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Venezuelan economic aid to Nicaragua down 10.9% first half 2016

Following a decline in oil prices, the Venezuelan government cut financial support for Nicaragua during the first half of 2016

The president of Venezuela, Nicolas Maduro (left) and Daniel Ortega (right) of Nicaragua
The president of Venezuela, Nicolas Maduro (left) and Daniel Ortega (right) of Nicaragua

(Today Nicaragua) Venezuela’s oil loan-centered cooperation with its traditional ally Nicaragua fell by 10.9% during the first half of 2016 as compared to the same period last year, reported Monday the Central Bank of Nicaragua (BCN).

Such drop followed a 43.8% decrease in 2015 from 2014, when Venezuelan cooperation hit USD 661.9 million, according to official numbers, Efe informed.

Funding totalled USD 172.1 million, below USD 193.3 million during the first half of 2015.

Venezuelan cooperation funds, which amount to USD 4.65 billion since Nicaraguan President running for re-election Daniel Ortega took office in January 2007, are administered on the sidelines of the law on domestic budget, a move deplored by several sectors.

Venezuelan aid during the first half of this year included oil loans (USD 108.3 million) and direct foreign investment (USD 63.8 million), the Central Bank of Venezuela (BCV) broke down in a communiqué on foreign official cooperation.

Within the framework of oil cooperation agreement, loans still derive from a policy on concessionary lending with a 25-year deadline, including a two-year’s grace period, and a 2% annual interest rate. These loans are to be paid by the private sector through investments in socio-productive projects, the BCV spelled out.

In words of the Nicaraguan state, Venezuelan cooperation has been used this year, among others, to fund energy subsidy (USD 25.7 million), financial outlay (USD 5.6 million), industry (USD 5.2 million), fair trade development (USD 4.7 million), business development (USD 3.7 million), farming production and forestry (USD 3.6 million), and housing (USD 2.3 million).

Venezuelan cooperation is channelled through joint oil venture Alba of Nicaragua (Albanisa), responsible for oil supply.

Ortega is the main political and economic ally in Central America of President Nicolás Maduro and of late Head of State Hugo Chávez.

Source El Universal

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