News briefing to July 29th

Ortega accuses La Prensa of treason in response to FARC meeting claims
Protests continue outside micro credit institutions, financial system unlikely to welcome change
Nicaragua signs agreement with World Bank
US present proposal for exchange of missiles for medicines
Santos travels to Iran and Kuwait to strengthen cooperation relations
Government coordinates construction of new hospitals
US Embassy funds NGOs to "consolidate democracy" in local elections
CGR will not investigate public spending during 19th of July celebration

Ortega accuses La Prensa of treason in response to FARC meeting claims
President Daniel Ortega accused the conservative newspaper, La Prensa, of treason after it published an article claiming that Ortega had met with six members of the FARC (Revolutionary Armed Forces of Colombia) leadership in Managua on July 18 prior to the celebration of the 29th anniversary of the Popular Sandinista Revolution the following day. During a public meeting in the House of the People on July 25 Ortega announced that he had ordered Attorney General Hernan Estrada to investigate whether sufficient evidence exists to justify legal action against the newspaper for "treason to the Nicaragua's sovereignty." Ortega went on to say that if and when he holds a meeting with FARC representatives in will be a public meeting.

In the July 23 edition of La Prensa, under the headline "Ortega received FARC leaders" journalists María José Uriarte and Elizabeth Romero, wrote an unconvincing follow up to their bold headline, based entirely on claims made by an unidentified "political source" that six members of the FARC leadership flew to Nicaragua from Venezuela in a PDVSA (Venzuelan National Oil Company) plane to take part in a secret meeting with Ortega.

High level representatives of the National Police and the Army have denied having any information about such a meeting taking place, while officials at Managua's International Airport were unable to confirm the arrival of such a flight. International Relations Officer for the Sandinista Front (FSLN) Jacinto Suarez described the above mentioned report as "pure speculation." The original article was reproduced by international media outlets, however, including ACAN-EFE and Notimex, as virtual fact.

On July 24 the Colombian government responded to the claims by denouncing the Nicaraguan government before the Organization of American States (OAS) and requesting in an "urgent message" to the International Organization of Police (INTERPOL) that the "veracity" of the information be investigated.

During a heated debate at the Permanent Council of the OAS in Washington on July 24 the Colombian Ambassador Camilo Ospina reiterated his government's position that Ortega is "protecting terrorists ... in flagrant violation of international law" by awarding asylum to three women linked to the FARC and by, supposedly, meeting with the FARC leadership in Managua. Nicaraguan Ambassador Denis Moncada responded by saying that the right "to award asylum to those suffering political persecution is sacred" for his country and describing Colombia as a "narco-state" which "practises state terrorism."

Secretary General of the OAS Miguel Insulza insisted that if Colombia wants to make a formal complaint against Nicaragua and a formal request for the OAS to intervene, then the country should do so, instead of reiterating the same informal accusations.

At home the national opposition parties, which have been critical of Ortega's willingness to mediate in Colombia's internal conflict, have expressed concern about the supposed meeting with the FARC. Yamileth Bonilla, Constitutional Liberal Party (PLC) deputy and President of the External Affairs committee in the National Assembly said she is planning to begin a committee investigation into the claims published by La Prensa saying, Ortega's "erratic foreign policy could have dangerous consequences for the country ... [it could] isolate us politically and economically." Jose Pallais, another PLC deputy, said Ortega is making "the same mistakes as in the 1980s." Sandinista Renovation Movement president Enrique Saenz, meanwhile, said that Ortega is "mixing up" the maritime border dispute between Nicaragua and Colombia with the latter country's internal conflict. Ortega is "imposing an agenda on Nicaragua and [forgetting about] internal problems, like inflation, like the increase in the price of rice and beans."

Meanwhile editors at La Prensa have reacted to Ortega's accusation of treason by comparing the current situation to that of 1959, when both current La Prensa president Jaime Chamorro and former La Prensa president, Jaime's brother Pedro Joaquin Chamorro, were among 109 people accused of treason by the Somoza dictatorship. Pedro Joaquin was later murdered by order of Anastasio Somoza. On July 28 La Prensa quoted right-wing commentator Sergio Garcia Quintero warning about parallels between the two brothers' lives, and claiming that Ortega's actions demonstrate "hate" towards the media and former appeal court judge Alfonso Davila Barboza said Ortega's accusation against La Prensa should be considered a "threat to all Nicaraguan journalists."

Protests continue outside micro credit institutions but financial system unlikely to welcome change
Members of the Movement of Small Farmers and Small Business Owners of the North continued to protest outside micro credit institutions in the northern town of Ocotal on July 23 during the rest of the week. Unlike the day before when violence between police and protesters had broken out, the protests were peaceful, but demands for the institutions to substantially reduce the interest rates charged remained the same. This movement of farmers and merchants demand that the institutions lower the annual interest rate on small loans to 8%.

Representatives of the Association of Micro Credit Institutions (ASOMIF) met with President of the Superior Council of Private Enterprise (COSEP) Jose Adan Aguerri in Managua on July 23 to discuss the violent incident in Ocotal the day before during which protesters tried to burn down the offices of FUNDENUSE,the Foundation for the Development of Nueva Segovia, the department of which Ocotal is the departmental capital. After the meeting COSEP issued a statement expressing its "shock" at the violence in Ocotal and called on President Daniel Ortega to "contribute to an integral solution [to the problem]." the statement also called on the President to "discourage the culture of refusing to honour debts" which could increase the "risk" associated with lending to Nicaraguan institutions therefore actually increasing interest rates on loans available to the population from finanical institutions.

After the meeting President of ASOMIF, Alfredo Alaniz, repeated the organization's position that it is "impossible" for micro credit institutions to lower the rate of interest they charge their clients because they are charged 11.5% interest on two or three year loans they receive from foreign banks, mainly European banks, with which they then lend on to small farmers and business people in Nicaragua. On top of the short payment periods and high levels of interest they are charged, he said, the micro credit institutions have to cover their administrative costs.

According to leader of the Association of Rural Workers (ATC) Jose Adan Rivera, however, micro credit institutions "exaggerate their administration costs and apply exorbitant interest rates of 4% a month plus late-payment penalties and interest." Rivera believes that a "cold analysis" of the payment conditions offered by these institutions is necessary with a view to establishing a national credit policy by which private financial institutions are "obliged to act as friends of national food production" by lowering interest rates, because as things currently stand micro credit loans are unpayable for farmers. He said that all the organizations and cooperatives associated with the ATC are planning to demand that such a national policy is approved.

Rivera described the European banks which loan to micro credit institutions at 11.5% interest as "vampires sucking the blood out of [Nicaraguan] society" and the national private financial institutions as "leeches." He emphasized the need to "change the model, to convert the financial system into a factor of social and economic development not a factor of usury." Rivera said this process has already begun in Nicaragua with the government support of programs like "Zero Hunger" and very low interest rate loans available for farmers from institutions like ALBA CARUNA and the Rural Development Institutions (IDR). He believes the process will be further consolidated with the creation of the national production bank.

On July 25 President Daniel Ortega reiterated his call to the micro credit institutions to renegotiate the payment conditions on debts with small farmers and small business owners. He denied that he had at any point encouraged the protesters not to honour their debts and encouraged them to carry on protesting but pacifically, without the use of violence.

Nicaragua signs agreement with World Bank
On July 25 Treasury Minister Alberto Guevara signed an agreement with the World Bank which will allow the Nicaraguan government access to US$40 million under very prefential payment conditions. The agreement was also signed by World Bank Director for Central America Laura Frigenti. The signing took place in the Nicaraguan Embassy in Washington.

The agreement consists of two zero interest rate loans from the World Bank's International Development Association, both for US$20 million. The first US$20 million is to be used to increase access to clean water and improve sanitary conditions in remote rural communities of the Northern and Southern Atlantic Autonomous Regions (RAAN and RAAS). The second US$20 million is to be used to support the growth and sustainability of the activities of small and medium businesses. The two loans should be paid back over a period of 40 years with an additional 10 year grace period.

Minister Guevara said the signing of the agreements was made possible by a significant improvement in relations between the Nicaraguan government and the International Monetary Fund (IMF). According to Guevara an IMF delegation will approve the first revision of its three year economic program with Nicaragua during a visit to the country in August. Until now the IMF has not approved this revision which has meant that disbursements of donations and loans from donor countries and institutions, like the World Bank, have been suspended.

US government presents proposal for exchange of missiles for medicines
On July 28 the US Ambassador Paul Trivelli announced that his government had presented its proposal for an exchange of medicine and medical equipment for 651 of the 1,051 SAM-7 missiles under the possession of the Nicaraguan Army. Trivelli said "now the ball is in the [Nicaraguan] government's court, I am confident that in the near future we will be able to sign the exchange agreement." Trivelli said that the proposal had been drawn up by US medical experts at the US Defence Department in consultation with the Nicaraguan Health Ministry (MINSA).

The US has been insisting on the destruction of Nicaragua's SAM-7 missiles since 2004 under the pretext that they could fall into the hands of "terrorists."

President Daniel Ortega made the offer to destroy 651 SAM-7 in exchange for medicines and equipment over a year ago now. It is interesting to note that the US took so long to respond to this initial offer and chose to do so when Nicaragua's relations with the US' closest ally in Latin America, Colombia, appear to be spiralling towards dangerous levels of tension.

Santos travels to Iran and Kuwait to strengthen cooperation relations
Foreign Minister Samuel Santos is currently in Teheran, Iran to take part in the Ministerial Meeting of the Non Alligned Countries. The meeting was called to discuss issues including south-south cooperation, the Middle East conflict and the spiralling prices of food and fuel on the international market. An official Nicaraguan press statement issued on July 29 announced that Santos is to hold meetings with the Iranian ministers of energy, agriculture and external relations in order to discuss existing and proposed bilateral cooperation agreements. Among the agreements to be signed during his trip to the Middle Eastern country is an agreement for the construction of several polyclinics in Nicaragua with all their equipment, financed by the Iranian government.

Santos will travel from Iran to Kuwait to attend an official invitation from the Kuwaiti government to discuss the possibility of investing in tourism and infrastructure in Nicaragua.

Government coordinates construction of new hospitals
As part of Operation Miracle, the eyesight health program made possible with Cuban and Venezuelan cooperation, another ophthalmological hospital is being built in Bilwi, capital of the Northern Atlantic Autonomous Region (RAAN). Already two ophthalmological hospitals have been built in the country as part of this program, one in Ciudad Sandino (Managua) and the other in Bluefields (Southern Atlantic Autonomous Region, RAAS).

Meanwhile, the Director of Planning and Development at the Ministry of Health, Alejandro Solis, announced on July 23 that the government plans to begin construction on a new maternal hospital in Managua within three months. The construction will be made possible with a loan for US$36 million from the Central American Economic Integration Bank. The hospital will have 300 beds and the capacity to attend to 500,000 women a year, providing all the basic services offered by modern obstetrics.

This hospital will replace the Fernando Velez Paiz maternity hospital as the main obstetric hospital in the country. Despite being seriously damaged during the 1972 earthquake in Managua, the maternity hospital has never been replaced until now. The hospital will continue to operate as a polyclinic once the new maternity hospital is built.

US Embassy funds NGOs to "consolidate democracy" in local elections
On July 24 the US Embassy in Managua called on NGOs from 31 different municipalities across the country to present proposals for projects which aim to "consolidate democracy" during the electoral process of the upcoming municipal elections which will take place in November. Projects approved by the embassy will receive funding of between US$2,000 and US$40,000 as part of the US Agency for International Development's (USAID) "Transparency Program." During recent months the US Embassy gave out over US$300,000 to national NGOs for similar "democratic" programs in preparation for the upcoming local elections.

CGR will not investigate public spending during 19th of July celebration
On July 25 Vice President of the Comptroller General's Office (CGR) Lino Hernandez announced that the five CGR magistrates had made a unanimous decision not to investigation any claims that the use of public institution vehicles or equipment during the celebrations of the 29th anniversary of the Popular Sandinista Revolution on July 19 was illegal, given that July 19th is established in the constitution as a national party and therefore any public institutions which desire to participate in the 19th of July celebrations are permitted to do so. Last week the opposition party "We're with Eduardo" threatens to accuse the government of misuse of public funds, so far no such accusation has been presented to the CGR, however.