Nicaragua downplays potential impact of US bill on lending

President Daniel Ortega downplayed the possible impact of a US bill that would condition international lending to Nicaragua on a range of democracy and rights issues, saying it’s more of a political than an economic threat to his country.

“The world is not going to disappear, the economy is not going to disintegrate” if the so-called Nica Act passes, Ortega said late Thursday after meeting with representatives of the International Monetary Fund during a visit to the Central American nation.

The bill before the House and Senate calls for the US to oppose most loans to Nicaragua’s government through organizations such as the IMF, the World Bank and the Inter-American Development Bank, with the exception of funds for humanitarian purposes or to promote democracy.

That would be the official US position unless the secretary of state certifies that Nicaragua is taking steps to hold fair and competitive elections, safeguard political rights, strengthen the rule of law and fight corruption, among other conditions. Similar legislation last year failed to advance in Congress. Nicaraguan opposition leaders and civil society groups accuse Ortega of manipulating elections to stay in power and of wanting to create a family dynasty by making his wife, Rosario Murillo, his vice president. Ortega’s government has opened negotiations with the Organization of American States ahead of local elections scheduled for November to discuss concerns about transparency and fairness.

OAS Secretary-General Luis Almagro urged US lawmakers this week to “reconsider” the bill to allow “time and space” for the negotiations to work. Economist and sociologist Cirilo Otero said Ortega may be underestimating the Nica Act’s potential effects because any uncertainty could prompt investors to suspend activity in Nicaragua until it clears up.

“We are a poor country that lives off international aid,” said Otero, a professor at the Universidad Centroamericana. “We are not self-sustainable to react in that way.” Nicaragua, the second-poorest nation in the Western Hemisphere after Haiti, relies on international loans to finance at least 10 percent of its budget. —AP