CENTAM AMBASSADORS CONCERNED ABOUT NICARAGUA'S

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000140 SIPDIS SIPDIS DEPT FOR WHA/CEN E.O. 12958: DECL: 01/17/2017 TAGS: PGOV PREL KDEM NU SUBJECT: CENTAM AMBASSADORS CONCERNED ABOUT NICARAGUA'S ROLE IN REGIONAL AFFAIRS REF: MANAGUA 0106 Classified By: Ambassador Paul Trivelli for reasons 1.4 (b and d) ¶1. (C) Summary: Central American ambassadors in Nicaragua were startled by the populist rhetoric and procession of infamous guests surrounding the inauguration of President Daniel Ortega (reftel),but maintain a cautious optimism that regional and international agreements will constrain the Ortega administration's scope of action. The ambassadors agreed on the need to publicize the benefits of CAFTA to regional economies and have been somewhat mollified by Ortega's promises to respect the rights of international investors and preserve relations with Taiwan. They also believe that, as neighbors, their countries can engage the Nicaraguan government and help offset the negative influence of Venezuelan President Hugo Chavez on Ortega. Several commented on Ortega's margin of victory and "minority government," wondering how the Liberals will ultimately relate to themselves and the Sandinistas. End Summary. ¶2. (C) Ambassador Trivelli hosted a group of Central American ambassadors for breakfast on January 17 to discuss the ramifications of Daniel Ortega's return to power on regional affairs. The ambassadors were dismayed by Ortega's populist rhetoric during the inauguration, his accession to agreements with Venezuela, and proposals to alter laws governing the Government and Defense ministries without public consultation. "He is behaving as though he has a clear mandate even though he only won with 38 percent of the vote," they commented. The ambassadors were hopeful, however, that regional and international agreements such as CAFTA and the Central American Integration System (SICA) can constrain his actions. They also agreed that Secretary Leavitt's health initiative, which was shared with most of them during bilateral meetings held on the margins of the inauguration, would be critical in helping Central America "catch up" with other countries in the region. The following chiefs of mission attended the breakfast: - Costa Rica: Manuel Barrantes, Charge d'Affaires - El Salvador: Jose Roberto Francisco Imendia Maza, Ambassador - Honduras: Jorge Milla Reyes, Ambassador - Guatemala: Jorge R. Echeverria Roldan, Ambassador - Panama: Miguel Lecaro Barcenas, Ambassador ¶3. (C) Several ambassadors made the point that "times have changed," so that the Sandinistas' behavior will not be as radical as in the 1980s. "The Sandinistas are older now -- they have less hair and more children, grandchildren, and investments," commented Barrantes. Milla wondered how long Ortega would be able to keep up his "double talk," and Lecaro responded, referring to Panamanian President Torrijos' relationship with Chavez, that one can be publicly polite and privately pragmatic (Torrijos realizes that Chavez is "unstable"). Echeverria mentioned that the other CentAm presidents can work through SICA to constrain Ortega, and that Guatemala can exercise a moderating influence as the country in charge of regional economic affairs. ¶4. (C) The ambassadors are skeptical of Chavez' Bolivarian Alternative for the Americas (ALBA),especially as they have not seen any details of the agreement, and mentioned the need to publicize CAFTA and its success thus far as a counterbalance. Ambassador Trivelli noted that CAFTA is an extensively negotiated treaty that underwent a thorough public vetting in each country. Imendia mentioned that El Salvador has already enjoyed a significant GDP boost from CAFTA, and Milla encouraged the group to educate the Central American public regarding the benefits of CAFTA. Imendia suggested that holding a regional conference on CAFTA would help promote the trade agreement. The Ambassador, who remarked that President Saca had raised this idea during his meeting with Secretary Leavitt, suggested holding such a meeting in Managua to allow the Nicaraguan government to appreciate CAFTA's importance first-hand. ¶5. (C) Some of the ambassadors commented on pre- and post-inauguration meetings with Ortega where the new President pledged not to disrupt the status quo in a number of areas. Ortega assured El Salvadoran President Saca that El Salvadoran investors in Nicaragua would be respected. Honduran President Zelaya pointed out to Ortega that the Central American relationship with Taiwan has been of mutual benefit to the region and urged Ortega not to switch official recognition to the PRC. (Note: Milla also remarked that Taiwanese President Chen Shui-bian thanked Zelaya at Ortega's inauguration for his efforts. End Note.) ¶6. (C) Regarding Ortega's ability to enact wide-ranging reforms, several ambassadors noted that the Sandinistas are a minority in the National Assembly. Milla wondered when and if the Liberals will finally put aside their differences and form a real opposition to the Sandinistas. Ambassador Trivelli responded that the future of the Liberals is dependent on the Liberal Constitutional Party's (PLC) relationship with convicted party leader Arnoldo Aleman, who is essentially Ortega's hostage. He commented on El Salvadoran ex-President Calderon Sol's pre-election efforts to separate Aleman from the PLC and suggested Calderon Sol's efforts might bear more fruit in the post-election environment. (Note: On January 18, the Ambassador suggested to Spanish Ambassador Jaime de la Cadena that a return visit of Calderon to Managua to meet with Nicaraguan Liberal leaders, including National Assembly lawmakers representing the Liberal Constitutional Party (PLC) and the Nicaraguan Liberal Alliance (ALN) might help to encourage them to mend their differences. The Spaniard was receptive to the idea. End Note.) ¶7. (C) Comment: Nicaragua's neighbors are understandably concerned if Nicaragua's domestic problems spill over the borders. The Guatemalan ambassador noted that "when Nicaragua coughs, Guatemala develops a fever," while the Costa Rican warned that "if Nicaragua coughs, Costa Rica catches pneumonia." We will continue to consult with the Central American ambassadors on the most effective ways to publicize CAFTA's successes and the use of regional mechanisms to counteract Chavez' influence in the region. The ambassadors agreed to continue to hold regular meetings to evaluate the actions of the Ortega administration. TRIVELLI