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Cablegate: Nicaragua: Mcc Ceo Emphasizes Constructive

VZCZCXRO8979
RR RUEHLMC
DE RUEHMU #0127/01 0351459
ZNY CCCCC ZZH
R 041459Z FEB 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 2031
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000127

SIPDIS

SIPDIS

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

E.O. 12958: DECL: 02/01/2018
TAGS: EAID PREL PGOV ECON EINV NU
SUBJECT: NICARAGUA: MCC CEO EMPHASIZES CONSTRUCTIVE
ENGAGEMENT

Classified By: Ambassador Paul Trivelli for reasons 1.4 b&d.

1. (C) Summary: On January 22-24, Ambassador John Danilovich,
CEO of the Millennium Challenge Corporation, visited
Nicaragua to inaugurate work on a key road segment of the
Pan-American Highway and to hand out clean property titles
and rural business development equipment during a public
event with President Ortega. In anticipation of the public
events, Amb. Danilovich held meetings with the GON
MCA-Nicaragua Board members and met one-on-one with President
Ortega. At a reception hosted by Amb. Trivelli, Nicaragua
political, business, and academic leaders emphasized common
themes in their discussions with Amb. Danilovich: the
importance of MCC projects as a critical tool to help foster
Nicaragua's economic development and stronger bilateral ties
between the two countries. Before departing Nicaragua, Amb.
Danilovich participated in the formal dedication of the New
Embassy Compound. The most striking aspect of his visit was
how well President Ortega stayed on message and refrained
from making disparaging comments about the USG or the MCC
program. Not only was President Ortega's consistently
positive message remarkable, but the imagery of the January
23 public event - the President standing alongside Amb.
Trivelli and Amb. Danilovich in front of the Nicaraguan and
American flags to hand out clean property titles - stood in
stark contrast to Ortega's normal, anti-American posture.
End Summary.

2. (C) On January 22-24, Ambassador John Danilovich, CEO of
the Millennium Challenge Corporation, visited Nicaragua to
participate in several MCC project events. He inaugurated
work on a key road segment of the Pan-American Highway,
handed out more than 700 clean property titles, and delivered
fire-fighting equipment and irrigation systems to rural
business development beneficiaries. The latter two
activities took place during a public ceremony presided by
President Ortega.

MUM'S THE WORD
--------------

3. (C) On January 22, Amb. Danilovich started his visit with
a meeting with the Government of Nicaragua (GON) members of
the MCA-Nicaragua Board. Despite previously expressing
concerns about various aspects of the program, the GON Board
members were relatively silent and even somewhat positive
about the state of the program. Amb. Danilovich met the
newly designated Chairman Alberto Guevara (Minister of
Finance), Senior Presidential Advisor Paul Oquist, and other
Ministers on the Board. The Chairman expressed the GON's
interest in expanding the Compact to include an energy
project and/or expansion to other regions of Nicaragua. It
was clear that Guevara had specific instructions from the
President to make the project a success. He also mentioned
the importance of guaranteeing that local Nicaraguan firms
are eligible to compete for MCA-Nicaragua contracts. Amb.
Danilovich explained that MCC does not provide preferences
based on nationality, but rather, the firms that are the best
qualified to do the job win the contracts. He commended the
GON Board of Directors for their recent engagement and
interest in making the Program succeed.

PRIVATE MEETING WITH PRESIDENT ORTEGA
-------------------------------------

4. (U) President Ortega's meeting with Amb. Danilovich in
Managua on January 22 involved a host of GON officials,
including FM Santos, Guevara, Free-Trade Zone Director
General Baltodano, and the Minister of Transportation and
Infrastructure Pablo Fernando Martinez. (Note: Baltodano also
oversees the GON's investment promotion unit, ProNicaragua,
involved in MCC activities. End Note.) Despite requests by
the Embassy to have no press coverage, the Presidency had
"friendly" news outlets present for a photo-op at the
beginning of the meeting and a short Q&A session at the
conclusion.

5. (C) The exchange between President Ortega and Amb.
Danilovich was cordial and constructive, building upon their
rapport established during a meeting on the margins of the
United Nations General Assembly last year. President Ortega
emphasized his interest in seeing road construction begin,
but also stressed the importance of building quality
infrastructure. Echoing his cabinet members' concern earlier
in the day, Ortega raised the issue of local firm
preferences. Juan Sebastian Chamorro, MCA-Nicaragua General
Director, presented the President the status of the
Infrastructure and Rural Business Development projects,
including some early results: the successful submission of
the feasibility and design plans for 364 kms of road as well
as recognition that thousands of Nicaraguans have already
benefited from the program. During the press session at the
end of the meeting, President Ortega clarified that his
new-found relationship with the U.S. Government was a result
of additional information he had received about the program
and a "new reality."

NICARAGUANS EMPHASIZE IMPORTANCE OF MCC
---------------------------------------

6. (U) At a reception hosted by Amb. Trivelli, Nicaraguan
political, business, and academic leaders emphasized common
themes in their discussions with Amb. Danilovich: the
importance of MCC projects as a critical tool to help foster
Nicaragua's economic development and stronger bilateral ties
between the two countries. They also asked whether Ortega's
typical anti-American rhetoric would affect Nicaragua's
eligibility for additional MCC funds. Amb. Danilovich
explained that eligibility is based on the continued positive
performance on MCC eligibility indicators.

VIVA LOS ESTADOS UNIDOS!
------------------------

7. (U) On January 23, Amb. Danilovich spent a full day in the
departments of Leon and Chinandega, the program
implementation region. His first stop was a press conference
and photo-op to initiate work on a key segment of the
Pan-American Highway that links the Northwest region of
Nicaragua to Honduras and beyond. MCC approved this 17
kilometer road segment as an addition to existing compact
activities due to budgetary savings. Amb. Danilovich
reassured the press and other concerned stakeholders that the
Infrastructure Project was on schedule and underway.

8. (U) Accompanied by President Ortega, First Lady Rosario
Murillo, and Nicaraguan Ambassador to the U.S. Arturo Cruz,
Amb. Danilovich participated in a public ceremony to hand out
more than 700 clean property titles as well as forest fire
prevention kits and irrigation equipment. Over four thousand
program beneficiaries were present for the event, including a
few individuals who were chosen to speak during the event on
behalf of all beneficiaries.

9. (C) Unusual for an Ortega event, this ceremony was notable
for its high level of civic participation, and lack of
partisan expressions or chanting. In his address, Amb.
Danilovich emphasized that MCC is a poverty reduction program
that strives to create jobs and foster economic growth. He
pointed out that the U.S. Government wants to have stronger
neighbors in the hemisphere. MCC is committed to helping the
people of Nicaragua as long as the GON supports the program
and commits to reforms that promote the well-being of the
Nicaraguan people.

10. (C) Throughout the event, President Ortega commented that
his impression of the MCC program had changed now that he is
better informed. Having just visited an MCA-Nicaragua
agricultural fair before taking the stage, President Ortega
spoke at length about the real differences being made in
people's lives as a result of the MCC program. President
Ortega stressed that the people of Nicaragua are united with
the citizens of the United States and that together we could
eradicate poverty, hunger and malnutrition. At the end, he
led the audience in repeated chanting: "Long live the United
States!"

NEW EMBASSY COMPOUND DEDICATION
-------------------------------

12. (U) On January 24, Amb. Danilovich participated as a
guest of honor in the formal dedication of the New Embassy
Compound. During his remarks before an audience which
included high-level GON representatives, he reflected upon
the activities of the previous day with President Ortega. He
also underscored the achievements of the MCC program and the
importance of building a long-lasting relationship with the
people of Nicaragua.

13. (U) MCC CEO Amb. Danilovich cleared on this message.
TRIVELLI

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