U.S. Denies Transparency Waiver to Nicaragua
Ambassador Powers
On Friday, U.S. ambassador to Nicaragua, Phyllis Powers, recommended that Nicaragua not be granted a transparency waiver concerning budget reporting, a decision that if it stands will result in the suspension of $3 million in aid to Nicaragua. The Nicaragua Network, which has been following this case closely, reports “Nicaragua has provided the information necessary to satisfy the technical requirements for that waiver. While money from the Bolivarian Alliance of the Peoples of Our Americas (ALBA) – which funds important anti-poverty programs – is not included in the government budget, Yale-educated economist Nestor Avendaño explains that it is included in Nicaragua’s balance of payment statement and its use is detailed in the quarterly reports of the Central Bank of Nicaragua. That has satisfied the IMF and World Bank and should be enough to satisfy the United States, as well.”
At the same time that the transparency waiver is under consideration Nicaragua is currently under the annual microscope of the “property waiver” process. Under the Helms-Gonzalez Amendment of the Foreign Relations Authorization Act of FY 1994-95 the U.S. government will not provide funding to governments that have seized property from U.S. citizens unless the President grants a waiver on the grounds that the government is making progress in the settlement of these disputes. In Nicaragua’s case the vast number of property disputes still lingering involve people who were not U.S. citizens at the time they left Nicaragua, but later became citizens. It has become an annual exercise in intimidation that usually ends in the waiver being granted, though this year it is in doubt.
This year the waiver process has become the latest episode in a dance that the Obama administration has been playing with Senator Marco Rubio (R-FL) of the Foreign Relations Committee since the elections in Nicaragua last November. In December Rubio was involved in negotiation with the Obama administration over the appointment of Mari Carmen Aponte to be ambassador of El Salvador. She had been made ambassador in a recess appointment the previous year, but her confirmation was being held up in the Senate. Rubio offered to get her nomination through if the Obama administration would take a strong stand condemning the elections in Nicaragua. There was no statement from Obama, and the nomination did not go through by the December deadline. However, on June 14 Aponte’s nomination was belatedly approved in the Senate with Rubio’s leadership. It was therefore no surprise that Powers made the announcement denying the transparency waiver a week later.
Rubio, gloating, is pressing on the property waiver as well, saying, “I urge the Administration to take a hard look at the Nicaraguan government’s compliance with a similar waiver given to ensure American investors receive fair compensation for the expropriations that took place during Ortega’s rule in the 1980s.” Rubio’s wants to further isolate the Sandinista government: “In addition, other Central American nations should recognize they have a clear stake in demanding greater transparency from the Nicaraguan government for the sake of peace and security in the region.”
Meanwhile, the Obama administration has granted waivers to the government of Colombia, which remains the most dangerous place to be a union organizer to this day, going so far as to green light the U.S.-Colombia Free Trade Agreement last month over the objections of human rights groups and labor unions. Obama continues to be supportive of the government of Honduras recommending increases in military and other security assistance despite a regime of state sponsored terror that has steadily evolved since the coup d’ etat in June of 2009. Honduras now leads the world in the murder of journalists, and has witnessed over 300 political assassinations over the past few years, including a very high number of LGBT activists. The current government in Honduras was elected in a condition of great insecurity following the 2009 coup; an election that the Obama administration was practically alone among the countries of the western hemisphere in supporting.
Anyone who has followed U.S. policy in Latin America over the years could hardly be surprised that the U.S. is more than happy to fund governments with grave human rights records, while using aid to strangle or intimidate progressive governments. In the end foreign assistance programs are ultimately about extending U.S. influence, and are transparently leveraged to get reforms wanted to secure open access to markets for U.S. business concerns. There is little new to the underlying orientation.
However, for U.S. policy makers today there is a balance of power concern in the Americas. It is no secret the U.S. has lost the influence it once held, especially in South America, and that the Obama administration is slowly seeking a way back to regional hegemony. In this effort it is supported by ideologically driven Republicans in the House and the Senate, like Rubio, who seem to still be in a Cold War mindset. Like the 1980s, U.S. policy toward Nicaragua is treating the country like a proxy – this time for Chavez.
The irony is that Ortega has largely been willing to go along with the U.S. as he plays his own complicated two-level game – trying to appease domestic constituents, while keeping the transnational business community happy. His government enjoys support from Caracas, but for how long is anybody’s guess. If Chavez, or his successor were to lose upcoming elections it may be game over for Ortega. He knows that, of course, and so has been a willing conduit for U.S. expansion of regional military assistance under the guise of fighting the drug war and the war on terror.
For the Obama administration, completely cutting off aid to Nicaragua would weaken the U.S. regional presence further – and thus it is likely that the property waiver will be granted. This would impact much more assistance ($1.4 billion over five years) than the transparency waiver, as it would require that the U.S. block multilateral assistance as well. Members of the business community in Nicaragua have characterized that level of suspension of aid as an “economic atomic bomb.” The denial of the transparency waiver move allows Obama to give ground to Rubio and his ilk in Congress, while sending a message to Ortega that further reductions in aid are possible next year. U.S. strategy in the interim will be all about undercutting Chavez in the elections this fall.
In the end, it is clear that U.S. foreign policy remains much as it has since 1945 in Latin America, aligning with regional elites to stem reform efforts. It is a short-sighted game, contributing more to cycles of violence and instability than actual promotion of U.S. interests. Yet, Obama is demonstrating the same lack of creativity and credibility that his predecessors have, and like in the past, it is the people of the region that pay the price.
–Tom Ricker