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Cablegate: Zero Hunger- Not a Long Term Solution

VZCZCXRO1385
RR RUEHLMC
DE RUEHMU #1783/01 2052144
ZNR UUUUU ZZH
R 242144Z JUL 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 0871
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RHEHNSC/NSC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 MANAGUA 001783

SIPDIS

SIPDIS
SENSITIVE

STATE FOR WHA/CEN, WHA/EPSC, AND EEB
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR

E.O. 12958: N/A
TAGS: EAID ECON PGOV NU
SUBJECT: ZERO HUNGER- NOT A LONG TERM SOLUTION


1. (SBU) Summary: President Ortega has held several splashy
ceremonies promoting his Hambre Cero (Zero Hunger) program, which
aims to end hunger in Nicaragua within five years by offering
standardized packages of livestock and other goods to families
living in extreme poverty. The program has come under fire from
civil society and opposition political parties, however, who claim
that Ortega is excluding organizations with proven development
expertise while funneling the benefits exclusively to FSLN
loyalists. Meanwhile, GON officials are seeking foreign assistance
to fund the program, which is expected to cost $150 million and
benefit a total of 75,000 families by 2012. Even if the desired
funding is secured, the controversial Hambre Cero program is
unlikely to live up to the lofty promises and feisty rhetoric used
by Ortega and other GON officials to promote it. End summary.

The Facts on Hambre Cero
------------------------

2. (U) On July 17, President Ortega made an appearance in the
Roberto Huembes Market Plaza to promote the inauguration of his
Hambre Cero (Zero Hunger) program in Managua. This was the fourth
inauguration attended by the President, following similar events in
the North Atlantic Autonomous Region (RAAN) on May 4, the Department
of Esteli on July 7, and the Nueva Segovia region on July 14.
Formally known as the Productive Food Project (PPA), the objective
of Hambre Cero is ambitious and yet deceptively simple--to eliminate
hunger from the poorest regions of the country by 2012.

3. (SBU) According to Hambre Cero founder and administrator Orlando
Nunez, the program is expected to benefit 75,000 peasant families
over five years, with a total cost of $150 million. Each
participating family will receive an allotment of goods and services
valued at approximately $2,000, including $1,500 worth of goods and
$500 worth of technical assistance and administrative costs. A
standard PPA allotment consists of one pregnant cow, one pig, five
chickens, one rooster, seeds, fruit and tree plants, a biodigestor
(which converts manure into methane cooking gas), and access to
revolving credit. The allotments are transferred in the name of the
female head of each household, although Agriculture and Forestry
(MAGFOR) Vice Minister Benjamin Dixon has said that only women who
are married with children will be eligible for participation. This
decision was condemned by Puerto Cabezas Mayor Nancy Elizabeth
Enriquez, who claimed that the government was actively
discriminating against single mothers. (Comment: This is not an
effective poverty reduction strategy in a country with one of the
world's highest incidences of single motherhood. End comment.)
While the initial Hambre Cero allotment is free of charge, the
beneficiaries are expected to return 20% of its estimated value to a
revolving collective fund organized in part by the Rural Credit Fund
(FCR).

Charges of NGO Exclusion and FSLN Vote-Buying
---------------------------------------------

4. (U) In the two months since its launch in the indigenous RAAN
community of Raiti, Hambre Cero has received significant criticism
from both civil society and opposition political parties. No
independent media outlets were invited to the Raiti installation,
leaving only official government sources to cover the event.
According to one NGO representative, the veil of secrecy surrounding
Hambre Cero has generated skepticism about its potential
effectiveness. At the beginning of February, approximately 100
representatives from dozens of Nicaraguan NGOs were convened by the
Sandinista National Liberation Front (FSLN) to discuss their role in
the execution of the program. Five months later, however, several
of these organizations have spoken out about their exclusion from
Hambre Cero, which they say is politically-motivated. The Ministry
of Agriculture and Forests (MAGFOR) will execute the program, but
the agency claims it is delegating responsibilities to several NGOs,
whose identities it has refused to release.

5. (U) According to a report released by the Nicaraguan Foundation
for Economic and Social Development (FUNIDES), the GON has not
clearly defined its objectives for the program or the criteria by
which it will select its beneficiaries. Nunez has stated that
peasant families will be evaluated for program eligibility based on
the vague criteria of "necessity, capacity, and commitment."
Nicaraguan political opposition parties claim that the FSLN is using
Hambre Cero as a means to generate votes for the 2008 municipal
elections. According to Constitutional Liberal Party (PLC)
representative Wilfredo Navarro, program benefits are currently
being delivered only to "militant Sandinistas." For his part, PLC
head Maximino Rodriguez claimed to hold concrete evidence that the
Hambre Cero funds in Murra, Nueva Segovia have been handed over
directly to the department's FSLN political secretary for
distribution. GON officials have denied the charges, insisting that
of the 300 women who have received Hambre Cero allotments in the
Department of Nueva Segovia, only half are FSLN members, and that
the GON intends to work with peasant women "independent of their
political color." (Note: Non-FSLN women receiving Hambre Cero
benefits tend to be independents. End note.)

6. (U) MAGFOR delegate Martin Rosales stated that the Citizen Power
Councils (CPCs) in each region will be responsible for distributing
the Hambre Cero allotments. The PLC, along with the Nicaraguan
Liberal Alliance (ALN) and Sandinista Renovation Movement (MRS), are
currently seeking legal reform that would eliminate the CPCs, which
they view to be an instrument of political consolidation and
exclusion on the part of FSLN. The three opposition parties have
also announced they will push for a law mandating that the 185
million cordobas designated for the Hambre Cero program in 2007 be
administered by individual municipalities rather than FSLN political
secretaries.


Questionable Development Strategies
-----------------------------------

7. (U) Although GON officials stress that the goal of Hambre Cero is
to enable peasant families to produce for themselves and have excess
to sell in markets, FUNIDES specialists expressed concern that the
dire immediate needs of program participants will deter them from
appreciating the value of long-term production. The Hambre Cero
program is said to be based on a revolving loan program developed by
the civil society organization CIPRES in the mid-1990s. The CIPRES
initiative, however, involved intensive training and follow-up with
its recipients--it is not clear that Hambre Cero incorporates either
of these critical features. Many have also questioned whether the
GON has the internal capacity to replicate CIPRES' small-scale
program on a nation-wide level, and how Hambre Cero's standardized
approach to development will correspond with the diverse
socioeconomic and cultural realities of the Nicaraguan people.
Additionally, the FUNIDES report emphasized that every successful
poverty-reduction program, including the highly-touted
"Oportunidades" program in Mexico, has had an independent monitoring
and evaluation component, which does not exist in the GON's Hambre
Cero model.

Nicaragua's Poor Left Waiting For Funding, Results
--------------------------------------------- -----

8. (SBU) FUNIDES also criticized the GON for refusing to release a
detailed line-item budget for the Hambre Cero program. All that is
currently known is that administrative costs will account for 25% of
the $10 million budget for 2007, which is considered high by
development experts. The National Assembly approved $10 million for
the program in 2007, just one-third of the funding Ortega had
originally requested. MAGFOR Vice Minister Dixon announced in July
that his agency is seeking international assistance from donors like
Japan and the EU to finance the $140 million needed to operate
Hambre Cero until 2012. Yet even with an infusion of foreign aid,
Hambre Cero appears unlikely to achieve its professed goal of
eliminating hunger in Nicaragua. According to the World Bank's
"Evaluation of Poverty in Nicaragua," the country is estimated to
have more than 2,300,000 individuals living below the poverty line
in 2005, while the Hambre Cero program is expected to reach only
75,000 families. Indeed, members of the three indigenous groups
that inhabit the banks of the Coco and Bocay Rivers-in the remote
northeast of Nicaragua where the Cero Hambre program was first
launched in May--have already complained that the assistance being
provided by the GON is not nearly enough to fulfill their needs.

Comment
-------

9. (SBU) President Ortega's Hambre Cero program seems destined for
failure. Even if the GON is able to secure the political and
financial support it needs to achieve the program's goals--a tenuous
proposition at best--it will still benefit only a fraction of
Nicaraguans living in extreme poverty. Moreover, although many key
aspects of Hambre Cero have remained out of the public view, from
those details that have been released, there is little reason to
believe that the program is based on sound and sustainable
development strategies. Indeed, it appears to have been developed
without any regard for the experiences of other Latin American
countries in implementing income transfer programs or for the
extensive literature written on the economics of these programs.
Having alienated members of both the NGO community and the National
Assembly, Ortega seems content to use Hambre Cero as a vehicle
through which to reward loyal FSLN supporters and consolidate
support for the 2008 municipal elections. Alternatively, widespread
discontent with the program's administration could serve as a
rallying point for a previously-fragmented political opposition.
Either way, we are all expecting some serious "parrilla" (BBQ) in
the Hambre Cero sites starting in November. End comment.

TRIVELLI

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