PATRONAGE TRUMPS PROFESSIONALISM AT NICARAGUAN TOURISM

UNCLAS MANAGUA 002232 SIPDIS SENSITIVE SIPDIS USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR E.O. 12958: N/A TAGS: ECON EINV NU SUBJECT: PATRONAGE TRUMPS PROFESSIONALISM AT NICARAGUAN TOURISM INSTITUTE REF: (A) MANAGUA 1789, (B) MANAGUA 452, (C) MANAGUA 341 ¶1. (SBU) Summary: Representatives of the Nicaraguan tourism industry complain that the Nicaraguan Tourism Institute (INTUR) has been decimated by an overhaul in personnel since President Ortega took office in January. They report INTUR is "paralyzed," offering no strategic vision for the sector. Industry insiders fear that prospects for the tourism sector, once poised for takeoff, have dimmed. End Summary. ¶2. (SBU) President Ortega appointed real estate developer Mario Salinas as President of INTUR in January 2007. Salinas quickly promised to develop the Atlantic Coast as a tourist destination and focus INTUR marketing on U.S. retirees and golf enthusiasts. Salinas also pledged to promote special tourist routes for groups such as Nicaraguans residing abroad and foreigners interested in Nicaragua's socialist history (Ref B). Policy and management conflicts with INTUR Vice President Nubia Arcia led to Salinas's departure in June. He now serves as Presidential Advisor for Tourism, Housing, and Infrastructure. ¶3. (SBU) In July, Arcia inherited Salinas' position. She lasted until late August, when she was summarily fired. In a conversation with Econoff, Tourism Chamber (CANATUR) officials said that Arcia was dismissed because she was "incompetent." ¶4. (SBU) Ninette Marcenaro, Vice President of INTUR under Arcia, has been named Acting President. She is believed to be an FSLN hardliner with close ties to First Lady Rosario Murillo. Industry insiders believe Arcia is the frontrunner to lead INTUR on a permanent basis, but she does not seem to be actively politicking for the job. At a tourism forum on September 24 dedicated to better understanding the link between tourism development and poverty alleviation, Marcenaro arrived late, left early, and made little effort to speak with industry representatives. At another forum held on September 26, she outlined INTUR's priorities in pedestrian form: protection of the environment, protection of cultural values, and tourism promotion, especially for microenterprises. ¶5. (SBU) Beginning slowly under Salinas' leadership, but picking up pace under Arcia, INTUR management has systematically purged professional staff to make way for FSLN party loyalists. To date, 54 staffers have departed. Industry sources believe that new staffers lack expertise in tourism development and promotion, bringing the institute to the point of paralysis. INTUR no longer actively promotes the country as a tourism destination nor offers a strategic vision for the sector. These same sources also complain that INTUR is no longer compiling statistics, making it impossible to track sector performance. Acting President Marcenaro has, however, publicly defended the appointment of new staffers, claiming they are "technically proficient" and that INTUR has only replaced "people who held positions of trust," common practice after any change in government. ¶6. (SBU) In a televised interview on September 26 that also covered problems in the tourist sector, Economic Advisor to the President Bayardo Arce claimed that although growth in the sector has fallen short of its 10% target, it is still 3%. He blamed this deceleration on the lack of promotion, and staff changes at INTUR, noting that the institute remains under the direction of an interim president. In contrast to the tourist sector forum hosted by Marcenaro on September 26 (see Paragraph 4),Arce focused on the need to improve infrastructure, such as roads, electricity, hotels, and tourist services. ¶7. (SBU) Comment: In 2006, nearly 900,000 visitors to Nicaragua spent $239 million in Nicaragua on hotel rooms, restaurant meals, transportation, and other goods and services. New investment in the sector totaled $60 million (Ref C). Despite significant infrastructure challenges, the sector appeared poised for take-off. Since the Ortega Administration took office, however, prospects have dimmed. In addition to property titling issues that have plagued investors for many years (Ref A),the implosion of INTUR has removed government leadership from the sector. A lack of reliable statistics makes it difficult to say definitively that there are fewer visitors or tourist dollars this year versus last. End Comment. TRIVELLI