The private sector of Nicaragua will lose its second largest bilateral donor in the last five yearsafter the breaking of diplomatic relations caused by the regime of Daniel Ortega with the Netherlands.
Between 2017 and 2021, this European country granted private sector companies some 175 million dollars in loansaccording to data from the Central Bank of Nicaragua (BCN).
Loans provided by the Netherlands Entrepreneurial Development Bank (FMO) were aimed at companies in the energy sector, the manufacturing industry, financial intermediation and othersaccording to the external cooperation reports of the BCN reviewed by CONFIDENTIAL.
The FMO details on its website that the loans financed for Nicaragua were destined for companies, microfinance institutions, and NGOs, such as: Polaris Energy Nicaragua, MLR Forestal de Nicaragua, Comercializadora de Maní, Financiera Fama, Fondo de Desarrollo Local, Nitlapan-UCA, Seeds for Progress Foundation, among others.
A private businessman highlighted the advantages of loans from the Dutch Business Development Bank, which although they are not concessional like those obtained by the Government, they are long-term and are not proper business loans.
The regime justified the rupture by accusing the Netherlands of a supposed “colonialist position” and “interventionist”, and for the unfulfilled promise to co-finance the Nuevo Amanecer de Bilwi Regional Hospital, a decision that the dictator Daniel Ortega described as “human misery”.
The public sector stopped receiving donations from the Netherlands since 2018when the authorities of this country expressed their concern about the human rights violations —committed by the regime of Ortega and Rosario Murillo— during the civic protests of that year.
According to cooperation reports, donations to the public sector were permanent. Between 2007 and 2017, 103.8 million dollars were donated. Meanwhile, the private sector received donations for 44.7 million dollars, between 2007 and 2012. At the time of suspending relations with the Netherlands, the cooperation was exclusively for loans for the latter sector.
Millionaire Dutch cooperation to the Ortega Government
Total, The Netherlands contributed 582.3 million dollars to Nicaragua from 2007 to 2021. Of these, 478.5 million dollars were delivered to the private sector: 433.8 as loans and 44.7 in donations.
Although support for the public sector was suspended in 2018, the private sector continued to receive funds from the Netherlands, despite the crisis in access to funds that was triggered by the dramatic reduction in foreign cooperation for Nicaragua.
In 2018, the Netherlands was Nicaragua’s largest external donor, contributing 72.4 million dollars. The following year the amount was reduced to 25.8 million dollars, but in 2020 it rose to 47.5 million. This placed the Netherlands as the second cooperant, after Germany, which contributed 69.1 million dollars that year. In 2021, he returned to that position by providing $32.7 million in loans to the private sector.
Private sector hit for the third consecutive year
According to BCN data, in 2021, the private sector suffered —for the third consecutive year— a reduction in foreign cooperation. That year it received just $195.1 million, down 34.4% from $279.7 million in 2020; and 45.4% less than the 357.6 million in 2019.
“Of the total external official cooperation for the private sector, 57.2% was channeled to the financial sector16.3% to the manufacturing industry sector, 8.9% to social services, health and education, 3.1% to the agricultural sector and 14.5% to other sectors”, details the BCN.
The largest bilateral cooperators were:
- United States with 60.8 million dollars
- Holland with 32.7 million dollars
- Taiwan with 17.2 million dollars
- The Kuwait Fund of Germany with 15.3 million dollars
- South Korea with 9.8 million dollars
The $195.1 million received in 2021 is divided into $159.0 million for loans and $36.1 million for donations.
They raise the cost of the Bilwi regional hospital
Ortega assures that the decision to break relations with the Netherlands was also influenced by the unfulfilled promise to build the hospital on the Caribbean Coast. But in his speech he does not mention that the suspension of the funds was announced four years ago as a form of international pressure for his government to investigate “the complaints of obstruction of medical care, the immediate cessation of violence and the dismantling of paramilitary groups” during the 2018 protests.
In principle, the Nuevo Amanecer de Bilwi Regional Hospital would be built with a loan of 52.9 million dollars from the Central American Bank for Economic Integration (CABEI) and with US$7.8 million more than the budget for a total of 60.8 million dollars, as reported in 2015. .
In May 2017, The Netherlands joined CABEI as a co-financier. According to reports, this country would donate 18.4 million euros, equivalent to more than 20 million dollars, for its construction and equipment.
However, a year later, due to state violence against civic protests and “complaints about the obstruction and serious delay in access to medical care for protesters in Nicaragua”, the Netherlands decided to suspend the delivery of funds. According to the foreign cooperation report, this was the first year that this country did not deliver donations to the public sector.
In August 2019, the regime began the construction of this hospital in Bilwi, with funds from CABEI and the General Budget. Nevertheless, the cost of the hospital was no longer $60.8 million, but $82 million.
Now that diplomatic relations with the Netherlands have been severed, the regime justifies its decision with this “broken promise”, which according to Murillo, it costs 99.3 million dollars, 1.2 times more than what would be invested initially.
