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Cablegate: A/S Shannon's Meeting with Business Leader Kruger

VZCZCXYZ0001
RR RUEHWEB

DE RUEHMU #2616 3352101
ZNY CCCCC ZZH
R 012101Z DEC 06
FM AMEMBASSY MANAGUA
TO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
INFO RUEHC/SECSTATE WASHDC 8334
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

C O N F I D E N T I A L MANAGUA 002616

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/29/2016
TAGS: ECON KDEM PGOV PREL NU
SUBJECT: A/S SHANNON'S MEETING WITH BUSINESS LEADER KRUGER


Classified By: Amb. Paul Trivelli for reasons 1.4 (b and d)

1. (U) Summary: On November 28, Assistant Secretary Thomas
Shannon, Ambassador Paul Trivelli, and Nicaraguan business
leader Erwin Kruger briefly discussed a broad spectrum of
post-election business and political topics relevant to
President-elect Ortega's upcoming presidency, including the
frailty of Nicaragua's macroeconomic state; the need for
stability through remittances, export expansion, observance
of International Monetary Fund (IMF) guidelines and access to
international donor funds; the impact of a corrupt judiciary
on investor confidence and poverty reduction; and, the
likelihood that Ortega will respect CAFTA. End Summary.

2. (C) A wide-ranging conversation with A/S Thomas Shannon
and the Ambassador, President of Nicaragua's Private
Enterprise Council (COSEP) Erwin Kruger, enumerated several
issues likely to impact on President-elect Daniel Ortega's
upcoming presidential tenure. These included:

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--the frailty of Nicaragua's macroeconomic state and the
importance of maintaining stability through remittances,
export expansion, observance of International Monetary Fund
(IMF) guidelines and access to international donor funds;

--the impact of a corrupt judiciary on investor confidence
and poverty reduction;

--the likelihood that Ortega would respect CAFTA despite
Venezuela's efforts to promote rupture between the U.S. and
Nicaragua; tradeoffs required while trying to protect
vulnerable sectors; other-than-CAFTA markets such as the
European Union; ALBA (Venezuela's counter-offer to CAFTA);
Mercosur, India and China;


3. (SBU) Kruger announced that an investment forum jointly
sponsored by government and social sectors will bring private
sector entities, including COSEP members and the American
Chamber of Commerce, to discuss "Investment for Nicaragua,
2007-2012: A Strategic Alliance for the Future." A/S
Shannon suggested that the Council of the Americas be invited
to the January 10-12 forum. He also recommended that the
forum provide a corporate "first-hand look" for companies
seeking business access and a perspective on democracy,
stability, free trade agreements, and post-electoral
political party stances. A/S Shannon characterized Nicaragua
as a "country positioned to do well," predicting that
President-elect Ortega will find a "table already set" for
positive regional participation, barring a return to caudillo
leadership.

4. (C) Kruger noted that SandinisQeSM}Q'Iwresident
elect Jaime Morales Carazo as the "best chameleon you can
find." Kruger underscored the new administration's
acknowledgment of its base, the perils of mismanaging
mandates, and the need to develop electricity. Finally, he
agreed with our engagement strategy regarding Ortega, saying,
"Ortega should get an early message that the United States
can be a friend."

5. (U) Participants:

Nicaragua:
COSEP President Erwin Kruger

U.S.:
A/S Thomas Shannon
Ambassador Paul Trivelli
Econoff Grace Brunton (notetaker)

6. (U) Assistant Secretary Thomas Shannon cleared on this
cable.
TRIVELLI

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