Nicaragua's president scraps reforms that sparked deadly protests

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President Daniel Ortega announced on Sunday that the Board of Directors of the National Institute of Social Security (INSS) made a decision to repeal resolution 1317 of April 16 of this year.

The protests follow a new legislation that increased pension contributions for workers and employers and reduced overall benefits.

The State Department also authorized the departure of personnel who so wish in the face of the situation in the Central American country, where government shock forces and riot police are repeatedly attacking the protestors.

Ortega - who had not shown his face during the crisis - appeared at noon on Saturday, local time, surrounded by the Army, Julio Cesar Aviles, in a demonstration of strength that sought to crush any doubt of the power of the regime.

The reform would aim to settle a US$76 million deficit faced by the country's social security institute.

The European Union, the United States and the Vatican have expressed concern at the situation and called for calm.

The Human Rights Center of Nicaragua, an independent organization of the Government, reports that there are at least 25 dead and 64 injured.

The center's director, Vilma Nunez, warned that there was "a lot of misinformation" going around that made obtaining the figure hard.

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Protesters damaged and set fire to government buildings in several cities took to the streets by the military.

The official said the embassy in Managua would be unable to provide routine services to the public until further notice, but would continue to be available by phone for emergencies and provide services to US citizens and visa applicants.

Late on Saturday, local media said the journalist, Angel Gahona, was shot and killed during a live broadcast from Bluefields, a town on Nicaragua's Caribbean coast. Stores in Managua were looted over the weekend, Reuters witnesses said. In some locations, armed store owners stood guard outside their premises to stop mobs from entering. Most of the dead were aged between 15 and 34, she said.

"The wounds suffered by students have been from firearms. That is why they are put at risk". Soldiers were also sent to the city of Esteli - some 149 kilometers north of Managua to guard public institutions. The army said it was "providing protection to entities and strategic sites".

Nicabus, an global bus line with links to Costa Rica and Honduras, said it had suspended services due to the violence.

Mr Ortega said on Saturday he would negotiate on the reforms, but only with business leaders. "We want a national recall referendum". "We don't want this dictatorship", he told AFP.

The protests have become the biggest challenge for the government of Ortega since its inauguration in 2007. Four hours later, the business leaders rejected the offer of dialogue with Ortega and demanded an end to the repression.

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