Nicaragua leads Central America in fostering EU trade

Nicarguan Foreign Minister Samuel Santos Lopez
In the last three years the Nicaragua has established a close cooperation with major Western European countries, while paying a special attention to economic diplomacy. This strategy took a new impetus after Foreign Minister Samuel Santos Lopez' official visit to Brussels and Strasbourg in December 2010. During his visit, Nicaragua's chief diplomat met with Miguel Angel Martinez - a leader of the Spanish Socialist Workers Party and Vice President of the European Parliament, and Emine Bozkurt - Chairperson of the EU Delegation to Central America and a Dutch member of European Parliament. Managua has historically relied heavily on foreign direct investments and implementation of sustainable development projects with the help of British institutions, Luxembourg’s Foreign Development Assistance Funds, and other European Union countries.
 
On October 6-7, EU Commissioner Andris Piebalgs visited Nicaragua to set the tone for the establishment of the new EU-Nicaragua cooperation program for the 2014-2020 period. One of the objectives of the visit was to strengthen EU-Nicaragua bilateral relations and ascertain the country's socio‑economic situation.
 
Commissioner Piebalgs' visit took place one week after the signing of a tripartite agreement between the EU, the World Bank and Nicaragua for the implementation of a Support Project in Nicaragua for Education Sector (PROSEN). This project will be beneficial to over 551,000 students and is included in the cooperation program for 2007-2013, for which EU has invested over €32 million.
 
EU – Nicaragua cooperation is expected to improve the standards for education, economy and trade as well as help develop a strategy that would attract new business investors to Managua and other regions.  The EU will allocate around €204 million, which is awaiting approval from the European Parliament and European Council. It has established a fund of €8 million in support of the development of small and medium-sized enterprises in Nicaragua. On the other hand, Luxembourg has also funded the development of two blood banks in Managua and donated over US$ 100,000 in the fight against dengue fever.
  
Although Nicaragua, stands at 124th place in the world economy, according to World Bank’s Doing Business 2014 Ranking,  since 2006 the country has experienced an economic growth and has made efforts to curtail extreme poverty (reduced to 9 percent, it was 18 percent in 2005). UNESCO has acknowledged positive and significant reforms towards the provision of free access to education for all children.
 
Nicaragua has a long way to go in regards to assuring electoral transparency and ensuring democracy:  two components that affect foreign investment levels in the country.  Electoral participation the part of Nicaraguans is not at a desired level: in the November 6, 2011, elections, Nicaraguans re-elected their incumbent president with a 63 percent majority and voted in 92 members to the general assembly.  The lack of new elites’ participation in politics and listening closer to opposition parties are two components of the electoral process that international experts believe ought to be improved in the Central American country.
 
Despite these challenges, President Daniel Ortega’s government has made some progress in education,  public health, agriculture, renewable energy and development of eco-tourism projects. Unfortunately, poverty in Nicaragua persists: 46 percent of the population is in general poverty and 15 percent of the population is in extreme poverty. The informal or black market accounts for 60 percent of the total economy.
 
British Investments to Nicaragua
 
In February 2013, a high-level delegation of business executives from the United Kingdom visited Nicaragua to seek new business opportunities. There exists a great potential of cooperation in the areas of oil exploration and in the framework of EU - Central American cooperation.
 
According to the Central American Business Council, the delegation held meetings with government officials and Nicaraguan business leaders. Its most important goal was to increase the current levels of trade between the two nations. The United Kingdom is the second largest global investor. However, its presence in Central America is very limited. Hope remains high in the strengthening British - Nicaraguan ties, especially now when both countries are part of the EU - Central American Association Agreement.
 
The delegation was accompanied by UK Non-resident Ambassador Chris Campbell who stated that “last year when [he] spoke with President Ortega, [he was committed] to deepen bilateral trade relations and this is a concrete example of that commitment,” This was the first British trade mission to Nicaragua in the last five years. In November of this year, Nicaragua’s Foreign Minister Santos visited London to promote his country as a place with a stable economy, potential for growth, infrastructure development and tax laws that are friendly to international investments. In a business meeting with leaders of the London – Latin American House, the Nicaraguan chief diplomat underscored Nicaragua’s political stability, attractive set of labor laws, tax incentives and the comparative advantage that his country offers to British and European investors.
 
Ortega’s government is fostering greater confidence in order to attract more investments from Great Britain to Nicaragua. In the last 6 years the Nicaragua’s GDP grew by 54.8 percent. By 2016, economic growth is expected to surpass 6 percent and exports will experience an increase of 50 percent. The Central American republic is experiencing a rapid population growth: over 31 percent of the population is under 15 years old.
 
During a November 27th meeting with British Secretary of State William Hague, Foreign Minister Santos z emphasized that “Nicaragua was the first Central American country to adopt the agreement between Central America and European Union, which serves as the pillar of economic cooperation between the two countries.” Such an agreement is expected to be ratified by the British Parliament in the first quarter of 2014.
 
The United Kingdom has traditionally supported Nicaragua’s path to prosperity and economic growth, now is the time for both countries to take concrete steps forward and materialize their close cooperation by generating more British investments in Managua, and promote balanced bilateral trade.
 
In this context, both parties have agreed to work towards strengthening economic opportunities and promote British private investment in Nicaragua, especially in the areas of infrastructure, energy, and an  inter-oceanic canal proposed by President Ortega that could rival the Panama Canal.
 
At the end of his visit to London, the second in as many years, foreign Minister Santos gave another lecture before business executives to showcase what his country can offer to London’s business community.
 
Spero columnist Peter Tase analyzes international trade and diplomacy.
Filed under politics, nicaragua, uk, uk, diplomacy, trade, business, panama, politics, Americas

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