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Cosep: Dialogue with Daniel Ortega Only If Agreements Are Met

Michael Healy: Cosep won’t negotiate on economic issues without reforms endorsed by national political leaders, the OAS and the EU.

The Superior Council of Private Enterprise (Cosep) is considering a return to the negotiating table. They’ve stated they might be willing to enter into dialogue with Ortega to discuss economic issues. However, affirmed Michael Healy, president of the business association, they’ll do so only if certain conditions are met.  They’re challenging the administration to offer clear signals of a desire to resolve the problems Nicaraguans are suffering.

Up until 2018, the large business owners had a privileged seat at the table with the government. That alliance began to crumble when it became impossible to reach agreements about appropriate Social Security quotas for employers.  It shattered definitively as a consequence of the armed violence the Ortega administration unleashed against protesters in 2018. At that time, the regime violently attacked citizens demanding democracy and justice in the April rebellion.

“Until the government takes the initiative, beginning with fulfilling the March 2019 accords, Cosep won’t sit down with them. We won’t negotiate economic issues. If the government demonstrates their willingness to realize an electoral reform”, Healy noted, an opportunity could be opened. Such a reform, he stipulated, must be acceptable to all parties and guarantee appropriate conditions. This would then need to be evaluated previously by the 26 individual business chambers.  

The basic theory, sustained across all opposition groups, is that “without sociopolitical agreement, there can be no economic stability.” Healy took this issue up. The first step would be the releasing all the political prisoners. Second, he demanded the fulfillment of agreements signed in March 2019. These agreements included reactivating citizens’ Constitutional rights and guarantees, and an end to the police state. They also restore freedom of mobilization and of the press, among other things.

In addition, “There must be an electoral reform. This reform must be endorsed by the country’s chief political and social figures, and also by the OAS and the European Union.” In that way voters can be sure that their ballots will be counted. That way, “the results will be accepted by all. So that there can be a government focused on restoring our rights (…) and repealing the repressive laws that violate human rights.”

The latter refers, among other things, to the law establishing life in prison, and the Foreign Agents Law. The latter limits candidacy for public office.

Economic demands for a possible dialogue with Ortega

On strictly economic issues, the head of the large business association had several specific demands. He asked the government to revise recent reforms made to the tax laws. He demanded an end to harassment tactics used by the Tax Department, the Customs Office, and the mayors’ offices.  These entities “take actions that harm companies.” All this leads to job losses, “when what’s needed is protecting companies and preserving jobs,” Healey pointed out.

Healy, also an agricultural producer, recalled that only 30% of the Nicaraguan economy is formal. He urged the government to find a way to increase the ability of companies to formalize their status. “That way, income is greater, there’s more infrastructure and the national economy is dynamized.”

Healy also demanded other changes, including “transparency in public investment projects”. He called for “an end to confiscations of media outlets. These properties were transferred to the Ministry of Health with no legal proceedings.” Similarly, he called for 29 producers to have their properties returned. Together, these producers had lost some 8,600 acres of productive lands to arbitrary confiscations.

“The confiscations send a negative message to foreign investment,” Healy stated. Foreign investment in Nicaragua plummeted from a record US $772 million in 2017, to US $470-500 million in 2020.

Given that the mechanism has been set in motion, the talks should also take up the new minimum wage increase. Healy stated that the private sector doesn’t have a defined proposal for this. He cited, however, the two variables that should be considered at the moment of such negotiations. These are inflation, which he calculated as over 3%, and the shrinkage in the GNP. Experts believe that Nicaragua’s GNP shrunk between -1.5% and -6% this year.

The Cosep president advocated for raising the ceiling for persons exempt from annual income taxes. He proposed moving the bar from the equivalent of approx. US $2,850 to $5,700. This, he claimed, would increase the amount of money in the hands of workers, increase consumption, and energize the economy.

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