Rosales resigns as Central Bank chief

Respected Central Bank chief gets replaced by finance minister in a shakeup that has some people worried about the direction of the economy

Economists, politicos and business leaders are offering mixed interpretations of Tuesday’s unexpected shakeup in the Central Bank, and wondering aloud what the managerial move might mean for the country’s macroeconomic stability and dubious democratic institutionalism.

The private sector is urging the new guard to avoid any partisan tomfoolery or other herky-jerky behavior that would denigrate Nicaragua’s Central Bank or betray investor confidence in the forwardly creeping economy.

On Tuesday morning, President Daniel Ortega passed a decree from his bunker naming Finance Minister Alberto Guevara the new president of the Central Bank. Guevara, whose nomination was sent to the Sandinista-dominated National Assembly for a rubberstamp imprimatur, will replace Antenor Rosales, who resigned Tuesday morning after several days of rumors that the presidential couple was readying the guillotine for him.

Rosales, whose five-year tenure as head of the Central Bank was universally praised, reportedly bowed out due to “personal reasons”—which in politics is usually euphemistic jibber-jabber meaning he was pushed out the door with his pockets hanging out and told not to touch anything until he reached the street.

Alberto Guevara ( R) signs a recent loan with the World Bank (photo/ Tim Rogers)

Rosales allegedly had a falling out with President Ortega last week, when the Central Bank boss publically challenged the Sandinista chieftain’s plans to move 1% of Nicaragua’s international reserves—roughly $17 million—into the coffers of the upstart Bank of ALBA, or BALBA. Rosales, a former Sandinista military coronel, said only the Central Bank has the authority to decide how the country’s international reserves are managed. He said the fate of the national treasure wouldn’t be influenced by “the personal whims” of anybody—especially those with a proclivity for whimsicality.

Ortega apparently didn’t like being reminded of the residual institutional separation of powers that exist between the Central Bank and executive branch. Less than a week later, Rosales—perhaps the most respected official in the Ortega government and a key factor in the government’s economic success—was left without a job.

Guevara, meanwhile, insists the Central Bank will continue forward on the same path under new management.

“We are going to keep doing what we’ve been doing,” the Chilean-educated economist said, before darting away from reporters with dutiful Sandinista evasiveness.

José Adán Aguerri, president of the country’s largest business chamber, COSEP, expressed concern about the Central Bank cleansing.

“Governments shouldn’t aspire to have functionaries who are marionettes,” Aguerri told La Prensa. “A government needs officials who are first and foremost dedicated to the country, secondly to the institution they work for and in third place their political party.”

Indeed, Rosales was a shining—and worrisomely rare—example of an independent-minded government official who was not afraid to show his party colors when appropriate, yet smart enough not to wear his Sandinista neckerchief so tight it cut off oxygen to his brain.

The opposition thinks Rosales’ ouster smells like graft-in-the-works.

“The core issue here is that that the government wants to nationalize the debt that ALBANISA (a private Sandinista cooperative) has with Venezuela,” charges opposition lawmaker Eliseo Núñez, member of the National Assembly’s economic commission. “The problem isn’t about using money to capitalize BALBA, rather what is behind that move. And what’s behind it is an attempt to try to legalize the debt that ALBANISA—not Nicaragua—has with Venezuela.”

Since Ortega returned to power in 2007, the opposition has worried that Nicaragua will be left holding $2-billion-plus bar tab from Venezuela once the Sandinistas’ bacchanal is over and everyone stumbles home with a hangover.

Venezuelan aid, which has been managed by the Sandinista government with the same transparency that a teenager uses to manage his stash of pot, has never entered the Nicaraguan budget and never been approved by the foggy-headed National Assembly. That means Venezuelan largess shouldn’t legally count as Nicaraguan debt, which is exactly why people who understand this country are worried that that’s what’s happening.

Guarded optimism

Others in Nicaragua’s business community are maintaining guarded optimism that Guevara’s promotion was the best move the government could have made, short of doing nothing at all.

César Zamora, vice president of the Association of American Chambers of Commerce in Latin America (AACCLA), says of all the possible changes that Ortega could have made in the Central Bank, the appointment of Guevara should “make the least amount of noise.”

“This was the best option he had,” Zamora told The Nicaragua Dispatch.

Zamora notes that the shuffle from finance minister to Central Bank headman is a routine slide in the government, considering both posts have similar responsibilities.

“It’s the other face of the same coin,” Zamora said of Guevara’s desk-switch.

Mario Arana was the last guy to do the macroeconomic two-step from finance minister to Central Bank ringleader during the Bolaños administration. So perhaps it should come as no surprise that he’s also taking the news with a minimum amount of huff.

“Alberto Guevara has been a key part of the economic team of this administration, and he has quite possibly had the most central responsibility, which is to maintain the budget deficit in check,” Arana told The Nicaragua Dispatch. “And he has done it with responsibility. So I hope that’s also the scenario in the Central Bank—one of continuity.”

  • Alixe

    Tim, you are so funny! I love the way you write. The article is good in spite of the news it carries being bad. Good job.

  • Concerned

    Likely good news for tourists who’ll be getting 30 cordoba for one dollar US if this kind of behaviour continues.

    Play games with reserves and off balance sheet loans and watch exchange rate get hammered. Greeks played this kind of game and look where it got them. Nicaragua hasn’t the shelter of euro partners stepping in to provide a ‘bail out’.

    Nicaragua needs major investment from outside to fund the change over to hydro and thermal electrical generation and those investors will be looking for solid responsible management from any Government looking to borrow that kind of money.

  • Mahmoud

    I agree with Alixe. Always frighteningly entertaining. Good job T-bone.

  • Rita Lugo

    Ya esta confirmado el porque de la auto renuncia del Capi Antenor Rosales como jefe del Banco Central de Nicaragua: Viene un corralito a como sucedió en la Argentina. Por mas elecciones que se robe Ortega, en realidad no tiene ningún poder y mas bien todo lo contrario: la gran mayoría del planeta tierra le tiene asco y aversión a Ortega.
    Chavez no tiene la capacidad de substituir con petrodolares la demanda que viene de retiros de dolares en Nicaragua. Ahora se darán cuenta todos los nuevos ricos Orteguistas lo que significa volverse los nuevos pobres, aunque canten mas y mas duro: que vivan los pobres?

  • Jaime Silva

    Operación Berta 2.0!! That is the near future of Nicaragua!!