Ortega has hitherto preserved ties with big business as a result of booming exports and foreign investment receipts, and his refusal to touch tax reform. On 12 July, the private sector lobby, Consejo Superior de la Empresa Privada (Cosep), and the national microfinance association (Asomif) issued a joint statement demanding a “firm response” from the government in relation to a revival of unrest staged by the ‘No Pago’ movement across the country over the past month.
Initially stirred up by Ortega himself in June 2008 when he backed protests by debtors against the micro-finance institutions (MFIs) – although he has since distanced himself from this stance –, the main complaint of the ‘No Pago’ movement is that MFIs, whose gross loan portfolio is some US$538m, including funds from savings and credit cooperatives, according to a 2011 report from the think tank Funides, charge interest rates that are too high, leaving borrowers swamped by unmanageable debt.
According to a leader of ‘No Pago’, Omar Vílchez, 13,758 debtors owe US$43.9m of overdue debt to the Nicaraguan banking system. One of his proposals is that those who owe more than US$10,000 (1,788 people, whose total debts come to US$24.5m) should have their debts restructured at a “symbolic rate of interest” over a 10-year period.
The Asomif-Cosep, however, complain that since 2008 uncertainty caused by the actions of ‘No Pago’, together with the economic crisis, resulted in losses of US$80m from foreign donors. They argue that a further US$300m earmarked for the current agricultural cycle is currently at risk.
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