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Cablegate: Sweden Ends Cooperation with Nicaragua

VZCZCXRO7569
RR RUEHLMC
DE RUEHMU #2203 2682303
ZNR UUUUU ZZH
R 252303Z SEP 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1355
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHSM/AMEMBASSY STOCKHOLM 0142
RHEHNSC/NSC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS MANAGUA 002203

SIPDIS


SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: EAID EWWT PREL ECON PGOV NU
SUBJECT: SWEDEN ENDS COOPERATION WITH NICARAGUA

REF: TEGUCIGALPA 1487

1. (SBU) Summary: On August 27, the Embassy of Sweden announced that
the country will end its foreign assistance program in Nicaragua as
part of a global strategy that aims to focus its international aid
to countries in Africa and Eastern Europe. Members of the
Nicaraguan National Assembly and independent economists speculated
that the decision was really due to Nicaragua's criminalization of
all forms of abortion and to President Ortega's leftist politics.
According to a Swedish aid officer, the process of deciding what
programs to cut was not transparent, and reflected the inherent
conflicts in Sweden's contentious coalition government. End
summary.

2. (U) On August 27, the Embassy of Sweden announced that the
country will end its foreign assistance to Nicaragua, as a result of
a global strategy that aims to focus its international aid to
countries in Africa and Eastern Europe. In recent years, annual aid
from Sweden to Nicaragua has averaged $21 million, reaching $35.6
million in 2006. The Swedish Embassy explained that the process of
withdrawal will take between two and four years. The diplomatic
functions of Sweden's Managua Embassy will be transferred to
Guatemala, with the embassy here converting to an aid office to
oversee the assistance phase-out. These moves are part of a larger
regional cutback as the GOS plans to conclude or significantly
reduce its assistance programs in Chile, Peru, Haiti, Honduras, and
Nicaragua (reftel). Projects being implemented in those countries
will continue until their scheduled completion dates.

3. (U) Sweden's assistance to Nicaragua focuses on the social issues
of health and education. It is also a member of the Budget Support
Group, composed mainly of European aid agencies and international
financial institutions which provide funding directly to Nicaragua's
general budget. This support is part of the Nicaraguan effort on
aid harmonization and alignment and the overall program to finance
the operations of the public social sectors as envisioned in the
Millennium Development Goals.

4. (U) Despite of the Swedish Ambassador's continued assertions that
this move was part of a global strategy and that the decision was
made over a year ago, members of the Nicaraguan National Assembly
and independent economists speculated that the decision was really
due to Nicaragua's criminalization of all forms of abortion and to
President Ortega's leftist politics.

5. (SBU) According to Swedish aid officer Sten Strom the decision to
curtail operations in Latin America was not only based on efforts to
concentrate assistance in countries or regions of strategic
importance to Sweden, but also reflects the inner workings of the
four party coalition in Stockholm. The decision to close an embassy
and conclude an aid program was based on one of two criteria, either
administrative benefit or local development policy, or, perhaps,
some combination of the two. Administrative criteria included the
savings to be gained by closing an embassy or aid program and
managing functions and projects from a regional center. In
considering beneficiary counties' development policies, the Swedish
government examined their commitment to sound economic policies, the
rule of law, gender equality, and HIV/AIDS amelioration.

6. (SBU) The process provides Swedish diplomats a convenient dodge
-- if a decision to close a development program proves
controversial, it can be attributed to administrative
considerations. According to Strom, the process was not truly
transparent, and reflected the inherent conflicts in a contentious
coalition government. During a recent session, the Chairman of the
Budget Support Group (currently the World Bank ResRep in Nicaragua)
asked Strom if the decision to terminate the program in Nicaragua
was motivated by Sweden's displeasure with the recent
criminalization of therapeutic abortion in Nicaragua; he responded
in the negative.

TRIVELLI

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