’09 WasAnother Windfall for Sandinistas’ ALBA Businesses

December 24, 2009

MANAGUA – It was a great year for doing business in Nicaragua … if you happen to be President Daniel Ortega or part of his inner circle, which this year strengthened its position as Nicaragua’s new economic elite.

With anti-capitalist rhetoric but a business model that might be described as “savage capitalism,” Ortega and crew expanded their Veneuzlean-financed business holdings through a network of companies operating under the auspicious of the Bolivarian Alliance for the Americas (ALBA).

Following last year’s $457 million in Venezuelan aid to Nicaragua, all managed in private accounts controlled by Ortega’s party, this year’s windfall of ALBA money for the Sandinista government was expected to be even greater. The Central Bank reported Dec. 4 that Ortega had already received $283 million in Venezuelan aid during the first six months of 2009, $71 million more than the same period last year.

Using the Venezuelan funds, Ortega and is comrades have created a dozen or so “ALBA businesses,” the strongest of which is known as ALBANISA, which has corned the country’s petroleum import and distribution markets, become the country’s leading energy supplier, purchased a series of hotels and other business ventures, and – at year’s end – was in the process of purchasing Canal 8 TV “Telenica.” Other ALBA companies turned profits on the sale of donated Russian busses, purchased gas stations, cornered food distribution networks, and became the country’s leading cattle exporter.

ALBANISA’s biggest deal of the year was to sign an energy contract that’s expected to net the company $500 million over 15 years.

Additional proof of the Grupo ALBA’s business clout is the fact that Venezuela this year became the third most important market for Nicaraguan exports, behind the United States and Central America. In 2006, before Ortega took power, Venezuelan didn’t even rank in the top 25 markets for Nicaraguan exports, suggesting that not many other businesses here are exporting to the South American nation.

While exports to Venezuela grew by a monstrous 339 percent this year, the economic news for the rest of the country wasn’t so good. Overall, Nicaraguan exports fell 7.59 percent this year, and the Nicaraguan economy entered recession.

An M&R Consultants poll published Dec. 15 shows 66.8 percent of Nicaraguans say they don’t see any benefit from ALBA.

The budget was also dramatically underfunded this year after the government lost $100 million in EU budget aid due to last year’s alleged electoral fraud, forcing the administration to reform the budget on three occasions, pass a tax reform and float another $130 million in public debt just to cobble together next year’s paltry budget, which still has an 18.6 percent deficit.

Despite the Sandinistas’ nouveau riche status, they still identify quaintly as the party of the poor, blaming Nicaragua’s problems on “the perverse model of global capitalism” and insisting, “We are just victims of its dreadful and domineering nature.”

–Tim Rogers

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