VZCZCXRO2515
RR RUEHLMC
DE RUEHMU #1720/01 1942023
ZNR UUUUU ZZH
R 132023Z JUL 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 0794
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RHEHNSC/NSC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHDC 0849

UNCLAS SECTION 01 OF 02 MANAGUA 001720 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR WHA/CEN, WHA/EPSC, AND EEB 
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR 
 
E.O. 12958: N/A 
TAGS: ECON PGOV PREL NU
SUBJECT: ECONOMIC IMPLICATIONS OF "CUADERNO SANDINISTA, NO.1" 
 
REF: A) MANAGUA 1621, B) MANAGUA 1622 
 
¶1. (SBU) Summary.  "Cuaderno Sandinista No. 1," a propaganda piece 
produced by the FSLN Department of Political Education, claims to 
outline a new plan of reconciliation and national unity for 
Nicaragua.  The plan is anchored by three pillars: improving the 
well-being of citizens, equitable economic development, and social 
transformation.  From an economic perspective, the document focuses 
on fostering growth among small- and medium-sized producers in the 
agro-industrial sector, all while promising to respect private 
property and encourage foreign investment.  The Cuaderno ("copy 
book") also envisages intervention in key economic sectors such as 
energy and "disruption" of the current tax structure.  Even if the 
GON does not follow through on these pledges, the persistent use of 
highly-charged rhetoric could frighten away potential investors from 
what they perceive to be an uncertain business environment.  End 
summary. 
 
The Cuaderno Sounds Familiar 
---------------------------- 

¶2. (SBU) On June 11, the embassy received a copy of "Cuaderno 
Sandinista No. 1" from the FSLN Department of Political Education. 
It was presented as a "document of consultation and debate" that 
seeks to generate dialogue about the "New Sandinista Project."  The 
Department of Political Education claims that such "cuadernos" will 
be released periodically so that the Nicaraguan people can remain 
informed on the government's progress.  This effort appears to be a 
reincarnation of the work of the Department of Propaganda and 
Political Education, which published numerous articles and books on 
FSLN history and ideology during the first Sandinista regime.  The 
name "Cuaderno Sandinista" is reminiscent of the "Cuaderno de 
Educacisn Sandinista" that the FSLN distributed as part of its mass 
literacy campaign in the 1980s. 
 
Three Pillars 
------------- 

¶3. (SBU) The document outlines a new "plan of reconciliation and 
national unity," one that it alleges is distinct from the 
"neoliberal project" of recent years as well as the Sandinista 
regime of the 1980s.  The plan is anchored by three "pillars" 
(versus the five presented in reftel A): improving the well-being of 
citizens through the provision of basic services, equitable economic 
development through agro-industrial growth, and social 
transformation through participative democracy and the creation of 
community councils.  The document proposes an immediate action plan 
for the project's first trimester (identified as May - July 2007) 
that consists of a series of national propaganda seminars to be 
replicated at the departmental and district level. 
 
¶4. (SBU) The document focuses on the need to foster equitable 
economic growth in the agro-industrial sector, with an emphasis on 
small- and medium-sized producers.  It proposes replacing the 
current system of "vertical accumulation," in which all stages of 
production and distribution are controlled by a "privileged elite," 
with a system of "horizontal accumulation" that will protect the 
private property of individual producers while encouraging 
collective channels of distribution.  The document contends that the 
FSLN is interested in foreign investment from large corporations, 
but only so long as these firms respect labor rights, take adequate 
environmental protection measures, contribute to national income 
taxes, and promote the agro-industrialization of the economy. 
 
¶5. (SBU) The document discusses the need for state intervention in 
the most strategic sectors of the economy, identified as energy and 
construction.  It also contends that many public services must be 
re-nationalized and ongoing and future privatization must be 
stopped.  Additionally, the document discusses the need to "disrupt" 
the Nicaraguan tax system to create a more progressive structure. 
It argues that the rise of globalization has necessitated the 
integration of the region's economies, but only specifically 
mentions Cuba and Venezuela as economic forces with which the FSLN 
has joined in solidarity (through the Bolivarian Alternative for the 
Americas, or ALBA). 
 
Comment 
------- 

¶6. (SBU) It is unclear who is the target audience for this tract or 
how frequently similar "cuadernos" will be published.  The document 
consists primarily of the standard FSLN political and ideological 
rhetoric and lays out few concrete plans for accomplishing its lofty 
goals.  The FSLN claims that it will "protect private property," 
while simultaneously ranting about the "savage capitalist system," 
asserting that it will prioritize the "popular economic bloc," and 
endorsing state intervention in key economic sectors.  Although 
Ortega often employs similar inflammatory language in his public 
speeches, the GON has yet to convert rhetoric into policy. 
Meanwhile, the moderate regular statements and policy pronouncements 
of the VP, President of the Central Bank, and other GON economic 
policy makers contradict the rhetoric framework of the Cuaderno. 
However, even if the GON does not follow through on the three 
"pillars," the persistent use of such highly-charged rhetoric by 
Ortega could frighten away potential investors from what they 
perceive to be an uncertain business environment.  End comment. 
 
TRIVELLI