DEMARCHE ON ASSISTANCE TO NICARAGUA FOLLOWING

UNCLAS SECTION 01 OF 02 STATE 132044 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EAID PGOV PREL NU SUBJECT: DEMARCHE ON ASSISTANCE TO NICARAGUA FOLLOWING FRAUDULENT ELECTIONS REF: A. STATE 122262 ¶B. MANAGUA 1422 ¶C. MANAGUA 1411 ¶D. MANAGUA 1393 ¶E. MANAGUA 1392 ¶F. MANAGUA 1384 ¶1. (U) This is an action request. See para 6. ¶2. (U) The Nicaraguan Government's decision to certify the badly flawed November 9 municipal election results short-circuited a domestic and international effort to review the disputed vote count. Credible sources have reported that the GON closed many voting stations early while people were waiting to vote, annulled and discarded legitimate marked ballots, rigged vote tallies, excluded opposition poll watchers from some voting stations and from the central tabulation center, and denied accreditation to credible domestic and international observers. Efforts by opposition parties and others to obtain a review of the results in the presence of observers were forcefully, and often violently, suppressed. Canada, the European Union, OAS Secretary General Insulza, the Carter Center, and other NGOs within and outside of Nicaragua have condemned the GON's behavior. ¶3. (SBU) The USG believes the international community should send a clear message to the GON that violations of democratic norms have a cost. Actions by multiple countries will be more effective in making this point than unilateral actions by a single country. We believe suspension of assistance programs, except for humanitarian help channeled through non-GON sources, is an appropriate response to the GON's actions. Since external assistance accounts for approximately 25 percent of GON budgetary inflows, the GON will feel the impact quickly. Such a concerted message increases the possibility of persuading the GON leadership to reconsider its current disregard for democratic practice, and to explore possible solutions to this electoral dispute. ¶4. (SBU) A November 18 statement issued by the Donors Group of Nicaragua expressed concern over the conduct of the elections and noted that development cooperation requires a commitment by political leaders and public officials to democratic principles such as free and transparent elections. (Note: The Donors Group consists of Austria, Canada, Denmark, Finland, France, Germany, Iceland, Italy, Japan, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, the United States, the British Ministry for International Development, the European Commission, the Inter-American Development Bank, and the World Bank. End note). We welcome actions already taken by some countries to eliminate or reduce budgetary support to the GON. (Note: To our knowledge, the following countries have reduced budgetary support to the GON since the run-up to the elections: Finland, Germany, Great Britain, the Netherlands, and Sweden. End note). We urge other countries to follow their lead. ¶5. (SBU) For its part, the U.S. has suspended its Millennium Challenge Corporation (MCC) compact with Nicaragua. In a December 5 letter to President Ortega, MCC Chief Executive Officer Ambassador John Danilovich expressed grave concerns over the conduct of the elections and noted the previously-announced (on November 25) suspension of disbursements for all activities and projects not already STATE 00132044 002 OF 002 contracted by MCA-Nicaragua. This means that approximately USD 64 million of the total USD 175 million five-year compact will be frozen. At the December 11 meeting, the MCC Board of Directors called on Nicaragua to develop and implement a comprehensive set of measures to address concerns regarding the government,s commitment to democratic principles. The Board will review the response of the Nicaraguan government and determine subsequent actions at its next meeting in March ¶2009. The U.S. is also reviewing other forms of assistance to Nicaragua. ¶6. (SBU) Action addressees are requested to approach host governments at the appropriate level and deliver a demarche to achieve the following objectives: -- gain host country agreement to suspend its current assistance to Nicaragua and freeze any planned new assistance, except for any explicitly intended for humanitarian purposes and channeled through non-GON institutions. -- make explicit to the GON that the decision to suspend assistance is directly linked to its handling of the November 9 municipal elections. -- underscore the importance of Nicaragua undertaking concrete steps to address the causes of the electoral impasse ) such as comprehensive reform of electoral laws and institutions ) before assistance is restored. ¶7. (U) Posts should report results of efforts by cable to WHA/CEN Nicaragua desk officer Albert Kraaimoore (202-647-1510) by December 24. RICE