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R 202130Z FEB 07
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TAGS: EIND EINV EAID ECON PINR NU
SUBJECT: NICARAGUA: AMBASSADOR CALLS ON TOURISM INSTITUTE 
EXECUTIVE DIRECTOR 
 
¶1. (U) Summary.  The Ambassador called on new Tourism 
Institute (INTUR) Executive Director Mario Salinas Pasos to 
introduce himself, outline USAID activities in the tourism 
sector, and discuss Salinas' plans.  Salinas told the 
Ambassador that INTUR is in the midst of defining tourist 
markets for Nicaragua.  He believes that Nicaragua should 
focus on the U.S. and Central American markets.  To 
facilitate the marketing of vacation packages, INTUR is 
working to develop tourist routes.  On the investment side, 
Salinas believes that the legal framework governing the 
sector needs to be reviewed, including laws governing 
retirement, investment incentives, and the coastal areas.  He 
believes it would cost $90-110 million to build a coastal 
road along the Pacific, but that the road could generate as 
much as $700 million in new investment.  Salinas hopes to 
encourage small- and medium-sized businesses to invest in bed 
and breakfast inns, restaurants, and other tourist services, 
much the way as has occurred in Costa Rica.  Salinas told the 
Ambassador that since the development of the tourism industry 
is a presidential priority, other ministries will play a role 
in the development of necessary infrastructure, e.g., roads, 
water supply, and power.  End Summary. 
 
¶2. (U) The Ambassador called on new Tourism Institute 
Executive Director Mario Salinas Pasos on February 1. 
Salinas was in a good spirits and spent a fair amount of time 
describing his priorities for the tourism sector.  Econoff 
and USAID Program Officer for Economic Growth and Development 
also attended. 
 
USAID Activities 
---------------- 

¶3. (U) The Ambassador began by outlining USAID activities to 
help develop the tourism industry in Nicaragua.  A new 
two-year natural resource management program is designed to 
link conservation management to eco-tourism.  With the help 
of the U.S. Forest Service, the program will involve public 
and private sectors, as well as local communities in 
conservation and watershed management.  USAID had also 
initiated what it terms a "global development alliance" with 
the U.S.-based Rainforest Alliance to strengthen the 
competitiveness and sustainability of agriculture, forestry, 
and tourism industries over three years.  The Ambassador 
explained that the Rainforest Alliance will certify products 
and services as "green" and help small and medium-sized 
businesses interested in ecotourism.  In a similar alliance, 
USAID has a three-year agreement with the U.S.-invested Gran 
Pacifica Development Company to provide English training to 
1150 students in Villa del Carmen, a potential tourist area 
on the Pacific shore.  The alliance also trains students in 
environmental and archeological conservation. 
 
¶4. (U) The Ambassador noted that the U.S. Mission in 
Nicaragua has had very good relations with INTUR, in 
particular with Salinas' predecessor Maria Nelly Rivas.  He 
expressed the desire to continue these good relations, which 
Salinas reciprocated. 
 
Finding A Market 
---------------- 

¶5. (SBU) Salinas told the Ambassador that INTUR is in the 
midst of contracting a marketing firm in Miami to define U.S. 
tourist markets for Nicaragua.  The firm will contact the 
American Association of Retired Persons to examine the 
potential for the development of retirement communities. 
Salinas noted how Costa Rica had created retirement cities 
where there had been nothing, and Nicaragua could do the same 
thing.  Another possible niche is Nicaraguan-Americans in the 
United States.  Here, Salinas differentiated between the 
tastes of older Nicaraguan immigrants living in California 
and those of younger Nicaraguan immigrants in Florida. 
 
¶6. (U) Salinas believes that INTUR should also look toward 
the Central American market.  He pointed out that Guatemala 
attracts significant numbers of Salvadorans, and Costa Rica 
draws tourists from the whole of Central America. 
 
¶7. (SBU) The Ambassador noted that it was important to 
develop tourist routes to facilitate the marketing of 
vacation packages.  Salinas agreed, saying that INTUR is 
working to develop one tourist route and one alternative 
route.  The InterAmerican Development Bank had agreed to fund 
$15 million to develop a coastal route that will include 
improving the airstrip at San Juan del Sur and building a new 
airport in San Juan del Norte.  Also in the works is a 
"Coffee Route" in the north of the country to include the 
Departments of Madriz, Nueva Segovia, Matagalpa, among 
others.  Over a four-day period, tourists would visit 
historic sites, stay at a coffee plantation, and visit the 
Canyon de Somoto.  Also under consideration, said Salinas, is 
a "Sandino Route" which would take tourists to places where 
national hero Augusto Sandino spent time, and a "Gold Rush 
Route," which might interest Americans who have descendents 
in Nicaragua dating from the days of the Nicaraguan gold 
rush.  Salinas added that tourist routes should help to 
convince more cruise ships along the Pacific coast to make 
Nicaragua a regular port of call. 
 
Promoting Investment 
-------------------- 

¶8. (SBU) Noting that the Embassy is receiving inquiries about 
the business climate in Nicaragua, the Ambassador asked 
Salinas for his assessment of investor interest.  In 
answering, Salinas addressed the need to review the legal 
framework governing the sector, including laws governing 
retirement, investment incentives, and coastal areas. 
Salinas explained that the review should include 
consultations with the private sector and the National 
Assembly.  Additionally, Nicaragua should carefully examine 
what has worked for other Central American countries. 
Salinas asserted that a new law governing coastal regions 
might be the single most important signal that the government 
could send to foreign investors.  He added that better 
titling and regulation of coastal property, the subject of 
many legal disputes in Nicaragua, would bring greater 
certainty to investing in the tourism industry.  Salinas 
commented that the recent proposal to create investment 
incentives through the issuance of tourism bonds was highly 
controversial and, thus, unlikely to gain the political 
support it needed in the National Assembly. 
 
¶9. (SBU) Salinas commented that he had just met with Carlos 
Slim, the Mexican billionaire who owns Nicaragua's land line 
telephone company, ENITEL.  The two talked about the need to 
build a 70-kilometer coastal road.  Salinas thought it would 
cost around $90-110 million to build the road, but that it 
could generate as much as $700 million in investment.  Slim 
showed interest in building hotels along such a road. 
 
¶10. (SBU) Salinas said that he wanted to work with INPYME 
(Nicaragua's small- and medium-sized business administration) 
to create bed and breakfast inns with four or five guest 
rooms, and to foster the development of restaurants and other 
tourist services.  He noted that this is what Costa Rica did 
fifteen years ago -- now Costa Rica has 40,000 rooms and 
Nicaragua just 5000.  Salinas said he thought that INPYME 
could help small businesses learn how to keep the books and 
access credit.  INTUR's responsibility would be to control 
service quality.  Salinas said that the Central American Bank 
for Economic Integration had already initiated a lending 
program to finance small- and medium-sized investment.  He 
agreed with the Ambassador that private banks should also 
create lending programs to support the development of small 
hotels and restaurants. 
 
¶11. (U) The Ambassador noted that tourism depended greatly 
upon existing infrastructure, including the availability of 
power, potable water, and well-paved city streets and 
sidewalks.  Salinas agreed, adding that the development of 
the tourism industry is a presidential priority.  Therefore, 
other ministries must also play a role.  Tourism contributes 
to President Ortega's priority to create jobs. 
 
¶12. (SBU) The Ambassador asked whether Salinas had any plans 
to improve the personal safety of tourists through the 
formation of a tourist police, for example.  Salinas replied 
that there is a need to rebuild the tourist police force. 
Nicaragua once had a force of 280, but this number had 
dwindled to just 20.  The idea would be to build it up again, 
and to provide special training, including English, to the 
officers.  The Ambassador suggested that investors might be 
willing to contribute to such a police force, and/or to 
provide job training to members of nearby communities in 
other areas.  Salinas replied that, indeed, Gran Pacifica had 
put aside $100,000 for the training of small businesses and a 
hospitality school. 
 
¶13. (U) Ambassador explained that a major part of his job is 
to help Nicaragua manage globalization and expand investment 
possibilities.  He suggested that perhaps the Millennium 
Challenge Corporation could incorporate tourism development 
within context of its program in the Departments of Leon and 
Chinandega.  In addition, the Overseas Private Investment 
Corporation (OPIC) had established a number of investment 
funds that could perhaps support housing development, power 
projects, and small business projects related to the tourism 
sector.  Salinas was aware of these projects, having been 
invited to attend events associated with OPIC President Rob 
Mosbacher's trip in October 2006 when the funds were 
announced. 
 
Atlantic Coast 
-------------- 

¶14. (SBU) The Ambassador asked about plans for tourism on the 
Atlantic coast.  Salinas replied that he is working with the 
autonomous departments on the Atlantic side of the country, 
but that autonomy made INTUR's work there more complex. 
INTUR had to work with and through the governors and mayors 
and, at this time, had almost no personnel stationed on the 
Atlantic coast.  He thought that, with international 
assistance, it was conceivable for investment to grow there. 
He underscored that the Caribbean is an internationally 
recognizable brand, and that there is no reason why tourism 
there cannot be developed.  Costa Rica had done it with Golfo 
Papagayo, he noted. 
 
Property Disputes 
----------------- 

¶15. (U) In an oblique reference to problems with titling and 
competing claims to ownership as a result of revolution in 
the 1980s and changing legal regimes, Salinas stressed that 
foreign investors had to be made aware of the need for 
thorough due diligence before purchasing any property in 
Nicaragua.  This, he thought, was perhaps the most 
significant measure an investor could take to reduce the risk 
of being involved in a property dispute in Nicaragua. 
 
¶16. (SBU) In reference to a recent property dispute affecting 
a U.S.-invested yacht port of call on the Nicaraguan northern 
Pacific coast, Salinas declared in a matter of fact way that 
the armed invasion of Puesta del Sol Hotel and Marina had 
been resolved.  (Note: At issue was a section of property 
that a local judge had determined was owned by a competing 
claimant.  The Embassy has been following the case, but we 
are not convinced that the core issue affecting the U.S. 
investors has been completely resolved.) 
 
Biography: Mario Salinas Pasos 
------------------------------ 

¶17. (SBU) Mario Salinas Pasos, 63, is a founding member and 
Executive President of Grupo Sooner, a large housing 
development and construction company with a name derived from 
an indirect connection to Oklahoma.  He has a degree in 
architecture from the University of Naples in Italy, and 
completed post-graduate work in urban development at the 
Milan Polytechnic Institute.  From 1989 to 1990, Salinas was 
President of the Public Sector Tourism Corporation, comprised 
of twenty-five businesses, eight hotels, four restaurants, 
and eight duty-free shops.  From 1986 to 1989, he developed 
and administered hotel projects for the Ministry of Tourism 
as the head of Hotelinsa.  Salinas was Vice Minister of 
Transport from 1984 to 1986, and Director of Planning in the 
Ministry of Commerce from 1979 to 1980.  He is fluent in 
Italian and Spanish. 
TRIVELLI