VZCZCXRO8979
RR RUEHLMC
DE RUEHMU #0127/01 0351459
ZNY CCCCC ZZH
R 041459Z FEB 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 2031
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000127 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA, WHA/CEN, WHA/EPSC, AND EEB/TPP 
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR 
TREASURY FOR SARA GRAY 
 
E.O. 12958: DECL: 02/01/2018 
TAGS: EAID PREL PGOV ECON EINV NU
SUBJECT: NICARAGUA: MCC CEO EMPHASIZES CONSTRUCTIVE 
ENGAGEMENT 
 
Classified By: Ambassador Paul Trivelli for reasons 1.4 b&d. 
 
¶1. (C) Summary: On January 22-24, Ambassador John Danilovich, 
CEO of the Millennium Challenge Corporation, visited 
Nicaragua to inaugurate work on a key road segment of the 
Pan-American Highway and to hand out clean property titles 
and rural business development equipment during a public 
event with President Ortega.  In anticipation of the public 
events, Amb. Danilovich held meetings with the GON 
MCA-Nicaragua Board members and met one-on-one with President 
Ortega.  At a reception hosted by Amb. Trivelli, Nicaragua 
political, business, and academic leaders emphasized common 
themes in their discussions with Amb. Danilovich: the 
importance of MCC projects as a critical tool to help foster 
Nicaragua's economic development and stronger bilateral ties 
between the two countries.  Before departing Nicaragua, Amb. 
Danilovich participated in the formal dedication of the New 
Embassy Compound.  The most striking aspect of his visit was 
how well President Ortega stayed on message and refrained 
from making disparaging comments about the USG or the MCC 
program.  Not only was President Ortega's consistently 
positive message remarkable, but the imagery of the January 
23 public event - the President standing alongside Amb. 
Trivelli and Amb. Danilovich in front of the Nicaraguan and 
American flags to hand out clean property titles - stood in 
stark contrast to Ortega's normal, anti-American posture. 
End Summary. 
 
¶2. (C) On January 22-24, Ambassador John Danilovich, CEO of 
the Millennium Challenge Corporation, visited Nicaragua to 
participate in several MCC project events.  He inaugurated 
work on a key road segment of the Pan-American Highway, 
handed out more than 700 clean property titles, and delivered 
fire-fighting equipment and irrigation systems to rural 
business development beneficiaries.  The latter two 
activities took place during a public ceremony presided by 
President Ortega. 
 
MUM'S THE WORD 
-------------- 

¶3. (C) On January 22, Amb. Danilovich started his visit with 
a meeting with the Government of Nicaragua (GON) members of 
the MCA-Nicaragua Board.  Despite previously expressing 
concerns about various aspects of the program, the GON Board 
members were relatively silent and even somewhat positive 
about the state of the program.  Amb. Danilovich met the 
newly designated Chairman Alberto Guevara (Minister of 
Finance), Senior Presidential Advisor Paul Oquist, and other 
Ministers on the Board.  The Chairman expressed the GON's 
interest in expanding the Compact to include an energy 
project and/or expansion to other regions of Nicaragua.  It 
was clear that Guevara had specific instructions from the 
President to make the project a success.  He also mentioned 
the importance of guaranteeing that local Nicaraguan firms 
are eligible to compete for MCA-Nicaragua contracts.  Amb. 
Danilovich explained that MCC does not provide preferences 
based on nationality, but rather, the firms that are the best 
qualified to do the job win the contracts.  He commended the 
GON Board of Directors for their recent engagement and 
interest in making the Program succeed. 
 
PRIVATE MEETING WITH PRESIDENT ORTEGA 
------------------------------------- 

¶4. (U) President Ortega's meeting with Amb. Danilovich in 
Managua on January 22 involved a host of GON officials, 
including FM Santos, Guevara, Free-Trade Zone Director 
General Baltodano, and the Minister of Transportation and 
Infrastructure Pablo Fernando Martinez. (Note: Baltodano also 
oversees the GON's investment promotion unit, ProNicaragua, 
involved in MCC activities. End Note.)  Despite requests by 
the Embassy to have no press coverage, the Presidency had 
"friendly" news outlets present for a photo-op at the 
beginning of the meeting and a short Q&A session at the 
conclusion. 
 
¶5. (C) The exchange between President Ortega and Amb. 
Danilovich was cordial and constructive, building upon their 
rapport established during a meeting on the margins of the 
United Nations General Assembly last year.  President Ortega 
emphasized his interest in seeing road construction begin, 
but also stressed the importance of building quality 
infrastructure.  Echoing his cabinet members' concern earlier 
in the day, Ortega raised the issue of local firm 
preferences.  Juan Sebastian Chamorro, MCA-Nicaragua General 
Director, presented the President the status of the 
Infrastructure and Rural Business Development projects, 
including some early results: the successful submission of 
the feasibility and design plans for 364 kms of road as well 
as recognition that thousands of Nicaraguans have already 
benefited from the program.  During the press session at the 
end of the meeting, President Ortega clarified that his 
new-found relationship with the U.S. Government was a result 
of additional information he had received about the program 
and a "new reality." 
 
NICARAGUANS EMPHASIZE IMPORTANCE OF MCC 
--------------------------------------- 

¶6. (U) At a reception hosted by Amb. Trivelli, Nicaraguan 
political, business, and academic leaders emphasized common 
themes in their discussions with Amb. Danilovich: the 
importance of MCC projects as a critical tool to help foster 
Nicaragua's economic development and stronger bilateral ties 
between the two countries.  They also asked whether Ortega's 
typical anti-American rhetoric would affect Nicaragua's 
eligibility for additional MCC funds.  Amb. Danilovich 
explained that eligibility is based on the continued positive 
performance on MCC eligibility indicators. 
 
VIVA LOS ESTADOS UNIDOS! 
------------------------ 

¶7. (U) On January 23, Amb. Danilovich spent a full day in the 
departments of Leon and Chinandega, the program 
implementation region.  His first stop was a press conference 
and photo-op to initiate work on a key segment of the 
Pan-American Highway that links the Northwest region of 
Nicaragua to Honduras and beyond.  MCC approved this 17 
kilometer road segment as an addition to existing compact 
activities due to budgetary savings.  Amb. Danilovich 
reassured the press and other concerned stakeholders that the 
Infrastructure Project was on schedule and underway. 
 
¶8. (U) Accompanied by President Ortega, First Lady Rosario 
Murillo, and Nicaraguan Ambassador to the U.S. Arturo Cruz, 
Amb. Danilovich participated in a public ceremony to hand out 
more than 700 clean property titles as well as forest fire 
prevention kits and irrigation equipment.  Over four thousand 
program beneficiaries were present for the event, including a 
few individuals who were chosen to speak during the event on 
behalf of all beneficiaries. 
 
¶9. (C) Unusual for an Ortega event, this ceremony was notable 
for its high level of civic participation, and lack of 
partisan expressions or chanting.  In his address, Amb. 
Danilovich emphasized that MCC is a poverty reduction program 
that strives to create jobs and foster economic growth.  He 
pointed out that the U.S. Government wants to have stronger 
neighbors in the hemisphere.  MCC is committed to helping the 
people of Nicaragua as long as the GON supports the program 
and commits to reforms that promote the well-being of the 
Nicaraguan people. 
 
¶10. (C) Throughout the event, President Ortega commented that 
his impression of the MCC program had changed now that he is 
better informed.  Having just visited an MCA-Nicaragua 
agricultural fair before taking the stage, President Ortega 
spoke at length about the real differences being made in 
people's lives as a result of the MCC program.  President 
Ortega stressed that the people of Nicaragua are united with 
the citizens of the United States and that together we could 
eradicate poverty, hunger and malnutrition.  At the end, he 
led the audience in repeated chanting: "Long live the United 
States!" 
 
NEW EMBASSY COMPOUND DEDICATION 
------------------------------- 

¶12. (U) On January 24, Amb. Danilovich participated as a 
guest of honor in the formal dedication of the New Embassy 
Compound.  During his remarks before an audience which 
included high-level GON representatives, he reflected upon 
the activities of the previous day with President Ortega.  He 
also underscored the achievements of the MCC program and the 
importance of building a long-lasting relationship with the 
people of Nicaragua. 
 
¶13. (U) MCC CEO Amb. Danilovich cleared on this message. 
TRIVELLI