VZCZCXRO7569
RR RUEHLMC
DE RUEHMU #2203 2682303
ZNR UUUUU ZZH
R 252303Z SEP 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1355
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHSM/AMEMBASSY STOCKHOLM 0142
RHEHNSC/NSC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS MANAGUA 002203 
 
SIPDIS 
 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CEN, WHA/EPSC, AND EEB 
TREASURY FOR SARA GRAY 
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR 
 
E.O. 12958: N/A 
TAGS: EAID EWWT PREL ECON PGOV NU
SUBJECT: SWEDEN ENDS COOPERATION WITH NICARAGUA 
 
REF: TEGUCIGALPA 1487 
 
¶1. (SBU) Summary: On August 27, the Embassy of Sweden announced that 
the country will end its foreign assistance program in Nicaragua as 
part of a global strategy that aims to focus its international aid 
to countries in Africa and Eastern Europe.  Members of the 
Nicaraguan National Assembly and independent economists speculated 
that the decision was really due to Nicaragua's criminalization of 
all forms of abortion and to President Ortega's leftist politics. 
According to a Swedish aid officer, the process of deciding what 
programs to cut was not transparent, and reflected the inherent 
conflicts in Sweden's contentious coalition government.  End 
summary. 
 
¶2. (U) On August 27, the Embassy of Sweden announced that the 
country will end its foreign assistance to Nicaragua, as a result of 
a global strategy that aims to focus its international aid to 
countries in Africa and Eastern Europe.  In recent years, annual aid 
from Sweden to Nicaragua has averaged $21 million, reaching $35.6 
million in 2006.  The Swedish Embassy explained that the process of 
withdrawal will take between two and four years.  The diplomatic 
functions of Sweden's Managua Embassy will be transferred to 
Guatemala, with the embassy here converting to an aid office to 
oversee the assistance phase-out.  These moves are part of a larger 
regional cutback as the GOS plans to conclude or significantly 
reduce its assistance programs in Chile, Peru, Haiti, Honduras, and 
Nicaragua (reftel).  Projects being implemented in those countries 
will continue until their scheduled completion dates. 
 
¶3. (U) Sweden's assistance to Nicaragua focuses on the social issues 
of health and education.  It is also a member of the Budget Support 
Group, composed mainly of European aid agencies and international 
financial institutions which provide funding directly to Nicaragua's 
general budget.  This support is part of the Nicaraguan effort on 
aid harmonization and alignment and the overall program to finance 
the operations of the public social sectors as envisioned in the 
Millennium Development Goals. 
 
¶4. (U) Despite of the Swedish Ambassador's continued assertions that 
this move was part of a global strategy and that the decision was 
made over a year ago, members of the Nicaraguan National Assembly 
and independent economists speculated that the decision was really 
due to Nicaragua's criminalization of all forms of abortion and to 
President Ortega's leftist politics. 
 
¶5. (SBU) According to Swedish aid officer Sten Strom the decision to 
curtail operations in Latin America was not only based on efforts to 
concentrate assistance in countries or regions of strategic 
importance to Sweden, but also reflects the inner workings of the 
four party coalition in Stockholm.  The decision to close an embassy 
and conclude an aid program was based on one of two criteria, either 
administrative benefit or local development policy, or, perhaps, 
some combination of the two.  Administrative criteria included the 
savings to be gained by closing an embassy or aid program and 
managing functions and projects from a regional center.  In 
considering beneficiary counties' development policies, the Swedish 
government examined their commitment to sound economic policies, the 
rule of law, gender equality, and HIV/AIDS amelioration. 
 
¶6. (SBU) The process provides Swedish diplomats a convenient dodge 
-- if a decision to close a development program proves 
controversial, it can be attributed to administrative 
considerations.  According to Strom, the process was not truly 
transparent, and reflected the inherent conflicts in a contentious 
coalition government.  During a recent session, the Chairman of the 
Budget Support Group (currently the World Bank ResRep in Nicaragua) 
asked Strom if the decision to terminate the program in Nicaragua 
was motivated by Sweden's displeasure with the recent 
criminalization of therapeutic abortion in Nicaragua; he responded 
in the negative. 
 
TRIVELLI