VZCZCXRO1385
RR RUEHLMC
DE RUEHMU #1783/01 2052144
ZNR UUUUU ZZH
R 242144Z JUL 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 0871
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RHEHNSC/NSC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 MANAGUA 001783 
 
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: EAID ECON PGOV NU
SUBJECT: ZERO HUNGER- NOT A LONG TERM SOLUTION 
 
 
¶1. (SBU) Summary: President Ortega has held several splashy 
ceremonies promoting his Hambre Cero (Zero Hunger) program, which 
aims to end hunger in Nicaragua within five years by offering 
standardized packages of livestock and other goods to families 
living in extreme poverty.  The program has come under fire from 
civil society and opposition political parties, however, who claim 
that Ortega is excluding organizations with proven development 
expertise while funneling the benefits exclusively to FSLN 
loyalists.  Meanwhile, GON officials are seeking foreign assistance 
to fund the program, which is expected to cost $150 million and 
benefit a total of 75,000 families by 2012.  Even if the desired 
funding is secured, the controversial Hambre Cero program is 
unlikely to live up to the lofty promises and feisty rhetoric used 
by Ortega and other GON officials to promote it.  End summary. 
 
The Facts on Hambre Cero 
------------------------ 

¶2. (U) On July 17, President Ortega made an appearance in the 
Roberto Huembes Market Plaza to promote the inauguration of his 
Hambre Cero (Zero Hunger) program in Managua.  This was the fourth 
inauguration attended by the President, following similar events in 
the North Atlantic Autonomous Region (RAAN) on May 4, the Department 
of Esteli on July 7, and the Nueva Segovia region on July 14. 
Formally known as the Productive Food Project (PPA), the objective 
of Hambre Cero is ambitious and yet deceptively simple--to eliminate 
hunger from the poorest regions of the country by 2012. 
 
¶3. (SBU) According to Hambre Cero founder and administrator Orlando 
Nunez, the program is expected to benefit 75,000 peasant families 
over five years, with a total cost of $150 million.  Each 
participating family will receive an allotment of goods and services 
valued at approximately $2,000, including $1,500 worth of goods and 
$500 worth of technical assistance and administrative costs.  A 
standard PPA allotment consists of one pregnant cow, one pig, five 
chickens, one rooster, seeds, fruit and tree plants, a biodigestor 
(which converts manure into methane cooking gas), and access to 
revolving credit.  The allotments are transferred in the name of the 
female head of each household, although Agriculture and Forestry 
(MAGFOR) Vice Minister Benjamin Dixon has said that only women who 
are married with children will be eligible for participation.  This 
decision was condemned by Puerto Cabezas Mayor Nancy Elizabeth 
Enriquez, who claimed that the government was actively 
discriminating against single mothers. (Comment: This is not an 
effective poverty reduction strategy in a country with one of the 
world's highest incidences of single motherhood. End comment.) 
While the initial Hambre Cero allotment is free of charge, the 
beneficiaries are expected to return 20% of its estimated value to a 
revolving collective fund organized in part by the Rural Credit Fund 
(FCR). 
 
Charges of NGO Exclusion and FSLN Vote-Buying 
--------------------------------------------- 

¶4. (U) In the two months since its launch in the indigenous RAAN 
community of Raiti, Hambre Cero has received significant criticism 
from both civil society and opposition political parties.  No 
independent media outlets were invited to the Raiti installation, 
leaving only official government sources to cover the event. 
According to one NGO representative, the veil of secrecy surrounding 
Hambre Cero has generated skepticism about its potential 
effectiveness.  At the beginning of February, approximately 100 
representatives from dozens of Nicaraguan NGOs were convened by the 
Sandinista National Liberation Front (FSLN) to discuss their role in 
the execution of the program.  Five months later, however, several 
of these organizations have spoken out about their exclusion from 
Hambre Cero, which they say is politically-motivated.  The Ministry 
of Agriculture and Forests (MAGFOR) will execute the program, but 
the agency claims it is delegating responsibilities to several NGOs, 
whose identities it has refused to release. 
 
¶5. (U) According to a report released by the Nicaraguan Foundation 
for Economic and Social Development (FUNIDES), the GON has not 
clearly defined its objectives for the program or the criteria by 
which it will select its beneficiaries.  Nunez has stated that 
peasant families will be evaluated for program eligibility based on 
the vague criteria of "necessity, capacity, and commitment." 
Nicaraguan political opposition parties claim that the FSLN is using 
Hambre Cero as a means to generate votes for the 2008 municipal 
elections.  According to Constitutional Liberal Party (PLC) 
representative Wilfredo Navarro, program benefits are currently 
being delivered only to "militant Sandinistas."  For his part, PLC 
head Maximino Rodriguez claimed to hold concrete evidence that the 
Hambre Cero funds in Murra, Nueva Segovia have been handed over 
directly to the department's FSLN political secretary for 
distribution.  GON officials have denied the charges, insisting that 
of the 300 women who have received Hambre Cero allotments in the 
Department of Nueva Segovia, only half are FSLN members, and that 
the GON intends to work with peasant women "independent of their 
political color."  (Note: Non-FSLN women receiving Hambre Cero 
benefits tend to be independents. End note.) 
 
¶6. (U) MAGFOR delegate Martin Rosales stated that the Citizen Power 
Councils (CPCs) in each region will be responsible for distributing 
the Hambre Cero allotments.  The PLC, along with the Nicaraguan 
Liberal Alliance (ALN) and Sandinista Renovation Movement (MRS), are 
currently seeking legal reform that would eliminate the CPCs, which 
they view to be an instrument of political consolidation and 
exclusion on the part of FSLN.  The three opposition parties have 
also announced they will push for a law mandating that the 185 
million cordobas designated for the Hambre Cero program in 2007 be 
administered by individual municipalities rather than FSLN political 
secretaries.

 
Questionable Development Strategies 
----------------------------------- 

¶7. (U) Although GON officials stress that the goal of Hambre Cero is 
to enable peasant families to produce for themselves and have excess 
to sell in markets, FUNIDES specialists expressed concern that the 
dire immediate needs of program participants will deter them from 
appreciating the value of long-term production.  The Hambre Cero 
program is said to be based on a revolving loan program developed by 
the civil society organization CIPRES in the mid-1990s.  The CIPRES 
initiative, however, involved intensive training and follow-up with 
its recipients--it is not clear that Hambre Cero incorporates either 
of these critical features.  Many have also questioned whether the 
GON has the internal capacity to replicate CIPRES' small-scale 
program on a nation-wide level, and how Hambre Cero's standardized 
approach to development will correspond with the diverse 
socioeconomic and cultural realities of the Nicaraguan people. 
Additionally, the FUNIDES report emphasized that every successful 
poverty-reduction program, including the highly-touted 
"Oportunidades" program in Mexico, has had an independent monitoring 
and evaluation component, which does not exist in the GON's Hambre 
Cero model. 
 
Nicaragua's Poor Left Waiting For Funding, Results 
--------------------------------------------- ----- 

¶8. (SBU) FUNIDES also criticized the GON for refusing to release a 
detailed line-item budget for the Hambre Cero program.  All that is 
currently known is that administrative costs will account for 25% of 
the $10 million budget for 2007, which is considered high by 
development experts.  The National Assembly approved $10 million for 
the program in 2007, just one-third of the funding Ortega had 
originally requested.  MAGFOR Vice Minister Dixon announced in July 
that his agency is seeking international assistance from donors like 
Japan and the EU to finance the $140 million needed to operate 
Hambre Cero until 2012.  Yet even with an infusion of foreign aid, 
Hambre Cero appears unlikely to achieve its professed goal of 
eliminating hunger in Nicaragua.  According to the World Bank's 
"Evaluation of Poverty in Nicaragua," the country is estimated to 
have more than 2,300,000 individuals living below the poverty line 
in 2005, while the Hambre Cero program is expected to reach only 
75,000 families.  Indeed, members of the three indigenous groups 
that inhabit the banks of the Coco and Bocay Rivers-in the remote 
northeast of Nicaragua where the Cero Hambre program was first 
launched in May--have already complained that the assistance being 
provided by the GON is not nearly enough to fulfill their needs. 
 
Comment 
------- 

¶9. (SBU) President Ortega's Hambre Cero program seems destined for 
failure.  Even if the GON is able to secure the political and 
financial support it needs to achieve the program's goals--a tenuous 
proposition at best--it will still benefit only a fraction of 
Nicaraguans living in extreme poverty.  Moreover, although many key 
aspects of Hambre Cero have remained out of the public view, from 
those details that have been released, there is little reason to 
believe that the program is based on sound and sustainable 
development strategies.  Indeed, it appears to have been developed 
without any regard for the experiences of other Latin American 
countries in implementing income transfer programs or for the 
extensive literature written on the economics of these programs. 
Having alienated members of both the NGO community and the National 
Assembly, Ortega seems content to use Hambre Cero as a vehicle 
through which to reward loyal FSLN supporters and consolidate 
support for the 2008 municipal elections.  Alternatively, widespread 
discontent with the program's administration could serve as a 
rallying point for a previously-fragmented political opposition. 
Either way, we are all expecting some serious "parrilla" (BBQ) in 
the Hambre Cero sites starting in November.  End comment. 
 
TRIVELLI