Page:RS22836 (IA RS22836-crs).pdf/5

 Some economists have also warned that if Ortega should engage in an increasingly radical or authoritarian manner, foreign investment in Nicaragua could decline.

Foreign Relations. President Ortega is working with the United States and the IMF to boost the country’s long-term prospects for economic development, but is also seeking aid from Iran and Venezuela to meet more immediate needs. Iran has pledged to invest in Nicaragua’s ports, agricultural sector, and energy network, with Venezuela co-financing many infrastructure projects. Venezuela has promised to build a $3.5 billion oil refinery and to provide up to 10 million barrels of oil at preferential prices annually through the PetroCaribe program. Ortega shares an ideological affinity with President Hugo Chávez of Venezuela and the other countries comprising the Bolivarian Alternative for the Americas (ALBA) trade block (Cuba and Bolivia). President Ortega generally maintains good relations with neighboring countries in Central America, but his government has been embroiled in a serious border dispute with Colombia. In December 2007, the International Court of Justice (ICJ) upheld Colombia’s sovereignty over the islands of San Andrés and Providencia, but the ICJ is still determining the official maritime boundaries between the two countries.

Despite initial concerns about the impact of Ortega’s November 2006 re-election on U.S.-Nicaraguan relations, the bilateral relationship, though tense at times, appears to be generally intact. One cause of tension has been President Ortega’s tendency to vacillate between anti-U.S. rhetoric and reassurances that he will respect private property and pursue free-trade policies. In September 2007, Ortega denounced the United States in a speech before the United Nations as “the imperialist global empire.” Rhetoric aside, Ortega’s interest in cooperating with the United States has been reflected in his pledge to hand over 651 Soviet-made surface-to-air missiles in exchange for military and medical equipment. Ortega has continued cooperating with the IMF, which approved a new three-year poverty reduction package for Nicaragua in October 2007. His government is also implementing the CAFTA-DR. The United States provides significant foreign assistance to Nicaragua, and the two countries cooperate on counternarcotics, trade, and security matters. The United States responded to Hurricane Mitch in 1998 by granting Temporary Protected Status (TPS) to eligible Nicaraguan migrants living in the United States. In May 2007, the U.S. government extended the TPS of an estimated 4,000 eligible Nicaraguans through January 5, 2009. In response to Hurricane Felix, a category 5 hurricane that hit Nicaragua in September 2007, the United States provided hurricane assistance to Nicaragua to help with the recovery efforts.

U.S. Aid. The United States provided Nicaragua with $50.2 million in foreign aid in FY2006 and $36.9 million in FY2007, while an estimated $28.6 million is being provided in FY2008. The Administration has also requested, but Congress has not yet