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Ortega banks on tourism to beat poverty

Nicaragua's leader was once the White House's nightmare. Now he's back... as a friend to the US

Rory Carroll in San Juan del Sur
Sunday January 7, 2007
The Observer

Daniel Ortega, the Sandinista leader who battled US infiltration the last time he ruled Nicaragua, returns to power this week with an unlikely slogan: Welcome, gringo.
The former Marxist guerrilla is due to be inaugurated as president of an impoverished nation which needs tourist dollars and foreign investment to stay afloat. Ortega hopes to accelerate a boom which has brought hordes of backpackers, surfers and retired Americans to Nicaragua's beaches and colonial towns.
Article continues
It is an ironic reversal for a man still remembered and reviled in the US as a Cold War foe who fought a bloody civil war against Contra rebels funded by the Reagan White House. Now a balding 61-year-old grandfather who espouses reconciliation, the former revolutionary firebrand won an election last November using John Lennon's 'Give Peace a Chance' as his campaign anthem.
Since then Ortega, who presided over 33,000 per cent inflation during his 1985-90 term, has sought to reassure tourism chiefs and other investors that his government will keep the economy stable. Nicaragua, the second poorest country in the hemisphere after Haiti, lacks jobs, electricity and infrastructure. The new president will need a booming tourism industry if he is to deliver tangible benefits to the peasants and urban poor who voted him back to power.
'No one is going to allow the seizure of property big or small,' he said recently. 'We need to eradicate poverty, but you don't do that by getting rid of investment and those who have resources.'
This was a message to travel agents, hotels, restaurants and other businesses: trust me.
From a tiny base, tourism has exploded, with 803,933 tourists visiting in 2005, mainly from the US, central America and Europe, up from 579,165 in 2002. Last year's revenues are expected to be $240m, outstripping the other main earner, coffee.
'Central America is the fastest growing region in the world and and we are growing faster than our neighbours,' Maria Rivas, the outgoing tourism minister, said. Donor nations, including Britain, are funding training and infrastructure projects in the belief that tourism is the country's route out of poverty.
The Lonely Planet guidebook ranked Nicaragua number three on its list of must-visit destinations, citing friendly people and a landscape of lakes, rainforests, volcanoes and oceans. 'It's also a cheaper, less polished destination than other parts of central America and the Caribbean,' said Joshua Berman, co-author of the Nicaragua volume of another guidebook series, Moon.
Interpol ranked it the safest country in Latin America, a fact obscured by memories of the war, said Berman. 'It's taken that long for people to replace 20-year-old, war-torn nightly news images with current, greener, peaceful visions of Nicaragua, which are, of course, the reality.'
The return of Ortega, however, has spooked some outsiders. In the surfers' paradise of San Juan del Sur and the colonial gem Granada several building projects have been halted while investors wait to see if the Sandinista really has changed.
'Our loose cash has been transferred out of here and we're waiting to see what happens,' said Sandy Perkoff, an American who runs an estate agency and a popular cafe in Granada. Many of the retired Americans who have bought homes in the area are ex-military men who did not anticipate a Sandinista comeback.
However, there is no evidence of major financial outflows, suggesting most investors have given Ortega the benefit of the doubt. Even the Bush administration, which warned of cuts in aid and trade if voters backed Ortega, appears to have relented. Its outspoken ambassador to Managua, Paul Trivelli, sounded conciliatory at a recent meeting with the president-elect.
Assuming the tourists keep coming, however, the poorly funded and stretched government will have difficulty controlling developments, some of them ugly apartment blocks reminiscent of southern Spain, which are popping up like toast along the coast.
'They're just throwing things up,' said Chris Berry, manager of Piedras y Olas, a plush resort at San Juan del Sur. 'Tourism is the salvation here but I have yet to see any part of Nicaragua get the planning right.'

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