When Nicaragua ratified the Central American Free Trade Agreement (CAFTA) one year ago, it joined its Central American neighbors in taking the next step on the path to building a prosperous society of opportunity. This agreement deepens the strong partnership between the United States and Nicaragua, as well as its Central American neighbors.
Nicaragua has made great strides. Nicaraguans can be proud of how they have struggled to shed the violence and battles of the past, and how they have fought against corruption and turned to open markets, democracy and the rule of law. On November 5, Nicaraguans have an historic opportunity to cast a vote for real reform and continue with the positive momentum of the last decade.
It wasn't so long ago that neither CAFTA nor the Millennium Challenge Compact (MCC) would have been possible for Nicaragua, but the Nicaraguan people, like their counterparts in other Central American nations, have worked their way to this moment. In CAFTA and the MCC program, Nicaraguans embraced the notion that fostering real democracy, raising living standards and promoting real business investment offer the best opportunity to expand social justice in the form of jobs, better education and health care. Harnessing this opportunity, and achieving long-term success in attracting investment, creating jobs, and reducing poverty, depend upon the country's ability to capitalize on the hard work already done: sticking with economic reforms, maintaining macro-economic stability, resolving property confiscation cases, establishing an independent judiciary committed to the rule of law, and continuing the opening of the economy to foreign trade. Success will strengthen not only Nicaragua, but Central America as a whole.
The United States accounted for roughly 34 percent of Nicaraguan exports for the first half of 2006, meaning tens of thousands of Nicaragua jobs are linked to trade with our nation. CAFTA will expand those opportunities even further. Since the agreement was enacted, U.S. imports from Nicaragua have grown by 33 percent. U.S. direct investment in Nicaragua already makes important contributions to the economy in sectors such as energy, financial services, manufacturing, tourism, and fisheries. Seventeen percent of Nicaragua's GDP comes from the $850 million in remittance monies sent home from abroad, the majority coming from the U.S.
The United States has made its commitment to working in partnership with a democratic Nicaraguan government that governs justly, invests in its citizens, and encourages economic freedom. To that end, the U.S. and Nicaragua signed a five-year, $175 million Compact July 14, 2005. The MCC will reduce poverty and spur economic growth by funding infrastructure and rural development projects in the regions of Leon and Chinandega. These projects will help reduce transportation costs and improve access to markets for rural communities; increase wages and profits from farming and related enterprises in the region; and increase investment by strengthening property rights. The U.S. was the driving force behind winning billions of dollars of debt relief for Nicaragua.
Standing in contrast to all this vital progress are two former presidents --one a convicted criminal and the other a former dictator. Arnoldo Aleman is guilty of stealing hundreds of millions of córdobas from the Nicaraguan people. Daniel Ortega was responsible for the 13,500 percent hyperinflation, high unemployment, food shortages and stunted economic growth of the 1980s. Ortega and Aleman's corrupt pact has threatened democracy and good governance. Standing against the "pact" are the people of Nicaragua, who in a groundswell of peaceful grassroots activism are strengthening their civil society. They wish to help build a future free from the corruption, violence and bad governance that defined the past.
Friends must be honest with one another. Progress with CAFTA and progress with the MCC will be endangered should anti-democratic forces prevail. On November 5, Nicaraguan voters are being asked to make an historic choice when they go to the polls. In exercising their vote, they will be presented with an opportunity to follow the path to opportunity, accountability, and real social justice. But to do so, they must reject the politics of corrupt and discredited caudillos who robbed Nicaragua of its prosperity and who still pose a threat to the bright future that Nicaragua has before it today.
The United States believes that democratic and economic reform, coupled with growth-oriented development and free trade, will make the blessings of freedom real for the Nicaraguan people. We stand ready to work with a democratically elected Nicaraguan government committed to governing democratically and in the best interests of Nicaragua's people.
Source: U.S. Department of Commerce
