News briefing August 5th

Fire destroys over 25% of Managua's Mercado Oriental
According to preliminary calculations the devastating fire in Managua's Mercado Oriental (Eastern Market) destroyed an area greater than 400 meters squared which represents over 25% of the commercial center, considered as Central America's biggest market. It is thought that the fire began at around 8.30pm on July 31. The local Fire Brigade was alerted a few hours later, but when firefighters arrived on the scene they found that, due to a power cut in the surrounding area (unrelated to the fire), sufficient water was not available to fight the flames. Sixteen hours after the fire began, the fire fighters managed to put out the flames with the help of the National Police, the Nicaraguan Army, the Environment Minister, the Civil Defense and the National System for Prevention and Mitigation of Disasters (SINAPRED). Thankfully no human lives were lost as a result of the fire and only a handful of people (mainly fire fighters) suffered significant injuries.

Managuan local authorities estimate that over 1,500 small and medium businesses were completely destroyed as a result of the fire which is thought to have caused over US$200 million losses.

On August 1 President Daniel Ortega visited the market with the Cheif Commissioner of the National Police Aminta Granera and head of the Civil Defense Mario Perez-cassar. Ortega promised his government would take the lead in reconstructing the market and providing support and protection for those affected.

So far the authorities appear to have handled the disaster with prudence, having avoided loss of life, avoided significant looting and having met with those business owners affected to establish a plan of action.

Analysts and commentators generally agree that this catastrophe was a disaster waiting to happen given the precarious infrastructure of the market and the lack of effectively implemented safety regulations and precautions. On August 4 Interior Miister Ana Isabel Morales confirmed suspicions that the fire originated from a short circuit in one of the illegal electrical connections (of which there are thousands in the market) after a power cut. Due to the constant threat of significant power cuts as a result of their conflictive relations with electiricity distribution company Unión Fenosa, many business owners have invested in fuel powered generators. The existence of a significant amount of gasoline to power such generators within the area the short circuit took place explains the ferocity with which the blaze spread through the market.

On August 4 Director of SINAPRED Arnesto Soza said that according to official calculations approximately 6,000 people have been made unemployed by the fire and that at least US$20 million would be necessary to rebuild the area of the market which was destroyed.

Mayor of Managua Dionisio Marenco has set up a special commission of the local government officials and engineering experts from the National Engineering University to oversee the reconstruction of the affected area. It is unclear as yet, however, where the funds to reconstruct will come from.

Channel 4 journalist shot in apparent provocation to increase political tension
On July 31 Antenor Peña, a TV journalist for pro-FSLN Channel 4, was shot in the leg during an incident about which different media have provided drastically differing reports. The clash, which took place in the roundabout Ruben Dario (by Metrocentro) in the center of Managua, was between a group of members of the Sandinista Youth "19 de Julio" and a group of members of the Movimiento Puente (Bridge Movement), a recently founded group which describes itself as having no political affiliation but of opposing the FSLN government. The group of Sandinista Youth members had been at the roundabout for the last three days with the aim of promoting the gains of the National Literacy Campaign.

On July 30, members of the Movimiento Puente announced their intentions to chain themselves to the large government publicity posters on bill boards at the roundabout as part of a protest against what they describe as excessive government spending on publicity.

The incident took place a few minutes after members from the Movimiento Puente turned up. Conflicting reports about what happened during the minutes leading up to the moment in which Peña was shot, make it difficult to determine the reasons behind this violent incident which is atypical in Nicaragua. According to the anti-FSLN media (Channel 2, El Nuevo Diario and La Prensa) the Sandinista Youth members threatened the members of Movimiento Puente and began throwing sticks and stones at them, causing National Police officers to intervene to restore order. As part of this effort, a police officer fired shots into the air (there are photos of this). These media outlets claim that this explains Peña's wound. It seems improbable, however, that a police officer shooting into the air, would accidently have shot Peña, who was amongst the crowd at the time.

According to the independent radio station Radio La Primerisima it was the members of Movimiento Puente who first behaved aggressively. After being dropped off in a bus, the group demanded that the sandinistas leave the roundabout. During the argument which proceeded, it was reported, a number of shots were fired from a white truck driving around the roundabout, one of which penetrated Peña's right leg.

Channel 4 reported the incident as being coordinated by political opposition groups including the MRS (Sandinista Renovation Movement) and the MVE ("We're with Eduardo" Movement), both of which describe Daniel Ortega's government as a "Dictatorship" and and threatened to "bring down" the government. According to the pro-FSLN media this incident was deliberately provoked as part of a destabilization campaign which aims to undermine the government, its supporters and its programs.

During the incident the vehicle in which Peña and his colleagues had arrived was damaged by members of Movimiento Puente who broke the windscreens with stones. This is the third time within recent months that Channel 4 journalists have been threatened or physically attacked (a Channel 4 vehicle was damaged and journalists threatened during an MRS protest rally in mid june, Channel 4 journalist Nelson Hurtado was kicked by MRS representative Carlos Mejia Godoy at another opposition protest in mid July). This incident represents the most serious of the three by far, however. The incident should be understood within the context of the reported presence within the country of "shock" groups trained to cause chaos by the CIA in the US and by the right wing Popular Party in Spain.

COSEP unwilling to accept unions' demands for significant wage increase
The Minimum Wage Commission (made up of representatives of the main workers' unions, the Superior Council of Private Enterprise, COSEP, and the Ministry of Labour, MITRAB) was scheduled to meet on July 30 to begin negotiating the rate of increase to be added to workers' pay at the end of September. Such negotiations take place every six months as established in the Labour Law. COSEP's representatives did not turn up to the meeting, however, having decided to request that the first meeting take place on August 7. According to leader of the Sandinista Workers Central (CST) Luis Barboza this last minute cancellation represents an attempt on COSEP's part to delay the whole process so as to avoid having to reach consensus with the unions. If no consensus is reached by September 23 then the Minister of Labor Janette Chavez, will be obliged to make a unilateral decision, according to the Labour Law.

The workers' unions were able to take advantage of the meeting despite COSEP's absence, however, reaching a consensus between all the unions present (affiliated with both left and right wing political parties) that the minimum acceptable increase would be 53%. This figure represents the loss of value of the minimum wage in real terms, according to official figures. The figure is so much higher than the official rate of inflation ( 11.7% to date this year) given that, because they earn so much less that the value of the basic basket (canasta basica) the vast majority of workers' wages are spent on the most basic products (food, energy, transport) which have experienced inflation rates significantly higher than the national inflation rate.

It is also worth pointing out that in August 2007 the value of the canasta básica was virtually doubled by a decision to include the cost of rent. Some analysts argue this change distorts the basis of wage talks by increasing existing inflationary pressures and threatening a wage-price spiral. Workers representatives say it reflects a truer, fairer and more realistic basis for negotiations.

COSEP President Jose Adan Aguerri expressed the organization's unwillingness to accept any increase above the official rate of inflation plus the rate of (positive or negative) growth relevant to each sector. He undermined the importance of the Minimum Wage Commission saying the final decision would be taken by President Daniel Ortega (who will approve or reject any proposals), saying that on that decision will depend "whether there is more or less employment, whether there is a stronger or weaker formal sector, whether there is more or less inflation, whether there is more or less growth."

"We cannot continue to allow [significant increases to the minimum wage] ... without any kind of economic consideration which takes into account productivity, competitiveness and what this means for the generation of jobs. That is why this issue must be de-politicized. We [COSEP] represent the formal sector, while the unions are [not representative]," he said.

US approves bilateral aid, but US Nicaraguan relations may be on the brink of a downward spiral
On July 31 the US Embassy in Managua announced the US government's decision to approve for another year the aid programs it sponsors in Nicaragua and its ongoing support of Nicaragua in apllications for loans from international financial institutions. The US conditions the continuity of its aid programs (including its financial and technical assistance to the Nicaraguan Army and the National Police, the Millennium Challenge Program USAID programs) on the Nicaraguan government's ongoing willingness to continue to compensate US citizens who hand land and property confiscated during the 1980s as part of the Sandinista revolution. This US policy does not only apply to Nicaragua, but to all countries which have undergone similar revolutionary processes and subsequently reestablished bilateral relations with the US. In order to ensure the continuity of the US aid programs, the government paid out over US$10 million to US citizens in compensation during the first six months of this year. Many of those US citizens who have received or who continue to claim compensation from the Nicaraguan government are wealthy Nicaraguans who fled to Miami during the 1980s where they were awarded US citizenship.

Despite what would appear to be a green light from the US, there are signs which suggest that US Nicaraguan relations could be on the brink of spiralling tension. Current US Ambassador Paul Trivelli voiced his "concerns" again this week about what he says has been "observed" as "the closing of democratic spaces" during President Daniel Ortega's administration citing the removal of deputy Alejandro Bolaños from his position, the postponement of the local elections in the Northern Atlantic Autonomous Region (RAAN), and the recent cancellation of the legal status of two small parties, as proof of this assumption which is repeated constantly by the national and international press and by national and international opponents to the Ortega administration.

[These arguments, however, are easily disproved by a close examination of the circumstances surrounding the events. Deputy Alejandro Bolaños was removed from his position after it was discovered that he holds double nationality (Nicaraguan and Canadian) which means that he is prohibited from holding public office. The elections in the RAAN were postponed due to the devastation caused by Hurricane Felix which displaced over 70% of the population in some areas and destroyed the electoral roles. The cancellation of the Sandinista Renovation Movement's (MRS) and the Conservative Party's legal status came after both parties failed, over a long period of time to meet legal prerequisites required by the Nicaraguan Electoral Law despite adequate opportunities to do so. This was vouched for by the Latin American Commission of Electoral Experts (CEELA). Nevertheless, the fact that the US Ambassador is so readily willing to repeat and divulge these snippets of misinformation is worth noting by analysts inside and outside Nicaragua.]

Trivelli is sceduled to leave Nicaragua within the next few days, handing over the post to Robert Callahan. Callahan was a key member of John Negroponte's team during the 1980s when Negroponte coordinated the Contra War from his position as US Ambassador in Honduras. More recently Callahan worked as spokesperson for the US Embassy in Baghdad during Negroponte's time as Ambassador at a a time when respected commentators talked about the implementation of the so-called "Salvador option" - the use of death squads like those in El Salvador in the 1980s - to wipe out alleged Iraqi resistance members and alleged sympathisers. It is strange and worrying that the US government has decided to send such an experienced wartime "diplomat" as Callahan to Nicaragua for the final six months of George W. Bush's regime.

Meanwhile, on July 31 Ortega announced his decision not to accept the US government's proposal of medicine and medical equipment as part of Ortega's own proposal to exchange misiles for medicines. Over a year ago Ortega offered to destroy 601 Sam-7 missiles in return for medicines and equipment from the US, which has put immense pressure on Nicaragua to destroy the weapons due to the fear they could "fall into the hands of terrorists." During the act to celebrate the 29th anniversary of the founding of the Nicaraguan Air Force on July 31, however, Ortega said that "the conditions" necessary to destroy the missiles, "do not exist" given the increasing levels of tension between Nicaragua and Colombia and the possibility that "at some point it may occur" to Colombia to carry out an air attack on Nicaragua over the maritime border dispute between the two nations. "The missiles are the only thing we have to defend ourselves against an air attack," said Ortega. He went on to say that he will "study the US proposal carefully" and "respond when the moment is right."

On August 5 the situation between Nicaragua and Colombia, the main US ally in Latin America, became more complicated after a Venezuelan corporate TV channel Globovision "revealed" the names of two FARC (Revolutionary Armed Forces of Colombia) delegates the channel claim took part in the secret meeting with Ortega which is supposed to have taken place in Managua on July 18. Without mentioning a source Globovision announced that the two FARC delegates were Ovidio Salinas (aka Juan Antonio Rojas) and Alberto Bermudez (aka el cojo). The media company went on to claim that Bermudez is the FARC representative in Cuba where "he has a fluid relationship with the Nicaraguan Embassy." Finally it was claimed that the Colombian authorities in Cuba were investigating whether or not the "mission" discussed during the "secret meeting" is to facilitate the sale of Nicaraguan Army SAM-7 missiles to the FARC.

Ortega has denied the claims first reported in Nicaragua's conservative newspaper La Prensa that he held a secret meeting with members of the FARC in Managua. "If I had met [with the FARC], ... we would have done so publicly," he said, "because in order to talk about peace there is no reason to go around hiding from anyone."