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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ¶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. - - - - - - - - - - - - - - - - ¶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 - - - - - - - - - - - - - - - - - - - - ¶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 - - - - - - - - - - - - - - - - - - - - - - - - - ¶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