NICARAGUA: MCC CEO EMPHASIZES CONSTRUCTIVE

C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000127 SIPDIS SIPDIS STATE FOR WHA, WHA/CEN, WHA/EPSC, AND EEB/TPP USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR TREASURY FOR SARA GRAY E.O. 12958: DECL: 02/01/2018 TAGS: EAID PREL PGOV ECON EINV NU SUBJECT: NICARAGUA: MCC CEO EMPHASIZES CONSTRUCTIVE ENGAGEMENT Classified By: Ambassador Paul Trivelli for reasons 1.4 b&d. ¶1. (C) Summary: On January 22-24, Ambassador John Danilovich, CEO of the Millennium Challenge Corporation, visited Nicaragua to inaugurate work on a key road segment of the Pan-American Highway and to hand out clean property titles and rural business development equipment during a public event with President Ortega. In anticipation of the public events, Amb. Danilovich held meetings with the GON MCA-Nicaragua Board members and met one-on-one with President Ortega. At a reception hosted by Amb. Trivelli, Nicaragua political, business, and academic leaders emphasized common themes in their discussions with Amb. Danilovich: the importance of MCC projects as a critical tool to help foster Nicaragua's economic development and stronger bilateral ties between the two countries. Before departing Nicaragua, Amb. Danilovich participated in the formal dedication of the New Embassy Compound. The most striking aspect of his visit was how well President Ortega stayed on message and refrained from making disparaging comments about the USG or the MCC program. Not only was President Ortega's consistently positive message remarkable, but the imagery of the January 23 public event - the President standing alongside Amb. Trivelli and Amb. Danilovich in front of the Nicaraguan and American flags to hand out clean property titles - stood in stark contrast to Ortega's normal, anti-American posture. End Summary. ¶2. (C) On January 22-24, Ambassador John Danilovich, CEO of the Millennium Challenge Corporation, visited Nicaragua to participate in several MCC project events. He inaugurated work on a key road segment of the Pan-American Highway, handed out more than 700 clean property titles, and delivered fire-fighting equipment and irrigation systems to rural business development beneficiaries. The latter two activities took place during a public ceremony presided by President Ortega. MUM'S THE WORD -------------- ¶3. (C) On January 22, Amb. Danilovich started his visit with a meeting with the Government of Nicaragua (GON) members of the MCA-Nicaragua Board. Despite previously expressing concerns about various aspects of the program, the GON Board members were relatively silent and even somewhat positive about the state of the program. Amb. Danilovich met the newly designated Chairman Alberto Guevara (Minister of Finance),Senior Presidential Advisor Paul Oquist, and other Ministers on the Board. The Chairman expressed the GON's interest in expanding the Compact to include an energy project and/or expansion to other regions of Nicaragua. It was clear that Guevara had specific instructions from the President to make the project a success. He also mentioned the importance of guaranteeing that local Nicaraguan firms are eligible to compete for MCA-Nicaragua contracts. Amb. Danilovich explained that MCC does not provide preferences based on nationality, but rather, the firms that are the best qualified to do the job win the contracts. He commended the GON Board of Directors for their recent engagement and interest in making the Program succeed. PRIVATE MEETING WITH PRESIDENT ORTEGA -------------- ¶4. (U) President Ortega's meeting with Amb. Danilovich in Managua on January 22 involved a host of GON officials, including FM Santos, Guevara, Free-Trade Zone Director General Baltodano, and the Minister of Transportation and Infrastructure Pablo Fernando Martinez. (Note: Baltodano also oversees the GON's investment promotion unit, ProNicaragua, involved in MCC activities. End Note.) Despite requests by the Embassy to have no press coverage, the Presidency had "friendly" news outlets present for a photo-op at the beginning of the meeting and a short Q&A session at the conclusion. ¶5. (C) The exchange between President Ortega and Amb. Danilovich was cordial and constructive, building upon their rapport established during a meeting on the margins of the United Nations General Assembly last year. President Ortega emphasized his interest in seeing road construction begin, but also stressed the importance of building quality infrastructure. Echoing his cabinet members' concern earlier in the day, Ortega raised the issue of local firm preferences. Juan Sebastian Chamorro, MCA-Nicaragua General Director, presented the President the status of the Infrastructure and Rural Business Development projects, including some early results: the successful submission of the feasibility and design plans for 364 kms of road as well as recognition that thousands of Nicaraguans have already benefited from the program. During the press session at the end of the meeting, President Ortega clarified that his new-found relationship with the U.S. Government was a result of additional information he had received about the program and a "new reality." NICARAGUANS EMPHASIZE IMPORTANCE OF MCC -------------- ¶6. (U) At a reception hosted by Amb. Trivelli, Nicaraguan political, business, and academic leaders emphasized common themes in their discussions with Amb. Danilovich: the importance of MCC projects as a critical tool to help foster Nicaragua's economic development and stronger bilateral ties between the two countries. They also asked whether Ortega's typical anti-American rhetoric would affect Nicaragua's eligibility for additional MCC funds. Amb. Danilovich explained that eligibility is based on the continued positive performance on MCC eligibility indicators. VIVA LOS ESTADOS UNIDOS! -------------- ¶7. (U) On January 23, Amb. Danilovich spent a full day in the departments of Leon and Chinandega, the program implementation region. His first stop was a press conference and photo-op to initiate work on a key segment of the Pan-American Highway that links the Northwest region of Nicaragua to Honduras and beyond. MCC approved this 17 kilometer road segment as an addition to existing compact activities due to budgetary savings. Amb. Danilovich reassured the press and other concerned stakeholders that the Infrastructure Project was on schedule and underway. ¶8. (U) Accompanied by President Ortega, First Lady Rosario Murillo, and Nicaraguan Ambassador to the U.S. Arturo Cruz, Amb. Danilovich participated in a public ceremony to hand out more than 700 clean property titles as well as forest fire prevention kits and irrigation equipment. Over four thousand program beneficiaries were present for the event, including a few individuals who were chosen to speak during the event on behalf of all beneficiaries. ¶9. (C) Unusual for an Ortega event, this ceremony was notable for its high level of civic participation, and lack of partisan expressions or chanting. In his address, Amb. Danilovich emphasized that MCC is a poverty reduction program that strives to create jobs and foster economic growth. He pointed out that the U.S. Government wants to have stronger neighbors in the hemisphere. MCC is committed to helping the people of Nicaragua as long as the GON supports the program and commits to reforms that promote the well-being of the Nicaraguan people. ¶10. (C) Throughout the event, President Ortega commented that his impression of the MCC program had changed now that he is better informed. Having just visited an MCA-Nicaragua agricultural fair before taking the stage, President Ortega spoke at length about the real differences being made in people's lives as a result of the MCC program. President Ortega stressed that the people of Nicaragua are united with the citizens of the United States and that together we could eradicate poverty, hunger and malnutrition. At the end, he led the audience in repeated chanting: "Long live the United States!" NEW EMBASSY COMPOUND DEDICATION -------------- ¶12. (U) On January 24, Amb. Danilovich participated as a guest of honor in the formal dedication of the New Embassy Compound. During his remarks before an audience which included high-level GON representatives, he reflected upon the activities of the previous day with President Ortega. He also underscored the achievements of the MCC program and the importance of building a long-lasting relationship with the people of Nicaragua. ¶13. (U) MCC CEO Amb. Danilovich cleared on this message. TRIVELLI