NICARAGUAN AMBASSADOR CRUZ ADDRESSES AMCHAM

UNCLAS SECTION 01 OF 02 MANAGUA 000278

SIPDIS

SIPDIS
SENSITIVE

STATE PASS TO OPIC

E.O. 12958: N/A
TAGS: ETRD ECON EINV PGOV NU
SUBJECT: NICARAGUAN AMBASSADOR CRUZ ADDRESSES AMCHAM

REF: A. MANAGUA 0274, B. MANAGUA 0059

Summary
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1. (SBU) Nicaraguan Ambassador to the United States Arturo Cruz
highlighted cooperation between the United States and Nicaragua on
arms control, property rights, investment, and foreign assistance in
a recent presentation for Nicaraguan businesspersons. Cruz believes
maintaining close, personal relationships between President Ortega
and senior U.S. officials, many of whom Cruz claims harbor deep
sympathy for Ortega, is critical to managing these sometimes
difficult issues. Our view is that Ortega likely sees this
communication with senior U.S. officials as a way to show
Nicaraguans that the United States has somehow given its stamp of
approval to the FSLN administration.

Only Big Countries Matter
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2. (SBU) Nicaraguan Ambassador to the United States Arturo Cruz
reflected on his first year in Washington, D.C., during remarks
delivered March 4 at a lunch organized by the American Chamber of
Commerce of Nicaragua (AmCham). Cruz began by sharing his
perspective on U.S. foreign policy formulation. He concluded that
the United States has no clear foreign policy toward Latin America,
but rather defines relationships with key countries such as Brazil,
Mexico, and Colombia within a broader global context.

Venezuela
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3. (SBU) Cruz then moved to the specifics of the U.S. - Nicaraguan
relationship, highlighting his objectives as Ambassador in managing
trouble spots and providing U.S. officials with accurate information
on Nicaragua. On Nicaragua's alliance with Venezuela, the
importance of which he said U.S. officials underestimate, Cruz
believes that Nicaragua is simply acting in the interest of the 80%
of the population that survives on $2/day or less. Development
funds available through ALBANISA (the Venezuelan - Nicaraguan joint
venture established for the import of Venezuelan oil) are available
for immediate disbursement to poverty alleviation programs, he
explained.

Cooperation with the United States
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4. (SBU) Cruz told the crowd that Nicaragua has made it a priority
to maintain a positive relationship with the United States. He
mentioned negotiations on man portable air defense systems (MANPADS)
as an example of cooperation between the United States and Nicaragua
to work through difficult issues. He highlighted the Millennium
Challenge Corporation (MCC) compact for Leon and Chinandega and
Peace Corp programs as examples of successful cooperation. Cruz
also emphasized his role in promoting investment in Nicaragua, and
he claimed to meet regularly with potential investors. Cruz
described himself as a "problem solver" for U.S. businesses facing
difficulties in Nicaragua, working with Managua-based government
officials. Cruz was careful to distinguish between those who
support his approach to facilitating investment, such as
Presidential Delegate for Investment Alvaro Baltodano, and unnamed
Nicaraguan officials who do not. On property issues, Cruz is
confident that the United States will again issue a waiver to
Section 527 of the 1994/5 Foreign Assistance Act. However, he
believes U.S. and Nicaraguan officials must reach a new
understanding on the criteria used to evaluate property claims (Ref
A).

The Value of Personal Relationships
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5. (SBU) Throughout his presentation, Cruz emphasized the importance
of personal relationships with senior U.S. government officials. In
particular, he highlighted his belief that President Ortega
maintains strong personal relationships with Secretary of Commerce
Gutierrez, MCC Director Danilovich, Health and Human Services
Secretary Leavitt, and Overseas Private Investment Corporation
President and CEO Mosbacher. Cruz believes that a personal
connection with Ortega facilitates constructive exchanges on
sometimes contentious issues.


6. (SBU) Cruz told the audience that Ortega's good relationships
with these senior U.S. officials are based on trust, "because they
understand that when Ortega commits to something, he follows
through." He suggested that many U.S. political leaders harbor deep
sympathy for Ortega and therefore exhibit patience for his rhetoric.
Cruz hinted that Ortega would likely begin to moderate his rhetoric
now that elections are behind him, and he also applauded the U.S.
Government's "moderate, intelligent approach" to the bilateral
relationship. He reported that U.S. Ambassador Designate to
Nicaragua Robert Callahan has been specifically tasked by senior
U.S. officials to develop a deep, personal relationship with Ortega.
Cruz announced that Department of Commerce official Walter Bastian
will lead an interagency delegation in the coming months to address
issues of competitiveness in Nicaragua. [Note: Cruz may be referring
to Post's as-yet unfunded BFIF proposal to host a competitiveness
seminar in Managua in May (Ref B). End note.]

Conclusion and Comment
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7. (SBU) Cruz dodged difficult questions on the deterioration of
democratic institutions and the government's pressure-laden
negotiating tactics with U.S. company Esso. He went to great
lengths to highlight positive relations with the United States,
especially on a personal level between Ortega and senior U.S.
officials. The importance of personal relationships for President
Ortega is something we have heard from other sources as well. In
particular, Cruz's remarks confirm that Ortega believes he has a
special connection with Commerce Secretary Gutierrez; this, in part,
fuels expectations that Secretary Gutierrez will visit Nicaragua
this year. Our view is that Ortega likely sees this communication
with senior U.S. officials as a way to show Nicaraguans that the
United States has somehow given its stamp of approval to the FSLN
administration.

TRIVELLI