San José, Costa Rica, since 1956

Ortega, Business Make Amends

Reversing several months of rocky relations with the government, the business and investment sector is starting to show new optimism following a series of positive signs from President Daniel Ortega.

After finalizing a much-celebrated accord with the International Monetary Fund (IMF) earlier this month, the Sandinista government continued the good business vibrations by holding what’s being called a “very positive” meeting with the Superior Private Business Council (COSEP).

“This is an important step, the government was receptive to our proposals,” said Lucy Valenti, head of the Nicaraguan Chamber of Tourism (CANTUR).

This month’s meeting between the Ortega administration and COSEP acted as a follow-up to the first encounter at the beginning of the year, when the President pledged to work with the private sector to improve communication and cooperation. During that first meeting in January, Ortega laid the groundwork for the creation of a special mixed commission, composed of a dozen working groups of business-sector leaders and administration officials to address fundamental issues in key sectors of Nicaragua’s economy and development.

The commission, which has been meeting in its various working groups for nine months, assembled Oct. 11 to present Ortega with its first progress report on advances and recommendations of how to improve the economy in areas ranging from tourism and investment, to agriculture, infrastructure and manufacturing.

“I am of the conviction that our country is presented with a new historic opportunity to detonate our growth, consolidate a state of law and correct social inequalities that have been dragging us down for generations,” said José Adán Aguerri, president of COSEP.

“But in order to achieve this, we need to cultivate a climate of business confidence that will benefit society as a whole. And for this to happen we need the government to adopt policies that are favorable to increasing private investment and creating employment.

“The private sector needs the government to convert itself into a strategic ally, to develop the proposals of the nation, which today we are presenting,” he said.

The recommendations made by the commission are diverse. For example, in the area of energy, the commission urged the government, as of Oct. 15, to reduce the level of power rationing – currently ranging from five to eight hours a day – now that rains have considerably increased the hydroelectric output of the plant on ApanásLake. In the area of investment, the commission recommended that the government streamline paperwork for construction permits.

The tourism commission asked the government to provide better judicial security by maintaining constant communication with the Supreme Court and acting quickly to sanction any lawyer or judge involved in any irregular activity that affects private property or the country’s investment climate (see box).

Among the long list of other commission recommendations are: a request to build an international airport in Puerto Cabezas; mechanisms for new financing for lowincome housing; improvements to sanitary measures in the dairy sector; a doubling of the country’s level of coffee production; the cultivation of African Palm and other sources of renewable fuel on the Caribbean coast; and the tripling of cane-based ethanol production over the next several years.

Done Deal?

Ortega listened to the presentations and then thanked the private sector for helping to create a situation where Nicaragua, despite its problems, is showing a “tendency of economic growth and an increase in exports, much greater than last year.”

The President also said that all the recommendations made by the commission can now be considered government policy.

“The first thing I want to express, is that I feel very content, very satisfied to have heard where we have advanced,” Ortega said. “I came here to listen to these reports, these decisions that you have taken, because they are decisions, not recommendations. You have already discussed with different government officials and arrived at consensus. If there is consensus, there is a decision and we have to carry through on it and put it into practice.”

Business sector leader Erwin Krüger, the former president of COSEP, qualified themeeting with Ortega and the Sandinista government ministers as “very positive for the private sector.”

“The impression I get is that they have the desire to implement these accords, and I hope that’s the case,” Krüger told The Nica Times this week.

Tourism Accord Aims to Revive Slumping Industry

The tourism accord, aimed at reviving and rejuvenating the stagnant tourism sector, includes key agreements in areas of legislative reforms, public relations and promotion of the tourism industry, which this year has been mostly in the hands of the private sector (see separate story).

By agreeing to the accords, the tourism sector hopes to achieve 16% annual growth in tourist arrivals, reaching 1.6 million annual visitors by 2011. The five-year plan also aims to triple tourism income to $717 million by 2011, create 100,000 new jobs, double the number of hotel/condo rooms to 10,000, increase tourism sales by 200% and attract $173 million annually in tourism projects.

To achieve this, the private sector agrees to:

*Invest $17 million a year in improving tourism projects

*Invest $1.5 million for construction of

Pochomil-Tecolapa Highway

*Invest $70,000 to redesign the

Coastal Highway

*Invest $80,000 to improve the sewage system in San Juan del Sur

*Invest $792 million in construction of residential-tourism projects

*Create a fund for social investment

*Create a mixed fund for tourism promotion

*Support small and medium-sized businesses

*Transmit information to media in responsible manner

The government agrees to:

*Redraft the Coastal Law, Reform Law 306 and Pass the Law of Public Registry

*Respect private property

*Elaborate long-term tourism strategy

*Attract new international flights

*Support important tourism projects

*Streamline info and permits from INTUR and MARENA

*Streamline migration policies

*President agrees to help image with consistent message that favors tourism


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