Nicaragua’s new mutually beneficial relations with China

In the following interview with journalist Erving Vega, Laureano Ortega, the Adviser to the President of Nicaragua for Investment Issues, International Trade and Cooperation, provides an overview of the wide scale and broad reach of the cooperation between China and Nicaragua, since the two countries re-established their diplomatic relations in December 2021.

Laureano, who played a key part in the negotiations on resuming diplomatic relations, affirms that “it is important to frame where this cooperation comes from; first of all, we reiterate that this comes from the historical relationship of two brother parties, the Sandinista National Liberation Front Party and the Communist Party of China, and then, in an ideological and political affinity, of shared objectives.” He explains that Nicaragua fully supports all the important initiatives put forward by Chinese President Xi Jinping, such as the Belt and Road Initiative, Global Development Initiative, Global Security Initiative and Global Civilization Initiative, noting that: “In these turbulent times in the world, these proposals, that have emerged from President Xi Jinping give us a light, a hope, a path of hope, a guide on how to achieve fair development and equal and respectful treatment by the international community. That is very important.”

The interview was conducted the day after work began on a Chinese project to build 12,000 new homes for social housing in the Nicaraguan capital, Managua. This is just one of numerous projects agreed during a visit from the President of the Chinese International Cooperation Agency for Development, which “will give great benefits to the Nicaraguan people.”

Noting how China had previously provided Nicaragua with three million vaccines to fight Covid-19, along with respirators, materials for the neonatal sector and other much needed equipment, Laureano outlines other areas of his country’s collaboration with China, including donations of wheat and fertilizers, scholarships for Nicaraguan university students, cultural exchanges, renewable energy, telecommunications, infrastructure, mining, and fisheries. “We see that the Chinese comrades work as we do, with a deep sense of social commitment, with a deep sense of humanism, of humanity, and it is not only for mercantilist profit, but there is truly a work that is of mutual benefit: ‘If you do well, I do well too’.”

The two countries are making rapid progress on a Free Trade Agreement, which is expected to enter into force next year.

The interview was originally published in Spanish by Tortilla con Sal. This version was published in English translation by Chicago ALBA Solidarity.

Nicaragua’s Housing Program with China is Building 12,000 New Homes

Laureano Ortega: Yesterday we inaugurated the first phase of the Housing Program, which is a first step, a very significant emblematic step, because it is the first Social Benefit Infrastructure Program to be developed in Nicaragua, with the cooperation of the People’s Republic of China.

The first step I say, because during the visit of the Chinese International Cooperation Agency for Development we have reviewed a large portfolio of projects, so that the prospects for cooperation with them are very large and that will give great benefits to the Nicaraguan people.

Erving Vega: We are motivated by the interview precisely to learn or go into a little more depth about this visit. A large Chinese delegation headed by the President of the Cooperation Agency was in the country this weekend [April 15-16]. What did they talk about? What are the topics on the agenda? And in this context the inauguration or launching of the Project; I say huge because we are talking about more than 12,000 houses.

LO: That’s right. It is a huge Project for Nicaragua because everything, of course in its due proportion, historic because of what it symbolizes. But it is also enormous because of the benefits, the number of families that will benefit, the Decent Roof that our Nicaraguan families, not only in Managua, but also in Chinandega, Estelí, Rivas, Masaya, Leon, the cities that are part of the program that will be developed over the next few years, as it should be, with these infrastructure programs that also take time of formulation and execution, to make them well, to make them right.

EV: It was in the context of the visit, perhaps the most visible thing. Later on I would like to expand on what other topics were addressed and what other topics are part of the China-Nicaragua Cooperation Agenda; but let’s go deeper into the topic of housing because it is indeed enormous in size and enormous in terms of its benefits. The project starts with more than 12,000 houses in Managua, but it is national in scope?

LO: It is national in scope and, of course, with the participation of Chinese companies, which is also very important because we are now firmly establishing these commercial and business alliances between Chinese state-owned companies that have great importance, great weight in China and in the world, an important presence in Central America, now in Nicaragua. We no longer have to go through intermediaries, we talk directly with them thanks to this direct relationship, and it is a project that will have a very positive impact.

I wanted to make a little history because it is important to frame where this cooperation comes from; first of all we reiterate that this comes from the historical relationship of two brother parties, the Sandinista National Liberation Front Party, the Communist Party of China, and then, in an ideological and political affinity, of shared objectives, but also, above all, of a deep sense of humanity, of social commitment, of social justice, which is what both governments and both peoples are looking for.

We have reiterated and we have had the honor of sharing, of being present at the meeting of our President, Commander Daniel, our Vice President, Compañera Rosario, with Comrade Luo Zhaohui, and we have always firmly accompanied China in the defense of its sovereignty, of its territorial integrity, especially on the issue of Taiwan, which is such a sensitive issue.

Our President has clearly stated in the meeting that we support China and that Taiwan is inalienable territory of the People’s Republic of China, and that it has been illegally used as a U.S. military base. In fact, it has already been officially proposed, our President said it, Nicaragua has reiterated it today in its Message and Official Government Position at the Meeting of the Council of Foreign Ministers of SICA [Central American Integration System], that Taiwan should be expelled from SICA for being a US military base and not a State, and we welcome China to be an Observer Member of SICA, because it also has the recognition and Diplomatic Relations with most of the Countries that are Members of SICA.

EV: It was Honduras, wasn’t it?

LO: It was Honduras. So, the legal reason, the legal reason, the logical reason also, is that China has to be there as Observer and not Taiwan.

Then, I wanted to reiterate that we, the cooperation that we have been restructuring with China is also within the framework of the first Agreements that were signed, and this has been in record time, we can say it with pride. Because we re-established Diplomatic Relations in December 2021. In January 2022 we received the visit of Comrade Luo Zhaohui, who came on behalf of the Chinese Government to participate in the Act of Inauguration of our President Commander Daniel.

During his meeting we signed the Framework Cooperation Agreement between China and Nicaragua, we signed the Cooperation Agreement within the framework of the Belt and Road Initiative; we also signed and have assumed all the proposals of President Xi Jinping, such as the Belt and Road Initiative, the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative. All of this is within the framework of what China has called the Building of the Community of Shared Destiny.

We fully share this vision, as our President has said, we are convinced that this is the only way for the survival of Humanity. In these turbulent times in the world, these proposals that have emerged from President Xi Jinping give us a light, a hope, a path of hope, a guide on how to achieve fair development and equal and respectful treatment by the international community. That is very important.

We also remember that we were recently in China, we were with Minister Acosta, with Comrade Daniel Edmundo, Media Coordinator, and there we were in high-level meetings where we were able to exchange on all these programs, these projects. We had meetings with the Chinese Trade and Investment Council, with the Ministry of Commerce, of course with the Chinese Foreign Ministry, with the Chinese Communist Party, with the Cooperation Agency, with the President, Comrade Luo Zhaohui, we saw him there in Beijing and we talked about all this which was later reaffirmed here during his visit.

And of course we had the Conclusion Meeting with the State Councilor, Comrade Wang Yi, who is the Director of the Department of Foreign Affairs, who is in charge of all the foreign affairs of the Communist Party of China.

So, that was a visit that allowed us to structure this work, to give a corresponding follow-up to the proposals, to land in terms of how they should be formulated, under what schedules. And then, as we were making progress in these last two months with the development of the beginning of the work for the First Phase of the Housing Program, we had the good news that the President of the Chinese Agency, Comrade Luo, could accompany us, and now we had him for these three days.

He came with a delegation of four specialists who accompanied him from the Agency, and during our meetings which were extensive, it was with a large team of our Government, we were able to review several sectors in which we will be formulating projects with the Agency and which are of broad positive impact for the Nicaraguan people, Development Projects, Projects for Life, Projects for Health, Projects for Education, Road Infrastructure Projects, Electrification Projects, Water Projects.

So we are talking about Humanitarian Cooperation, which will allow us to link up more, which will allow us to have access to those Programs they have for assistance, cooperation and credits, and which will also allow us to insert more Chinese companies in Nicaragua. This is very important, because the participation of state-owned Chinese companies with great experience, of great capacity, gives us the opportunity to link up with Nicaraguan companies, to create these business alliances, and we can strengthen the capacities of Nicaraguan companies through the transfer of technologies, transfer of knowledge, exchange of personnel, and all this is a very enriching experience for us.

EV: There are quite a few issues on the table in the China-Nicaragua Cooperation; the housing project has already been inaugurated. What can we expect in terms of moving forward?

LO: This is also important to mention, because we inaugurated housing, but we cannot fail to mention that we had already received a Solidarity Cooperation from China, from the Cooperation Agency. We received three million vaccines to face the COVID, from the Chinese Cooperation, just weeks after reestablishing relations.

In fact, the plane in which we returned already had the first shipment of vaccines and then the first million vaccines were completed with some additional ones and then came two million more. This has allowed us to successfully face the Coronavirus, so that Nicaraguan families are protected with the Vaccination Days carried out by the Ministry of Health. An additional two million vaccines are on their way.

This is an extraordinary cooperation for us and exemplary in the whole world, because China has been the most supportive country in the world with regard to the Coronavirus issue, and we acknowledge and are deeply grateful for it.

They also sent equipment and materials for the Ministry of Health, always within the framework of the battle against the Coronavirus. They sent respirators, they sent this type of equipment; and also for the neonatal sector they sent equipment, materials, and reinforcements of materials for the Health Personnel; so this has also been very important.

We had the delivery of equipment and materials for the National Police, we had that act; and these equipment and materials come to reinforce the capacities to continue giving tranquility, security and peace to the Nicaraguan people.

And then, in the midst of the natural disasters when we had the last hurricane, they also gave us the cooperation to SINAPRED, they gave a donation through the Embassy of the People’s Republic of China here in Nicaragua.

We are also waiting to complete donations of wheat, donations of fertilizers that come from China, through the CIDCA Agency, and that will also serve, as we have established with other sister countries, these Donation Programs also serve as a showcase for the promotion of products.

So we hope that all these Chinese products will also have a greater presence in the Nicaraguan market; they come through mechanisms of donation, assistance, cooperation, and then those Chinese companies that are the producers can settle in Nicaragua, establish their offices, establish their sales points, and in Nicaragua have a greater presence not only in Nicaragua but regionally.

We, as always, promote ourselves as the Central American platform for our Country, Brothers of the People’s Republic of China.

I also want to conclude with the cooperation that we have established, very important in these times, the media battle, which is the cooperation with the China Media Group, which also a few days after the reestablishment of diplomatic relations opened its Bureau here in Nicaragua, its office for Central America. We have also had Trainings, Forums, Seminars, in which we are actively participating.

We have received scholarships for Nicaraguan university students who are studying there. And also the cultural exchanges.

We have had the presence of the Ambassador of the People’s Republic of China, Comrade Chen Xi, in several acts where they have delivered instruments for the Student Orchestra Program carried out by the Ministry of Education and the Ruben Dario National Theater. We have been there with Comrade Salvador Vanegas, Comrade Ramón Rodríguez, delivering those instruments.

We are also cooperating in the area of Cinema and Television. We have organized a Chinese Film Festival with the National Cinematheque. We are promoting the presentation of audiovisual material in the Nicaraguan Channels.

We also continue working within the framework of the Alliance for Music Education in the Belt and Road, which has been proposed by the Chinese Embassy, we have assumed it from the Rubén Darío National Theater; we have already sent our Letter of Request to be part of that Alliance. So cooperation in all these fields is on an excellent path, this is good news for the Nicaraguan people, because it is a great opportunity to continue strengthening the bonds of brotherhood between our peoples.

EV: This is the Cooperation Component, you also mentioned the investment issue. What opportunities are opening up for Nicaragua in this framework of China-Nicaragua relations?

LO: Exactly. That is very important. We have been working with the CIDCA Agency, which was recently here with that very successful visit, on the Development Assistance Projects, where we have already talked about the Housing Infrastructure Projects, Housing; Water and Sanitation; the ENATREL Thermal Plants which were announced and we signed the first Agreement for the Feasibility Studies; Technologies for Education, Road Infrastructure, Health Infrastructure, Electrical Infrastructure.

And this leads, as I was saying, to the settlement in Nicaragua of large Chinese state-owned companies that are also part of the development and implementation of these projects. Because we have to be very responsible, we are a country that executes the Project Portfolio very well and this is carried out under the coordination of Minister Iván Acosta, who does an excellent job of coordination so that we maintain our level of budget execution, and also of repayment of debts before the financing and credits, which we have an excellent record.

This allows us to present to Chinese banking institutions, to the Chinese Cooperation Agencies, that Nicaragua can assume public financing, but we also promote financing for public-private and private projects, and there it is a matter of promoting investments and trade. And through the presence and participation of these Chinese companies in public projects, we awaken their interest in the sector of investment projects in our country, because they are companies that have great capacity and also know operators.

EV: Are there already areas of interest?

LO: There are already very specific areas of interest, we are talking right now about investments that will be developed in the coming years in Renewable Energy Projects, which is a priority sector for us. Because our objective is to lower, to reduce the tariffs of the end user, of the Nicaraguan people, of the cost of energy. We are talking about Photovoltaic Energy, where the Chinese have a great strength; Hydroelectric Energy, Wind Energy.

We are also talking about Telecommunications, as I mentioned before, we have here the very strong presence of the Huawei Company that has been working on the development of Projects. And also Infrastructure Projects, Mining Projects, Fishing Projects where they are very interested, we already have some companies exporting products.

Thank God we have the work done very efficiently by IPSA and the Nicaraguan Ministry of Commerce, to facilitate the Agreements that allow us to export meat products, aquatic products to China. These agreements are practically ready and, as has been mentioned in the media, some Nicaraguan companies are already starting to export aquatic products to China, which is very important.

And there is a very strong interest of the Chinese companies to install their own capacities here in alliance with the Nicaraguan companies, to strengthen the capacity of the Processing Plants, the Processing Extraction Plants, so that they can have a greater presence in the Chinese market.

Now, all this takes an important work of access to financing, financing for Public Projects, financing for Private Projects, and we have managed to establish, after the visits to Beijing, direct contacts with the Export Bank of China, with the China Development Bank, the CDB, with the Bank of China also, which has offices in Panama. And now we have, we can say, a direct relationship that is managed by our Ministry of Finance in which we are already in the process of formulating and structuring financing for the Project Portfolio. This is quite a wide range.

EV: Is there any estimate, projection, that when all this starts to be implemented, what would be the average and how would this affect foreign investment?

LO: We have as a Country objective, as a Country Strategy, and we have been working with our Minister Iván Acosta, to count on China as the main financier of Projects in Nicaragua because of their capacity to do so, and us, because we also have the capacity and the responsibility to execute them, and also because Chinese companies are very fast, and we respond with the same efficiency, with the same speed and with the same responsibility.

So we have found a very similar way of working, we have a very good synergy, in which we have extremely fast response times and I think that allows us to have this amount of success in such a short time, because everything we are structuring in such a short time is really something historic for Nicaragua.

The prospects of what is going to be developed in the coming years is something extraordinary, which fills us with great hope, and thanks to that special attention, because this also requires special political attention from the highest level of the Government of the People’s Republic of China and they are giving it.

There have been virtual meetings between our President and President Xi through participation in Forums, and we have also had exchanges of letters between Presidents, exchanges of letters between Foreign Ministers. There is a quite dynamic, permanent communication and special attention. And this allows the Ministries, the Institutions to execute what our Leaders, our Presidents, mandate.

Talking about figures at this moment is not the right thing to do, because we have to finish formulating each one of these initiatives in terms of real costs, each technology is different, has its own costs, so we have to be prudent and responsible with them too, so, for the moment what we can talk about is the perspectives of the Projects, of the Programs, of the sectors, and that, without any doubt, we will see great positive impacts in our Country.

EV: Now, Nicaragua in its vision of development has great Strategic Projects, the Canal, the Deep Water Port. What other opportunity do we have?

LO: Well, in reference to the Port, we already have a very positive progress with the Central American Bank for Economic Integration and we hope to start construction next year, and that goes hand in hand with everything we are seeing here, because we are going to build roads, we are going to build more energy capacity, we are going to build the facilities that allow a Port to operate efficiently, and if we talk about a Deep Water Port in the Caribbean it is a very serious thing, and then our Port in Corinto. We have, of course, the objective of then linking both Ports through a railroad.

All these are discussions, programs, projects that are being proposed with companies from all over the world and of course with companies from the People’s Republic of China and we hope that there will be an active participation through international competitions where all the companies of the world can participate, and we know that China has a great capacity, a disposition also through its companies and we hope for an active participation.

EV: On the subject of trade what we are waiting for is the signing of the Free Trade Agreement. How advanced is the negotiation? Laureano already mentioned in the first part of the Program all the opportunities that are opening up in terms of Cooperation, and what has been the Chinese Cooperation since the reestablishment of relations, in a short time, quite a lot, right?

LO: Quite a lot, quite a lot! We also want to give special thanks for the work that the Embassy of the People’s Republic of China has been doing here in Nicaragua, Comrade Chen Xi, the Ambassador and his entire team. We have a permanent, daily, permanent contact, hour by hour we are there exchanging messages, exchanging emails, because the work is intensifying, that is an excellent sign that we are making progress. We want to acknowledge that he has done an extraordinary job, a special attention to our country.

And also to our Ambassador in Beijing, Mr. Ian Coronel, who is also there holding countless meetings with companies, with institutions, to continue strengthening all the efforts that we have been making here in Nicaragua and that everything has a successful process.

EV: The expectations, apparently of the Nicaraguan people in general, regarding the China-Nicaragua relationship, both in terms of Cooperation, Investment and Trade, are very high. Even, when one reviews the polls, the most recent survey of the future perspective of the Nicaraguan is with optimism and hope, based on the opportunities that this type of scenario opens. On the subject of investments, you also made a summary.

LO: I think that what you are mentioning is important, that factor of optimism that it generates in the Nicaraguan people, and I think it has to do with two elements: One, it is obvious that China is an enormous market, that it has the largest population in the World, that it has great strength in terms of purchasing power, a population that thanks to the development system that they have implemented has greater purchasing power, they have managed to reduce Extreme Poverty which is an extraordinary achievement and the whole World recognizes it, and it is a great example of what is achieved through Socialism. This is an obvious factor that is there.

It also generates great optimism because we see that the Chinese Comrades work as we do, with a deep sense of Social Commitment, with a deep Sense of Humanism, of Humanity, and it is not only for mercantilist profit, but there is truly a work that is of mutual benefit: “If you do well, I do well too”.
This is very important because this is what they work on in reference to the concept of the Community of Shared Destiny, the World is for everyone, we have to share it in a responsible way, and it is a relationship based on mutual respect. That is something very important and that is what, in general, I believe, gives us a great aura of optimism in terms of our relationship.

Now, we are following this successful path of promoting Cooperation Projects, Investment Projects; the relationship with the Banks, the relationship with the companies is very important. We also have one of the fundamental pillars in what is the strengthening of Nicaragua’s economic capacities, and that is the promotion of trade, and thanks to God, in record time, and thanks to the political attention given by the Chinese Government to the relationship with Nicaragua, we have also advanced in the negotiation of the Free Trade Agreement.

Our Minister Jesús Bermúdez is in charge of this negotiation from the Ministry of Industry and Commerce, he has a large team that has been developing the negotiations efficiently with a Chinese team that also responds in the same way, in a very positive negotiation environment, seeking the best for both parties.

With that we achieved the Early Harvest Agreement, which has already been signed, which, like any agreement, had to go through its internal procedures in Nicaragua, internal procedures in China, to achieve its approval. We understand that they have already been fulfilled and we hope that this Early Harvest Agreement will enter into force in May, which is great news for us because these benefits will start to be applied.

And we expect the Free Trade Agreement to finalize its negotiation very soon, in the next few months, and that it can enter into force this year or at the beginning of next year. That will also be something extraordinary for us, it will give us the opportunity not only to place more products in China but also to bring more products from China.

Currently China is the third most important market for the origin of our imports here in Nicaragua, and we believe that through the signing of the FTA it will become the first most important market from which we import products, and that is very good because we will also have products that are more accessible to the Nicaraguan people, and then, of course, the placement of more Nicaraguan products in that great Chinese market.

Historically, Nicaraguan companies, businessmen have only looked towards North America, some European countries, but we believe that the future is looking towards China, towards Asian countries in general, and that is where we can go; all Nicaraguan products are basically consumed in those markets.

EV: Is the negotiation expected to be concluded this year?

LO: We hope so. It is very advanced, I would even say that in the next few months, it won’t even take us the whole year, and that will allow it to enter into force once, I repeat, once the internal procedures that China and Nicaragua must comply with are fulfilled, and that must be ratified by the Assembly, that must be ratified by the corresponding Authorities for it to enter into force.

This is excellent news, and I also believe that it is very important to see that we should be working with a long-term vision, a broad vision, in which we must pay attention to the transformations that are taking place in the world.

EV: Everybody wants to sell to China, right?

LO: Yes, but we also see that there are Strategic Alliances that are being formed and strengthened between China, Russia, India, the Arab countries, that is the market of the future where Nicaragua has to see that there is a great opportunity where we have excellent diplomatic relations, where we also have an affinity, where we have brother countries, where we have countries that work based on respect and not on imposition, as has historically been the position of the United States, which although it is true that it is an important trading partner for Nicaragua, but it plays with the economy to harm other countries.

And in this case we see here a front of brotherly countries that have strengthened their position in the world economy making this block so strong and where Nicaragua, we believe that companies, entrepreneurs should have their attention, their sights set, and we invite, continue to promote that companies from all these countries come, especially from the People’s Republic of China, to see the opportunities that exist in Nicaragua to make investments, to establish strategic alliances with Nicaraguan companies.

And we have said it here with you several times, Nicaragua maintains all those benefits, incentives that exist in our legal framework which is very open to foreign investment; otherwise, how can you explain that in the midst of so much aggression from the United States, U.S. companies continue to invest? Because the legal framework is very clear. The government is responsible, we work well, we work efficiently, we fight corruption, not like previous governments here in Nicaragua, who lived off corruption, we fight corruption and we carry out policies and projects that benefit our people.

EV: Laureano, you spoke of a block of important countries, China, India, Russia and others. This is the majority of the world and well, we are talking about the number of population, of consumers. What is the advantage for countries like Nicaragua, taking into account that they surely represent a challenge as well, because do we have the volumes that this market is demanding?

LO: No, we do not have them, we do not have the volumes and that is precisely an opportunity, because that means that they can come and we are already making those contacts so that Chinese businessmen, Russian businessmen, businessmen from these countries, Iranians, can come to Nicaragua and see that there is still a lot of land to produce more in Nicaragua, that there are still many opportunities to produce all kinds of products that they consume.

They can even bring genetic material of products that are not native to Nicaragua, as experiments have already been done with INTA in our country, and here they are planted, here they are produced and taken to that target market, and then there is that opportunity.

Right now the amount of products we have is limited, that is true; with the policies of our Government, the special attention we have through the System of Production, Consumption and Commerce we guarantee and take care of Food Security; that is, that what Nicaragua produces is first of all for the feeding of the Nicaraguan people and that must always be guaranteed, the supply of products in the market for national consumption.

But we have the surplus that allows us to sell to the United States, to sell to Mexico, to sell to Central America, to sell to Europe, to sell to China, to sell to all the countries of the world, in quantities that are still rationally small but proportionally important for the Nicaraguan economy.

And here what we see is that there is a good opportunity for them to see that if they come with the capital, with the technology, they can establish their own companies or ally themselves with Nicaraguan companies, establish those partnerships and produce from Nicaragua any type of product, whether it is food, manufacturing or technology product, and take it to that market, which can even be the Central American market, I repeat, Nicaragua as a Central American platform and through the agreements we have to sell even to the United States, to Europe.

But we know that there is a huge demand for products in Asia, particularly in China and in the rest of the Asian countries, so this could be a market that without any problem could bring all these products at market price and we as Nicaragua could obtain these benefits.

EV: Thank you very much, Laureano. Just to recap a little bit, then, the prospects in terms of the negotiation of the FTA with China, is that it will be concluded in the next few months and the internal approval process will begin in each country, to enter into force next year.

LO: That’s right, God willing, but not until next year, and for us that is already one of the main successes that we are going to mark in the history of the bilateral relationship between China and Nicaragua.

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