National Assembly Approves Alternative Trade Accord with Venezuela

March 28, 2007
Managua, Nicaragua

Nicaragua's National Assembly has approved an alternative trade accord with Venezuela, a move that could usher in $20 million dollars' worth of credit for the country's agriculture, energy, and finance industries. The vote is a strong sign that whatever the political differences with Venezuela's fiery president, Hugo Chavez, further cooperation with the oil-rich country is widely viewed as good for Nicaragua's economy.

Out of the 99 representatives, or diputados, in the Assembly, there were 78 votes in favor, several abstentions, but only one vote against the pact. The agreement is part of the Bolivian Alternative for the Americas, or ALBA, a trade accord that Cuba and Venezuela first started as a way to replace the economic dependence on the United States. Despite President Daniel Ortega's closeness to Chavez, the Sandinista leader continues to pledge his support to the U.S.-led Central American Free Trade Agreement. 
 
The dueling allegiances have so far proven beneficial to Nicaragua. The United States continues to pledge millions in aid, and the friendly relations have allowed the once warring countries to maintain an open trade border with American consumers, the largest market for Nicaraguan exports. Meanwhile, the Sandinista-led government has been able to access Venezuela's politically-motivated generosity, a friendship that more conservative Nicaraguan presidents couldn't count on.

The growing closeness to Chavez provokes concerns for the future, but the relationship has resulted in some clear gains for businesses and the tourism industry. Venezuelan shipments of discount oil and emergency generators, for example, have all but eliminated the blackouts that plagued the country this past summer. 

As long as Nicaragua doesn't fall too far into Chavez's orbit, even conservative economists here, such as Jose Luis Medal, predict that the economy could grow by 4.8% over the next couple of years. That's good news.

Your Latin America Editor,

Suzan Haskins
in Nicaragua for International Living

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