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Viewing cable 07MANAGUA106, ORTEGA BLAIMS "NEO-LIBERALISM" FOR NICARAGUAN

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Reference ID Created Released Classification Origin
07MANAGUA106 2007-01-17 17:40 2011-06-21 08:00 CONFIDENTIAL//NOFORN Embassy Managua
VZCZCXRO0497
PP RUEHLMC
DE RUEHMU #0106/01 0171740
ZNY CCCCC ZZH
P 171740Z JAN 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC PRIORITY 8628
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 0884
RUEHLP/AMEMBASSY LA PAZ 0178
RUEHUB/USINT HAVANA 0023
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RHEHNSC/NSC WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 02 MANAGUA 000106 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/CEN 
 
E.O. 12958: DECL: 01/16/2017 
TAGS: PGOV PREL ECON KDEM NU
SUBJECT: ORTEGA BLAIMS "NEO-LIBERALISM" FOR NICARAGUAN 
POVERTY AT INAUGURATION 
 
 
Classified By: Ambassador Paul Trivelli for reason 1.4(d) 
 
1. (U) Summary: New Nicaraguan President Daniel Ortega 
assumed office on January 10 singing the praises of his 
Bolivarian "twin" Hugo Chavez and proclaiming the failure of 
"neo-liberalism."  Ortega repeated his campaign promises to 
alleviate poverty through national and regional "unity," 
joining the Chavez-sponsored Bolivarian Alternative for the 
Americas (ALBA), and ending privatizations of public 
companies.  While he avoided directly criticizing the U.S. 
and promised not to pull out of CAFTA, Ortega pledged that 
his government will "revisit" certain elements of the 
agreement.  Honored guests Chavez, whose late arrival delayed 
the onset of the inauguration by almost two hours, and 
Bolivian leader Evo Morales used the occasion to attack the 
U.S. and pronounce "death to imperialism."  End Summary. 
 
2. (U) Nicaraguan President Daniel Ortega was sworn in during 
a disorganized and sun-baked January 10 ceremony at the 
Non-Aligned Plaza.  The proceedings were held up for over 90 
minutes, despite the presence of numerous heads of state and 
other dignitaries, to await the arrival of Venezuelan 
President Hugo Chavez.  While Ortega appeared uncomfortable 
during the official ceremony, he quickly became animated 
after moving a few blocks to a popular rally at the Plaza de 
la Fe, where he thanked his supporters for bringing the 
Sandinista National Liberation Front (FSLN) to power.  Chavez 
and Morales shared the stage with Ortega. 
 
Ortega Promises to End Poverty by Rejecting Neo-Liberalism 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
3. (U) After arriving at the Plaza de la Fe, Ortega held up 
the presidential sash before the masses and announced that 
"this belongs to all Nicaraguans who are ready to fight for 
justice, to eradicate hunger, and the lack of health care and 
education in our country."  Ortega then launched into a 
strong critique of "neo-liberalism," which he blamed for 
continued poverty.  Ortega told the media, "I have discussed 
with international financial organizations the fact that the 
neo-liberal model has not resolved the needs of the 
population."  He claimed that 35 percent of the population is 
now functionally illiterate compared to 12 percent in 1990. 
(Note: The Ministry of Education currently estimates 
illiteracy at 20 percent of the population, and UNESCO 
indicates a figure of 30 percent.  End Note.) 
 
4. (U) Ortega called for "national unity" of rich and poor, 
saying that the election "represents an opportunity to move 
down a new path, so that Nicaraguan families can "live with 
dignity."  He also voiced his support for Latin American 
"unity and solidarity," claiming that such unity would reduce 
poverty in all countries. 
 
5. (U) Ortega proceeded to proclaim that Nicaragua would join 
the Bolivarian Alternative for the Americas (ALBA) sponsored 
by Venezuela, which he did the following day (septel). 
However, Nicaragua he claimed, would not renounce CAFTA, 
although his government may "revisit the conditions of the 
treaty."  "The problem (with CAFTA) was that there was 
asymmetry with the Nicaraguan economy that can't compete with 
an economy like the United States," Ortega stated. 
 
6. (U) Ortega promised that his administration will not 
undertake further privatizations of public utilities, 
specifically mentioning water and the hydroelectric generator 
(Hydrogesa).  Ortega criticized the private energy regulator 
Spanish-owned Union Fenosa, but did not threaten to 
re-nationalize the sector.  He thanked Chavez for Venezuela's 
assistance providing emergency electrical plants to relieve 
Nicaragua's energy crisis. 
 
7. (U) Ortega claimed that the members of his administration 
will be responsible to the "people of Nicaragua."  He 
promised to reduce the "megasalaries" currently allocated to 
ministers and form a more gender balanced cabinet. 
 
8. (U) Ortega called on the campesinos (small farmers) not to 
occupy private lands as "Nicaragua has sufficient land for 
all of its population."  He commented that, "what we need in 
this country is a government policy that provides land for 
campesinos and financing so that they can work the land." 
 
Chavez and Morales Attack U.S. 
- - - - - - - - - - - - - - - - 
 
9. (U) Venezuelan President Hugo Chavez, who was treated as 
the guest of honor during the festivities, used the 
inauguration as a platform to repeat his populist rhetoric 
and criticize the United States.  After presenting Ortega 
with a replica of Simon Bolivar's sword, Chavez proclaimed 
that Ortega's win represents a "victory for those of us who 
are fighting to change the pattern of colonial domination in 
Latin America, open paths of social justice, liberation, and 
equality..."  Chavez also praised Cuban leader Fidel Castro 
and Bolivian president Evo Morales before ending with the 
proclamation: "Always to victory!  Country, socialism, or 
death -- we will be victorious!"  Ortega thanked Chavez and 
called him his "twin." 
 
10. (U) After Chavez' speech, Bolivian President Evo Morales 
offered brief remarks criticizing the U.S. and defending his 
own domestic policies.  Morales defended the nationalization 
of natural resources and called for Latin American unity 
against "North American imperialism."  Morales added that 
"indigenous peoples" should fight to recover natural 
resources that have been privatized. 
 
Opposition Response is Publicly Subdued 
- - - - - - - - - - - - - - - - - - - - 
 
11. (SBU) Ortega opponents responded to the discourse 
proclaiming it "more of the same."  Victor Hugo Tinoco, a 
leader of the Sandinista Renovation Movement (MRS) and a 
former vice minister for foreign affairs in the 1980s, 
commented that Ortega only repeated what he has said before, 
and stated that he did not have enough details to discuss 
ALBA.  Maria Eugenia Sequeira, head of the Nicaraguan Liberal 
Alliance (ALN) caucus in the National Assembly, agreed that 
Ortega's speech was "what we have always heard from him 
before" and said that she hoped Ortega would govern 
responsibly and "not turn Nicaragua into another Cuba." 
After the inauguration, several contacts commented that 
Nicaraguans are, however, much more concerned by the rhetoric 
than what they have expressed publicly. 
 
Comment: Ortega between Moderates and Extremists 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
12. (C) Chavez' grandstanding at Ortega's inauguration was 
seen by many as payback for Chavez' support during the 
campaign.  Ortega was careful not to openly attack the U.S. 
(only "neo-liberalism"), although he allowed Chavez and 
Morales to do so.  The new President continues his tightrope 
walk between paying his dues to his radical paymasters and 
placating the more moderate factions of the FSLN (who would 
suffer personally should Nicaragua lose the confidence of 
investors), all the while trying not to provoke the USG. 
TRIVELLI