Peter Tase: How do you see the current bilateral relations between the United States and Nicaragua?
Francisco Campbell: An effort is underway to build for the first time a mature, constructive relationship between the United States and Nicaragua, based on mutual respect. We are mindful that this is not an easy task. The history of interventions, impositions and aggression has shaped perceptions as well as suspicions about intentions on both sides. This is why Nicaragua – U.S. relations are often described as “difficult”; more recently “complicated” has become the definition of choice. Intransigent voices that want to dictate rather than listen have inhibited understanding and the nurturing of empathy for the aspirations, hopes and dreams of the other. This is why we believe that to build a mutually beneficial relationship the smoky lens of ideological prejudice must be removed, so as to squarely focus our attention on issues of fundamental importance to the safety and well-being of our two countries and peoples.
In this context, it is worth recalling that during the Fifth Summit of the Americas held in Trinidad and Tobago in April of 2009, president Obama spoke of his desire for a new era in the relations between the United States and the countries of Latin America and the Caribbean, adding that this new approach had to be based on mutual respect. That moment was significant in that it highlighted the possibility of re-imagining a mature relationship between Nicaragua and the United States, for it is a vision that coincides with, and is central to, a major foreign policy principle of the Nicaragua government under president Daniel Ortega, namely respect of sovereignty and right to self-determination of all countries regardless of geographic size, wealth, or stage of development. The challenge then is how to translate this shared vision into concrete reality.
For Nicaragua the building of a constructive, mature relationship with the United States has to go beyond words. The bilateral agenda must have content that is both realistic and practical, covering cooperation in areas of fundamental importance to both nations.
P.T.: What are the three most important items of the bilateral agenda?
FC: My government considers security, trade and investment, and development of renewable energy as the three major pillars.
Security is an issue of vital importance not only to Nicaragua and the United States, but to the Hemisphere as a whole. The greatest threat our Hemisphere currently faces stems from drug trafficking and organized crime. Demand for drugs in the United States is the primary force that drives drug trafficking from South America through Central America and Mexico, fueling levels of violence that undermine institutions, as well as peace and stability in the region. The northern triangle in Central America consisting of El Salvador, Honduras and Guatemala is considered to be the most violent region in the world outside of a war zone.
Because this threat is hemispheric, a regional response based on the principle of shared responsibility is necessary. Consuming countries must do more to reduce demand for drugs, become more effective in controlling drug trafficking within their borders, deal more effectively with money laundering and additionally, in the case of the United States, exercise greater control over the sale of firearms that crosses illegally into Mexico.
Producing countries for their part must find ways to reduce production as well as trafficking in their territories. The Central American Countries, primarily transit countries, have the responsibility to intercept and disrupt drug trafficking operations.
Nicaragua has fully assumed its responsibility in this effort and is widely recognized as one of the most effective partners of the United States in the region. Working closely with U.S. antidrug agencies, the Southern Command and our Central American neighbors, Nicaragua has been able to intercept record amounts of drugs, so much so, that intelligence reports indicate that traffickers are modifying routes away from Nicaragua to avoid capture.
While we are rightfully proud of the work and accomplishments of our army and police in dealing with this hemispheric threat, we are also the first to acknowledge our limitations. We do not have the capability to completely seal off our borders from drug traffickers. In spite of our best efforts, some of the drugs will enter into our territory, either by air or by sea, infiltrating highly vulnerable impoverished isolated communities on the Nicaragua Caribbean Coast, in part due to the limited presence of the Nicaragua state.
Here is where there is a convergence between the Nicaragua strategy to deal with the hemispheric threat on the one hand and on the other, the historic threat to peace and stability in our country posed by poverty, which is a direct result of the inequality, exclusion and marginalization inherited from our colonial and neo-colonial past. The Nicaragua comprehensive strategy against drug trafficking has incorporated efforts to eliminate vulnerabilities in these communities through implementation of development programs, jobs creation, as well as to provide health care, education and healthy recreational opportunities for young people.
This holistic approach is key to greater effectiveness in the fight against drug trafficking and organized crime and by eliminating vulnerabilities, we simultaneously address the historic threat to peace and stability posed by poverty.
The number one priority of the Nicaragua Government of National Unity and Reconciliation is precisely the fight against poverty. This is why the government has implemented a comprehensive mix of social programs to alleviate the urgent needs of the majority poor, combined with a sound growth oriented economic policy developed jointly by a tripartite consultative body that includes representatives of the private sector, labor and government. This approach is of strategic importance and is based on a clear understanding that sustainable economic growth requires the participation of all sectors, which is vital to success in the fight against poverty.
This growth oriented policy is bolstered by a sound macroeconomic foundation within a stable environment, with high levels of security in its various manifestations. This is why Nicaragua has become an attractive destination for foreign investments, having registered a yearly average of U.S. one billion dollars over the last three years, including a record 1.5 billion in 2013. The Nicaragua Investment Promotion Agency (Pro-Nicaragua) has played an important role in this effort and was recently recognized as the best agency of its kind in Central America and second in all of Latin America behind its Colombia counterpart.
Diversification of trade and cooperation is also of great importance to the Nicaragua development strategy and to this end, Nicaragua has entered into a seriesof trade and cooperation agreements including the Bolivarian Alliance (ALBA); the Association Agreement between Central America and the European Union; the Free Trade Agreement with Mexico; Free Trade Agreement with Taiwan; and the agreement last year with Chile. Likewise, there are strong bilateral agreements with Canada, Japan, South Korea, Russia and other emerging economies.
The US- Central America Free Trade Agreement known as DR-CAFTA was signed in 2005 during the previous administration and was the first of its kind subscribed by Nicaragua. When the present Nicaragua government took office in 2007, there were those who speculated that interest in DR-CAFTA would diminish or that Nicaragua might withdraw from this Agreement with the United States. However, the opposite has been the case. The Ortega government has sought to creatively administer these various trade agreements, including DR-CAFTA, in ways that are complementary and favorable to Nicaragua producers and exporters.
The most recent DR-CAFTA evaluation found that Nicaragua was the member country that had performed the best during the last five years. This positive assessment was made possible because of decisions by the government to create favorable conditions and to encourage Nicaragua producers and exporters to become more creative and dynamic, taking advantage of opportunities available to them under DR-CAFTA.
The United States continues to be the largest source of foreign direct investments to Nicaragua, and also remains the main market for Nicaragua exports. While the U.S. has increased exports to Nicaragua by about 25%, Nicaragua has nearly doubled its exports to the United States since joining DR-CAFTA. In 2007, Nicaragua exported 1.6 billion dollars to the United States and by 2013 this figure rose to 2.8 billion. Imports from the U.S. were US$890 million in 2007, growing to US$1.1 billion in 2013.
United States investments and bilateral trade with Nicaragua have been major contributors to the robust 4.8% GDP growth in the Nicaragua economy over the past three years. Just as important is the fact that this economic performance was achieved alongside impressive gains in levels of social inclusion. Formal employment based on the number of new affiliates to the Nicaragua Institute of Social Security grew by 8%, representing fifty thousand new workers entering the formal economy. Likewise, Nicaragua has succeeded in meeting most of the Millennium Goals ahead of time: mal nutrition was reduced by 50%; infant mortality by 2/3; maternal mortality declined greatly; foreign direct investment grew and women participation in the social, economic and political arenas was widely recognized. It is worth noting that last year the World Economic Forum reported that Nicaragua was the number one country in the Western Hemisphere with respect to women participation in politics.
P.T.: What are some of the renewable energy projects?
FC: The third pillar in this constructive engagement agenda with the United States is related to renewable energy. Clean energy development is of interest to our two countries and the rest of the world because of its implications for climate change mitigation. This is an area in which our two countries can work together for mutual benefit.
In 2005 the Nicaragua National Assembly approved the Renewable Energy Generation Law (law 253), but it was not until 2007 that steps were taken to put the law into effect. Major efforts have been made to attract investments to develop renewable energy sources such as hydroelectric power, wind, geothermal, solar and biomass. Much progress has been made in the transformation of the national energy matrix from fossil fuel to renewables. Last year, renewable energy generation climbed to 52% from a base of 19% in 2007, and this past April 13the National Energy Dispatch Center announced that 60.3% of energy generated came from renewables. The projection is to reach 90% in 2017 and by 2025, the renewable energy share is projected to reach 98%.
The capstone project towards these goals is “TUMARIN”, a Brazilian investment of US$1.1 billion in a hydroelectric plant being built in the Southern Caribbean Autonomous Region, that will generate 253 megawatts when it becomes operational in 2017. Beyond hydro power, the Ministry of Energy and Mines has authorized preparation of a feasibility study for a 100 megawatts solar energy project in Chinandega department and the geothermal energy potential of the country is estimated to be 2,000 megawatts. At present, just 10% of this geothermal potential is being exploited, partly with investment from the US. A total of six sites are under contract for further exploration and development.
Nicaragua is interested in more U.S. investment in this sector. Our minister of energy and mines visited Washington, D.C. in April to attend the “2014 Geothermal Showcase”, organized by the Geothermal Energy Association as an “occasion for investors to know the current landscape of opportunities in the geothermal energy world”. During this visit, the Nicaraguan delegation also participated in a geothermal best practices workshop hosted by the State Department and the Geothermal Energy Association.
Full development of the Nicaragua renewable energy potential will have a profound impact on the country. In fact, it is already being felt as our oil bill has begun to decline with the change towards renewables, freeing resources that are now being invested in social programs and infrastructure projects.
Just as significant is the fact that within the next three to five years Nicaragua is likely to become a net exporter of energy, able to sell surplus energy to other Central American countries and beyond, using the soon to be completed Central American Electrical Interconnection System, known as SIEPAC.
The image of Nicaragua as the safest country in Central America, with responsible and efficient management of the economy and increasing availability of low cost energy, are elements that have made the country an attractive tourism destination and a good place to do business.
This is why we are confident that Nicaragua is firmly on the road to development, guided by a shared national vision of what a just and prosperous society should be. But we know that to accomplish our objectives we need and indeed welcome the support of all countries that are willing to work with us, particularly the United States, a country with which we have important bilateral interests.