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Cablegate: Madriz - Ortega Promises Remain Unfulfilled

VZCZCXYZ0003
PP RUEHWEB

DE RUEHMU #1183/01 1281612
ZNY CCCCC ZZH
P 081612Z MAY 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 0112
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L MANAGUA 001183

SIPDIS

SIPDIS

DEPT FOR WHA/CEN SCHIFFER

E.O. 12958: DECL: 05/04/2017
TAGS: KDEM ECON PGOV PINR NU
SUBJECT: MADRIZ - ORTEGA PROMISES REMAIN UNFULFILLED

REF: A. 06 MANAGUA 2423 AND PREVIOUS
B. MANAGUA 01069

Classified By: Ambassador Paul Trivelli for reasons 1.4(B,D)

1. (C) SUMMARY: Citing higher gas prices, no new jobs, and
political favoritism, the citizens of Somoto and Totogalpa,
Madriz spoke to the Ambassador of growing dissatisfaction
with President Ortega's administration. While local
opposition leaders are talking, they have not unified or
capitalized on the population's discontent. Aggravating the
situation is the Sandinista National Liberation Front's
(FSLN) wholesale replacement of local technocrats with
untested party supporters in local government offices and its
party bias in selecting families for Ortega's new Zero Hunger
program. Although the region receives sizable remittances
and generous financial support from sister cities, the
underlying economy is weak. Since January, hundreds of area
residents have left the country in search of work. Although
local business and political leaders believe a free trade
zone is essential to development, they have taken virtually
no action over the past several years to make it so. Despite
spending US$2.5 million on projects in the region, U.S.
visibility is scant. Leaders encouraged the U.S. to stay
engaged in Nicaragua using an "approach of respect" centered
on "positive messages and positive signs." END SUMMARY.

2. (U) On April 29 and 30, Ambassador visited the northern
department of Madriz to participate in a variety of meetings
and events in the departmental capital, Somoto, and the town
of Totogalpa. In Totogalpa, the Ambassador attended three
USAID-funded activities, including the inauguration of a
tomato and vegetable packing plant, the opening ceremony of
the first annual tomato festival, and the ribbon-cutting
ceremony of a new discount pharmacy. In addition, during the
two-day visit, the Ambassador met with the mayors of Somoto
and Totogalpa, local representatives from the Nicaraguan
Liberal Alliance (ALN) and Sandinista Renovation Movement
(MRS) political parties, the civil rights advocacy NGO Ethics
and Transparency (EyT), a Totogalpan indigenous group and a
group of women's ceramic cooperatives. The Ambassador also
met with the presidents of the local Chamber of Commerce and
Coffee Growers Association and the priest of the Somoto
Catholic church, and gave interviews with two local radio
stations - "Radio Frontera" and "Que Buena."

Free and Fair Elections, but...
- - - - - - - - - - - - - - - -

3. (SBU) Somoto EyT director Uriel Antonio Garcia reported
that the November 5 elections were free and fair thanks to
the presence of observers from the US Embassy, Carter Center,
EU, and EyT in the department's voting centers. He commented
that the police did an excellent job with security, allowing
the people to vote in a safe and calm atmosphere. Further,
Garcia assured the Ambassador that all votes were counted,
there were no irregularities during the counting/closing
process, and that the "fiscales" (party observers) were
vigilant. However, as was consistently reported throughout
the country during the campaign process, Garcia confirmed
that voter card issuance (cedula) had been a problem during
the campaign, citing that nearly 1 in 4 applicants did not
receive their ID card before November 5 (reftel A). (NOTE:
On November 5, the FSLN received 31,773 votes to the PLC's
25,831 and the ALN's 9,503 votes. The FSLN won in 8 of
Madriz' 9 municipalities, only losing to the PLC in
Totogalpa. END NOTE).


Opposition Forces Should Unify
- - - - - - - - - - - - - - - -

4. (C) The Liberal Constitutionalist Party (PLC) mayor of
Totogalpa along with ALN, MRS, EyT, and business community
representatives unanimously agreed that the opposition
parties must set aside their differences and form a single
national opposition party for the 2008 municipal elections.
They all acknowledged that a strong, unified opposition is
the only way to stave off disaster in next year's elections.
Even with unity, they admitted, gaining the upper hand in
local elections will be a daunting task given the FSLN's
formidable discipline and funding. Catholic priest Fruto
Valle added that, regardless of unification, the Liberal
opposition will have a tough time winning hearts and minds in
the region after 16 years of neglect by the three previous
Liberal administrations. He commented that throughout this
time, while the Liberals did nothing, the Sandinistas --
working through their well-organized network of NGOs and
using international funding -- helped the population by
building roads, clinics, stadiums, etc., giving the
Sandinistas a strong advantage in the region. (COMMENT:
Until recently, Valle was known as a staunch PLC/Aleman
proponent. Thus, it is interesting that he openly admits the
failures of previous administrations -- including Aleman's --
to address the region's woes. END COMMENT).

First 100 Days - Ortega "Fails to Deliver"
- - - - - - - - - - - - - - - - - - - - - -

5. (SBU) Asked about their satisfaction with the Ortega
administration thus far, there was near universal agreement
that President Ortega has not fulfilled his campaign promises
of cheaper prices and full employment. Of particular concern
are the rising prices of gasoline and diesel. Quoting
unemployment figures as high as 80 percent, local leaders
characterized the overall economic situation as "desperate"
and "very, very bad" in rural areas. MRS representative
William Ortega opined that "thousands" of people in the
Somoto area had left the country since the start of the year
looking for work in El Salvador, Costa Rica, Spain, and the
U.S.

6. (SBU) Business leaders, the mayor of Totogalpa, and ALN,
MRS, and EyT representatives all decried alleged
discrimination in public sector employment. They insisted
that the Ortega administration was "cleaning house," removing
any non-Sandinistas from public service jobs -- regardless of
experience and expertise -- and replacing them with party
loyalists. Business leaders were especially critical of this
practice, stating that new officials were "not qualified" and
that the process of changeover was highly "disorganized,"
creating an atmosphere of uncertainty and confusion in their
communities. Further, they agreed that the new government
agency representatives were "non-responsive." As a result,
the overall business climate is uncertain.

Sister City Relations Key to Survival
- - - - - - - - - - - - - - - - - - -

7. (SBU) Remittances and bi-lateral unofficial assistance
received from sister cities in France, the U.S., and
especially Spain, mask the local economy's underlying
troubles, according to the participants. All were quick to
acknowledge that generous financial support from Somoto's
Spanish sister city had paid for schools, churches, and
parks, among other things. In addition, the mayor of Somoto
detailed an "exchange" program through which over 1,000 women
from the greater Somoto area had gone to work as domestic
employees in the Spanish sister city, providing a much-needed
source of income through remittances. (NOTE: When queried
about this exchange program, other participants scoffed,
indicating that it was not a formal program, and its success
questionable. Many women had taken out loans against
property and houses to finance their trips only to return --
now with an outstanding loan -- after failing to find jobs.
The Ambassador raised concerns about trafficking in persons
given the lack of oversight or control over the exchange, but
participants did not believe it to be a problem. END NOTE.)

8. (U) According to the mayor of Somoto and others, the
assistance of sister cities skewed the region's income so
much that Madriz' economic classification was upgraded in the
last census, reducing assistance from the Nicaraguan
government. As a result, insisted the mayor, the region's
suffering is worsening.

Program "Zero Hunger" Seen as Political Tool
- - - - - - - - - - - - - - - - - - - - - -

9. (C) As one of Nicaragua's poorest regions, Madriz was
selected for the Ortega administration's new "Zero Hunger"
program, which gives up to $2,000 worth of direct assistance
and vouchers per family to facilitate self-sufficiency.
Approximately 300 families in Somoto and 100 in Totogalpa
were selected for the program. While there was general
agreement that the program could cause jealousy and rivalry
within the communities, Totogalpa's PLC mayor, Carmen
Mercedes Hurtado, as well as ALN and MRS representatives,
claimed the selection process is politicized. Although
participants are nominated by the mayors, explained Hurtado,
the Ministry of Agriculture and Forestry (MAGFOR), as the
implementation partner, makes the final decisions. She and
others claim that Sandinista supporters have "found it easier
to qualify" for final selection. Hurtado also claimed that
NGOs involved in the implementation are Sandinista. Further,
Hurtado questioned the program's potential effectiveness in
Madriz given that participants must own at least one hectare
of land to qualify, excluding the landless -- the poorest of
the poor -- from participating.

Universal Interest in Free Trade Zone
- - - - - - - - - - - - - - - - - - -

10. (SBU) Asked what could be done to improve the economic
situation in Madriz, there was unilateral support for the
establishment of a free trade zone (FTZ) to absorb the excess
labor supply and jump-start the economy. All believed that
Somoto's proximity to the Honduran border, good road system,
strong agricultural base, and ample supply of labor make the
region a prime candidate for FTZ investment. Despite these
apparent advantages, in the last six years, only one attempt
has been made to contact FTZ authorities in Managua and no
one has ever approached ProNicaragua, a Managua-based
investment promotion NGO. The Ambassador urged action on
both fronts, remarking that without action there cannot be
results. The Ambassador also encouraged them to focus on
products that play to the region's natural strengths -- such
as food-based production -- instead of garment factories.

Opposition to 7-year Term Proposal
- - - - - - - - - - - - - - - - - -

11. (C) Given recent discussions by the Ortega
administration and PLC to extend mayoral terms to seven years
(reftel B) to coincide with the 2011 presidential elections,
Ambassador sought input from the mayors, business leaders,
EyT, and the ALN and MRS representatives. There was strong
opposition to the proposal from everyone but the Sandinista
mayor of Somoto, Marcio Ariel Rivas Nunez, who answered that
the "transition of governments is hard" and that "he would
have to think about it." Despite commenting that the ALN and
PLC "would be dead" if elections were held in 2008, and that
extending the period might give opposition forces a "better
chance," Hurtado held firm that dividing national and
municipal elections "is better for democracy." Garcia
soundly rejected the idea as an "error" from a legal
standpoint, opining that such a move "might confuse voters."

U.S. Visibility Poor - Lacks "Personal Touch"
- - - - - - - - - - - - - - - - - - - - - -

12. (C) Despite US$2.5 million in USAID projects in the
departments of Madriz and Nuevo Segovia, there is little
awareness or recognition of U.S. efforts in the region. In
fact, the department's 12 Peace Corps volunteers are the most
visible symbols of U.S. assistance. While Hurtado laid the
blame on the department's Sandinista majority, claiming that
they won't acknowledge any work done by non-Sandinistas,
others provided more reasoned explanations. Nunez reminded
the Ambassador that U.S. visibility is impeded by the strong
presence of Somoto's Spanish sister city. Other participants
cited Madricenos' peculiar tendency to associate projects
with individuals and if no Americans are directly involved in
implementation, the people will not associate a project with
the United States.

Advise to US - Stay Positive, Stay Engaged
- - - - - - - - - - - - - - - - - - - - -

13. (C) Participants urged the U.S. to stay engaged and to
"keep working even if you don't want to" to maintain positive
relations, in spite of Ortega's anti-U.S. rhetoric. Business
leaders asked the U.S. to maintain a "long-term perspective
on the relationship" while EyT's Garcia emphasized that the
U.S. should take an "approach of respect" centered on
"positive messages and positive signs." He stated that the
Nicaraguan people have heard enough negative rhetoric, which
only feeds uncertainty and fear.

Comment
- - - -

14. (C) Notwithstanding alleged disillusionment among the
populations of Somoto and Totogalpa -- and perhaps the other
municipalities of Madriz -- due to higher fuel prices, no new
jobs, and a Sandinista-bias in the Zero Hunger program,
Liberals readily admitted that they face a serious challenge
in the 2008 municipal elections. There was general agreement
on the need to unify the opposition parties, but no clear
ideas on how to achieve it. Further, there was no evidence
of homegrown unified initiatives to take advantage of the
FSLN's particular weakness in Madriz, despite the
opportunity. Lack of funds -- and perhaps lack of guidance
from party leaders in Managua -- is certainly an important
factor. While these local branches maintain contact with
Managua, without funding it is all they can do to simply keep
their doors open. While national unification is symbolically
important, opposition party leaders should prioritize and
support unification efforts at the municipal level where
political party leaders have shown a willingness to work
together to select the most viable opposition candidate and
where specific pre-election strategies can be developed to
target localized FSLN weaknesses.
TRIVELLI

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