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: 
 
--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