Nicaragua rolls out welcome mat for Western investors
Nicaragua is often charged with adopting Cuba's Marxist-oriented politics. And now it may follow Cuba's lead by rolling out a welcome mat to capitalist foreign investors.
According to Cesar Arostegui, subdirector of the International Reconstruction Fund, Nicaragua's Sandinista government will soon approve a bill that promotes selected foreign investment in the country. The step is designed to attract much-needed foreign exchange in a nation with tottering industries and a $2.5 billion foreign debt.
''It is not the answer to all our economic problems, but it is one of a series of measures being considered to maintain a mixed economy,'' Mr. Arostegui says.
Nicaragua would like to see companies bring in new technology to help diversify production, he explains.
A question on the minds of some Nicaraguans, however, is whether foreigners would really want to start up something new in Nicaragua, whose leftist-leaning leaders are involved in heated disputes with several neighboring countries. The government will have to clean up its own house first before inviting new guests, they maintain.
''The government has not lived up to its promises to private and domestic investment, so how can it make promises to foreign investors?'' a Managua businessman queries. ''To invest in Nicaragua now takes a certain amount of naive optimism.''
Specifically, the plan is designed to attract investments in the fields of agriculture, industry, mining, and fishing, officials say. The government also would like to see greater exploitation of the cattle, cotton, and sugar industries, as well as development of shrimp and lobster fishing on the Atlantic coast.
''We'd be interested in a company that makes shirts, because we could supply the cotton,'' Mr. Arostegui explains.
Tomas Arguella, director of the Department of Investments in the Ministry of Planning, says: ''The government believes that foreign investment is essential to strengthen Nicaragua's development.''
''The idea is to promote foreign investment, increase development in certain areas, and to help our economic objectives as outlined in the revolution.''
Officials would not detail the specifics of the measure. But they say it is flexible and would provide foreign investors with the same guarantees as domestic investors. It would also guarantee that foreign companies receive foreign exchange for their profits to return to the parent company.
The plan was scheduled to be approved in May, Arguella says, but under the government's state of emergency - called in March after key bridges were blown up by saboteurs - attention shifted to security and other related concerns.
According to Arostegui, junta coordinator Daniel Ortega Saavedra will ''soon'' send the investment measure to the State Council, the lawmaking body.
Spokesmen for the influential Superior Council of Private Enterprise (COSEP) said they had not been consulted about the measure, and declined to pass judgment on it.
''The only thing that our government must offer to foreign - or local - investors is security that their investment won't be confiscated and some clear rules of the game,'' said COSEP vice-president, Anthony Burgos.
''The bill is certainly most desirable, but no one will believe it,'' adds the manager of a US multinational firm in Managua. ''Maybe it will attract investment from industrialized socialist countries, but I doubt whether any will come from Western nations.''
Arostegui, however, claims the government has received queries from businessmen from North America, Japan, England, and several Arab nations. He insists that the government did not make an about-face in its policies toward foreign investment.
''In reality, there were no foreign factories or businesses confiscated after the revolution,'' he maintained.
''What was confiscated were industries that belonged to the Somocistas (those close to former Nicaraguan dictator Anastasio Somoza Debayle), but had the participation of foreigners.''
The International Reconstruction Fund official stresses that 75 percent of Nicaragua's industry and 80 percent of its agriculture remain privately owned. About a dozen multinational companies are located in Nicaragua today, including Coca-Cola, Nabisco, Penwalt, and the Shell, Esso, Chevron, and Texaco oil companies, he says.