ORTEGA BLAIMS "NEO-LIBERALISM" FOR NICARAGUAN

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000106

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/CEN

E.O. 12958: DECL: 01/16/2017
TAGS: PGOV PREL ECON KDEM NU
SUBJECT: ORTEGA BLAIMS "NEO-LIBERALISM" FOR NICARAGUAN
POVERTY AT INAUGURATION


Classified By: Ambassador Paul Trivelli for reason 1.4(d)


1. (U) Summary: New Nicaraguan President Daniel Ortega
assumed office on January 10 singing the praises of his
Bolivarian "twin" Hugo Chavez and proclaiming the failure of
"neo-liberalism." Ortega repeated his campaign promises to
alleviate poverty through national and regional "unity,"
joining the Chavez-sponsored Bolivarian Alternative for the
Americas (ALBA),and ending privatizations of public
companies. While he avoided directly criticizing the U.S.
and promised not to pull out of CAFTA, Ortega pledged that
his government will "revisit" certain elements of the
agreement. Honored guests Chavez, whose late arrival delayed
the onset of the inauguration by almost two hours, and
Bolivian leader Evo Morales used the occasion to attack the
U.S. and pronounce "death to imperialism." End Summary.


2. (U) Nicaraguan President Daniel Ortega was sworn in during
a disorganized and sun-baked January 10 ceremony at the
Non-Aligned Plaza. The proceedings were held up for over 90
minutes, despite the presence of numerous heads of state and
other dignitaries, to await the arrival of Venezuelan
President Hugo Chavez. While Ortega appeared uncomfortable
during the official ceremony, he quickly became animated
after moving a few blocks to a popular rally at the Plaza de
la Fe, where he thanked his supporters for bringing the
Sandinista National Liberation Front (FSLN) to power. Chavez
and Morales shared the stage with Ortega.

Ortega Promises to End Poverty by Rejecting Neo-Liberalism
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3. (U) After arriving at the Plaza de la Fe, Ortega held up
the presidential sash before the masses and announced that
"this belongs to all Nicaraguans who are ready to fight for
justice, to eradicate hunger, and the lack of health care and
education in our country." Ortega then launched into a
strong critique of "neo-liberalism," which he blamed for
continued poverty. Ortega told the media, "I have discussed
with international financial organizations the fact that the
neo-liberal model has not resolved the needs of the
population." He claimed that 35 percent of the population is
now functionally illiterate compared to 12 percent in 1990.
(Note: The Ministry of Education currently estimates
illiteracy at 20 percent of the population, and UNESCO
indicates a figure of 30 percent. End Note.)


4. (U) Ortega called for "national unity" of rich and poor,
saying that the election "represents an opportunity to move
down a new path, so that Nicaraguan families can "live with
dignity." He also voiced his support for Latin American
"unity and solidarity," claiming that such unity would reduce
poverty in all countries.


5. (U) Ortega proceeded to proclaim that Nicaragua would join
the Bolivarian Alternative for the Americas (ALBA) sponsored
by Venezuela, which he did the following day (septel).
However, Nicaragua he claimed, would not renounce CAFTA,
although his government may "revisit the conditions of the
treaty." "The problem (with CAFTA) was that there was
asymmetry with the Nicaraguan economy that can't compete with
an economy like the United States," Ortega stated.


6. (U) Ortega promised that his administration will not
undertake further privatizations of public utilities,
specifically mentioning water and the hydroelectric generator
(Hydrogesa). Ortega criticized the private energy regulator
Spanish-owned Union Fenosa, but did not threaten to
re-nationalize the sector. He thanked Chavez for Venezuela's
assistance providing emergency electrical plants to relieve
Nicaragua's energy crisis.


7. (U) Ortega claimed that the members of his administration
will be responsible to the "people of Nicaragua." He
promised to reduce the "megasalaries" currently allocated to
ministers and form a more gender balanced cabinet.


8. (U) Ortega called on the campesinos (small farmers) not to
occupy private lands as "Nicaragua has sufficient land for
all of its population." He commented that, "what we need in
this country is a government policy that provides land for
campesinos and financing so that they can work the land."

Chavez and Morales Attack U.S.
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9. (U) Venezuelan President Hugo Chavez, who was treated as
the guest of honor during the festivities, used the
inauguration as a platform to repeat his populist rhetoric
and criticize the United States. After presenting Ortega
with a replica of Simon Bolivar's sword, Chavez proclaimed
that Ortega's win represents a "victory for those of us who
are fighting to change the pattern of colonial domination in
Latin America, open paths of social justice, liberation, and
equality..." Chavez also praised Cuban leader Fidel Castro
and Bolivian president Evo Morales before ending with the
proclamation: "Always to victory! Country, socialism, or
death -- we will be victorious!" Ortega thanked Chavez and
called him his "twin."


10. (U) After Chavez' speech, Bolivian President Evo Morales
offered brief remarks criticizing the U.S. and defending his
own domestic policies. Morales defended the nationalization
of natural resources and called for Latin American unity
against "North American imperialism." Morales added that
"indigenous peoples" should fight to recover natural
resources that have been privatized.

Opposition Response is Publicly Subdued
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11. (SBU) Ortega opponents responded to the discourse
proclaiming it "more of the same." Victor Hugo Tinoco, a
leader of the Sandinista Renovation Movement (MRS) and a
former vice minister for foreign affairs in the 1980s,
commented that Ortega only repeated what he has said before,
and stated that he did not have enough details to discuss
ALBA. Maria Eugenia Sequeira, head of the Nicaraguan Liberal
Alliance (ALN) caucus in the National Assembly, agreed that
Ortega's speech was "what we have always heard from him
before" and said that she hoped Ortega would govern
responsibly and "not turn Nicaragua into another Cuba."
After the inauguration, several contacts commented that
Nicaraguans are, however, much more concerned by the rhetoric
than what they have expressed publicly.

Comment: Ortega between Moderates and Extremists
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12. (C) Chavez' grandstanding at Ortega's inauguration was
seen by many as payback for Chavez' support during the
campaign. Ortega was careful not to openly attack the U.S.
(only "neo-liberalism"),although he allowed Chavez and
Morales to do so. The new President continues his tightrope
walk between paying his dues to his radical paymasters and
placating the more moderate factions of the FSLN (who would
suffer personally should Nicaragua lose the confidence of
investors),all the while trying not to provoke the USG.
TRIVELLI