FIVE PILLARS OF FSLN STRATEGY

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 001621

SIPDIS

SIPDIS

DEP FOR WHA/CEN

E.O. 12958: DECL: 06/18/2017
TAGS: PGOV PREL PINR ECON KDEM NU
SUBJECT: FIVE PILLARS OF FSLN STRATEGY


Classified By: Ambassador P. Trivelli for Reasons 1.4 (b and d)


1. (C) A document leaked to the press recently revealed that
the FSLN has readied a plan called the "Five Pillars of the
Revolutionary Project" to be formally announced on the July
19 celebration of the 28th anniversary of the Somoza
overthrow. The 5 Pillars are: direct democracy and civilian
power; autonomy of economic management; economic development
and a revolution in energy; universal public health and
education; and Latin American integration and unity.
Venezuelan President Hugo Chavez's "5 Motors" provides the
model for the 5 Pillars, form and content.

Pillar 1: Direct Democracy and Civilian Power


2. (SBU) The goal of the first pillar is to expand direct
civilian action beyond the election of officials. The
official wording proposes that the people be "the protagonist
of the political process." This process has already been
established in the "Civilian Councils" which have been a
source of considerable opposition-party outrage in previous
weeks. The Councils, which are a direct evolution of the
"Sandinista Defense Committees" of the 80's, while officially
not party-affiliated, are widely considered to favor
Sandinistas and exclude all others. Although the councils
have no standing within the government, elected officials
will be pressured to adhere to their suggestions. (SEPTEL)

Pillar 2: Autonomy of Economic Management


3. (C) The "self-management" of the economy as defined within
the 5 Pillars consists of establishing credit programs,
ensuring security of supplies, and providing access to
property for the masses while respecting private property
rights. (Note: As with many of Ortega,s economic
pronouncements, they are based on populist/Marxist concepts,
so it is unclear how they are supposed to co-exist with a
vibrant private sector. Ortega only held his first meeting
with the private sector players six months into his tenure.
While the Vice President has been active in trying to portray
a friendly investment climate, companies, both local and
foreign, are concerned that Ortega,s consolidation of
political power will begin to extend to them. In the 1980s
Ortega was famous for showing favoritism to a few companies
of "patriotic entrepreneurs" and leaving all the rest to
struggle. Interestingly, his focus on the credit to small
producers has been through a state run program. There have
been no efforts to force the private sector banks to become
involved in a sector they consider risky. The ideas also
circumvent the 300 micro-lending enterprises which exist in
Nicaragua and reach down directly to the poor and SMEs. End
Note.)


Pillar 3: Economic Development and a Revolution in Energy


4. (C) According to the leaked document, development will
focus on the construction of new oil refineries, factories
for aluminum products, and the improvement of Nicaragua's
inefficient energy system. Ortega recently announced that he
asked Iranian President Mahmoud Ahmadinejad for energy
assistance during his recent trip across the Middle East in
Africa. (SEPTEL) Venezuela has also been a significant
source of foreign aid, much of it in the form of subsidized
petroleum. However, this aid is not as beneficial as it
seems. Completed refineries are a long way off; financing is
complicated as the costs are between USD 2-4 billion, there
is a two year waiting list for the parts needed, and
construction is a complicated process. An inauguration in
five years would be a very aggressive estimate. Oil shipments
from Venezuela have arrived erratically and not in the full
quantities promised. Also of concern are the terms of the
oil deal, which could potentially create a public debt of
over USD 300 million a year in addition to violating the
agreements that allowed Nicaragua to receive massive debt
forgiveness through the HIPC program (most of which was debt
incurred in the 1980s.) The only hope that Nicaragua has to
improve energy output for the near future are new electric
plants, which are set to add approximately another 200
megawatts to the system in 2008.


Pillar 4: Universal Public Health and Education


5. (SBU) Making Nicaragua's health and education systems
truly universal has been a long-term goal of the Sandinistas.
The problem developing it will be twofold: financing the
supplies and infrastructure necessary, and implementing such
a vast scheme within a system not known for efficiency.
Reports indicate that demand for health and education centers
has risen significantly since the decision to eliminate all
associated fees and that the increase already poses a
challenge to the system. The need for more facilities,
personnel, and materials is seriously hampering facilities
that have received little to no additional financial relief.

Pillar 5: Latin American Integration and Unity


6. (C) Continued participation in The Bolivarian Alternative
for the Americas, or ALBA, will be the key to the final
pillar. The countries of ALBA, of which Venezuela clearly
exerts primary influence, have already begun the process of
joint support through the establishment of a bank to fund the
projects proposed by member countries. ALBA is clearly being
set up as a counterweight to CAFTA and policies which help
Nicaragua take advantage of it have taken priority over
pro-CAFTA policies. Negotiations for an FTA with Taiwan are
currently stalled and the Central America-wide agreement with
the EU has not gotten off the starting blocks.

Comment


7. (C) The Five Pillars contain no new plans, merely a new
presentation of the same objectives and rhetoric that the
FSLN has utilized consistently throughout the last six
months. The cry for a more democratic process is a thin
veneer disguising the real goal: to establish FSLN mechanisms
in the political system from the municipal level upward. The
concepts of greater civilian participation and universal
health and education are admirable, but Ortega has yet to
propose firm plans on how to accomplish any of his goals.
Unless the rhetoric behind them is matched by reality, the
Five Pillars will serve only as an additional public
relations device for Ortega.
TRIVELLI