Nicaragua Network Hotline

www.nicanet.org

November 3, 2009

1. Reelection controversies continue: Sandinistas assail Callahan
while Liberals fail to unite 2. IMF approval of economic program
revisions will release US$36 million 3. Hydroelectric and wind power
projects in the works 4. New poll shows positive opinion about
government programs 5. FAO commends National Assembly for food
sovereignty law 6. Basic Basket prices remain stable

Topic 1: Reelection controversies continue: Sandinistas assail
Callahan while Liberals fail to unite

The Nicaraguan government said on Nov. 2 that it would not declare
US Ambassador Robert Callahan persona non grata, but his continued
tenure will depend on "his political behavior" according to a
statement on Nov. 2 by Vice Minister of Foreign Affairs Manuel
Coronel. Callahan angered many Sandinistas last week when he called
the decision of the Supreme Court to remove term limits for president
and mayors, "unlawful, hurried, and secret." On Oct. 29, the
government had released a communiqui calling Callahan's statements
"interventionist" and "unacceptable." National Assembly Deputy and
head of the National Workers Front (FNT) Gustavo Porras and Supreme
Court Justice Francisco Rosales, who chaired the Constitutional
Panel of the Court that ruled to allow reelection, had demanded
that he be declared persona non grata and be expelled.

Government supporters demonstrated at the Central American University
(UCA), at the National Assembly, and in front of the US Embassy
Oct. 30-31, demanding Callahan's ouster. Coronel called Callahan's
remarks "a political blunder from one who does not measure his
words." But, he described commercial and military relations with
the United States as "good" despite tensions over claims of fraud
in last November's municipal elections and the recent Supreme Court
ruling. Nicaragua has not had an ambassador in the United States
since the departure of Arturo Cruz last February.

On Oct. 27, opposition members of the National Assembly failed to
achieve a quorum to consider a bill proposed to annul the Supreme
Court ruling. Only 42 deputies appeared out of a necessary 47. The
opposition deputies had hoped to void both the court ruling and the
year old municipal elections. The next day, deputies attended the
session to receive a commendation from the United Nations on World
Food Day, but only the 38 Sandinistas registered as present.

Liberal deputies said they would boycott the Assembly until the
bill to annul the Oct. 19 court ruling was put on the agenda. The
leadership of the Assembly met later that day but the opposition's
bill did not end up on the agenda because Third Secretary Alejandro
Ruiz of the Nicaraguan Liberal Alliance (ALN) abstained from voting
on the agenda at the last minute. That may have been because the
ALN does not want to give up the four municipalities it won in the
Nov. 2008 election.

Mario Valle Davila, a deputy from the Nicaraguan Unity Bench (BUN),
said that both the Supreme Court ruling and the bill the opposition
wishes to pass in the Assembly are examples of the illegality into
which the country has fallen.

"I believe that the court exceeded its powers but I also believe
that the Assembly is trying to exercise powers it does not have
because the constitution says that the rulings of the Supreme Court
must be complied with," Valle said. President Ortega followed the
example of Nobel Peace Prize winner, Costa Rican President Oscar
Arias who recently gained the right to run for a second term my
making the same case to his country's Supreme Court. It also ruled
term limits to be a violation of a fundamental right of the people
to vote for the candidate of their choice.

Topic 2: IMF approval of economic program revisions will release
US$36 million

The International Monetary Fund (IMF) has approved the second and
third revisions of the government's economic program which will
permit the immediate release of US$36 million in loans for 2009
general budget support. The IMF approval will also release funds
from other financial institutions such as the World Bank and
Inter-American Development Bank totaling at least US$88 million.

Central Bank President Antenor Rosales said that the approval
demonstrates the responsibility and seriousness with which the
Sandinista government has dealt with the macroeconomic stability
of the country. Rosales said that while the Nicaraguan economy has
been affected by the global financial crisis, the commitment of the
government to macroeconomic stability and maintaining prudent
policies has permitted conclusion of the budget revisions and given
Nicaragua access to additional international resources for economic
growth, generation of jobs, and reduction of poverty. He said this
is the first time IMF loans have been used for budget support. He
added, "These resources are to implement government plans and
programs in the social sphere such as health, education, and
infrastructure."

Topic 3: Hydroelectric and wind power projects in the works

A committee from the National Assembly composed of Eliseo Nuqez and
Francisco Sacasa (both from the Liberal Party) met in Bluefields
with the Regional Council of the South Atlantic Autonomous Region
to explain the Tumarin Hydroelectric Project on the Rio Grande de
Matagalpa. Nuqez told the Council, "We cannot continue to depend
on fossil fuels and international aid, nor can we continue to permit
the expenditure of funds to buy hydrocarbons abroad." He went on
to say, "That is why Tumarin is necessary because it will generate
200 megawatts of electricity which represents 40% of the energy
consumption of the country."

Nuqez said that the project would have an enormous impact, noting,
"With relation to the zone where the dam would be located, it would
mean bringing globalization to a poor region that for the first
time would have satellite communication, health care, and transportation
via the highway that will be built by the government from Rio Blanco
to San Pedro del Norte and from there to Tumarin."

Alejandro Mejia, a member of the regional council, agreed that the
project was important and he said that he anticipated unanimous
approval by the RAAS Regional Council. However, there is suspicion
and opposition on the part of some people in the region who live
on the banks of the Rio Grande de Matagalpa and who fear being
displaced by the dam and becoming homeless. Nuqez said that the
1,200 people who would need to be moved would have a choice between
two alternatives. The government could build them a town (now being
designed, he said, by Roger Solorzano) with a school and health
center or they could individually be compensated for their houses
and/or properties.

In other energy news, last week, Energy Minister Emilio Rappaccioli
announced that the Ministry of Energy and Mines had reached an
agreement with the company Eolo, S.A. and the international consortium
Amayo, S.A. for wind power generating projects in the Department
of Rivas. Rappaccioli said that the Amayo Consortium would expand
a wind project into its second phase which would provide 23 megawatts
of energy. Then, Eolo, S.A., would install a wind plant in the same
zone (Rivas) that would generate 37 megawatts of electricity.

Rappaccioli said that together the plants would generate 60 megawatts
of wind power.

Topic 4: New poll shows positive opinion about government programs

The company Siglo Nuevo Consulting released a new poll on Oct. 27
which, according to company head Tomas Valdez, showed that 32.1%
of Managua residents felt that the government's measures to deal
with the economic crisis, maintain employment levels and social
programs was "good," 37.8% said efforts were satisfactory and 27.5%
said they were unsatisfactory. The poll showed that 22.75% of
Managuans thought that the economic situation in the country was
good, 39.7% said satisfactory and 37.3% bad. While 24.2% surveyed
said their economic situation had improved this year, 43.6% said
their situation was the same as last year, and 31.7% said they were
worse off than last year.

The poll indicated that 50% believed that the government had made
advances in the struggle against hunger, illiteracy and poverty;
21% said that it had not and 27% said "more or less." Sixty-seven
per cent said the government had done a good job in confronting the
H1N1 flu virus.

Forty-three per cent of respondents said they sympathized with the
Sandinista Party, 14.3% with the Constitutional Liberal Party (PLC),
4% with the "Let's Go with Eduardo" Movement [of Eduardo Montealegre],
and 1.9% with the Sandinista Renovation Movement. However, 32.2%
declared themselves independents. When asked which party identified
with the poor, 52.9% said the Sandinista Party, 30.5% answered "no
party," and 9.8% said the PLC.

Forty-three percent of those polled said that the Supreme Court
ruling allowing sequential presidential reelection was "correct"
(exactly the same percentage who said they sympathized with the
Sandinista Party) while 29.5% said it was "incorrect" and 23.5%
said "more or less." A slightly higher percentage (42.8%) said they
would vote for President Daniel Ortega's reelection.

Topic 5: FAO commends National Assembly for food sovereignty law

The UN Food and Agriculture Organization (FAO) commended the
Nicaraguan National Assembly on Oct. 27 for passing the Food Security
and Sovereignty Law. The commendation was given during a special
session of the Assembly on World Food Day. FAO representative, Gero
Vaagt, thanked the delegates for passing the law which, according
to National Assembly President Rene Nuqez, had been before the body
for two years. Walmaro Gutierrez, chair of the Assembly's Economic
Committee, stated that passage of the law obligates the government
to implement policies and actions to insure food security.

Funds for national food production will be provided through the
national budget. The law creates a National Commission for Food
Sovereignty and Security, presided over by the President of the
Republic, to direct the use of the funds. Among its priorities is
to assure that the national system produces enough to cover national
consumption in order to avoid foreign dependence. A cooperation
accord between the FAO and Nicaragua was signed following the
session.

Topic 6: Basic Basket prices remain stable

Local merchants predict that the cost of the "basic basket" of goods
[Nicaragua's measure of the cost of living] will remain stable
through the end of the year although some product prices will rise
during the holiday season.

Rice, beans and cooking oil will remain stable for the traditional
gallo pinto rice and beans dish, said Jose Alvarez, a vendor at
Managua's Roberto Huembes market. According to Amaru Suarez, that
is not true of all products. Observers noted that normally some
prices rise in the last two months of the year, citing potatoes,
pork, and some vegetables as examples.

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