NICARAGUA BRIEFS

Envío team

RUSSIAN PLANES:
MILITARY OR COMMERCIAL?

In an interview with the Nicaraguan newspaper El Nuevo Diario in April, Russian ambassador to Nicaragua Nikolay Mikhaylovich Vladimir denied his country was negotiating the sale or donation of fighter planes to the Army of Nicaragua (EN). “I don’t know where that version came from,” he said. Actually, it came from two of the country’s main military authorities only a month or two earlier.

In February, Major General Adolfo Zepeda, the EN inspector general, said Nicaragua was negotiating to obtain such planes to combat drug trafficking. Although he wasn’t specific, it was speculated that they could be MiGs given that he mentioned the issue two days before a visit to Nicaragua by Russian Defense Minister Serguéi Shoigu. The following month, the EN
chief himself, General Julio César Avilés, specifically mentioned MiGs as one of the possibilities. In April’s interview, the Russian ambassador said that what is being negotiated with the Nicaraguan government is the acquisition of Sukhoi civilian planes for commercial aviation.

ALBANISA MOVES INTO MEDICINES

On April 14, governing party representatives and their allies in the National Assembly approved an executive decree establishing the “Constitutive Treaty for an ALBA-TCP Regulatory Medications Center and ALBA-TCP Grandnational Registry of Medications for Human Use,” otherwise known as ALBAMED. This company, which is private like the numerous other companies of the ALBA consortium in Nicaragua created with profits from the sale of Venezuelan
oil, has been created to commercialize medications to both the population and the State. The governing party’s argument is that this treaty and this company will allow specialized medications to be imported
at lower prices. Opposition legislators challenged the decree’s privatization of the registration of all medications entering the country, a faculty previously corresponding to the Ministry of Health. They fear that the real intent is to create an ALBA-controlled monopoly of the estimated US$300 million national medicines market.

VIEWS ON PHYSICAL
PUNISHMENT OF CHILDREN

A national survey conducted by M&R between March 17 and 30 revealed that 80.6% of the 1,721 people polled consider the physical punishment inflicted by parents on their children a valid behavior corrective, with 76.4% saying that hitting their children is a sign of love and 88.8% that doing so is a parental right. A similar number (79%) contradictorily consider the same punishment to be abuse if meted out by teachers. Just shy of 84% said that their parents or tutors hit them when they were children and teenagers, and most of those (86.1%) believe it was beneficial to their education.

INADEQUATE HOUSING

According to Inter-American Development Bank (IDB) data, 78% of Nicaraguan families live in houses without drinking water and sanitation. In addition, 45% have dirt floors, which favor infectious diseases and may be the main reason mothers don’t let their infants crawl, probably unaware that it’s a development stage crucial to their motor, intellectual and emotional development. The IDB ranks Nicaragua first in Latin America and the Caribbean with respect to inadequate housing, followed by Bolivia (75%) and Peru (72%).

A FINANCIAL FREE TRADE ZONE?

In late April the government announced a reform to the industrial free trade zone decree to include a financial free trade zone in this special regime. The decree sent to the National Assembly justifies it on the grounds of improving the already-existing regime in the country and “adapting it to the new world and local reality.” The decree would also create new free trade zones dedicated to producing and exporting goods and services “under a fiscal and customs regime of exception.” Among the new modalities, it proposes to create “an autonomous international financial zone.” This came as a surprise to different sectors and sparked concern that a tax haven beyond the reach of national laws is being created in Nicaragua that could be used to launder money. Álvaro Baltodano, the presidential delegate for investments, shrugged off these concerns, stating that it is a normal free trade zone scheme.

PELLAS AND COEN
MAKE IT TO FORBES

Forbes, a prestigious biweekly US business and finance magazine, recently listed Nicaraguan businessmen Piero Coen and Carlos Pellas among the 10 multimillionaire family or “clan” leaders who are most influential in the Central American countries’ economies and politics. The issue’s cover carries a photo of several of them, with Pellas in the center.
This is the Forbes list:
1. Gutiérrez Bosch family (Guatemala)
2. Aizenman Family (Costa Rica)
3. Poma Family (El Salvador)
4. Castillo Family (Guatemala)
5. Rosenthal Family (Honduras)
6. Durman Family (Costa Rica)
7. Vallarino Family (Panama)
8. Coen Family (Nicaragua)
9. Simán Family (El Salvador)
10. Pellas Family (Nicaragua)
The magazine reports that the Coen group employs 7,000 people and its strength is financial services and the agro industrial sector, where it has packing plants and over 8,000 hectares planted in sorghum, soy, peanuts, plantains, sugar cane, Persian lemons and avocadoes. The Pellas Group reportedly employs 23,000 people. Its assets are defined as an economic conglomerate of 25 companies including banking, sugar plantations and refineries, ethanol production, vehicle sales, tourism, telecommunications, insurance, real estate, computer and software sales, health, entertainment, and production of liquors. It has a presence throughout Central America and the Caribbean and in the United States.

ARE PRODUZCAMOS AND
MEFCCA FAILURES?

The two state institutions created by the Ortega government to help the grassroots economy have apparently failed. In mid-April the government announced it was transforming Produzcamos, its state development bank, “into a mixed-venture corporation subject to banking law,” issuing stocks that will incorporate private partners. Days later, the Ministry of the Family, Community, Cooperative and Associative Economy (MEFCCA), which was created in July 2012 and incorporated several state institutions and more than 40 programs to respond to the needs of the social economy, was defined as “a mess” by Bayardo Arce, Ortega’s economic adviser. Arce said it would be reorganized, implicitly recognizing its failed management.

INTEROCEANIC CANAL

The Danish Maersk Line, one of the world’s biggest shipping companies, denied that it is “backing” the Chinese HKND Group’s canal project in Nicaragua, as stated on HKND’s web page ever since June 2014. In response this April to a letter from Danish environmental organization Forests of the World reminding it of its commitment to the United Nations’ Global Compact instrument on human and environmental rights in infrastructure projects, Maersk stated that HKND had used its name “without having requested its consent.” “We are not involved,” said Maersk’s press officer. “We are not supporting the project, and we have not expressed our support.” Radio Denmark broadcast a statement by Maersk’s public relations chief clarifying that “what we expressed was our
support to the principle of infrastructure development, not the project per se, and it was no indication that we would use a canal of that type. We have not requested a canal and we do not need it.” Meanwhile, HKND failed to present the environmental studies it had promised for April.

SAUDI ARABIA DONATES DATES

On April 16 the World Food Program delivered the Ministry of Education 72 tons of dates donated by the Saudi Arabian government to enrich the school snack the government will provide for a month and a half to 156,000 public school students of Jinotega and the North Caribbean Coast. Saudi Arabia donated nearly twice as much of this high nutritional value fruit (136 tons) for the same purpose in 2013. The Ministry of Education provides a daily school snack to over a million public pre- and primary school children.

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