LETTER TO EDITOR: The truth about Nicaragua

At the center of James Glassman’s recent article titled “Decline of Ortega’s Nicaragua” (Op-Ed, March 4), as an purported demonstration of the current government’s intent of chasing away foreign investment, there is a mention of Law 364, literally called “Special Law for the Procedures of Lawsuits Promoted by People Affected by the use of DBCP-based Pesticides.”

It passed in 2000, seven years prior to the Ortega administration. Mr. Glassman refers to this as “how Nicaragua concocted a law to the severe detriment of foreign businesses.” However, this law was created to establish specific procedures for legal processes in cases where the use of DBCP-based pesticides by companies in Nicaragua harmed human beings. It is important to note that in 1979, the U.S. Environmental Protection Agency prohibited the use of DBCP after learning that its use caused serious health complications to workers in California.

The Foreign Investment Promotion Law (Law 344) is the country’s main legislation governing foreign investments. It establishes a series of solid legal guarantees, such as equitable treatment for foreign investors, full currency convertibility, full international ownership and freedom to expatriate all capital and profits. In general, the country’s legal framework grants foreign investors all the legal securities they require to operate successfully.

Despite misleading headlines, foreign direct investment (FDI) is on the rise in Nicaragua. From 2004 through 2007, FDI inflows have grown at an annual average rate of 17 percent, and preliminary statistics indicate 2008 set a new historic record in FDI attraction by surpassing the $600 million mark, compared to $335 million reported in 2007. On a regional benchmark that measures FDI as a percentage of the GDP, in 2007 Nicaragua ranked second, only behind Costa Rica, outweighing other countries of the region. These results can only be achieved by offering foreign investors the adequate conditions needed to develop their investment projects, which include a solid legal framework and pro-investment efforts from the government.

JAVIER CHAMORRO

Executive director

PRONicaragua

Managua, Nicaragua