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Cablegate: Patronage Trumps Professionalism at Nicaraguan Tourism

VZCZCXYZ0000
PP RUEHWEB

DE RUEHMU #2232 2751707
ZNR UUUUU ZZH
P 021707Z OCT 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 1400
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS MANAGUA 002232

SIPDIS

SENSITIVE
SIPDIS

USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR

E.O. 12958: N/A
TAGS: ECON EINV NU
SUBJECT: PATRONAGE TRUMPS PROFESSIONALISM AT NICARAGUAN TOURISM
INSTITUTE

REF: (A) MANAGUA 1789, (B) MANAGUA 452, (C) MANAGUA 341

1. (SBU) Summary: Representatives of the Nicaraguan tourism industry
complain that the Nicaraguan Tourism Institute (INTUR) has been
decimated by an overhaul in personnel since President Ortega took
office in January. They report INTUR is "paralyzed," offering no
strategic vision for the sector. Industry insiders fear that
prospects for the tourism sector, once poised for takeoff, have
dimmed. End Summary.

2. (SBU) President Ortega appointed real estate developer Mario
Salinas as President of INTUR in January 2007. Salinas quickly
promised to develop the Atlantic Coast as a tourist destination and
focus INTUR marketing on U.S. retirees and golf enthusiasts.
Salinas also pledged to promote special tourist routes for groups
such as Nicaraguans residing abroad and foreigners interested in
Nicaragua's socialist history (Ref B). Policy and management
conflicts with INTUR Vice President Nubia Arcia led to Salinas's
departure in June. He now serves as Presidential Advisor for
Tourism, Housing, and Infrastructure.

3. (SBU) In July, Arcia inherited Salinas' position. She lasted
until late August, when she was summarily fired. In a conversation
with Econoff, Tourism Chamber (CANATUR) officials said that Arcia
was dismissed because she was "incompetent."

4. (SBU) Ninette Marcenaro, Vice President of INTUR under Arcia, has
been named Acting President. She is believed to be an FSLN
hardliner with close ties to First Lady Rosario Murillo. Industry
insiders believe Arcia is the frontrunner to lead INTUR on a
permanent basis, but she does not seem to be actively politicking
for the job. At a tourism forum on September 24 dedicated to better
understanding the link between tourism development and poverty
alleviation, Marcenaro arrived late, left early, and made little
effort to speak with industry representatives. At another forum
held on September 26, she outlined INTUR's priorities in pedestrian
form: protection of the environment, protection of cultural values,
and tourism promotion, especially for microenterprises.

5. (SBU) Beginning slowly under Salinas' leadership, but picking up
pace under Arcia, INTUR management has systematically purged
professional staff to make way for FSLN party loyalists. To date,
54 staffers have departed. Industry sources believe that new
staffers lack expertise in tourism development and promotion,
bringing the institute to the point of paralysis. INTUR no longer
actively promotes the country as a tourism destination nor offers a
strategic vision for the sector. These same sources also complain
that INTUR is no longer compiling statistics, making it impossible
to track sector performance. Acting President Marcenaro has,
however, publicly defended the appointment of new staffers, claiming
they are "technically proficient" and that INTUR has only replaced
"people who held positions of trust," common practice after any
change in government.

6. (SBU) In a televised interview on September 26 that also covered
problems in the tourist sector, Economic Advisor to the President
Bayardo Arce claimed that although growth in the sector has fallen
short of its 10% target, it is still 3%. He blamed this
deceleration on the lack of promotion, and staff changes at INTUR,
noting that the institute remains under the direction of an interim
president. In contrast to the tourist sector forum hosted by
Marcenaro on September 26 (see Paragraph 4), Arce focused on the
need to improve infrastructure, such as roads, electricity, hotels,
and tourist services.

7. (SBU) Comment: In 2006, nearly 900,000 visitors to Nicaragua
spent $239 million in Nicaragua on hotel rooms, restaurant meals,
transportation, and other goods and services. New investment in the
sector totaled $60 million (Ref C). Despite significant
infrastructure challenges, the sector appeared poised for take-off.
Since the Ortega Administration took office, however, prospects have
dimmed. In addition to property titling issues that have plagued
investors for many years (Ref A), the implosion of INTUR has removed
government leadership from the sector. A lack of reliable
statistics makes it difficult to say definitively that there are
fewer visitors or tourist dollars this year versus last. End
Comment.

TRIVELLI

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