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FM AMEMBASSY MANAGUA
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INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L MANAGUA 001183 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA/CEN SCHIFFER 
 
E.O. 12958: DECL: 05/04/2017 
TAGS: KDEM ECON PGOV PINR NU
SUBJECT: MADRIZ - ORTEGA PROMISES REMAIN UNFULFILLED 
 
REF: A. 06 MANAGUA 2423 AND PREVIOUS 
     ¶B. MANAGUA 01069 
 
Classified By: Ambassador Paul Trivelli for reasons 1.4(B,D) 
 
¶1.  (C) SUMMARY:  Citing higher gas prices, no new jobs, and 
political favoritism, the citizens of Somoto and Totogalpa, 
Madriz spoke to the Ambassador of growing dissatisfaction 
with President Ortega's administration.  While local 
opposition leaders are talking, they have not unified or 
capitalized on the population's discontent.  Aggravating the 
situation is the Sandinista National Liberation Front's 
(FSLN) wholesale replacement of local technocrats with 
untested party supporters in local government offices and its 
party bias in selecting families for Ortega's new Zero Hunger 
program.  Although the region receives sizable remittances 
and generous financial support from sister cities, the 
underlying economy is weak.  Since January, hundreds of area 
residents have left the country in search of work.  Although 
local business and political leaders believe a free trade 
zone is essential to development, they have taken virtually 
no action over the past several years to make it so.  Despite 
spending US$2.5 million on projects in the region, U.S. 
visibility is scant.  Leaders encouraged the U.S. to stay 
engaged in Nicaragua using an "approach of respect" centered 
on "positive messages and positive signs."  END SUMMARY. 
 
¶2.  (U) On April 29 and 30, Ambassador visited the northern 
department of Madriz to participate in a variety of meetings 
and events in the departmental capital, Somoto, and the town 
of Totogalpa.  In Totogalpa, the Ambassador attended three 
USAID-funded activities, including the inauguration of a 
tomato and vegetable packing plant, the opening ceremony of 
the first annual tomato festival, and the ribbon-cutting 
ceremony of a new discount pharmacy.  In addition, during the 
two-day visit, the Ambassador met with the mayors of Somoto 
and Totogalpa, local representatives from the Nicaraguan 
Liberal Alliance (ALN) and Sandinista Renovation Movement 
(MRS) political parties, the civil rights advocacy NGO Ethics 
and Transparency (EyT), a Totogalpan indigenous group and a 
group of women's ceramic cooperatives.  The Ambassador also 
met with the presidents of the local Chamber of Commerce and 
Coffee Growers Association and the priest of the Somoto 
Catholic church, and gave interviews with two local radio 
stations - "Radio Frontera" and "Que Buena." 
 
Free and Fair Elections, but... 
- - - - - - - - - - - - - - - - 
 
¶3.  (SBU) Somoto EyT director Uriel Antonio Garcia reported 
that the November 5 elections were free and fair thanks to 
the presence of observers from the US Embassy, Carter Center, 
EU, and EyT in the department's voting centers.  He commented 
that the police did an excellent job with security, allowing 
the people to vote in a safe and calm atmosphere.  Further, 
Garcia assured the Ambassador that all votes were counted, 
there were no irregularities during the counting/closing 
process, and that the "fiscales" (party observers) were 
vigilant.  However, as was consistently reported throughout 
the country during the campaign process, Garcia confirmed 
that voter card issuance (cedula) had been a problem during 
the campaign, citing that nearly 1 in 4 applicants did not 
receive their ID card before November 5 (reftel A).  (NOTE: 
On November 5, the FSLN received 31,773 votes to the PLC's 
25,831 and the ALN's 9,503 votes. The FSLN won in 8 of 
Madriz' 9 municipalities, only losing to the PLC in 
Totogalpa.  END NOTE). 
 
 
Opposition Forces Should Unify 
- - - - - - - - - - - - - - - - 
 
¶4.  (C) The Liberal Constitutionalist Party (PLC) mayor of 
Totogalpa along with ALN, MRS, EyT, and business community 
representatives unanimously agreed that the opposition 
parties must set aside their differences and form a single 
national opposition party for the 2008 municipal elections. 
They all acknowledged that a strong, unified opposition is 
the only way to stave off disaster in next year's elections. 
Even with unity, they admitted, gaining the upper hand in 
local elections will be a daunting task given the FSLN's 
formidable discipline and funding.  Catholic priest Fruto 
Valle added that, regardless of unification, the Liberal 
opposition will have a tough time winning hearts and minds in 
the region after 16 years of neglect by the three previous 
Liberal administrations.  He commented that throughout this 
time, while the Liberals did nothing, the Sandinistas -- 
working through their well-organized network of NGOs and 
using international funding -- helped the population by 
building roads, clinics, stadiums, etc., giving the 
Sandinistas a strong advantage in the region.  (COMMENT: 
Until recently, Valle was known as a staunch PLC/Aleman 
proponent.  Thus, it is interesting that he openly admits the 
failures of previous administrations -- including Aleman's -- 
to address the region's woes. END COMMENT). 
 
First 100 Days - Ortega "Fails to Deliver" 
- - - - - - - - - - - - - - - - - - - - - - 
 
¶5.  (SBU) Asked about their satisfaction with the Ortega 
administration thus far, there was near universal agreement 
that President Ortega has not fulfilled his campaign promises 
of cheaper prices and full employment.  Of particular concern 
are the rising prices of gasoline and diesel.  Quoting 
unemployment figures as high as 80 percent, local leaders 
characterized the overall economic situation as "desperate" 
and "very, very bad" in rural areas.  MRS representative 
William Ortega opined that "thousands" of people in the 
Somoto area had left the country since the start of the year 
looking for work in El Salvador, Costa Rica, Spain, and the 
U.S. 
 
¶6.  (SBU) Business leaders, the mayor of Totogalpa, and ALN, 
MRS, and EyT representatives all decried alleged 
discrimination in public sector employment.  They insisted 
that the Ortega administration was "cleaning house," removing 
any non-Sandinistas from public service jobs -- regardless of 
experience and expertise -- and replacing them with party 
loyalists.  Business leaders were especially critical of this 
practice, stating that new officials were "not qualified" and 
that the process of changeover was highly "disorganized," 
creating an atmosphere of uncertainty and confusion in their 
communities.  Further, they agreed that the new government 
agency representatives were "non-responsive."  As a result, 
the overall business climate is uncertain. 
 
Sister City Relations Key to Survival 
- - - - - - - - - - - - - - - - - - - 
 
¶7.  (SBU) Remittances and bi-lateral unofficial assistance 
received from sister cities in France, the U.S., and 
especially Spain, mask the local economy's underlying 
troubles, according to the participants.  All were quick to 
acknowledge that generous financial support from Somoto's 
Spanish sister city had paid for schools, churches, and 
parks, among other things.  In addition, the mayor of Somoto 
detailed an "exchange" program through which over 1,000 women 
from the greater Somoto area had gone to work as domestic 
employees in the Spanish sister city, providing a much-needed 
source of income through remittances.  (NOTE:  When queried 
about this exchange program, other participants scoffed, 
indicating that it was not a formal program, and its success 
questionable.  Many women had taken out loans against 
property and houses to finance their trips only to return -- 
now with an outstanding loan -- after failing to find jobs. 
The Ambassador raised concerns about trafficking in persons 
given the lack of oversight or control over the exchange, but 
participants did not believe it to be a problem.  END NOTE.) 
 
¶8.  (U) According to the mayor of Somoto and others, the 
assistance of sister cities skewed the region's income so 
much that Madriz' economic classification was upgraded in the 
last census, reducing assistance from the Nicaraguan 
government.  As a result, insisted the mayor, the region's 
suffering is worsening. 
 
Program "Zero Hunger" Seen as Political Tool 
- - - - - - - - - - - - - - - - - - - - - - 
 
¶9.  (C) As one of Nicaragua's poorest regions, Madriz was 
selected for the Ortega administration's new "Zero Hunger" 
program, which gives up to $2,000 worth of direct assistance 
and vouchers per family to facilitate self-sufficiency. 
Approximately 300 families in Somoto and 100 in Totogalpa 
were selected for the program.  While there was general 
agreement that the program could cause jealousy and rivalry 
within the communities, Totogalpa's PLC mayor, Carmen 
Mercedes Hurtado, as well as ALN and MRS representatives, 
claimed the selection process is politicized.  Although 
participants are nominated by the mayors, explained Hurtado, 
the Ministry of Agriculture and Forestry (MAGFOR), as the 
implementation partner, makes the final decisions.  She and 
others claim that Sandinista supporters have "found it easier 
to qualify" for final selection.  Hurtado also claimed that 
NGOs involved in the implementation are Sandinista.  Further, 
Hurtado questioned the program's potential effectiveness in 
Madriz given that participants must own at least one hectare 
of land to qualify, excluding the landless -- the poorest of 
the poor -- from participating. 
 
Universal Interest in Free Trade Zone 
- - - - - - - - - - - - - - - - - - - 
 
¶10.  (SBU) Asked what could be done to improve the economic 
situation in Madriz, there was unilateral support for the 
establishment of a free trade zone (FTZ) to absorb the excess 
labor supply and jump-start the economy.  All believed that 
Somoto's proximity to the Honduran border, good road system, 
strong agricultural base, and ample supply of labor make the 
region a prime candidate for FTZ investment.  Despite these 
apparent advantages, in the last six years, only one attempt 
has been made to contact FTZ authorities in Managua and no 
one has ever approached ProNicaragua, a Managua-based 
investment promotion NGO.  The Ambassador urged action on 
both fronts, remarking that without action there cannot be 
results.  The Ambassador also encouraged them to focus on 
products that play to the region's natural strengths -- such 
as food-based production -- instead of garment factories. 
 
Opposition to 7-year Term Proposal 
- - - - - - - - - - - - - - - - - - 
 
¶11.  (C) Given recent discussions by the Ortega 
administration and PLC to extend mayoral terms to seven years 
(reftel B) to coincide with the 2011 presidential elections, 
Ambassador sought input from the mayors, business leaders, 
EyT, and the ALN and MRS representatives.  There was strong 
opposition to the proposal from everyone but the Sandinista 
mayor of Somoto, Marcio Ariel Rivas Nunez, who answered that 
the "transition of governments is hard" and that "he would 
have to think about it."  Despite commenting that the ALN and 
PLC "would be dead" if elections were held in 2008, and that 
extending the period might give opposition forces a "better 
chance," Hurtado held firm that dividing national and 
municipal elections "is better for democracy."  Garcia 
soundly rejected the idea as an "error" from a legal 
standpoint, opining that such a move "might confuse voters." 
 
U.S. Visibility Poor - Lacks "Personal Touch" 
- - - - - - - - - - - - - - - - - - - - - - 
 
¶12.  (C) Despite US$2.5 million in USAID projects in the 
departments of Madriz and Nuevo Segovia, there is little 
awareness or recognition of U.S. efforts in the region.  In 
fact, the department's 12 Peace Corps volunteers are the most 
visible symbols of U.S. assistance.  While Hurtado laid the 
blame on the department's Sandinista majority, claiming that 
they won't acknowledge any work done by non-Sandinistas, 
others provided more reasoned explanations.  Nunez reminded 
the Ambassador that U.S. visibility is impeded by the strong 
presence of Somoto's Spanish sister city.  Other participants 
cited Madricenos' peculiar tendency to associate projects 
with individuals and if no Americans are directly involved in 
implementation, the people will not associate a project with 
the United States. 
 
Advise to US - Stay Positive, Stay Engaged 
- - - - - - - - - - - - - - - - - - - - - 
 
¶13.  (C) Participants urged the U.S. to stay engaged and to 
"keep working even if you don't want to" to maintain positive 
relations, in spite of Ortega's anti-U.S. rhetoric.  Business 
leaders asked the U.S. to maintain a "long-term perspective 
on the relationship" while EyT's Garcia emphasized that the 
U.S. should take an "approach of respect" centered on 
"positive messages and positive signs."  He stated that the 
Nicaraguan people have heard enough negative rhetoric, which 
only feeds uncertainty and fear. 
 
Comment 
- - - - 
 
¶14.  (C) Notwithstanding alleged disillusionment among the 
populations of Somoto and Totogalpa -- and perhaps the other 
municipalities of Madriz -- due to higher fuel prices, no new 
jobs, and a Sandinista-bias in the Zero Hunger program, 
Liberals readily admitted that they face a serious challenge 
in the 2008 municipal elections.  There was general agreement 
on the need to unify the opposition parties, but no clear 
ideas on how to achieve it.  Further, there was no evidence 
of homegrown unified initiatives to take advantage of the 
FSLN's particular weakness in Madriz, despite the 
opportunity.  Lack of funds -- and perhaps lack of guidance 
from party leaders in Managua -- is certainly an important 
factor.  While these local branches maintain contact with 
Managua, without funding it is all they can do to simply keep 
their doors open.  While national unification is symbolically 
important, opposition party leaders should prioritize and 
support unification efforts at the municipal level where 
political party leaders have shown a willingness to work 
together to select the most viable opposition candidate and 
where specific pre-election strategies can be developed to 
target localized FSLN weaknesses. 
TRIVELLI