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tortillaconsal punto/dot com
By Karla Jacobs, 18th September 2009
When the FSLN government came to power in 2007 it began implementing a foreign policy which could be considered the antithesis of the one employed by Enrique Bolaños’ administration before it. In doing so, Nicaragua has been successful in demonstrating that the previous arrangement of almost exclusive dependence on the US and European Union Aid-Trade-Debt model is most certainly not in the nation’s interests.
Nicaragua’s successful diversification of trade and cooperation partnerships and the resulting opportunities for the nation’s people and economic sectors quickly became an example for the region, and for the world; an example Western Bloc governments have been desperate to conceal and undermine. Two and a half years later, however, and despite US and European attempts to the contrary, Nicaragua’s pragmatic and bold foreign policy continues to provide benefits which would have been unthinkable if the Washington inspired, neoliberal status quo had remained intact.
By far the most important foreign policy decision taken by the FSLN government was the country’s incorporation into the Bolivarian Alternative - now renamed the Bolivarian Alliance - for the People of the Americas, ALBA, and its little sister, the regional energy integration initiative, Petrocaribe.
Nicaragua’s membership of these two regional initiatives, founded by the Venezuelan and Cuban governments and based on an ideology of solidarity, complementarity and fair trade, has permitted the FSLN government to overcome the catastrophic energy crisis that had brought the national economy to its knees by late 2006, and freed up hundreds of millions of dollars for desperately needed social and infrastructure projects.
Also thanks to ALBA, Nicaragua has found a secure market for its surplus food production in Venezuela. Nicaraguan exports to Venezuela increased from US$6.3 million in 2007 to US$32.7 million in 2008. During the first semester of 2009 exports to the South American country were worth US$45.4 million superseding the figure for all of 2008.
The main products Nicaragua exports to Venezuela are cattle, beef, basic grains and dairy products. The Venezuelan market has been a lifesaver for the agriculture sector at a time when other markets (specifically the US and Central American markets) have significantly reduced purchases of Nicaraguan produce.
Promoting regional integration closer to home
In line with Nicaragua’s general foreign policy objective of strengthening regional unity and cooperation, the FSLN government has played an important role in promoting Central American integration. This has been achieved mainly through Nicaragua’s participation in SICA, the Central American Integration System.
Between January and June of 2009 the FSLN government held the pro tempore presidency of SICA during which time it took full advantage of the opportunity to promote its philosophy of regional solutions for regional problems. Numerous presidential and ministerial meetings were hosted in Nicaragua on subject matters as diverse as food security, social housing, environmental protection and sustainable rural development with Nicaragua’s recent experiences of projects in these areas put forward as a model for other Central American countries.
President Daniel Ortega’s six-month presidency also oversaw the unification of regional positions regarding the inclusion of a Common Credit Fund as part of Central America’s Association Agreement with the European Union. As a result, the EU eventually agreed to the creation of this multi million-dollar credit fund, financed mainly with European money, which will serve as a source of funding Central American governments can tap into for social, infrastructure and other projects.
While staunchly defending ALBA and Petrocaribe at regional and other forums, Nicaragua has also managed to strengthen trade and cooperation links with important regional players, Mexico and Brazil, whose governments have demonstrated varying degrees of opposition to the regional integration initiatives.
In June 2007 Ortega and Mexican President Felipe Calderon signed an important bilateral agreement as part of which greater political, commercial and cultural exchange and cooperation between the two countries was established. As part of this agreement Calderon committed to providing funds for the construction of three stretches of highway in Nicaragua and the purchase of 350 new buses for public transport.
In terms of bilateral relations with Brazil, President Luiz Inacio Lula da Silva made an official visit to Nicaragua in August 2007 during which an agreement to strengthen relations in all fields between the two countries was signed by the Nicaraguan and Brazilian foreign ministers. The agreement included Brazil’s commitment to finance development projects in Nicaragua in the areas of education, health, energy, agriculture, forestry, external relations, tourism and investment.
As a result of the general rapprochement between the two countries, earlier this year a Brazilian company was awarded a contract to construct a major hydro-electric generation plant in the central zone of Nicaragua.
Nicaragua establishes close relations with extra-regional governments
In terms of extra-regional relations, the government has managed to secure new cooperation agreements with Russia and Iran as well as fomenting private commercial links with The People’s Republic of China while maintaining the longstanding cooperation agreement with the Taiwanese government.
During a three-day official visit to Russia in December 2008 President Daniel Ortega and Russian President Dmitri Medvedev laid the foundations for major projects funded by Russia to be carried out in Nicaragua. The main areas of cooperation with Russia include healthcare (Russia is providing funding to update technological equipment in Nicaraguan public hospitals), energy (Russian companies plan to construct hydro electric plants capable of generating 400 megawatts of electricity), telecommunications (Russia will facilitate the development of fourth generation communications in Nicaragua as well as permitting Nicaraguan use of the Russian global system of navigation with the GLONASS satellite global positioning system) and public transport (Russia has committed to facilitating hundreds of new vehicles for Nicaragua’s public transport system).
Recently further cooperation agreements between the two countries were signed including a military cooperation agreement that will permit the Nicaraguan Army to declare the country free of landmines by the end of 2010.
Earlier this year the newly established trade links with Russia were proven to be an indispensable factor of the FSLN government’s diversification of trade partners. In January and February, as seafood exports to the US fell dramatically, the Nicaraguan seafood industry found itself on the verge of collapse. In April, however, a Russian government delegation visited the country to sign a major commercial agreement permitting Nicaraguan seafood exports to Russia.
It is not surprising that Russia is keen to establish broad cooperation links with Nicaragua given the historical geo-political importance the small Central American nation has held in terms of Russia’s wider foreign policy objectives. Additionally, Nicaragua’s prompt recognition of Abkhasia and South Ossetia as sovereign states after the Russian military succeeded in ousting Georgian troops from the two territories in 2008 has helped to encourage Russian cooperation with Nicaragua. Venezuela folllowed Nicaraguaps lead when it too recognized South Ossetia and Abkhasia during a visit early in September this year by President Hugo Chavez Frias.
Another new ally as part of the Nicaraguan government’s pro South-South integration foreign policy is the Iranian government led by Mahmud Ahmadinejad. As part of the agreements resulting from the recently established bilateral relations with Iran, the construction of a number of health centers in marginalized neighbourhoods has been financed and a US$234 million loan for the construction of a major hydro-electric generation plant was awarded by the Iranian Development Bank.
Additionally the FSLN government has facilitated commercial links with companies from Vietnam and from the People’s Republic of China. Earlier this year the Vietnamese State petroleum company PetroVietnam signed an energy cooperation agreement with Nicaraguan state oil company, Petronic, to carry out joint hydrocarbons exploration studies off Nicaragua’s Pacific and Caribbean coasts.
Meanwhile the recently established Nicaraguan-Chinese Chamber of Industry and Commerce organized the First Chinese Commercial Exhibition in Nicaragua, which took place in late August. During the event Nicaraguan producers of tobacco, dried fruits, organic coffee, rum and handicrafts were able to make direct contact with Chinese companies keen to import their products. Currently plans are being made for a Nicaraguan delegation to participate in a major commercial exhibition in Shanghai in 2010.
US and Europe’s unease begins to show
In its 2009 institutional plan the Nicaraguan Ministry of External Relations describes its strategic objectives as, among others, to strengthen bilateral relations and fraternal links with the people and governments of the world, to permanently defend Nicaraguan sovereignty and to coordinate relations with governments and multilateral organizations that provide cooperation funds ensuring that the use of these funds is in line with the FSLN government’s national priorities.
The array of new commercial and economic cooperation opportunities listed above demonstrates the success of the Foreign Ministry’s expressed objective of strengthening links with other countries around the world.
The fact that the US and European governments have begun to make it more difficult for Nicaragua to access aid and development money could be considered as evidence that the Foreign Ministry has succeeded in the latter two objectives - to defend Nicaraguan sovereignty and to insist on a say in the designation and use of aid money coming into the country.
In December 2008 the Budget Support Group, made up of different European governments, announced its decision to withhold a little more than US$40 million of budget support money. The reason given for the decision was the political opposition’s allegations that the municipal election process, which took place the previous month, was fraudulent.
This same false excuse was put forward as justification by the Directorate Board of the US government’s Millennium Challenge Corporation for its decision to bring to an end to its operations in Nicaragua.
Both the European and North American governments dragged out the aid decision making process for as long as possible thus maximizing the number of opportunities for the corporate media to cover officials calling on the government, in the best traditionsof hypocritical neo colonialism, to respect “internationally accepted democratic norms,” without ever defining exactly what that amorphous phrase may in fact mean, or how it might apply to Nicaragua.
It took the Millennium Challenge Corporation’s Directors six months to make up their minds whether the government had, from their neocolonial poitn of view, cleaned up its act. The European’s are still unsure. Recently the European Commission’s foreign affairs representative, Steffani Sannino, was in Nicaragua and announced the disbursement of US$10 million of the suspended aid money, pending a final decision about the designation of the aid, probablky for Nicaragua's education system.
The vague and unconvincing argument that concern for the state of democracy in Nicaragua is behind the US and Europe’s decision to reduce aid is considered merely a front by the FSLN government. For the people who are constructing the road to Latin America’s second independence, the importance of Nicaragua’s role in that process is obvious. It is natural, therefore, that Western Bloc governments should begin to feel uneasy about any loosening of their chokehold on Nicaragua’s economy and its foreign policy.
The bottom line of all this is the historically demonstrated fact that Western governments are not well disposed to aid-recipient governments that take the initiative to construct a future for their nation other than the one the Western Bloc already has mapped out for them.
Given the current international economic situation, and more specifically the state of the US and European economies, the FSLN government’s decision, back in 2007, to diversify its commercial and other external relations, has been shown to be wise. It is almost impossible to imagine the extent of the crisis the country would currently be submerged in if the FSLN had not acted swiftly during its first months in office.
Nicaragua’s victories have not come easily, however. Right now Honduras is paying the price for its decision to try tentatively to follow in the footsteps of its southern neighbour. It remains to be seen how much further the Western Bloc is willing to go, or indeed able to, given its current economic debacle, to crush Nicaragua’s good example.