VZCZCXYZ0002
RR RUEHWEB

DE RUEHMU #0611/01 1352018
ZNY CCCCC ZZH
R 142018Z MAY 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 2611
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUMIAAA/CDR USSOUTHCOM MIAMI FL//J2/J3/J5//
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L MANAGUA 000611 
 
SIPDIS 
 
STATE FOR WHA/CEN, WHA/EPSC, EEB/TRA, INR/IAA 
 
E.O. 12958: DECL: 05/13/2018 
TAGS: ELTN ECON ELAB EFIN PGOV NU
SUBJECT: NICARAGUA: TRANSPORTATION STRIKE CONTINUES 
 
REF: A. MANAGUA 578 
     ¶B. MANAGUA 520 
 
Classified By: Ambassador Paul A. Trivelli for reasons 1.4 (b,d) 
 
¶1. (C) Summary.  Nicaragua's national transportation strike 
involving taxis, inter-urban buses, and freight haulers is 
now in its ninth day.  On May 12, for the second day in a 
row, transportation leaders and government representatives - 
led by Transportation Minister Fernando Martinez - failed to 
reach an agreement, with both sides remaining far apart. 
Produce prices are up, with fresh vegetables costing twice as 
much as last week, but markets have generally been able to 
restock.  Despite sporadic cases of violence and police 
detentions, city traffic patterns and urban behavior belie 
hysterical headlines about the strike.  Union leaders, who 
may not be able to sustain the strike for a prolonged period, 
believe it is "now or never" for the workers to gain 
concessions from the government.  End Summary. 
 
Scale and Seriousness of Strike Unclear 
- - - - - - - - - - - - - - - - - - - - 
 
¶2. (U) Nicaragua's national transportation strike involving 
taxis, inter-urban buses, and freight haulers is now in its 
ninth day.  There is no consensus as to whether the scope of 
the strike is growing or subsiding.  Some media reports 
indicate that the strike is losing steam outside of Managua. 
However, others show the strikers becoming more radical, for 
instance, by burning two trucks at a rural Managua Department 
intersection.  Instant television and press Internet coverage 
report multiple injuries the result of the truck burnings and 
the heart attack fatality of one detained taxi driver 
protester in the city of Leon. 
 
Talks Break Down For a Second Day 
- - - - - - - - - - - - - - - - - 
 
¶3. (SBU) On May 12, for the second day in a row, 
transportation leaders and government representatives - lead 
by Transportation Minister Fernando Martinez - failed to 
reach an agreement.  Transportation leaders began 
negotiations by meeting with Lenin Cerna, the Sandinista 
National Liberation Front's (FSLN) Political Secretary, and 
other FSLN representatives to discuss and gain support for 
their counter-proposal to freeze gas prices at $2.11 per 
gallon, nearly half of the government's offer. 
Transportation leaders had expected this "pre-meeting" to 
soften the government's position during negotiations. 
However, the government continued to stand by its proposal to 
lower retail gas prices for taxis and inter-urban buses by 
$0.50 cents to a current $4.20/gallon.  The proposal does not 
cover freight carriers.  Upon hearing the government's 
position, transportation negotiators abruptly left the 
meeting and have indicated that they will only negotiate with 
President Ortega directly. 
 
Politics Come into Play 
- - - - - - - - - - - - 
 
¶4. (C) According to the government's offer, 20 cents of the 
50-cent price cut would come from the national budget. 
(Comment.  It is not clear where the remaining 30 cents would 
come from, though Andres Lara, the Nicaraguan Transport 
Chamber President, reports that the Government of Nicaragua 
(GON) would find the funds from the Albanisa Venezuelan 
petroleum subsidy.  End Comment.)  However, Liberal 
opposition National Assembly deputy and Managua mayoral 
candidate Eduardo Montealegre declared that he will not 
support an additional budgetary obligation.  Instead, he 
called on the government to subsidize the 20-cent price cut 
using off-budget funds accumulated from sales of Venezuelan 
oil, estimated to be between US$200-400 million a year.  In 
addition, Montealegre hinted that he would tie any opposition 
backing for additional budgetary support to further 
negotiations over election delays in the North Atlantic 
Autonomous Region (RAAN) (Ref B)  (Comment.  Shifting 
attention away from striker demands that Ortega use Venezuela 
ALBA funds to lower gasoline prices and toward the opposition 
in the National Assembly would seem to play into Ortega's 
hand.  End Comment.) 
 
Scarcity, Prices, and the View from the Street 
- - - - - - - - - - - - - - - - - - - - - - - 
 
 
¶5. (U) News reports decry a scarcity of produce on the 
shelves and rising prices.  EconOff's visit to the largest 
market in Managua on May 13 confirmed this had been 
situation.  That day, however, a major delivery arrived 
filling market stalls with fresh produce, basic grains and 
non-perishable items.  Prices are up, with fresh vegetables 
costing twice as much as last week.  Most prices have risen 
between 24% and 400%.  Only onions and rice remained stable, 
with basic grains and beans reflecting only modest price 
changes.  Chicken, distributed by the independent Tip-Top 
enterprise, whose truckers are not striking, reflected no 
change in prices.  Fresh meat prices have risen due to 
delivery issues.  The price of butane, the cooking fuel used 
by most Nicaraguans, has risen 4% the last week.  We have 
reports, however, of perishable produce crated for export 
unable to be transported, whose limited shelf life make an 
eventual wholesome delivery, to the U.S. or Europe, uncertain. 
 
¶6. (U) Stores belonging to major supermarket chains - Pali, 
La Union, and La Colonia - were well-stocked, with prices in 
concert with those observed at the municipal market.  Shelf 
managers indicated sporadic, though sufficient, delivery 
schedules.  The regional produce manager for WalMart Central 
America, the owner of the Pali and La Union chains, has 
expressed his concern over continued supply of dairy, fruit, 
and vegetable products, as well as the inability to move meat 
delivery exports. 
 
¶7. (C) Reports of thousands of containers stacking up at the 
national port of Corinto were denied by the National Port 
Authority (EPN).  Bernardo Salazar Meza, EPN's legal advisor, 
said that the importation of goods has been proceeding on 
schedule.  Container inventory at the port is manageable, 
though he would not specify a number.  He told us that the 
arrival of export containers was down, but was not worrisome. 
 This official report was contradicted by shipping company 
contacts, who said that the port is indeed full to capacity, 
with both import and export shipments unable to move. 
 
¶8. (U) Finally, Managua traffic reflects nearly normal hustle 
and bustle.  The threatened strike on May 12 by the remaining 
buses from Managua's largest bus cooperative did not happen, 
and there seems to be an increasing number of taxis and buses 
in circulation.  Most Embassy locally employed staff are 
making it to work, albeit with some delays. 
 
Comment 
- - - - 
 
¶9. (C) While market inventories ebb and flow, markets have 
been able to restock, though at higher retail prices. 
Despite sporadic cases of violence and police detentions, 
city traffic patterns and urban behavior belie hysterical 
headlines about the strike.  With many of Nicaragua's bus, 
truck, and taxi drivers financially unable to sustain the 
strike indefinitely, union leaders believe it is "now or 
never" for the workers to gain concessions from the 
government.  According to one Sandinista union leader, who 
characterized Ortega as "taking extreme positions," if the 
strikers cannot resolve the situation by May 14, "Ortega will 
wait them out and give them nothing."  Asked about the 
political implications of such a move, he responded that 
"after three or four months the issue will be forgotten," 
implying that it would not affect the outcome of the 
municipal elections.  Ortega's planned departure for the 
Euro-Latin Summit in Lima suggests that waiting the strike 
out may indeed by the GON's strategy. 
TRIVELLI