By TIM JOHNSON
McClatchy Newspapers
MANAGUA, Nicaragua -- Over the past four years, entities controlled by Nicaraguan President Daniel Ortega have received at least $1 billion in no-strings-attached donations through an oil deal brokered by President Hugo Chavez of Venezuela.
The windfall has helped Ortega mount a vigorous campaign to fight rural poverty and generate electricity - and to build political support for himself.
By the account of one respected economist, who was assisted by the World Bank in gauging rural poverty, the money has had a dramatic effect. It's put more food in the bellies of tens of thousands of Nicaraguans and better roofing over their heads.
It's also created a web of Ortega-controlled companies with no public oversight, making the president a force in Nicaragua's economy and blurring the lines between what belongs to him, to his party and to the citizenry.
Ortega's new economic clout unnerves those who compete with his business interests and angers civic activists, who say the oil proceeds should be transparent. The money, meanwhile, allows Ortega to buy off or silence his foes.
Ortega's senior financial adviser, Bayardo Arce, a former Sandinista comandante, said that Venezuelan assistance topped $1 billion, and he acknowledged that the off-the-books nature of the aid has facilitated a fight against poverty.
When Ortega came to office, Arce said, creditor banks and nations in Europe and North America had imposed a variety of conditions on new credit to the country.
"There were 54 conditions to obtain the loans - 54 conditions!" he said.
So when Chavez, a pan-Latin nationalist and critic of the U.S., offered a way to use oil imports to raise discretionary funds, the Ortega government jumped.
"Venezuelan aid has been fundamental for the country," Arce said, listing large assistance programs that have received money, such as Zero Hunger, Zero Usury, Roads for the People and Housing for the People.
The Zero Hunger program gives selected rural households pregnant cows, pregnant pigs, six chickens each, seed, materials to build stables and bio-systems to turn cow manure into cooking gas. Arce said the aid packages, worth about $2,000 each, had benefited 48,950 families so far.
As in many of the programs, the aid goes to the women at the heads of rural households, so that "the men don't sell the assets to raise money for booze," he said.
All told, the assistance programs have reached nearly 150,000 households. The Zero Usury program offers micro-loans to single mothers, and has benefited 79,500 women so far, Arce said.
Alejandro Martinez Cuenca, an economist with a Ph.D. from Vanderbilt University, said that research from his Managua institute, conducted with technical assistance from the World Bank, indicated marked improvements in rural conditions in barely four years.
"The principle factor is that the government has had access to unlimited resources from Venezuela, and these have gone toward the rural sector," he said. "This money has had an impact."
Martinez Cuenca said his study found that the number of Nicaraguans in extreme poverty fell from 17.2 percent of the population in 2005 to 9.7 percent in 2009.
The study also found that rural young people are staying in school slightly longer, lowering rates of illiteracy, and that rural housing conditions are improving.
"If you fly over the rural areas now, you'll see how it's changed. You'd see that many of the huts are no longer huts but small houses with roofs of zinc," said Martinez Cuenca, who served as foreign trade minister under the Sandinista government that ruled Nicaragua from 1979 to 1990.
Read more: http://www.miamiherald.com/2010/08/11/1770990/nicaragua-finds-huge-patron-in.html
