The new political and ideological link between the People’s Republic of China and Nicaragua since the resumption of diplomatic relations on December 10, 2021 It has been characterized by the constant signing of agreements and conventions, which to date have only resulted in small miscellaneous aid with little impact, taking into account the weight of the Asian giant in the world economy.
In concrete terms, the cooperation of the People’s Republic of Chin has so far meant for Nicaragua the donation of 800,000 doses of Sinopharm vaccines against covid-19; the delivery of six containers with medical supplies valued at a little more than one million dollars, the promise to begin the construction of 12,000 “two-bedroom, one-story” homes, and the offer to restore a special education center located in the city of Leon.
But, the announcements that there will be a greater flow of cooperation and commercial exchange have been constantly present in this diplomatic turn of the Ortega regime, which meant the rupture and expulsion of Taiwan, one of the most generous and faithful donors of the regime.
Nicaragua’s value depended on its relationship with Taiwan
Margaret Myers, director of the China and Latin America analysis program at the Inter-American Dialogue think tank, pointed out that the geopolitical value of Nicaragua for the “Asian dragon” is conditioned by its previous relationship with Taiwanthe rogue island that China claims as part of its territory.
“Once those ties were severed, the value of the partnership with Nicaragua diminished considerably. The relationship remains important, as China seeks to establish and maintain partnerships with countries that have strained relations with the US, but Nicaragua has little to offer China from an economic perspective,” Myers said.
The specialist revealed that inside China, companies have been encouraged to look abroad for investment agreements of “higher quality and lower risk”, and Nicaragua does not offer favorable conditions that point to these scenarios.
Nicaraguan environment is not promising for China
“Nicaragua’s investment environment is not particularly promising compared to other destinations in the region. In addition, China’s previous economic relations with Nicaragua have been complicated. Wang Jing, who led the famous canal projectis now a disgraced figure in China, having been delisted from the Shanghai Stock Exchange,” he recalled.
“If project ideas arise that are of strategic or economic value to China, the country and its companies are well positioned to pursue them. This commitment will depend on both China’s strategic interests in Central America and the evolution of Nicaragua’s investment environment,” Myers said.
Evan Ellis, professor and researcher of the Center for Strategic and International Studies of the War College of the United States, in a published opinion piece in CONFIDENTIALalso referred to the little weight Nicaragua has for China’s interests, compared to other countries in the region.
“Unlike other countries that have recently established relations with China, such as Panama, El Salvador, the Dominican Republic and Costa Rica, the change in Nicaragua has not been accompanied by announcements of memorandums of understanding between the governments, nor by new and important investments. or infrastructure projects by companies based in the Asian giant,” Ellis wrote.
The “alien fever” that Ortega sweated for China
However, the regime of Daniel Ortega and Rosario Murillo continues to play its role as an unconditional ally of China in the global theater. August 2nd, strongly condemned the visit of the president of the House of Representatives of the United States, Nancy Pelosi, to Taiwan, calling it a “provocation”.
The Ortega regime was the only Chinese ally in Latin America that publicly criticized the tour of the senior US official.
“The Government of Reconciliation and National Unity of Nicaragua, through the Ministry of Foreign Affairs, strongly condemns the provocation constituted by Mrs. Nancy Pelosi’s visit to the territory of the People’s Republic of China,” said the Nicaraguan Executive, in a message signed by Foreign Minister Denis Moncada.
In addition, the regime continues to highlight through its propaganda the minimal contributions made to date by China, despite the fact that these are not in line with what could be expected from the second largest economy in the world, with a nominal Gross Domestic Product of 18 500 billion dollars, and exports for 3,363,959 million dollars per year.
“We have received a large number of Chinese vaccines to deal with the coronavirus. We have received equipment and medical supplies to strengthen the Nicaraguan health system and we are working on a social housing program for families, which will have a national impact, and other development programs. All within the framework of non-reimbursable cooperation, with that enormous solidarity and heart that the Chinese people and Government have shown”, declared Laureano Ortega Murillo, son of the presidential couple, to the regime’s propaganda media, and who acts as a direct link with the Asian giant.
Ortega Murillo was in charge of receiving at the Managua international airport, at the end of last June, the ambassador of the People’s Republic of China in Nicaragua, Chen Xi.
Chinese promises to Nicaragua
In addition to the 800,000 doses of anticovid vaccines sent to Nicaragua, on August 8, 2022, Rosario Murillo, spokesperson for the regime, announced that China will donate an additional two million doses.
On January 10, 2022, Laureano Ortega Murillo, on behalf of the regime, signed the agreement for the incorporation of Nicaragua into The New Silk Roada Chinese initiative that brings together 70 countries that seeks to strengthen maritime and rail links to develop a robust trade network between Asia, Europe and America.
On July 12, Nicaragua and China also signed a “early harvest agreement which will supposedly allow the commercial exchange of export and import goods with preferential tariffs on inputs such as vehicle harnesses, textiles, beef, seafood, vegetables and rum, among others.
The Minister of Finance and Public Credit, Iván Acosta, predicted during the signing of this agreement, “that taking into account that China is the largest global consumer market and we are food exporters, we are going to expand rapidly to reach and probably surpass in the next two or three years, more than 1,000 million dollars in exports, to gradually close the existing trade gap”.
China announces “two-bedroom, one-story” houses
But the agreement that has had the most resonance in the country due to the severe housing deficit in Nicaragua -957,000 homes according to data from the Chamber of Developers- was made by Rosario Murillo on January 28, 2022.
On January 28, 2022 Rosario Murillo announced a “large housing program that they hoped to start in 2022, which was going to cover 84 of the 153 municipalities throughout the country and was going to last for three years”, financed by China.
This agreement was signed on April 27 by Laureano Ortega Murillo and Iván Acosta, for an amount of 60 million dollars from the China International Agency for Development Cooperation.
The dropper information about this project continued on August 30, when Zhao Fengtao, vice president of the China International Agency for Development Cooperation, explained that the first phase of the project contemplated the construction of “920 two-bedroom, one-story homes in the city of Managua.
Fengtao participated in a signing ceremony for a project confirmation note together with Laureano Ortega Murillo, who added that the program planned to build 12,034 homes, under a “non-reimbursable cooperation modality”, which means that these will be donated.
The current market value of a social interest home, such as the ones projected by this program, ranges between 15,000 and 40,000 dollars. The representatives of both China and Ortega did not give details about the delivery mechanism for the beneficiaries, nor the price that the houses will have, taking into account that they are donated.
Nicaraguan economy does not matter to China
An economist who requested anonymity expressed the opinion, along with Professor Ellis and Margaret Myers, that the real importance of Nicaragua for China it goes in function of being an annoying political counterweight in the region for the United States.
“It is a fact that the amount of resources that China is giving to Nicaragua represents very little, taking into account its economic weight in the world. What really matters here is how the Nicaraguan government aligns itself with China. If China was really interested in a perspective of economic importance in Central America, they would have been interested in developing projects such as the interoceanic canal through Wang Jing”, he pointed out.
“What matters to China, at least in political aspects, is having like-minded governments that align with them to represent a political counterweight to the United States, mainly in international multilateral bodies,” he added.
