Although it is known to be a nation with a relatively undersized armed forces in Central America, Nicaragua continues to demonstrate significant progress and  a leading role in the war against drug trafficking and organized crime in the Central America.   According to General Julio Cesar Aviles, the Nicaraguan armed forces last year alone had demonstrated a great efficiency in capturing nearly ten thousand pounds of cocaine and 21 naval transportation boats used by drug cartels. During these operations Nicaraguan Special Forces have arrested over 117 drug smugglers and criminals.

One of  Managua’s latest efforts is the establishment and deployment of the Naval First Battalion to fortify and secure the inter-border areas from illegal smuggling and transnational crime.  General Aviles noted that "Nicaraguans are strategically located at the heart between South America, the main center for drug production in this planet, and North America, where there is a predominant level of violence and an increasing demand of drug consumption."

On the same lines of the regional war against drug trafficking, the Honduran president Porfirio Lobo Sosa will serve as a host of the upcoming Central American Integration System (Sistema de Integración Centroamericano, SICA) meeting, with the regional leaders, in order to reach a unified voice and a joint position on behalf of SICA during the VI OAS Summit of the America’s that took place on April 14 in Cartagena de Indias, Colombia.

In February, 2012, Nicaragua and the Central American Integration System approved a series of measures to further strengthen the inter-border security in the region.  Within the framework of the national border security program  to be implemented on all central American countries (SEFRO), there are selected eighteen particular border patrol posts in order to inaugurate more accurate and effective operations as well as utilize the latest generation of technology. 

The border areas of Nicaragua, El Salvador, Guatemala and Honduras are constantly facing a growing threat deriving from a myriad of illicit activities such as weapons and human trafficking, drug smuggling, illegal transportation of consumption goods. The current SICA Security initiative has received a commendable support from the government of Taiwan (Republic of China).  The Taipei government has awarded a grant of USD 1.16 million to be invested towards the modernization of SICA E-Services’ regional program focused on the further modernization of institutional logistics by making use of the latest generation of information technology.  

This grant came as a result of an agreement signed between SICA secretariat and the Taiwanese government representatives during a bilateral meeting held during the second half of 2011.   In November 2008 SICA had received USD 18.2 million in assistance money from the Republic of Taiwan; these resources were destined to be used on six mutual projects focused on the restoration of Nicaragua’s government buildings, food production, and improvement of regional social policy. 

A Flourishing Central American Economy

Under President Ortega’s administration, during the last five years Nicaraguan economy has experienced a shift from a nation with regional reputation into a country that is becoming a success story beyond Central America.  Ortega’s administration has always found pride in becoming the fastest-growing economy in Central America in relation to exports and foreign-direct investment.  Nicaragua is also flexing its mussels in order to become a more reputable partner while being surrounded by countries that traditionally have been economically superior to Nicaragua. In 2011, Nicaragua exported USD 4.3 billion in goods and services and attracted USD 967.8 million in foreign-direct investment, an increase of 91 percent compared to 2010.

The leading foreign direct investment countries are Canada, with an investment of USD 255.52 million in the sectors of mining and energy project.  Trailed by the United States reaching USD 158.8 million and Spain with USD 115.6 million.  Venezuela has also played a prominent role on project investments in Nicaragua, which only last year have reached USD45 million.  

Last year, officials in Managua stated that the country had registered an impressive growth in foreign-direct investment on the three main sectors: a growth of 37 percent in energy, (from USD 158.8 million to USD217 million); telecommunications investment increased by 35 percent or from USD 118.7 million to USD 160 million); and free trade rose by 35 percent or in numbers as  USD96.6 million to USD130.2 million.

Nicaragua has also experienced a cautious growth in sectors pertaining to foreign-direct investment such as: commerce and services which increased by 1,4 percent, mining experienced a great growth by 352 percent, industry (751%), agriculture (11,541% —from $400,000 to $47.7 million), construction (1,311%) and transportation (1,250%).

Some of the sectors have experienced a down turn such as: fisheries, which were reduced by 61 percent, tourism lowered by 48 percent, and forestry that has gone down by 97 percent. 

Fostering relations with Russia

In January 23rd, 2012 the Nicaraguan Minister of Industry, Commerce and Trade Promotion, Mr. Orlando Solórzano Delgadillo led an official delegation with government executives and business leaders to Russia.  Throughout this official visit Solórzano met in Moscow with the Deputy Russian Foreign Minister Sergey Ryabkov

During his stay in Moscow the Minister Industry signed three agreements with his counterparts: the first agreement was focused on the mutual protection of capital investments; the second agreement would mark the opening of bilateral Cultural Centers that will be opened in Russia and Nicaragua, the third agreement is aimed at strengthening the bilateral ties in the areas of economic, technical and scientific research including the mutual use of cosmic space for peaceful services such as cellular telecommunication services and global positioning. 

The Russian government is highly interested in assisting the Nicaraguan government to further develop its cocoa production and build a modern rail way system to connect Managua (the nation’s capital), with Granada, Nicaragua’s fourth largest inhabited city, located in the western province of Granada. The potential rail way project is anticipated to cost more than USD 52 million dollars. 

With the same level of interest Minister Solórzano invited Russian business to participate on a number of infrastructure projects awaiting to be implemented in the Central American nation. 

Nicaraguan business leaders had also very engaging meeting with their counterparts.  The President of HEMCO (one of the largest mining companies in Nicaragua founded in 1995), Mr.  Sergio Rios gave a press conference after his return from Moscow, without any fanfare stated that he had secured from Russian suppliers a thousand tons of cyanide per year to be used on further processing of gold. 

Spero analyst Peter M. Tase is a former Peace Corps volunteer to Paraguay.



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