VZCZCXRO7056
PP RUEHLMC
DE RUEHMU #1963/01 2341312
ZNY CCCCC ZZH
P 221312Z AUG 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 1079
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUMIAAA/CDR USSOUTHCOM MIAMI FL//J2/J3/J5// PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEABND/DEA HQS WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC PRIORITY
RUEHMU/USMILGP MANAGUA NU PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 MANAGUA 001963
SIPDIS
SIPDIS
NSC FOR V ALVARADO
E.O. 12958: DECL: 08/20/2017
TAGS: PGOV PHUM ECON KDEM NU
SUBJECT: FEAR AND LOATHING ON NICARAGUA'S ATLANTIC COAST
REF: A. MANAGUA 1783
B. MANAGUA 1944
Classified By: Ambassador Paul Trivelli for reasons 1.4b,d
1. (C) SUMMARY: Our contacts on Nicaragua's Atlantic Coast
("costenos") support the Ambassador's non-combative
engagement strategy with President Ortega's administration.
With many households almost wholly dependent on remittances
from family members working in the U.S., costenos are fearful
of the impact of Ortega's anti-U.S. rhetoric on bilateral
relations. The coast's dismal economic situation fuels
continued concern over drug-trafficking and personal security
and is causing an exodus of young people from the region,
robbing it of future economic and political leaders. At the
heart of coast's economic woes is the 20-year old Law 28, the
Law of Autonomy. Under Law 28, the coast does not enjoy
financial autonomy, and its communal property laws and
complex territorial arrangements discourage private
investment. Opposition political party unification efforts
in the regional capitals of Bluefields and Puerto Cabezas are
far ahead of Managua. Further, political and civic leaders
have thus far repelled the efforts of the Sandinista National
Liberation Front's (FSLN) Citizen Councils to establish a
presence on the Atlantic Coast. Future USG efforts to
strengthen democratic forces on the Atlantic Coast should
include the Catholic and Moravian churches which wield
tremendous influence up-and-down the coast and face
increasing pressure from the Ortega administration. END
SUMMARY
2. (U) From August 9-11, the Ambassador visited the Atlantic
Coast towns of Bluefields in the Autonomous Southern Region
(RAAS) and Puerto Cabezas in the Autonomous North (RAAN) to
inaugurate several projects, including two mediation centers,
a model school in the Excellence program, a municipal family
health project, and a refurbished Navy patrol boat refitted
to undertake long voyages in open water as part of the USG's
anti-narcotic assistance efforts. In addition, the
Ambassador spoke with religious, community, and political
leaders in both communities about the situation on the
Atlantic Coast.
Costenos Support Embassy Engagement Strategy
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3. (C) Leaders in the RAAS and RAAN unanimously support the
Embassy's engagement strategy with the Ortega Administration.
Initially fearful that the U.S. would "abandon" the
Nicaraguan people following the elections, leaders expressed
satisfaction that U.S. involvement and programs are
continuing. Further, they praised the Ambassador for his
positive public discourse, refusing to be provoked by
Ortega's verbal attacks on the U.S. In fact, Ortega's
attempts to discredit the U.S., according to leaders, are
having the opposite affect on the Atlantic Coast, bolstering
the image of the U.S.
4. (C) Costenos are hyper-sensitive to U.S. policy in
Nicaragua because of their dependence on monthly remittances.
According to leaders in both the RAAS and RAAN, nearly every
household receives funds from a family member working in the
U.S. In many instances, they reported, remittances are the
sole source of household income, masking, to a degree, the
gravity of the economic situation in these regions.
Security Key Concern for Costenos
- - - - - - - - - - - - - - - - -
5. (SBU) Given the high rates of unemployment, drug
trafficking and petty theft remain constant problems on the
Atlantic Coast. Police and civic officials acknowledge that
recent counter-drug initiatives have reduced the flow of
illicit substances, however, trouble remains. Although
relations between the police and military were characterized
as "close" and "cooperative," general public security in both
regional capitals is a problem, reported community leaders,
impacting local business and tourism. Adding to the
difficulty in the RAAS, is the long legal backlog due to a
severe shortage of prosecutors. With only two prosecutors in
the entire region, the Bluefields chief of police lamented
that drug traffickers operate with near impunity, knowing
they will never be convicted if caught.
Law of Autonomy Holding Back Development
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6. (U) The lack of development -- and subsequent economic
problems -- on the Atlantic Coast can be traced back to Law
28 - the Law of Autonomy. Passed in 1988 by then-President
Ortega, the law was designed to "calm down" the indigenous
communities on the Atlantic Coast without, according to the
Bluefield mayor, being the "most appropriate" law. Under Law
28, indigenous communities do not enjoy fiscal and budgetary
autonomy. In addition, those regional businesses that do pay
taxes, pay them directly to Managua, leaving coastal
communities without the means to make autonomous decisions
about public works investments.
7. (C) In nearly every meeting, the Ambassador underscored
the importance of property rights and clear title to
attracting foreign investment and driving growth. Under Law
28, all land is communal and potential investors face a
dizzying array of councils and committees -- regional,
municipal, territorial, and community -- to win approval to
use, by lease, any land. As a result, infrastructure
projects have languished for years and national and
international private investors shy away from the region,
focusing instead on the Pacific Coast.
8. (SBU) Leaders were receptive to the Ambassador's idea of
a formal 20-year anniversary study to evaluate the effects of
Law 28 and to propose changes to facilitate investment. RAAN
governor Reynaldo Francis has proposed reforms to streamline
the negotiation process with regional and local authorities.
In his own efforts to attract international investment,
Francis remarked that he had been in California the week
prior meeting with Nicaraguan/American businessmen to explain
the value proposition and process for investing in the coast.
9. (C) Francis appears to be the exception. Most costenos,
although recognizing the serious shortcomings of Law 28, have
taken very little initiative to change the law. Most blamed
their National Assembly representatives, accusing them of
forgetting about the coast once they get to Managua. While
political neglect is a likely contributing factor, the
complex structure of regional councils and committees set up
under Law 28 makes it nearly impossible to reach consensus
for coherent reform.
Oil Exploration - Ready and Willing
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10. (C) Infinity Oil and MKJ oil exploration projects have
both fallen prey to this complex process and the political
infighting that accompanies it. Regional council members and
governors in both the RAAS and RAAN voiced strong support for
the oil firms and were frustrated that the projects had been
blocked by procedural problems. However, Francis as well as
the president of the RAAS regional council, Maria Lourdes
Aguilar Gibbs, informed the Ambassador that the companies had
not consulted with the regional councils as required by law
(although the firms did follow the advice of the central
government), thus slowing down the process. Other leaders
remarked, more cynically, that the oil exploration projects
would not get off the ground until certain "party interests"
were involved, implicating the FSLN and PLC.
Civil Society / Youth Disengaged
- - - - - - - - - - - - - - - - -
11. (SBU) Due to the Atlantic Coast's grim economic
situation, religious, political, and civil society leaders
warned of a general lethargy among youth and civil society.
These leaders insist that this trend threatens security,
democracy, sense of community, and future economic
opportunities. The former mayor of Bluefields, remarked that
only 300 people protested the brutal killing of four police
officers last year. Vote buying in both regions is also
common practice, with people reportedly selling their votes
for as little as five dollars. Instead of working for
change, young people are leaving the Atlantic Coast, getting
involved in drug-trafficking, or simply existing from
remittances, with a resulting paucity of young emerging
political and social leaders. Across the board, these
community leaders urged U.S. support for programs to
re-engage youth and civil society.
CPCs Threaten Autonomy, not Welcome
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12. (C) Given the fragility of the economic and social
situation in both regions, leaders are very concerned about
the Citizen's Councils which they see as the Ortega
government's attempt to subjugate regional authorities to
will of the Sandinistas (reftel B). Thus far, the CPCs have
met strong resistance by authorities in both regions and have
not been established in either Bluefields or Puerto Cabezas.
However, our interlocutors warned that the costenos' poverty
and poor education make them easy to manipulate, and that the
CPCs may slowly penetrate the coast through programs like
Zero Hunger (reftel A) that promise token assistance.
Leaders fear that, once entrenched, the CPCs would be
difficult to extract, threatening the region's autonomy by
demanding compliance with Ortega's wishes in exchange for
government funding and resources.
Political Opposition Groups Working Together
- - - - - - - - - - - - - - - - - - - - - - -
13. (SBU) Despite the lack of Liberal unity between the
Liberal Constitutional Party (PLC) and Nicaraguan Liberal
Alliance (ALN) at the central level in Managua, on the
Atlantic Coast, democratic opposition groups are working
together in preparation for the 2008 municipal elections. In
the RAAS, opposition political groups have been formally
working together for the past 15 months. In the RAAN, seven
political groups signed a unity agreement three months ago,
although discussions continue. Although he has repeatedly
declined to run for mayor of Puerto Cabezas, there is
universal support among all non-FSLN political parties,
religious leaders, and civil society groups for Javier
Williams-Slate, the former vice foreign minister of foreign
affairs under Bolanos. In the RAAS, discussions are under
way to identify a democratic candidate. In this sense,
Liberal/opposition unification in the Atlantic Coast is far
ahead of Managua and most other departments. However,
leaders fully expect Ortega to mount a concerted effort to
infiltrate and break-down liberal support using the CPCs,
Zero Hunger, and blocking investment to the area (as in the
case of Infinity Oil and MKJ) in order to bring the region to
its knees.
Opportunities for USG Support
- - - - - - - - - - - - - - -
14. (C) The Ambassador received over a dozen assistance
proposals during his two-day visit to the Atlantic Coast.
While personal pleas for assistance and small requests for
materials were mixed among the proposals, half were requests
to fund civil society organizations or churches to support
local outreach or to provide training and education programs
targeting youth and marginalized groups. Historically
underserved by the national government, the situation for
non-Sandinista organizations, including local governments, is
becoming increasingly grim as Ortega tightens his grip and
chokes-off funding. For example, the mayor of Bluefields
complained that he had only 11,000 Cordobas ( USD 600.00) to
service the needs of 12 communities outside Bluefield's
center.
Comment - Churches Represent Strategic Opportunity
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15. (C) Given the dearth of non-Sandinista NGOs on the
Atlantic Coast, the Moravian and Catholic churches represent
strategic opportunities for USG-supported programs. They
have strong inter-faith dialogue, wield enormous influence
within most communities up-and-down the Atlantic Coast, and
are increasingly uncomfortable with the Ortega
administration. During their meetings with the Ambassador,
these representatives provided crisp analysis of the problems
facing the costenos and presented sensible ideas and
well-developed proposals which position the church as an
instrument of social outreach and civic education. Such
ideas may help forge the solution to the coast's most
overarching problem -- the lack of a unified vision of the
region's future -- and encourage greater cooperation among
the RAAS and RAAN's ethnically diverse population. Over the
coming weeks, we will evaluate these proposals for the
Ambassador's democracy fund. In addition, we will reach out
to other organizations such the National Endowment for
Democracy to facilitate contact. As the battle for control
over the Atlantic Coast's political future heats-up and more
weight falls on the churches' shoulders to defend civil
rights and democracy, we will work to support and strengthen
their positions and programs.
TRIVELLI