Nicaragua Minimizes Impact of the Venezuelan crisis on its Economy

Baryardo Arce. Foto:
Baryardo Arce. Photo:

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.

7 thoughts on “Nicaragua Minimizes Impact of the Venezuelan crisis on its Economy

  • I should remind you that “The Empire” collapsed in 1989/90 and that the collapse led to even harder times than Cubans are currently experiencing.

  • But the Castro regime in Cuba cannot make the same claim! Can it?

  • “McDonalds, Burger King and shipping malls…: You might have a point there. Nobody need to meddle in Nicaraguan politics. They have everything in good order, with the backing of the huge majority of their wonderful people. The Sandinista Government is in office through the ballot box.

  • By The Empire, do you mean the U.S. government? If so, that’s ridiculous and just out of date cold war rhetoric using the U.S. as a scapegoat for an underperforming economy. If you mean McDonalds, Burger King and shopping malls you may have a point. I’m not interested in meddling in Nicaraguan politics. I just wish that the government would do more for the wonderful people in Nicaragua that I have come to know.

  • …cue the Star Wars theme.

  • The Empire will not triumph over the People’s Revolution. The People will never allow that to happen. Times may be hard right now, but The People stand with their leaders, and they shall triumph in glory. Forward Ever! Backward Never!

  • The domino effect. It will be interesting to read the propaganda spin coming from the Castros once the effects of declining oil subsidies begin to be felt in Cuba.

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