Nicaragua: the Heart of Central America, “So small, yet so large” Presentation by Norman Caldera Cardenal Minister of Foreign Affairs München, 30 September 2004

Old advertisement?  I don’t know who you are!  I don’t know your region!  I don’t know your country!  I don’t know your country’s reputation!  Now, where is it that you want me to risk my hard-earned money?

 Free Trade Area of the Americas, (North, South, and Central, as well as The Caribbean).  Target date: negotiations end In force,  Before events in South America-the Caribbean, (Haiti and, Venezuela.)  Brazil now wants Merco- sur Customs Union and SAFTA ere FTAA. FTAA After they discarded LAFTA!

CAFTA, including Nicaragua  Neither Mexico, nor South America!  2 ½ hours by air from Miami, Houston or New Orleans.  Shores on the Pacific Ocean and the Caribbean Sea.  40 million people with access to the largest consumer market in the world!

Was CAFTA*, a return to Geopolitics?  2003 Trade with US was over US$ 31 Billion.  3rd in the Hemisphere after Canada and México.  1.5 times the sum of Russia, India and Indonesian trade with US.  7 times as much as US Trade with Chile.  Negotiated 2003, ratified In force,  Regional Technology exports to the US are US$ 100 per cápita. *Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Dominican Republic.

Central America : Exports by Regions % 17 % 2% 29 % 9%

Central America  8 elected presidents who know each other well. Saca – Maduro Bolaños Berger Pacheco Torrijos  “Democratic Security”, reasonable balance of forces.  Defense of Human Rights in the hemisphere.  A Customs Union in the Making: late  Belize, member, Dominican Republic, associate.  Mexico has applied for membership.

Central America under CAFTA  Intellectual Property Rights agreements in place;  Measures to foster Competition, included.  Environmental Regulations in place. – We all have signed the Kyoto Agreement and are partners in CONCAUSA. – TPA asks for enforcement of existing regulations, not new ones.  Labor practices under ILO scrutiny. – Nicaragua, is party to 54 ILO agreements, the US is party to less than 15.  CAFTA legal bridges being built to provide continuous legal highway.  “One of the two most promising regions in the World”: Michael Porter.

Nicaragua Single digit inflation since 1997  Completion Point of HIPC reached by IMF 24 Jan  Safest neighborhoods: lowest crime rate in the region.  B.I.Ts with US, Canada, Netherlands, France, etc.,  Nicaraguan “Mountain Grown Coffee” hit world record prices in 2004 internet auction. Over 12 US$ per lb.  Check out our Cigars in “Cigar Aficionado”!  Our Rum “Flor de Caña” is well-known worldwide.  Route 66 Jeans and Docker’s made there! GAP, Old Navy and even Banana Republic are approved by GAP. (not by us, but there is freedom of expression in Nicaragua)  Automobile spare parts for the US market, by Yasaka.  Export supply mix is short, but excel at what we do!

Nicaragua.  Alternative Dispute Settlement Mechanisms (Arbitration) accepted. CIADI, MIGA, Panama, New York.  Anticorruption Drive is the Real McCoy: – Former Finance Vice-Minister condemned 10 years for graft and corruption – Former President condemned 20 years for Money Laundering – Both from the same party as the President.  Tax Collection has gone up.  Our budget is in internet for all to see and follow  Official Development Assistance is also in internet (  “Nicaragua’s Pacific Coast property is like California but at fraction of the cost.” Business Week 1999.

Comparisons by Interpol Suicide Rate Crime Rate Per 100,000 Per 100,000  Japan: 50.0  Switzerland: 36.5  France 35.5  Australia 26.3  US 21.7  Costa Rica 11.8  NICARAGUA 6.9  England 9,927  Germany 7,736  US 4,161  NICARAGUA 1,750

Comparisons by Interpol Murder Rate Prison Inmates Per 100,000 Per 100,000  World: 8.86  Latinamerica:  El Salvador:  Guatemala  New Orleans  D.C  Atlanta  Chicago  Costa Rica 7.20  NICARAGUA 3.40  Honduras 9,816  El Salvador 9,378  Costa Rica 5,542  NICARAGUA 3,913

Comparisons by Interpol Police Officers Prisoners Per 1,000 Per 100,000  Italy: 5.3  Spain: 4.7  Germany 4.4  El Salvador 2.6  Costa Rica 2.5  NICARAGUA *1.2 * 50% unarmed  US 682  Canada 123  Scotland 119  Germany 96  NICARAGUA 57

Comparisons Army Size International Institute for Strategic Studies  Nicaragua’s Army went from 120,000 to 14,000. ( )  Number 129 of 132 for military growth.  Nicaragua ranks below Holland in Soldiers for every 1,000 population.

Comparison by the CIA factbook Military spenditure  Mexico: US$ 4 billion  Guatemala: US$ 120 MM  Costa Rica: US$ 69 MM  NICARAGUA US$ 26 MM  Military spending per person:  NICARAGUA US$ 5.18 COSTA RICA: US$ 17.99

WEIGHTED AVERAGE INTEREST RATES

GDP GROWTH %

EXTERNAL DEBT RELIEF - NICARAGUA Millions US$ (Current) Total External Debt – December ,098 Total External Debt – December ,444 Pending Debt Relief (4,907) Total External Debt after Debt Relief 2,537

Debt Reduction Effort (Million US$)

National Vision National Development Plan  Controlling transaction costs and nurturing a stable Business Environment.  Supporting Cluster Development at the micro-level – 7 Clusters  Foreign Service in Trade and Investment Promotion.  President and Ministers answer from Investors and Importers.   Company Strategy, Structure and Rivalries. Related Industries Upstream, downstream Factor Conditions Demand Conditions

LOCATIONLOCATION Unique Natural Resources, Water And Biodiversity Unique Natural Resources, Water And Biodiversity Year round Agriculture and Forestry Year round Agriculture and Forestry Wooden Furniture and parts Tourism Beef and DairyProducts Energy Agribusiness and Food Procesing. Light manufactur e and Textiles & Garments Fisheries and Aquacultur e Priority Clusters 2002

Who are we? To whom will you be talking?  Enrique Bolaños: President. BSE, Engineering, University of St. Louis.  Norman Caldera: Foreign Minister: BBA, University of Texas, Austin. (McCombs) MIM, VPI.  Mario Arana. Minister of Trade and Industry, Ph.D. Economics, University of Texas, Austin.  Eduardo Montiel. Minister of Finance: DBA Harvard University.  Eduardo Montealegre, MBA, Harvard Business School. Chief of Staff of the President.  José Antonio Alvarado: Minister of Health: J.D. Harvard.  Silvio DeFranco Minister of Education: PDS, Kennedy School, Harvard.  Mario DeFranco: Chief Economic Adviser: PDS, Kennedy School, Harvard.  Carmen Largaespada, Minister of the Family, Ph.D., University of Alberta, Canada  María Dreyfus Ulvert, Trade Commissioner in Miami, MBA, Columbia University.  Guillermo Pérez-Argüello: Chief of Protocol M.A. Oxford.  Lester Mejía: Ambassador to Belgium: Ph.D. International Law, Université de Bordeaux.  Salvador Sacasa, MBA PhD, Candidate. Diplom Econom. Hochschüle für Ökonomie. Berlin. Assistant to FM  Francisco Fiallos: Ambassador to Costa Rica, Master of Law, Harvard Law School.  Salvador Stadthagen: Ambassador to Washington: M.P.A., Kennedy School, Harvard.  José René Gutiérrez Huete, Ambassador to Guatemala, Master of Law, Harvard Law School.  Marco Narváez: President of the National Finance Institute: MBA, U. Chicago.  Frank Kelly: President of the Communications Regulating Board: B.S.E. West Point, MBA Harvard.  Raul Barrios: Delegate to the IDB: MBA, Wharton School of Business, University of Pennsylvania.  Ariel Granera: Adviser to Foreign Minister: M.S. Sorbonne University, Paris.  Mario Flores: Vice-President of Central Bank: M.S. Economics, University of Louvaine, Belgium.  Luis Pereira: Manager, Pro-Nicaragua: MBA, Harvard.

Sampling of Pioneers already in Nicaragua! * United Brands* Nien Hsing Textiles * Greenstone Resources* BATCO * Parmalat* Xerox * Nestle S.A.* Kativo * Fortex Industrial* Chiquita Tropical Products * BellSouth* Texaco. * China United Garments* Barceló Hotels * Shell Oil* Holiday Inn * Hampton Inn* Nabisco * Esso Standard Oil* Bayer Great King Garments* Unión Fenosa America Mobil* Swedtel

New answers!  Now you know who we are!  Now, you know about CAFTA!  Now, you know where we are!  I hope you know our reputation!  See you in Managua!!!

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