Nicaragua Minimizes Impact of the Venezuelan crisis on its Economy

HAVANA TIMES — The Government of Nicaragua has alternative sources of external funding and “will not die” by the virtual collapse of the Venezuelan aid, which has supported the country’s economy for nearly ten years, said Bayardo Arce, economic adviser to President Daniel Ortega on Thursday, reported dpa news.

Speaking to reporters, Arce played down the impact the political and economic crisis in Venezuela is having on the Nicaraguan economy.

“We have cooperation from multilateral organizations, the Inter-American Development Bank (IDB), the World Bank, the International Monetary Fund, the European Union and a number of countries,” argued Arce.

He said the IDB provided Nicaragua with around 1.7 billion dollars in the last decade as part of a cooperation plan.

“So, even though we are not happy when a country has problems, and much less a friend that  is helping us, but we will not die over it, we have other alternatives with which to work,” he said.

He added that the focus of the government’s economic policy has been the “diversification” of international cooperation and that the country is ready “to receive funding from any country in the world.”

Arce did not confirm media reports on an alleged labor crisis at the Nicaraguan-Venezuelan company Alba Petróleos de Nicaragua (Albanisa), which reportedly laid-off would at least 105 employees due to the crisis in the South American country.

Anonymous Albanisa sources told “Confidencial”, one of the few media outlets critical of the Ortega government, that management of the consortium fired 20 percent of the more than 500 employees working in three of its subsidiaries.

The layoffs supposedly occured in the companies Alba Forestal, Albalinisa and Social Alba, due to the collapse in international oil prices, according to the same source.

According to recent data from the Central Bank of Nicaragua, Nicaragua in 2015 recorded a decrease of 3.7 percent in the amount of foreign cooperation with respect to 2014.

The most significant drop was observed in the aid from Venezuela, which dropped from 787 million in 2012 to 654.2 million in 2013 to 619.9 million in 2014 and 306.8 million in 2015, said the Central Bank.

Nicaragua receives Venezuelan aid under preferential payment terms, under an oil agreement signed agreement between Ortega and the late President Hugo Chavez in 2007.

According to “Confidencial”, as the tap of the “petrodollars” began to close, food exports from Nicaragua to Venezuela (sugar, coffee, cattle, beef and chicken, among others) have also dropped and payments have taken longer than usual.