fiscal advantages and various special laws justified by the argument that in 2020 more than 90% of the energy produced in Nicaragua will be “clean.”

No one doubts Tumarín’s importance, but 149 farmers expropriated to construct the dam with the promise of relocation have yet to receive any information about the payment of some US$20 million they assess their lands were worth and have heard nothing about the new city the Brazilians promised to construct to resettle them.

The “secrets” of
Venezuelan cooperation

Another bottom-line issue for both governors and governed today and in the future, with consequences that are not only economic but also political, is Venezuela’s cooperation.

Between 2007 and 2013 Venezuelan cooperation, which largely but not only revolves around the oil agreement, had already added up to US$2.967 billion. It started out at US$138 million in 2007 but grew rapidly until reaching some US$500 million a year, equivalent to the annual average of all international cooperation Nicaragua received during the Bolaños government, which the Ortega government also continued receiving, at least for a couple more years.

This month, the government’s Export Procedures Center (CETREX) demonstrated the dimensions of only one of the businesses in the ALBA consortium in Nicaragua known as Albanisa, a Venezuelan-Nicaraguan joint investment venture created with the resources from Venezuelan cooperation and run by Nicaragua’s governing party. According to CETREX, AlbaAlimentos de Nicaragua (Albalinisa), the intermediary that monopolizes foods exported to Venezuela partly as in-kind payment for the oil supplied by Venezuela, has increased its annual exports from US$3.08 million in 2009 to US$94.3 million in 2014. That exponential growth has made Albalinisa Nica¬ragua’s third largest export company.

On September 11 the Superintendence of Banks authorized Banco Corporativo, S.A. (Bancorp), the strategic financial entity Albanisa set up in 2007 to privately manage the income from the Venezuelan oil agreement, to operate all over the country. Superintendent Víctor Urcuyo only confirmed as recently as last November that Bancorp was in fact Albanisa’s bank. At that time it was reported that Bancorp would not compete with Nicaragua’s other private banks in attracting resources from the public, but would dedicate itself exclusively to capitalizing the lucrative large-scale, long-term projects of this increasingly powerful economic group linked to the governing party.

The destination and administration of all this Venezuelan cooperation have never been public information open to the scrutiny of any institution or the citizenry because it has been managed independent of the national budget. The secrecy with which it was handled for years began to lift slightly in 2010, when the International Monetary Fund (IMF) pressured the Central Bank into providing some information about both the amount and destination of Venezuela’s cooperation resources. Nonetheless, even the issue of La Gaceta, the official government journal, in which Bancorp’s authorization to operate nationally appears contains no names of its board members or of who its general manager will be.

The question that saturated the independent media at the time Alba¬nisa was set up still persists: given that Venezuelan cooperation has been privatized by the governing party, will the debt that oil deal and other non-donated Venezuelan aid is generating also be private or will we suddenly discover down the road that it is in fact public debt? So far no answer has been forthcoming. It’s one of the most opaque aspects of the government’s relationship with Venezuela.

“Country risk” and Venezuela

Venezuelan cooperation was the equivalent of nearly a third of what the Nicaraguan government collected in taxes last year, which gives an idea of both its economic and political importance. It reflects Nicaragua’s enormous and increasingly dicey dependence on Venezuela acquired over the past few years.

“The shipping of oil to other countries through the Petrocaribe energy cooperation agreements has an extremely high cost for Venezuela,” Venezuelan economist José Toro Hardy repeated again this month. Toro Hardy, who until 1999 headed the board of PDVSA, Venezuela’s state oil company, warned of the need to review the agreements. For years he has been signaling PDVSA’s “unprecedented” debt level, the “lamentable” condition of the infrastructure still used to extract the oil, the lack of investment in the state operation and cases of internal corruption. He noted that the supplies of crude through various cooperation agreements, including Petrocaribe, had reached US$54.9 billion between 2006 and 2013. “When you’ve got difficulties at home you can’t go around giving gifts to the neighbors,” argued Hardy, referring to Venezuela’s current economic and political problems. While Cuba is the country that has most benefited from Venezuelan generosity, the crude sold to Argentina, the Dominican Republic, Jamaica and Nicaragua on extremely favorable repayment terms represents 66% of Venezuela’s total exports.

This month Moody’s, the international credit rating agency, released its latest annual review of “country risk,” which refers to the risk of investing in a country based on changes in its business environment or the value of its assets. Nicaragua is still stuck in category “B3 with a stable outlook,” which means there are no foreseeable changes that would allow it to move to a better category.

Moody’s sees our country’s greatest risk as its dependence on the oil agreement with Venezuela, which is going through a political crisis with seemingly inescapable economic consequences. “Should Venezuela reduce its support,” it warns, “Nicaragua’s balance of payments would come under pressure and the government would have to accrue more external debt from alternate sources at less favorable terms or adjust public finances.” Last year the same possibility led Moody’s to predict that “the government’s capacity to maintain social spending could be significantly impaired, resulting in social unrest.”

COSEP president José Adán Aguerri interpreted the report as evidence of the business elite’s crucial contribution to the country’s govern¬ability, as it lauds “the close working relationship between authorities and the private sector in place since the Ortega administration took office in 2007…, with the private sector strongly contributing to the design of public policies.” He apparently views designing policies that exonerate many big business sectors from paying taxes as a contribution to governability that offsets the private sector’s flagging investment rate.

From the opposition, Edmundo Jarquín argued that Nicaragua’s low qualification is due to its “institutional arbitrariness.” Taking a new and more noncommittal stance, Ovidio Reyes, president of Nicaragua’s Central Bank (BCN), declared that the report merely reflects Moody’s “opinion.”

And if Venezuela does
reduce its cooperation?

Only a few months earlier Reyes had criticized the criteria Moody’s used to qualify Nicaragua, aguing that the low qualification given our country was in open contradiction with the real behavior of foreign investors, who had significantly increased their presence in the country.

Reyes then played a little rhetorical Q&A game: “What are the investors seeing? Opportunities. And what is Moody’s seeing? Risks. There’s obviously a mismatch there. If you read Moody’s reports you only see risks, risks, risks.” This time around the BCN president was more cautious, playing up the fact that at least Nicaragua had maintained its qualification, while that of other countries had deteriorated, alluding indirectly to Costa Rica.

Reyes added that the government he represents aspires to a better Moody’s qualification not only to attract more investment, but also to be able to issue debt bonds and place them in the international market. What he didn’t say was that the logic of that strategy is to have a financial mechanism that in the short run would allow it to compensate a possible, and greatly feared, reduction in Venezuela’s cooperation. The BCN president has previously declared that Nicaragua could issue bonds for up to US$500 million a year, a figure suspiciously similar to the amount of cooperation Nicaragua has received from Venezuela in recent years. But he makes no overt linkage between the two as that would be tantamount to admitting that the only solution to a reduction of Venezuelan aid would be to indebt the country.

The “solution”
remains covered up

After indicating that Nicaragua’s dependence on the concessionary flows of Venezuelan aid is the main risk to its macroeconomic strategy, the Moody’s report identified an alternative strategy to reduce that risk that combines three elements. The first is short-term financing from the Central American Bank for Economic Integration through a contingent credit line originally approved to help the region’s governments deal with the impact of the global crisis and renewed this year for Nicaragua. The second is to negotiate a new agreement with the IMF, which would then provide new funds to support the country’s macroeconomic stability. And the third is to reduce fiscal spending, which the government has already done for this last quarter by cutting the original national budget, particularly social spending.

According to the government figures on Venezuela’s aid required by the IMF, 38% of it subsidizes a variety of services such as Managua’s urban transport system rather than being invested to expand the country’s productive capacity, and thus help ensure that the debt could be paid in the future. If that significant amount were reflected in the national budget’s current expenses, as it should be, the multilateral financing institutions would probably stop their loans to the government, leaving it unable to finance its public investment program. Should that happen, today’s already unsustainable fiscal deficit of 5-5.5% of the GDP (including the loans from Venezuela) would increase even further and the collateral damage would be a considerably worsened country risk qualification.

Moody’s suggested alternative combines indebtedness to the multilateral banks with reduced fiscal spending, but that holds no appeal for the Ortega government as it would mean accepting the IMF’s conditions and a fiscal spending cut in the big pre-election year coming up. As happened in 1996, presidential, legislative, municipal and Caribbean autonomous government elections will all coincide in 2016, which explains why all information about this uncertain future is jealously guarded within the government’s economic Cabinet.

Hitting the mark

Among the ideas proposed by the Ortega government’s “uncontaminated” Communication Strategy we accidentally learned about in March 2007 was to “verbalize” in all public officials’ speeches “our project’s transcendent, ethical, value-laden or religious ethic.” Murillo gave a hypothetical “example” of how to apply this verbalization: “A business group launches an important investment program in some department and we communicate it from the “always blessed Nicaragua” idea, which essentially interprets the sense of a citizenry that attributes a good part of the things that happen to God.”

In the protests in those areas where Nicaragua will be split in two by precisely such an “important investment program,” i.e. the interoceanic canal and its subprojects, the peasants are kicking the pins out from under this strategy, which suggests that people believe everything comes from God and that Ortega sits on his right hand. As one protester clearly put it, “Coman¬dante Daniel doesn’t have the right; he’s just our administrator, not our owner.” That man isn’t leaving things to God; he’s rightfully demanding his citizen’s rights from the person put in office to be the maximum public functionary, and obliged to share public information with the population that put him there.

Another peasant, this time a woman, said, “They’re going around using any ruse to convince us; they want to persuade the evangelical church pastor to convince us, and the community isn’t looking favorably on that because they just want to trick us.”

She knows that abusing God is trickery and is demanding her right to the truth. If “they who sow the wind shall reap the whirlwind,” what will be reaped by those who sow silences, half-truths, lies and cover-ups, who don’t respect the right to the truth and don’t fulfill their duty to inform?

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