Nicaragua News Service
                         January 1 - 7, 1995
                            Vol. 3, No. 2

Major news stories for the week:

1.  Political battle within FSLN over who should be the
      new president of the National Assembly;
2.  Lacayo says that relations with Cuba are on hold;
3.  FETSALUD negotiates increase in benefits;
4.  Landless peasants invade the island of Zapatera;
5.  Major recontra commander killed in combat;
6.  Workers to regain control of match factory;
7.  Energy strike settled after three days;
8.  IMF and World Bank come to grade the Nicaraguan economy.
______________________________________________________________________
 
1.  Political battle within FSLN over who should be the new president 
of the National Assembly
 
Members of the FSLN National Directorate met last week to decide that 
their party should support Conservative leader Miriam Arguello in her 
campaign for election to the presidency of the National Assembly, 
which begins its 1995 session on Monday, January 9th.  The election 
of the new executive committee is the first item on the parliament's 
agenda.  It is not clear, however, if either Arguello or Luis Humberto 
Guzman, the present President, have enough votes to be elected.  The 
uncertainty explains the fact that the election filled the front page 
of local newspapers all during last week.
 
One of the major problems for the FSLN on this issue is that the 
Sandinista deputies within the National Assembly are divided.  
Officially the Sandinista bench, led by Dora Maria Tellez of the 
"renovation" current, supports the candidacy of Luis Humberto Guzman 
in exchange for support for the re-election of Reynaldo Tefel and Ray 
Hooker of the FSLN to the executive committee.
 
Omar Cabezas, Sandinista deputy, told the newspaper Barricada that 
several Sandinista members of the National Assembly have decided to 
form a group to serve as a bridge between the two different FSLN 
groups in the National Assembly.  "What we are doing is depolarizing 
the Sandinista bench, whose division, we must recognize, took place a 
short time before the last FSLN congress."   Barricada did not state 
who else was promoting the reconciliation movement. 
 
All last week Barricada published articles accusing Luis Humberto 
Guzman of misusing National Assembly funds in order to finance 
Democratic Christian Union Party (UDC) political activities, while at 
the same time giving ample coverage to the political opinions of 
Miriam Arguello.  
 
Barricada also published procedural criticisms of Dora Maria Tellez 
for the decision to include Doris Tijerino as the third candidate of 
the FSLN for the executive committee, claiming that a democratic 
decision had not been made on the issue by FSLN National Assembly 

members. (Barricada,  Jan. 3, 7)
 
2.  Lacayo says that relations with Cuba are on hold. 
 
In a interview with Barricada last week, Minister of the 
Presidency Antonio Lacayo, stated that pressures from the United 
States directly influence the state of relations between Cuba and 
Nicaragua and that, at present, relations with the Caribbean island 
are on hold.  According to Lacayo, the moments of most pressure 
were those in 1992 when the right wing in the US, under the leadership 
of Senator Jesse Helms, held up the aid approved for Nicaragua.  The 
situation improved somewhat with the election of Bill Clinton to the 
White House. However, Lacayo said, it is probable that with the 
Republican majority in the new US Congress, tensions will again 
increase between the US and Nicaragua, affecting the relations between 
Nicaragua and Cuba.
 
With respect to Nicaragua's foreign debt to Cuba, Lacayo did not 
specify how much was owed but stated that Nicaragua was periodically 
paying with goods such as black beans or meat with a mutual 
understanding that the repayment would not put the Nicaraguan economy 
under any severe pressure.  The value of the houses in conflict 
between the Cuban embassy in Managua and the Nicaraguan Ministry of 
Foreign Affairs will also be deducted from the Nicaraguan debt to the 
island.  (Barricada,  Jan. 3)
 
3. FETSALUD negotiates increase in benefits
 
Health workers received an additional $3 in their productivity bonus 
according to agreements signed last week between their union FETSALUD 
and the Ministry of Health (MINSA).  The bonus, which had already been 
raised in previous negotiations at the end of 1994 from $18 to $29, 
now represents an additional $32 to be paid monthly to each health 
worker.  
 
FETSALUD was able to make the government agree to guarantee employment 
to the almost 1500 new specialists who will graduate this year and 
who faced certain unemployment.  The union and MINSA also agreed to 
look for funds to create a housing loan program and a credit fund for 
the use of all health workers.  (Barricada, Jan. 7)
 
4. Landless peasants invade the island of Zapatera
 
The island of Zapatera, located in Lake Nicaragua and known as one of 
the most valuable archaeological preserves of Nicaragua, was 
completely taken over by more than 600 families fleeing from areas of  
violence in the north of Nicaragua, including San Rafael del Norte, 
Waslala, Siuna,  Bocana de Paiwas, Mulukuku and other areas in the 
Departments of Matagalpa and Jinotega.  Many of the men were 
demobilized from the army or the Ministry of the Interior and had been 
targets of violence during recent years by recontra leaders such as 
Nortiel and El Charro.
 
Government officials sent messengers to negotiate with the settlers 
who refused to leave the area until the government guaranteed each 
family a plot of land outside of their original areas due to the 

violence in those regions.  When negotiations failed, the army sent in 
more than 70 soldiers to forcibly oust the squatters, in their majority 
women and children as the men had decided to abandon the area and 
hide. 
 
Jose Maria Ampudia, a naturalized Nicaraguan citizen of Spanish 
origin, is being held by the police as intellectual author of the land 
takeover.  The police continue to search for Antonio Jarquin, former 
head of UNAG in the Nandaime area, as another of the promoters of the 
takeover.  (Barricada,  Jan. 5, 7)
 
5. Major recontra commander killed in combat
 
The body of recontra leader, Nortiel, was buried last week in front of 
TV cameras to assure the population that the dreaded recontra leader, 
responsible for at least 73 murders, the burning of 15 vehicles and 
the kidnaping of at least 8 farmers in the north, was really dead.  
 
Nortiel was killed in combat on January 1st in the area of Bocay.  He 
was held responsible for the cold-blooded murder of a young doctor 
doing his social service in Waslala in 1991 and more recently, the 
vice mayor of the town of Wiwili at the beginning of 1994.  
(Barricada, Jan. 5)
 
6.  Workers to regain control of match factory
 
Within a few weeks a stock holders meeting of the match company, La 
Fosforera, will be called to elect new company officers and replace 
the controversial Pedro Ortega Macho as President of the company, 
according to a statement by National Workers Federation (FNT) leader 
Damaso Vargas.
 
The match factory is at present closed due to the conflict between the 
workers and Ortega Macho.  Union leaders said that Ortega Macho, who 
owns 27% of the company's stock, massively fired workers who refused 
to sell their shares to him.  The workers own 50% of the stock in the 
company, but Ortega Macho gained control of the company for a period 
by making temporary alliances with union leaders affiliates of CAUS 
(Confederacion de Unificacion Sindical), which represents a majority 
of the factory workers.  Vargas stated that, with the new stock
holders meeting, the workers will regain control of the factory and 
rehire those workers fired by Ortega Macho, whose property was 
confiscated in 1979 because of his direct links with the Somoza 
government.  (Barricada, Jan. 3)
 
7.  Energy strike settled after two days
 
A two day strike which did not affect energy flows to clients but did 
affect the Nicaraguan Energy Institute's ability to collect bills 
was settled after five hours of negotiations between INE and union 
officials. The agreement resulted in the rescinding of an INE decision 
to send 300 workers into unemployment.  The agreement does not cover 
the workers who succumbed to INE pressure to sign a "Labor Mobility 
Agreement."
 
Ronaldo Membreno, Secretary General of the Federation of Energy 

Workers, stated after the successful negotiations that, although he 
agreed that there were excess workers in the different INE offices, 
INE could not force workers to accept a layoff agreement which 
violated the present labor code and the internal labor code of INE 
itself. 
 
At present, INE is undergoing significant organizational changes which 
will result in the creation of a Ministry of Energy, as well as other 
agencies and offices, both private and mixed, that will sell energy 
services such as maintenance and distribution.  Negotiations will 
continue in order to achieve just compensation for those workers who 
will not be able to find jobs in these new companies.  
 
80% of all energy workers on the national level participated in the 
strike, in which for two days saw all major power generating plants in 
the country under the control of the workers.  While the strike 
lasted, INE lost over $140,000 daily in revenues. (Barricada, Jan. 7, 
8)
 
8. IMF and World Bank come to grade the Nicaraguan economy
 
Within the next two weeks a joint World Bank-IMF mission will come to 
"grade" the Nicaraguan government on its pledges made to those 
agencies last April as part of the Economic Structural Adjustment 
Facility (ESAF) agreements.  From the conclusions of the visit will 
come the official recommendations of those two agencies to the next 
Club of Paris meeting in February where the discussion of whether or 
not to forgive Nicaragua's foreign debt will be continued.  
 
Some of the key issues for the coming mission are the following:
 
--The fact that the "Labor Mobility Plan" (voluntary layoffs for 
state workers) attracted only 2,000 workers.  The government may be 
pressured to cut the "voluntary" from the program description;
 
--The fact that the government has not as yet privatized 40% of the 
stock in the telecommunications complex TELCOR;
 
--The efforts to privatize key services of INE;
 
--The functioning of the state-owned National Development Bank (BND), 
which, in the opinion of the international agencies, continues to be 
inefficient and non-profitable. The last IMF mission questioned the 
fact that the Bank was only lending to large farmers and suggested 
that the Bank give priority to small and medium farmers, leaving the 
needs of the large farmers to the attention of the private bank 
sector. 
 
In the next Club of Paris meeting, the government hopes to reduce the 
Nicaraguan bilateral debt with Club of Paris member governments by 
90%, but the negotiations must have the blessing of the IMF and World 
Bank.  That blessing and a successful round of negotiations in 
February would mean that Nicaragua would have access to $520 million 
in new loans for 1995 at a cost of increased unemployment and more 
privatization of sensitive state services. (Barricada, Jan. 3)