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Ortega-Chavez Pact Will Cost the Nicaraguan People Dearly

Article Summary:

The agreement between Nicaraguan President Daniel Ortega and Venezuelan President Hugo Chavez is creating a huge debt, according to experts, and it is imminent that it will be paid by the people of Nicaragua.

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Photo Credit: La Prensa Honduras

Original Article Text From La Prensa Honduras via Google Translate :

Five years ago, the National Rural Safety (Caruna) was little more than a stranger. This cooperative, with 18 years of existence, then had only a small headquarters in the neighborhood Monsignor Lezcano. It functioned as a small financial assistance it provided to its partners. But since leaving be Caruna, to be called Alba Caruna, his luck has changed radically.

This credit union and that started with 18 associates, is now the “petty cash” where it is deposited 25 percent of the oil bill of Nicaragua, under the agreements of the Bolivarian Alternative for the Americas (ALBA) signed between President Daniel Ortega and Venezuelan President Hugo Chavez Frias in 2007.

The other 25 percent, which is supposed to be channeled by Albanisa executed by the Ortega government for social projects (by arrangement Alba), nothing is known. And many of the programs implemented by government patronage Ortega are funded through appropriations Alba Caruna.

Official figures state that until last year, Caruna has had in his hands $ 395 million. This has come to become a heavyweight financial situation of Nicaragua, the “big lender” state.

Economist Adolfo Acevedo is independent of the voices convinced that the debt incurred by Caruna is not private. Even has drawn attention to some unsupported disbursements made from the same general budget of the Republic.

The economist, like other specialists, and political opponents, estimated that Nicaragua could be facing a kind of laundering proceeds of debt Venezuelan oil deal. (See graphics).

“The main problem here is the lack of transparency. The lack of transparency comes from the fact that you want to hide something. We could be witnessing a model in which we are indirectly making these private debts into public debt with Venezuela through Alba Caruna loans, but these speculations would not exist if there were transparency, “he said Acevedo.

CONVERSION OF DEBT
The first thing to understand is that Nicaragua must pay every cent it receives Venezuelan oil. No donation. Alba agreements stipulate that 50 percent of the bill is paid no later than 90 days, another 25 percent is administered by Alba Caruna and the remaining 25 percent Albanisa for social programs. This amount will be repaid in 17 to 25 years, depending on international oil prices, with an interest rate of two percent of total debt. That’s the concessionality of Alba. The big question is who will pay that money is spent privately, but it is feared to be loaded at the end as public debt?

The scheme proposed by scholars and political opponents on the washing of the State Caruna loans work this way: dirt, call it something that you are taking away the debt is the concept of “private debt” argument with the which the politicians of the government rejected the accusations related to the emergence of a huge foreign debt with Venezuela.

The “private debt” is Caruna with Petroleos de Venezuela (PDVSA), Venezuela’s state fuel supplier of the framework of ALBA. But this debt would be “cleansed” through government payments, either through the resources of the municipalities, autonomous agencies or by the general budget of the Republic. Not to forget that the original resource that offers such loans Caruna arising from the oil bill paid by all Nicaraguans refueling their vehicles.

For the president of the Economic Commission of the National Assembly, Deputy Gutierrez Sandinista Wálmaro, these arguments are pointless because there is a clear process on how the state acquires a debt established by the Debt Act (see interview) .

UNSUPPORTED DISBURSEMENTS
One of the points that attract attention Acevedo is that without them the explanations provided by the Law on Budget System and games are being established huge State resources for payment of debts of which there is no information on when were acquired.

An example of this are the 788 million cordobas included in the 2012 budget called “contingent liabilities”. The reform of the budget established for that item that would pay the subsidy on electricity tariff and contribution to the Bank of Alba.

“The newly appointed Minister of Finance (Ivan Acosta) said that both games would leave a” contingency fund “, trying to confuse the contingency budget under this heading for contingent liabilities. But as everyone knows, anything that has to do a fund to troops, that a party intended to pay contingent liabilities, “said Acevedo.

“In the domestic debt component set out in Budget 2012, the third component is that of the 788.2 million cordobas for judgments and other contingent liabilities. What does this refer to contingent liabilities? What entity, corporation or entity responsible for that debt? When that debt is authorized by the State was guaranteed? Why this item is included overall without any details and without any explanation? This amount is huge, more than the sum of the total amounts allocated to Marena and MIFAMILIA together, “he said.

SHIELD CRACKED
The famous legal shield which prides itself on the political opposition to curb any possible debt collection by Venezuela oil is so fragile as a termite-eaten wood. Such protection is the National Assembly resolution of November 3, 2009, which established that despite the adoption of framework agreements relating to energy cooperation with Venezuela and the initiative known as Petrocaribe not recognize any debt to the country South American is not approved by the plenary.

“You have to define the legal status of this debt. The problem is that opposition MPs are complicit, so they remain silent. They approved the energy agreement and this is an international agreement, a valid legal instrument that makes clear the obligation of Nicaragua, “said Acevedo.

DO NOT HAVE TO BE IN BUDGET
For tax specialist Julio Francisco Báez, who is also a firm believer that the public debt to Venezuela, there is a false belief among legislators and other areas of national life, that all public sector revenues should be incorporated as part income recorded in the Annual Budget Law of the Republic.

Baez noted that Article 15 of the Financial Administration Act and Budgetary System (Act 550), it is clear to notice that there are several types of budgets. The most important is the Annual Budget of the Republic, without prejudice to the existence of other budgets among which the decentralized entities, municipalities, or companies and financial institutions of the state. All these assumptions are detailed in Article 15 and make up the Public Sector Consolidated Budget.

“One thing is that the Venezuelan debt should be incorporated in the Annual Budget of the Republic purposes only and elemental transparency, strictly controlled the legislative body must perform as provided by law, and quite another to mechanically want to integrate the revenue budget for the year, since it is by the grace of a deputy that all income derived from any public budget or income with specific involvement, should be included as income in the Annual Budget then be spent happily in the same period, “Baez said via email.

The ERROR OF THE OPPOSITION
This, in consideration of Baez’s wrong with opposition MPs falling by requiring products of oil accord resources should be incorporated into the General Budget of the Republic, and then distribute it according to what lawmakers decide.

The Ortega government cleverly made use the same argument to use as a banana peel on which the opposition slipped last year, when approved Legislative Decree 06-2009.

“As this concept would not or could not esgrimirse consistently in the National Assembly during the previous administration, the government caucus and the opposition bloc, the first giving porridge with your finger and pretending to punish the latter do not know who voted unanimously that not be incorporated as income Venezuelan cooperation in the Annual Budget would not be recognized as public debt, and therefore would never be paid. What a nice way to confuse Chana with Jane! “He said Baez.

Caruna, following exactly the communication policy of Rosario Murillo, is reluctant to interviews with the independent press. Manuel Aburto, its president, is a longtime activist in the cooperative world. They say those who know him now that he is a man in a suit and tie, is still a pretty cordial. More than one might expect from someone who heads a cooperative that manages $ 400 million and is the lender of the state. Nothing to do with that little association located in the small house of Monsignor Lezcano neighborhood.

Debts that have changed According Sinforiano Caceres, president of the National Federation of Cooperatives (FENACOOP), is not the first time the Nicaraguan government used to clear debts cooperatives. But this time, the “modus operandi” is different. Before public debts became private.

During the government of Violeta Barrios de Chamorro began a project called Development Poles (Poldes), which were financed through ten cooperatives various agricultural projects. But according to Cáceres, assets purchased with this money (40 million dollars from the Italian Cooperation) were in the hands of relatives or officials of that Government, and Nicaragua had to pay that debt. During the government of Arnoldo Aleman Lacayo scandal broke heifers, a cattle breeding program that would also run by cooperatives, but the cattle purchased with money from international cooperation became the property of staff, friends or associates of the leader liberal.

Link to Original Article:

From La Prensa Honduras

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