Nicaragua News Service Published by the Nicaragua Network Education Fund April 21-27, 1996 Vol. 4, No. 16 Major news stories for the week: 1. Weather service predicts good rainy season. 2. Banking scandal affects presidential candidate. 3. FSLN elects 500 delegates for upcoming Congress. 4. Electricity company cuts power to Managua city government. 5. National Assembly freezes sale of Banco Nicaraguense. 6. Exports for 1996 calculated at $625 million. 7. PRONAL selects candidates. 8. U.S. senators express concern about Nicaraguan elections. 9. Nicaragua Consultative Group calls for debt forgiveness. 10. Loma de Tiscapa declared national monument. _______________________________________________________________________ 1. Weather service predicts good rainy season. According to the Nicaraguan Institute for Territorial Studies (INETER), the Nicaraguan rainy season, which traditionally starts in the month of May, will be a good one, with precipitation levels calculated to be within the ranges of what is historically "normal." Rain is expected in Managua in the third week of May but a few sporadic storms could begin as early as the last days of April. Predictions were based on satellite readings received from the U.S. (Barricada, April 27th) 2. Banking scandal affects presidential candidate. A Nicaraguan presidential candidate not mentioned specifically but presumed to be Alvaro Robelo, was accused last week by an Italian district attorney of being involved "in a colossal operation of money laundering involving over $12.5 million" part of which is being used to finance his presidential campaign in Nicaragua. Robelo is the candidate of the ARRIBA NICARAGUA Party and president of a private bank, the European Bank of Central America (BECA). The judicial declarations do not mention Robelo by name but his presumed association in shady dealings has been daily news in Nicaragua, especially in the newspaper la Prensa. Robelo, upon hearing the news, held an emergency meeting in Managua with the Ambassador of Italy and later stated to reporters that the whole thing sounded like a "TV soap opera" and that he has nothing to do with the affair, and the publicity is simply part of the cost of being a public figure running in a national campaign. He also stated that his visit to the Italian embassy was simply a routine visit to inform the Ambassador on the current situation in Nicaragua. Robelo, however, has been mentioned many times as having possible links to international drug dealings. The money laundering scheme, according to the Italian police, also involves Italian businessmen, bank officials, members of the international Masonic movement and several foreign secret service agencies. Eighteen people have been arrested in Italy thus far, including a man who supposedly is a representative of a Nicaraguan bank in Italy, the name of which has not been revealed but which does not have legal authority to operate in Italy. (Barricada, April 27; La Prensa, April 28) 3. FSLN elects 500 delegates for upcoming Congress. FSLN members throughout the country voted last week to elect the 500 delegates who will represent them next week at the Party's National Congress. The number of members voting for the delegates was less than expected, however. Some leaders of the party attributed the low turn out to "the little publicity given the elections in the local news media, and the still open wounds left with some as a result of the recent primaries." 102 of the delegates will be from Managua. Lists were not published of the delegates who will be participating. The FSLN Congress, which will select national and local candidates for the up-coming elections, will be held from May 3 - 5 and will be, according to Tomas Borge, "decisive for the Frente and for Nicaragua, because it is there that the Electoral Platform of our party will also be defined." Borge is to preside over the Congress next week, which will be dedicated to the memory of Sandino's wife, Blanca Arauz, and in homage to all Nicaraguan women. In other pre-Congress news, Rev. Miguel Angel Casco, announced that he was leaving "vacant" his candidacy for the vice presidential nomination. He said he was "leaving the decision in the hands of the delegates to the Congress who will be those that elect the presidential and vice-presidential candidate" according to a statement released in a press conference last week. Casco based his decision on his understanding that the National Directorate needs leeway to make efforts to consolidate a political alliance. Casco also expressed that if the FSLN had to go it alone in the elections, that he would be available again as a candidate. He also declared: "It is time to close ranks with FSLN. With all its errors and weaknesses, it is our party in which we should continue to struggle forward with hope, not only for the victory in 1996, but also to save the natural popular origins of the Sandinista family." (Barricada, April 22) 4. Electricity company cuts power to Managua city government. The Nicaraguan Electrical company, ENEL, shut off the lights of the government of Managua last week for 24 hours because the city council had not paid its light bill. The electrical company threatened to stop all electrical work involving traffic lights on Managua city streets. Lights were restored when the city paid a total of $24,000 on a pending bill of $32,000 and promised to pay the rest by June 23rd. (Barricada, April 25) 5. National Assembly freezes sale of Banco Nicaraguense. The president of the Executive Committee of the National Assembly, Cairo Manuel Lopez, stated last week that the sale of majority stock in the state-owned Banco Nicaraguense (BANIC), must be approved by a special law from the National Assembly authorizing that sale. The sale of 65% of the shares of BANIC was announced last week by its president, Benjamin Lanzas, who is also the vice-presidential candidate for PRONAL. Lopez declared that it was not up to the Executive Committee of the Bank to make a decision on the capitalization of 65% of the stock, which would, in effect, privatize the bank. The country's Constitution states that only the National Assembly can decide to privatize a state bank and that only the Assembly can guarantee the security of foreign investors in such a transaction. Dr. Evenor Taboada, president of the Central Bank, however, said that BANIC is not a state bank in the sense of being created by a law of the Republic, such as the one creating BANADES, to the Nicaraguan Investment and Financial Institution. BANIC, he insisted, is a "Sociedad Anonima," limited liability corporation, which can capitalize itself via the sale of stock. The sale of BANIC promises to be a major source of conflict between the Executive and National Assembly this year and the conflict will also be filled with political ramifications given the major players involved. (Barricada, April 25, La Prensa, April 26) 6. Exports for 1996 calculated at $625 million. Nicaragua's exports for 1995 increased 45% over the figures for 1994 and it is expected that in 1996 exports will increase again, from $537 million in 1995 to $625 million in 1996, according to the latest reports from the Nicaraguan Ministry of Economy and Development (MEDE). However, export production could be affected by the following factors: payment on the external debt, population growth, high interest rates and the lack of credit within the banking system. One MEDE official stated that the lack of credit could seriously affect the country's capacity to continue to generate a yearly growth rate in exports of between 15 and 20%, which is the rate that has been seen in the last few years. (La Prensa, April 22) 7. PRONAL selects candidates. To the surprise of no one, Antonio Lacayo was nominated by the members of his party, PRONAL, to be their presidential candidate in the upcoming elections. Benjamin Lanzas was nominated to be the vice- presidential candidate, much to the displeasure of his rival, Eduardo Rizo, who, after being defeated, cried fraud and resigned from the party. (La Prensa, April 22) 8. U.S. Senators express concern over Nicaraguan elections The chairman of the Senate Foreign Relations Committees, Senator Jesse Helms (R-NC) and the chairman of the House International Relations Committee, Congressman Benjamin Gilman (R-NY), sent a letter last week to Warren Christopher, US Secretary of State, expressing their concern about the current electoral process in Nicaragua. The two declared in the letter that more than 20% of the Nicaraguan population are "contras" who are treated as "second class citizens" by the Nicaragua Supreme Electoral Council. The two requested that the Secretary intervene in order to "correct the irregularities observed and guarantee the cleanliness of the electoral process." In the letter the two expressed concern that the $3.5 million in US support for the elections would be channeled through the Centro de Asesoria y Promocion Electoral (CAPEL), an non-governmental organization (NGO) that has not yet submitted its proposal to AID. The two recommended that the US assist in broadening the mandate and extending the stay of the Support and Verification Commission of the Organization of American States (CIAV-OAS) and that the current ambassador, John Maisto, also stay on until after the elections. The letter also reminded Christopher that the US has an "obligation to supervise the Nicaraguan process because the US has invested $1.5 billion in the transition towards democracy since 1990." According to Republican staff researchers in the US Congress, 475,000 persons will not be able to vote in the coming elections because of problems in the census and voting ID card process. The Human Rights Commission of the Nicaraguan National Assembly stated that the US figures were exaggerated but that probably 100,000 persons were in danger of not being able to vote in 26 municipalities in the north and center of the country. Carlos Gallo, former president of the Commission, stated that in these townships, site of continued violence by irregular armed groups, there is little presence of the state and the census process in those areas was not well designed. In light of these factors, the Supreme Electoral Council (CSE) has decided not to use in those zones the permanent identification cards being used in the rest of the country and instead will use an ad hoc system similar to that used in the 1984 and 1990 elections. The CSE is working on the problem of how to guarantee the participation of the population of those zones in the coming elections. (La Prensa, April 25) 9. Nicaragua Support Group calls for debt forgiveness. A Support Group for Nicaragua, made up of Spain, Sweden, Canada, Mexico, Holland and the UN Development Programme called on governments and multilateral organizations to look for a solution to the Nicaragua foreign debt problem "in the shortest time possible." The need to lighten the financial burden of Nicaragua was expressed in a letter signed by the members of the group and sent to the World Bank and the IMF. The declaration spoke of the concern of the group that future negotiations on the country will be difficult given that Nicaragua will be facing prioritized debt payments (meaning payments to the multilateral lending agencies) far out of line with its export income over the next five years. The Group also expressed concern that international investment will never take Nicaragua seriously as long as its debt situation is considered "unsustainable." "The Support Group considers that debt relief, at the same time as investment is reactivated and exports are increased, would reinforce the viability of Nicaragua's external sector." The document further stated that "not to provide rapid and definite relief will negatively affect investment and cut off any possibility of a more dynamic growth of the economy, with all the repercussions which that could cause." The document calls for governments and multilateral organizations to give special treatment to Nicaragua's case and also suggests that the multilaterals not only give "advice" but also consider debt relief themselves. (La Prensa, April 26) 10. Loma de Tiscapa declared national monument. President of Nicaragua Violeta Chamorro celebrated her six years in office last week by declaring that the Loma de Tiscapa would now be a Historic National Park. The Loma, a volcanic hill containing a crater lake, is in the center of Managua and was the military headquarters of the dictator Anastasio Somoza. It was one of the most visible and hated symbols of the Somoza dictatorship. Chamorro's own husband, Pedro Juaquin Chamorro, was one of the persons tortured in the "bunker" after having been arrested in April of 1956, suspected of participating in the assassination of the first Somoza, Anastasio Somoza Garcia. During the Sandinista years in government, the site was used as a military training installation. The "demilitarization" of the area also opens the way for massive Taiwanese investment to remodel the Intercontinental Hotel and build a large shopping mall nearby. Not surprisingly, the first stone of the complex was placed last week also. Chamorro took advantage of the ceremony to talk about what she considered the major accomplishments of her six years in office. She mentioned the end of the war, the reduction of the foreign debt, control of inflation and the establishment of civil liberties. The President stated that she was satisfied by what she had accomplished and that in eight months and thirteen days she would turn over the government to whomever wins the coming October elections. (La Prensa, April 26)