| Video61@tcq.net 2006-06-17, 8:07 am |
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no wonder these people are pouring into the u.s.a.
http://www.doublestandards.org/solo1.html
Neo-liberal Nicaragua: Neo Banana Republic
by Toni Solo
29 July 2003
When US-backed candidate Violeta Chamorro won the most observed
election ever in Nicaragua in 1990, she promised Nicaraguans that US
government aid would quickly put the country back on its feet.After a
decade of war, exhausted Nicaraguans took Chamorro at her word.
However, US aid currently averages around US$38 million a year - a
trickle by any standard [1].Nicaragua has taken twenty years to recover
output levels it attained in 1982. Always among the poorest countries
in the region, the war and its aftermath have left Nicaragua the second
poorest country in the hemisphere after Haiti.
Nicaragua has been a hapless guinea pig for a neoliberal and
neoconservative experiment - if one can call it that. The neoliberal
treatment is better described as "misery by design", and the
neoconservative penchant for democracy has meant corrupt and inept
governments installed by means of rigged elections in which US
government representatives have actively campaigned for their preferred
candidate. A quest for self-determination and overcoming the legacy of
dictatorship and war has given way to a systematic impoverishment of
the country, and to craven subjugation by the country's governments to
the whims of the US embassy. The implicit promise once made to
Nicaragua before 1990, to bring the country out of its misery, has
given way to neglect. An observer may conclude that the US is still
punishing Nicaragua for having attempted to obtain its independence and
exercise its right to self-determination. One wonders how much longer
this torture must continue.
A Snapshot
Nicaragua's economy has always depended on agriculture. But, whereas
the US subsidizes its farmers at record levels, the doctrine imposed on
Nicaragua has been rigidly free-market. Predictably, Nicaragua's
agriculture is in crisis. The extensive network of cooperatives built
up prior to 1990 has fallen apart, unable to compete through lack of
access to credit, spiraling costs and stagnant or falling prices.
Government policy, while not openly attacking agricultural
cooperatives, has been deliberately unhelpful.
Until 2000, coffee had been Nicaragua's main foreign exchange earner,
and it had a long history since the 1870s. After years of World Bank
pushing countries (especially Vietnam) to plant this cash crop, the
coffee sector in Nicaragua, as elsewhere, has collapsed. The resulting
migration from the land has exacerbated all of Nicaragua's serious
social problems, compounding the economic crisis that is affecting the
whole region. Last year, hundreds of destitute families camped out for
months on the roads leading to the coffee growing areas, pleading for
work. Television showed pictures of children in Matagalpa, the coffee
capital, showing levels of starvation usually associated with Africa.
The problems of the rural economy worsened through the 1990s with the
unraveling of the radical land reforms carried out under the Sandinista
government of the 1980s. Former supporters of the Somoza dictatorship,
as well as people with legitimate claims, appeared to reclaim land for
which many of them had already been compensated, in some cases more
than once. Many of them had racked up huge debts against property
before fleeing the country with the proceeds in 1979. The Sandinista
government failed to issue solid legal land titles for most of the
properties they distributed, leaving the way open for dispossession and
eviction of thousands of families and cooperative members under the
Violeta Chamorro government and her successors.
Even former Contra fighters who took up arms against the Sandinistas in
the 1980s remain disgruntled. Their leaders faced tough negotiations to
get any just compensation for their supporters. Confronting the very
politicians who urged them to go to war in the 1980s, they often
resorted to armed force to occupy land. So disenchanted are these
former Contras - now referred to as the ex-Resistencia - they have
joined their old enemies, the Sandinistas, in a political alliance
known as the National Convergence. Politicians of all parties agree
that the last few years have exacerbated the economic crisis with no
progress in sight.
Chronic Corruption
US government and World Bank officials have praised recent
anti-corruption measures in Nicaragua. But their espousal of
neo-liberal economic measures, like privatization and government
cutbacks, actually promoted corruption in the first place. The IMF has
prompted wage reductions in the public sector of 44 per cent since
1990. This impoverishment has further increased the incidence of petty
corruption.
To bear that out, pay a visit to the local Public Registry office. Want
a certificate that your property is free of any lien so you can get
credit at the bank? Ten dollars - no questions asked - yields a
preferential procedure and a certificate is produced straight away.
Non-financially assisted "normal" service will take much longer.
Thirty dollars and a quiet word to the relevant official can readily
improve problematic exam results. Fifty dollars in hand and a
persuasive conversation with the judge will help resolve a tricky
lawsuit, especially in remote rural areas. Stopped for a traffic
violation? To avert a heavy fine, take the two officers (there are
almost always two) to their nearest friendly Coca Cola stall, buy two
very expensive sodas and the friendly lady at the bar will pay her two
uniformed clients later.
An anti-corruption drive headed by someone like current President
Enrique Bola=F1os is unlikely to root out systemic corruption. He was
Vice-President for five years under President Arnoldo Aleman - know
popularly as "Gordoman" (Super Fatman) - now under arrest for
defrauding the country of hundreds of millions of dollars. Recent
testimony by disgraced former Treasury Minister Byron Jerez directly
implicates close relatives of Bola=F1os in Gordoman's ransacking of the
treasury.
In February 2003, in a regional seminar on corruption, US Ambas or
Barbara Moore said, "It is very appropriate that we are meeting in
Nicaragua which has been in the front line of the struggle against
corruption under the leadership of President Bola=F1os." Setting the
tone of his anti-corruption government, President Bola=F1os draws a
lifetime pension as a former Vice-President as well as his salary as
current President. When he was questioned about this on television
recently, he replied: "It's legal, isn't it?"
Bola=F1os was installed as President in 2001 with a helpful US electoral
high tech manipulation, just as Arnoldo Aleman had been eased in before
him in 1995. Opposition Vice-Presidential candidate leader Agust=EDn
Jarquin related how the then US Ambasor Oliver Garza arrived at the
electoral count center in the small hours of election night demanding
that the count be restarted with new US embassy-approved personnel.
Election officials tamely submitted to Garza's demands. The count
developed into a marathon. Despite a large back room computer staff,
the electoral authority took w s to confirm all the results against a
background of acrimonious political wrangling. It is possible Garza was
 - maybe he thought he was in Florida.
Perhaps this is an example of what former US ambasor, Lino
Gutierrez, meant when he told the Managua American Chamber of Commerce
in June 2001: "Certainly we ought to celebrate the fact that 34 of the
35 governments in our hemisphere came to power through the ballot box.
But we have all learnt that democracy is much more than holding free
and fair elections."
One trend the neo-liberals should approve is the way the Nicaraguan
Army has become a major player in the economy. After three major bank
failures over the past two years, the banking regulatory body was
looking hard at Banco de Finanzas, in which the army has a large
interest. The regulators soon backed off perhaps because former Army
chief, Humberto Ortega, is an important regional investor inside and
outside Nicaragua. Although not as powerful as the army in Guatemala,
the enterprising Nicaraguan army has followed its counterparts in
Honduras and El Salvador in consolidating a shady and powerful
military-business elite.
Neo-liberalism - neo-business as usual
Since 1990, the World Bank and the International Monetary Fund have
worked to open up markets (of course, it is always referred to as
freeing the markets) and cut back government expenditures.
Privatization is a key part of this program. Over three hundred small
state enterprises were privatized between 1990 and 1995, but it has
taken longer to bring the big state utilities - Power, Communications
and Water - to the market. Under cover of the unconvincing measures
to improve efficiency, neo-liberals hoped to hoodwink people in
Nicaragua into accepting the privatization of the water utility.
Anxious to force the issue, the IMF tried to impose this as a condition
for a loan earlier this year. However, legislators defeated the
proposal when it came up for approval in the National Assembly. The
measure has been shelved - at least for the moment.
Nicaragua has already privatized its telephone utility, creating a
monopoly of landline phones. It did the same with electricity
distribution, sold to a Spanish multinational, Union Fenosa.
Consequently, stories of over-charging abound, such as the woman
tortilla maker living in a shack with just a small television and a
couple of light bulbs, earning around US$28 a month. Accustomed to
bills of US$3 or 4 a month, she suddenly received one for US$200.
Forced to pay these exorbitant demands or go without, many Nicaraguan
families sink deeper into debt.
Resentment against the price rises is widespread. The prices of both
water and electricity have increased fivefold since 1990. During the
same period, despite a modest increase in the minimum wage in 1997,
wages have been virtually frozen, while prices for basic items rise
relentlessly. Over 60% of the population make do with less than US$2 a
day - that many people live in poverty. The cost of the basic basket
of goods for a family of four has doubled since the early nineties.
Health and education services are impoverished, and the government can
barely provide even the most basic facilities and services necessary.
For the huge numbers out of work, health services might as well not
exist at all. What use is a prescription for US$10 of medicine to
someone with an income of US$28 a month? Hospitals depend on donations
from individuals and foreign charities even for the most basic
equipment - a nebulizer, a dialysis machine.
Nicaragua is unable to educate the people it needs to develop its
economic potential. Over 40% of the school age population fails to
attend classes. Nineteen-year-old Gabriela Garcia has almost finished a
degree in Information Systems Engineering at her local university in
the capital, Managua. Her mother is a nurse earning around US$55 a
month. Gabriela was brought up in her grandmother's house where family
remittances from relatives overseas helped see her through college. The
household includes Gabriela's pregnant sister, her brother and two
cousins. To complete her degree Gabriela needed US$900. She says,
"Maybe I'll get lucky and win the lottery." For the foreseeable future,
her life is on hold. She's looking for any work she can find to help
pay the family's routine debts. But Gabriela's lucky to have gotten so
far; 65% of Nicaraguans starting school never finish their secondary
education.
Education initiatives collapse because incompetent, ideologically
motivated Education Ministry personnel are incapable of sustaining
program agreements from one semester to the next. Off the record, a
high-ranking World Bank official will say they would rather cut
Nicaragua loose; the government is so inept. They hang in there because
an admission of failure would have a very high political price.
The majority of Nicaragua's economically active people cannot generate
enough income to sustain their families. Family remittances from abroad
are now Nicaragua's principal source of foreign exchange. Rural areas
suffer depopulation as able-bodied men, women and children move to the
cities and beyond in search of work. Nearly a million Nicaraguans work
in Costa Rica, and most do so illegally. In a typical barrio in any
city around 60% of people will be out of work. Many people cook just
every other day in order to save money.
Y drogas tambien...
Drugs also have become a dominant and unwelcome fact of life in
neo-liberal Nicaragua. Bags of crack can be bought on the street for a
dollar. Most petty crime is drug related. Drug and solvent abuse have
become a way of life for the youths of the widespread and increasingly
violent gang culture. Neo-liberals should certainly admire the
enterprising spirit, while neo-cons may well approve the drug-induced
passivity.
Recently police chiefs on the Atlantic coast were arrested for
involvement in the local drug trade. A police chief in Managua is
alleged to have authorized paying informants with bags of drugs. Noting
the lack of economic options for survival apart from the drugs
business, local Atlantic Coast Catholic Bishop Pablo Schmidt, stated:
"If you take this away, how are they going to live? This is not an easy
problem to solve. And it destroys not only the image of a people, but
their culture as well."
Yes, this is globalization
Beside this misery, for over a decade USAID has subsidized agribusiness
elites in organizations supposedly promoting market solutions. At the
same time, the banking system starves small and medium farmers of
credit, stacking the broadly-based domestic agricultural economy in
favor of large agribusiness. The clear conclusion is that Nicaragua has
been softened up prior to being railroaded into a Central American Free
Trade Area (CAFTA) to yield preferential trade advantages for US
investors and corporations.
Mario Arana, the Nicaraguan government representative in recent CAFTA
negotiations remarked: "The offer made by the United States to Central
America is well below expectations and this is particularly true in the
case of Nicaragua." He added, "I believe that Nicaragua comes out worse
than the other countries, because of the nature of her economy,
fundamentally agricultural."
Jose Marin's story is emblematic. He owned a smallholding in the
beautiful rural coffee growing area of San Juan del Rio Coco, but he
had to sell it to pay off his debts. Now he lives with his family of
seven children in a rented shack. He works as a security guard earning
US$90 a month - and he should consider himself lucky.
Under the former Sandinista government, Jose Marin would have been able
to renegotiate his debt with the state-owned National Development Bank,
keep his land and continue producing. A talented young woman like
Gabriela Garcia would have finished her education with a grant from the
State. Books were subsidized. Health care was free. Prices for basic
goods were controlled by the State.
Murky politics...
The Sandinistas, who promoted that welfare state model back in the
1980s, now continue to emphasize health, education and support for
small and medium agricultural producers, but as part of a market
economy. The biggest group in the National Convergence opposition
front, the Sandinistas are still headed by Daniel Ortega who led the
opinion polls in the run-up to the last election despite controversy
provoked by sex-abuse allegations from his former step-daughter
Zoilamerica Narvaez, herself a prominent figure in Nicaragua's women's
movement. Most people believe he will again be the opposition
presidential candidate in the next election in 2005.
Despite widespread disenchantment with politicians, Nicaraguan civil
society is vibrant and vociferous, a valuable inheritance from the
revolution. After a decade of cutbacks in health, education and social
services, community associations and non-governmental organizations
have shouldered much of the burden. Their operations are funded
overwhelmingly by overseas donations from the plethora of aid and
development programs offered by foreign governments and aid agencies.
To a large degree, government cutbacks and market reforms in Nicaragua,
as elsewhere, are only feasible on the back of subsidies from foreign
donors. Neo-liberal accounts of international development seldom
acknowledge this fact.
The importance of Nicaragua
The importance of the Nicaraguan experience is that members of the same
gang who ran Reagan's illegal Contra war (Negroponte, Armitage, Abrams,
and others) are now prominent players within the Bush Junior regime.
Back then, they lied that Nicaragua threatened US security, just as
they have lied about Iraq. A look at contemporary Nicaragua therefore
gives some idea of what Iraqis can expect from their US occupiers.
Miguel D'Escoto, who guided the successful Nicaraguan case against the
US for terrorism in the International Court of Justice in 1986, wrote
last month, "It would be a serious mistake to conclude that the current
behavior of the United States represents something temporary that will
change when George Bush [Junior] leaves the presidency. Never in its
history has the United States taken a backward step in its drive
towards universal domination and never has it corrected its behavior,
going from bad to worse from the point of view of the rights of the
rest of humanity." He writes from experience. In Nicaragua, as
elsewhere, no self-determination is tolerated, and the US ambasor is
the de facto proconsul.
Today's neo-conservatives pontificate about democracy, freedom, and
economic development. One only has to look at Nicaragua to see what
this means. From the Nicaraguan perspective, US foreign policy is made
up of three main ingredients: hypocrisy, cynicism and ism.
Nicaraguan society was destroyed by the Reagan and Bush Sr. regimes to
make a policy point - countries that diverge from US control will be
undermined economically and, if sanctions fail to bring them into line,
subjected to military attack.
Fifty thousand people died during the US-instigated Contra war against
Nicaragua, ostensibly to put it on the "road to democracy". In 1987,
the International Court of Justice ordered the US government to pay
Nicaragua an indemnity of US$16 billion in compensation for the losses
caused by its terrorism. But of course, the US ignored the ruling and
pressured the 1990 Violeta Chamorro government to drop attempts to
secure this just restitution. Nicaragua was rewarded with an economic
aid drip feed and the prescriptions of the World Bank. Whereas Israel
receives US$540 per capita in economic assistance, Nicaragua, one of
the poorest countries in the world with a similar size population,
receives little more than US$7 [2]. Note, a very well off society with
a notorious apartheid-like reputation, receives over 70 times more aid
than a very poor and battered society, and a country battered by the
effects of American intervention. The US owes a moral debt to
Nicaragua, due to the war it waged against the country, the long-time
support for the former dictator Somoza, and the promises made leading
up to the 1990 elections. Seen in that light, US aid to Nicaragua is a
pittance.
Today, most people in Nicaragua are even worse off than they were
twenty years ago. The Clinton and Bush Jr. regimes intervened
decisively to ensure the elections of Arnoldo Aleman and Enrique
Bola=F1os; one a crook, the other a stooge. Under the aegis of the US
and the World Bank, these proxies, and Violeta Chamorro before them,
put in place the disastrous policies that have reduced most Nicaraguans
to ever-deepening penury. The hopes of the poor majority for a decent
life have disappeared. The sign at the end of the neo-liberal route for
Nicaragua reads loud and clear: "Dead end. Made in the USA."
Toni Solo is an activist based in Nicaragua and can be reached at
tonisolo@hotmail.com
Endnotes
[1] It is very difficult to obtain US aid figures for Nicaragua. First,
the Nicaraguan government doesn't have these figures, as any request to
the Nicaraguan Central Bank will reveal. Furthermore, much of the aid
is "in kind" - thus with US technicians or goods, and any value can
be imputed for these. Even if USAID states that it has spent $1.1bn
since 1990 (US Census Bureau tables show a total of US$540 million aid
for the same period), one must reckon that a significant portion of
this pays for US input - roughly estimated to be about 40%, i.e.,
funds that mostly pay for expensive American personnel and overheads.
Finally, one must realize that US aid is not under the control of
Nicaraguans. Aid to Nicaragua is not a lump sum like the aid Israel
receives to disburse at will.
NB: the US embassy, USAID, and Nicaraguan gov't agencies were most
unhelpful in obtaining these numbers. They all referred us to their
websites, and one can easily verify that there is little break down in
their numbers or no figures at all.
[2] For the figures on Israel, see Paul de Rooij's "Feeding the
Cuckoo," CounterPunch, Nov. 16, 2002. The Nicaraguan figure was
obtained as follows: the average reported aid flows for 1998 to 2003
were divided by the average population during those six years.
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