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C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000241 
 
SIPDIS 
 
E.O. 12958: DECL: 03/04/2019 
TAGS: PREL PGOV NU
SUBJECT: ORTEGA LAUNCHES CHARM OFFENSIVE TO WOO BACK AID 
 
Classified By: Ambassador Robert J. Callahan, reasons 1.4 (b, d) 
 
¶1. (C) Summary.  Faced with a worsening economic situation, 
steep cuts in foreign assistance, and an ongoing domestic 
political crisis resulting from fraudulent municipal 
elections in November 2008, President Ortega has a launched a 
belated and superficial charm offensive with foreign donors 
to woo back aid and attract new cooperation and investment. 
In its outreach to donors, especially from the EU, the GoN 
has emphasized the negative impact cuts would have on the 
rural poor and sought to minimize concerns over 
anti-democratic trends and credible accounts of elections 
fraud.  Additionally, Ortega has called for a "national 
dialogue" to restore donor confidence, while avoiding 
committing to concrete minimum conditions or participation by 
opposition groups in any such dialogue.  End Summary. 
 
CHANGING THE RHETORIC AND OPENING DOORS 
-------------------------------------- 
 
¶2. (C) In the immediate aftermath of the November 2008 
municipal elections and cuts or freezes in aid announced by 
donors in response to credible reports of massive electoral 
fraud, the Ortega administration appeared defiant and 
welcomed the departure of the "imperialists."  In late 
November, Ortega told his fellow participants in the ALBA 
Summit in Caracas, Venezuela that the departure of the 
Millennium Challenge Corporation's (MCC) program would make 
Nicaragua "more free."  Vice Foreign Minister Manuel Coronel 
Kautz later said that the freezing of MCC and other 
international aid was an "act of desperation" and suggested 
that Nicaragua would be better off without such aid "because 
this type of cooperation does not develop the country." 
 
¶3. (C) Three months later, facing a worsening economic 
situation compounded by a significant budget shortfall, 
President Ortega and senior GON officials have launched an 
effort to woo back foreign aid and enhance relations with 
foreign donors.  Over the last month, senior GON officials, 
including the Finance Minister, Education Minister, Foreign 
Minister and President Ortega himself have made personal and 
direct efforts to enhance or highlight cooperation with the 
U.S. as well as with other key foreign donors.  In public, 
Ortega and other senior FSLN/GoN leaders have scaled back, 
though not eliminated their standard anti-U.S. and European 
rhetoric. 
 
¶4. (C) Moreover, Ortega and the FSLN leadership have expanded 
their personal outreach to the Embassy and the Europeans.  On 
January 29, Ambassador hosted Ortega and his wife, Rosario 
Murillo, for their first ever dinner at the U.S. Ambassador's 
residence.  Over the course of the three hour event, Ortega 
and Murillo were engaging and personable, but cautiously 
avoided discussion of substantive issues.  In a February 10 
meeting with the Ambassador, Foreign Minister Santos 
committed to quickly resolve several long-standing bilateral 
disputes involving exemption from taxes for the Embassy and 
personnel.  After months of being told that the Finance 
Ministry opposed granting the Embassy exemption from taxes on 
gasoline purchases, Finance Minister Guevera told the 
Ambassador that he was "under orders" to resolve the problem 
and committed to exempting the Embassy from future taxes as 
well as removing the demand that back taxes be paid on prior 
fuel purchases.  Other FSLN National Assembly Deputies and 
regional party officials have also opened their doors to 
Emboffs after declining or canceling requests for meetings in 
previous months.  Other diplomatic missions have reported to 
us a similar sudden change in GoN behavior.  One Ambassador 
told us that "cooperation has never been better" and that he 
could not explain the change in attitude and cooperativeness 
suddenly coming from the GoN. 
 
NATIONAL DIALOGUE - BUT ON FSLN TERMS 
------------------------------------- 
 
¶5. (C) Beyond changing the rhetoric and opening their doors 
to Western diplomats, the FSLN has re-circulated an idea 
proposed last year to convene a "national dialogue" to move 
Nicaragua beyond its current crises.  On February 27, 
National Assembly President and Ortega-confidant Rene Nunez 
publicly announced the proposal for a "national dialogue in 
which would participate all the social, political and 
economic sectors of the country."  The goal of the dialogue, 
according to Nunez, would be to design programs that would 
counteract the "negative effects of the decadence of the 
capitalist and neo-liberal system."  Only a national 
 
MANAGUA 00000241  002 OF 002 
 
 
dialogue, he asserted, would be able to address the problems 
facing the country and keep the nation on course to address 
the real problems of poverty and other social needs of 
Nicaraguans.  On March 3, Ortega met with Cardinal Miguel 
Obando y Bravo (who chairs the pro-Ortega National 
Reconciliation Commission) and proposed that Obando chair the 
national dialogue.  (Note: Obando, who was once the leading 
critic of Ortega, has allied himself with Ortega, publicly 
defending his handling of the November municipal elections 
and rejecting criticism of Ortega's slide towards 
authoritarianism.  Obando's popularity has fallen as a result 
and his role in any dialogue would be widely rejected by 
opposition political parties and NGOs.  End Note.) 
 
¶6. (C) In a sign that the call for a dialogue is likely part 
of the "Pacto" power-sharing agreement between Ortega and 
former President Arnoldo Aleman, Constitutional Liberal Party 
(PLC) leader Wilfredo Navarro issued a public challenge to 
Ortega to convene the dialogue and committing the PLC's 
participation, but only if it included a discussion of the 
formation of a new Supreme Electoral Council (CSE) and 
broader constitutional and political reforms, including 
permitting presidential re-election.  Civil society leaders 
with whom we have spoken have rejected the call for a 
dialogue on the FSLN's and PLC's terms, fearing that they 
would be excluded from the table and any outcome of the 
dialogue, which is more than likely pre-determined.  Violeta 
Granera, Executive Director of the civil society group 
Movimiento por Nicaragua, believed the call for a dialogue 
was a "trap" that would be used to endorse constitutional 
changes, cosmetic reforms of the electoral system, and lead 
to a further concentration of Ortega's power at the expense 
of civil society.  Granera reported that a group of NGOs 
working to promote electoral reform would shortly issue a new 
platform of recommended changes to electoral law (that do not 
involve constitutional reform) that she hoped could serve as 
the basis for a real dialogue and a minimum standard by which 
to evaluate the GoN's commitment to reform. 
 
COMMENT 
------- 
 
¶7. (C) It is clear that Ortega is beginning to feel the bite 
of the global financial crisis and reduced international aid, 
particularly European-donated direct budget support, and is 
looking for a way forward to attract re-investment.  At the 
same time, it is also clear that Ortega is confident that his 
administration can ride out the economic storm and woo back 
aid if they go through the motions of committing to improved 
relations and reform.  He appears willing to give lip-service 
to reform, but only to the extent that it serves his 
long-term agenda of securing his hold on power through 
constitutional reform and presidential re-election.  We have 
seen no indication that Ortega or others in the FSLN have 
reached out to key segments of Nicaraguan society, including 
pro-democracy NGOs, the business community, or the Catholic 
Church, or that such organizations would be prepared to 
engage in a dialogue on the terms proposed by Ortega. 
 
 
 
CALLAHAN