VZCZCXRO6053
RR RUEHLMC
DE RUEHMU #1409/01 3251954
ZNY CCCCC ZZH
R 201954Z NOV 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 3416
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 001409 
 
SIPDIS 
 
E.O. 12958: DECL: 11/20/2028 
TAGS: ECON EINV PGOV PREL NU
SUBJECT: NICARAGUA: PRIVATE SECTOR SUBDUED ON ELECTIONS 
CRISIS 
 
REF: MANAGUA 1392 
 
Classified By: Ambassador Robert J. Callahan, reasons 1.4 b and d. 
 
Summary 
------- 
¶1. (C) When authorities announced preliminary municipal 
election results on November 10, business leaders initially 
called for a recount in Managua and other municipalities 
where parties in opposition to the FSLN alleged electoral 
fraud.  Since then, the private sector has avoided a public 
role in the ongoing political crisis.  The president of one 
prominent business association said it would be difficult to 
take a political stand now, but he is looking forward to 
maintaining private sector unity in anticipation of 2011 
national elections.  Meanwhile, he said maintaining channels 
of communication with the government to protect members' 
economic interests is his objective.  One businessman 
explained that business leaders fear government retaliation 
if they publicly support the opposition.  By taking 
themselves out of the game, however, the private sector may 
be inadvertently ensuring that, by 2011, it will be too late 
to have any impact on elections.  End summary. 
 
Private Sector Calls for Review 
------------------------------- 
¶2. (C) When the Supreme Electoral Council (CSE) announced 
preliminary municipal election results on November 10, 
business leaders initially supported the political opposition 
-- the "Vamos con Eduardo" - Constitutional Liberal Party 
(PLC) alliance, Sandinista Reform Movement (MRS), and 
Conservative Party (PC) -- in its call for a recount in 
Managua and other municipalities where it alleged fraud 
(reftel).  In the days following the elections, the American 
Chamber of Commerce (AmCham), the Federation of Nicaraguan 
and Business Associations (COSEP), and several individual 
chambers that are COSEP members issued formal declarations 
warning that political instability caused by the elections 
crisis would have a severe economic impact, and they called 
for an open, transparent review of the election results. 
Since, the private sector has avoided a public role in the 
ongoing political crisis. 
 
COSEP: Difficult to Take a Political Stand 
------------------------------------------- 
¶3. (C) On November 18, Jose Adan Aguerri, President of the 
Federation of Nicaraguan Business Associations (COSEP), told 
the Ambassador that it would be difficult for the private 
sector to take a firm stand in support of any political party 
in the ongoing elections crisis.  Aguerri said that he has 
worked to achieve unity within COSEP to deal with the Ortega 
administration on business issues; taking a stand on 
political issues would be even more difficult. 
 
¶4. (C) Aguerri said it is his primary goal during the crisis 
to ensure that the private sector "weathers the storm" 
without significant losses in terms of sales or employment. 
"COSEP must protect its members' interests," Aguerri 
emphasized, "by maintaining an open channel of communication 
with the government."  COSEP is already looking toward 
national elections in 2011.  Keeping the private sector 
united and strong will allow COSEP to play a constructive 
role when it comes to electing a new president and 
legislators, said Aguerri. 
 
AmCham: Legal Process Must Run Its Course 
----------------------------------------- 
¶5. (C) American Chamber of Commerce of Nicaragua (AmCham) 
President Cesar Zamora told Econoff on November 14 that 
AmCham continues to press for a full recount of the November 
9 municipal election results.  He said that to be credible, 
the recount must be subject to international observation. 
When pushed on whether AmCham would step up its public 
support for Montealegre, Zamora replied dryly that 
Montealegre and other members of the opposition must make use 
of the legal process available to contest the results.  He 
said AmCham did not want to interfere or get ahead of the 
legal process, which should be allowed to run its course. 
AmCham would wait to see how the process unfolds, he added. 
 
Government Convinces Private Sector to Back Down 
--------------------------------------------- --- 
¶6. (C) Jorge Solis, Corporate Relations Manager for the 
Nicaragua Brewing Company (Guatemalan and Costa Rican owned), 
told Econoff on November 14 that President Ortega,s Economic 
 
MANAGUA 00001409  002 OF 002 
 
 
Advisor Bayardo Arce called him twice on November 10 to 
discourage him from supporting a general strike that business 
leaders had discussed for November 11.  Solis reported that 
Arce made similar calls to COSEP President Aguerri and other 
business leaders to discourage support for Montealegre. 
 
¶7. (C) Solis told us that a number of high-level FSLN 
officials had participated in efforts discourage private 
sector support for Montealegre.  Rather than seek common 
ground, as Arce does when he argues that political 
instability will only hurt business, Attorney General Hernan 
Estrada bullies and intimidates.  First Lady Rosario Murillo 
was concerned that a strike on November 11 would have quickly 
solidified domestic and international opinion against FSLN 
electoral fraud.  Solis told us that Murillo became directly 
involved in efforts to kill a strike and called Aguerri on 
November 10 to lobby against it.  Fearing government 
retaliation, Aguerri felt he had no choice but to acquiesce 
to her request. 
 
Comment 
------- 
¶8. (C) COSEP continues to be cautious in its relations with 
the Ortega administration.  Its members have been subject to 
tax audits, regulatory harrassment, accusations of criminal 
wrongdoing, and assorted threats from government officials. 
With assets at risk and responsibility for thousands of 
employees and their families, it is not surprising for 
members of the private sector to think twice about taking on 
an increasingly autocratic government.  By taking themselves 
out of the game, however, the private sector may be 
inadvertently ensuring that, by 2011, it will be too late to 
have any impact on elections. 
CALLAHAN