In her first appearance as U.S. Ambassador to Nicaragua, Phyllis Powers told the Nicaraguan-American Chamber of Commerce (AMCHAM) this afternoon that it will be difficult for Nicaragua to get another extension on its property and transparency waivers and that U.S. remains very concerned about the state of the country’s representative democracy.
“The ambassador was diplomatic, but direct and strong in her message,” says Yalí Molina, president of AMCHAM, following today’s luncheon with the new U.S. ambassador. “I think everyone was a little surprised with how direct she was. I think this is going to be the beginning in new phase in the relationship between the U.S. and Nicaragua.”
Molina says Powers’ message to AMCHAM was—in no uncertain terms—that the U.S. government is very concerned with issues of transparency and democracy in Nicaragua, as well as a new series of property confiscations against U.S. interests. The AMCHAM president said the impression that everyone got after listening to Ambassador Powers was that “the U.S. is not satisfied with Nicaragua’s compliance on the waiver issues” and that they probably won’t be extended beyond July.
“We’ve been warning about how catastrophic this could be for a while,” Molina said. “But the ambassador was clear that the U.S.’ support for the people of Nicaragua will continue.”
According to U.S. law, the U.S. government is not allowed to provide bilateral aid to any country whose government has confiscated properties belonging to U.S. citizens. In the case of Nicaragua, the U.S. government circumvents the restriction by extending an annual property waiver every July. The waiver allows Nicaragua to continue receiving U.S. aid as long as it continues to make progress resolving the pile of pending U.S. citizen property claims from the 1980s.
Over the past 18 years of the waiver program, the Nicaraguan government has resolved some 2,740 U.S. property claims by indemnifying the rightful owners, spending hundreds of millions of dollars in the process. With clear progress being made, the U.S.’ extension of the property waiver became a rubberstamp approval from Washington every year.
This year, however, there is serious concern—for the first time in more than a decade—that the U.S. might actually cancel the waiver. Gonzalo Gallegos, the U.S. Deputy Assistant Secretary for Caribbean and Central American Affairs, said in an interview March 31 with Confidencial that the U.S. Embassy has registered 10 new confiscations of U.S. citizens’ properties in the past year alone.
In addition, the Sandinista government and the U.S. government don’t seem to agree on how many old confiscation cases remain pending. The U.S. government claims there are 383 old cases pending while the Sandinista government says there are only 178.
If the waiver gets canceled, it would put Nicaragua in a very difficult position. The U.S. would immediately cut-off all bilateral aid to Nicaragua and would also pressure the World Bank and Inter-American Development Bank to deny future loans to Nicaragua, potentially damaging the country’s otherwise solid working relations with international-lending institutions.
The U.S. government has not yet announced its official position on the waiver issue, but the messages from Powers and Gallegos seem to be preparing Nicaragua for bad news.