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Solo, Toni  (2007) Nicaragua: Class and the ethics of vanity. Double Standards : -.

"History ends up looking like private property, whose owners are the owners of everything else."Rodolfo Walsh(1)

Over the next few months the new coalition government in Nicaragua will begin to implement programmes to try and redress the immiseration of Nicaragua's people imposed by 16 years of corporate crony-capitalism. In January this year, the administration led by Daniel Ortega took over a government ransacked by their predecessors in the crudest possible way. This was only to be expected of the regime under former President Bolaños who had been Vice President to Arnoldo Aleman throughout the kleptocracy they both supervised between 1996 and 2001. But one hears no condemnation from North American or European governments or their corporate media of the Bolaños' "piñata".

After they lost the election in 1990, that was the term used to denigrate the Sandinista Front for National Liberation's frantic attempt to compensate thousands of functionaries and workers facing poverty and unemployment after a decade of service and sacrifice. It was also an attempt to try and keep hold of resources they believed would only be divvied up between the various factions of the incoming oligarchy. On that latter score, events proved their fears to be all too justified. Now the thoroughgoing corruption of the Bolaños administration is available for all to see. But this embarrassing reality has been kept very quiet by the foreign governments who consistently and fatuously praised the Bolaños administration for its commitment to root out corruption.

It has long been the case that the governments and international financial institutions that talk loudest about anti-corruption tend to be the very ones that promote corruption in the first place. Policies of privatization, deregulation and reduction in government services constitute a determined rejection of even notional attempts at redistribution of meagre macro-economic growth. In a small society like Nicaragua's, dominated even more noticeably than societies in North America or Europe by a greedy, venal elite, such a policy stew was bound to foment corruption. One leading analyst has calculated that the Nicaraguan Treasury has lost as much as US$13.6 billion to corruption, tax evasion, spurious tax exemptions and privatizations since 1990. (2)

After the watershed 1990 election, corporate capitalism's fierce propaganda onslaught against the legacy of the Sandinista Revolution promoted the individualist consumerism that facilitates private capital's assault on the common good. Its frontpersons, Violeta Chamorro, her son-in-law Antonio Lacayo and their colleagues, followed later by Arnoldo Aleman and Enrique Bolaños set about dismantling government's influence in all areas of economic and social life - from health and education to industry and agriculture. While the US and its proxy international financial institutions decried government intervention in society and the economy, they instigated ideology-driven interventions of their own in favour of big business. It is worth reviewing the subsequent history so as to understand some of the characteristics of Nicaragua's current political arguments, especially vis-a-vis the new government led by the FSLN.

16 years of neo-liberal Dark Side
The process of demolishing effective government had many effects. Apart from facilitating concentration of wealth in the country's oligarchic elite, wrecking government's capacity to redistribute wealth, it weakened the possibility of sustaining a coherent popular movement. As in the rest of Central America, trades unions found hard-won gains from earlier decades steadily eroded as the low-wage, high-profit "free market" model was ruthlessly implemented with enthusiastic government support. With credit harder to obtain and technical assistance cut back, the cooperative movement was deliberately undermined. Hundreds of co-ops broke up. By contrast, private non-governmental organizations proliferated. Many prospered from development funding from large international institutions and major foreign development agencies. Others tried to survive providing genuine grass-roots services.

Ideological arguments in the FSLN began soon after their 1990 electoral defeat and tended to mirror the fragmentation of society in general. They turned fundamentally around how far progressive political agendas could accommodate to aggressive corporate capitalism. It was easy in the mid-1990s to see revolutionary aspirations and especially Cuba's determined defence of those aspirations as an anomaly. "Globalization" seemed to sweep all before it. European-style social democracy and submission to "free market" capitalism-with-a-human-face looked attractive. In 1994, from that argument and the various personal acrimonies accompanying it, sprang the Movement for Sandinista Renewal (MRS) led by former Vice-President Sergio Ramirez, one of Latin America's pre-eminent novelists.

After losing the chaotic, fraud-ridden 1996 presidential elections to Arnoldo Aleman's Liberal Alliance movement, arguments within the FSLN became steadily more bitter. The main disagreement had to do with the nature and extent of the quid pro quo involved in dealing with Aleman's governing PLC party to facilitate legislation in the National Assembly. The disagreements were compounded by damaging but disputed accusations of sexual abuse against Daniel Ortega by his step-daughter in 1998. Despite, or perhaps thanks to, vicious attacks attempting to make political capital out of the affair, Ortega's credibility held up. He lead the FSLN's significant progress in the municipal elections of 2000, when the party won control of the capital Managua.

In 2001, he stood as presidential candidate for the FSLN-led Convergencia Nacional coalition. Despite the openly corrupt use of post-Hurricane Mitch aid money by the sitting government, that election was won by Enrique Bolaños following a campaign in which US ambassador Oliver Garza openly and actively campaigned on Bolaños' behalf. Then FSLN vice-presidential candidate, Agustin Jarquin, related how on the night of the election count Garza stalked into the count centre in Managua, halted the vote-counting process and demanded changes in personnel, which were made. The election took place in the shadow of the horrific attacks in New York and Washington, which the US embassy and its protégé Bolaños shamelessly exploited, accusing the FSLN of being supporters of terrorism.

Following yet another loss in presidential elections, leading Sandinista dissidents insisted that either a change of candidate and policies, or both, were essential for the FSLN. But their arguments faltered when the FSLN-led Convergencia Nacional made significant gains in the 2004 municipal elections. Even so, disenchanted with the FSLN's political deal with the PLC, still led by disgraced ex-President Arnoldo Aleman, several talented and experienced leaders like Herty Lewites, Henry Ruiz, Victor Tirado, Victor Hugo Tinoco, Luis Carrion and Monica Baltodano either left the FSLN or were expelled. In 2005, the party they supported, the Movement for Sandinista Renewal led by the widely respected Dora Maria Tellez left the Convergencia Nacional in order to support the presidential candidacy of former FSLN mayor of Managua, Herty Lewites.

With both the Sandinistas and the Liberals split, the 2006 elections seemed to mark a possible change in the loyalty inertias that have characterized Nicaraguan politics since the Contra war of the 1980s. Herty Lewites' untimely death in July of that year lead to the MRS substituting a former top-level official of the Inter-American Development Bank, Edmundo Jarquin, experienced and capable, but not nationally well-known. Immediately prior to the election, in an apparent attempt to embarrass the FSLN, President Bolaños submitted a request to fast track an anti-abortion law through the National Assembly. The move followed a Catholic Church organized anti-abortion rally of around 200,000 people as part of an unscrupulous campaign to take advantage of electoral considerations. The legislation passed easily since no party was prepared to risk the electoral consequences of bucking the political and economic power of the Catholic Church hierarchy.

Kinds of ethics worth wanting (3)
It is in this context that the FSLN came to power for the second time led by Daniel Ortega. The FSLN's electoral programme was clear, a return to genuinely free education, more resources for health services, food security programmes for areas suffering hunger and malnutrition, prioritizing financial and technical support for small agricultural producers and cooperatives, working with Venezuela to guarantee energy supplies, promotion of foreign and national investment so as to increase employment, a non-aligned foreign policy and improved management of the environment and natural resources. Two key FSLN commitments are to promote more direct democracy and to encourage national reconciliation.

Despite the clarity of the FSLN's programme for government, anyone trying to follow Nicaraguan affairs through the corporate media - including the two most important Nicaraguan national dailies La Prensa and El Nuevo Diario, both owned by members of the elite Chamorro family - would find it hard to get a coherent account of government measures. Disinformation abounds. Likewise, coverage in alternative media also tends to be dominated by the views of the FSLN's political opponents in the MRS. One might think this is simply an accident or a coincidence, that people from diverse backgrounds happen to concur in their views of what is happening in Nicaragua and that therefore their views must present a reasonable account of reality.

Another view is that available interpretations of events in Nicaragua are inextricably, viscerally linked to class. A good example is the clear preference in the foreign solidarity and development managerial class for social democrat MRS interpretations of Nicaragua's political reality as this quote from a recent article by Witness for Peace in the Countercurrents web site clearly demonstrates. "For years, civil society groups' concrete proposals for change have fallen on deaf ears as the government insisted on adhering to the U.S. or IMF policies that provoked popular protest. While the details of policy shifts are difficult to predict at this early point, the Ortega administration's initial action and discourse offer some indication that several civil society demands for change may now be heeded." (4)

The appeal to the sacred "civil society" cow as some kind of arbiter of FSLN government policy is remarkable for its vanity. FSLN government policy lines were clear from well before the 2006 election, but Witness for Peace suggests the Ortega government needs "civil society" in order to know what it should do about 16 years of neo-liberal economic war on the impoverished majority. This reads suspiciously like the liberal social democrat managerial class staking out its claim for funding from their respective donors.

Compare this from a leading ideologue of the MRS, Carlos Tunnerman Bernheim, commenting on FSLN government proposals for more direct democracy, "Solid democratic governance relies on the existence of broad social and political agreement....a balance between the powers of State is not sufficient, constructive relations with civil society are also necessary that permit long term policies to rest on broad national consensus.........While political action aims to attain power, when it is inspired by ethical principles the drive to power does not end with power in itself but rather in the capacity to respond to the demands of the citizenry in a context of full respect for human rights and the rule of law."(5)

Tunnerman shares with Witness for Peace the social democrat vision derived from liberal middle-class experience of political pluralism in North American and European capitalist societies. The underlying assumption is that the analysis of the managerial class embodied in what they call "civil society" - namely, they themselves - should be privileged and that it is necessarily benign and "ethical". Anyone unaware of the bitter political sectarianism from which the MRS sprang might find these clear arguments for European-style social democratic societal consensus appealing. But there are other ways of looking at things which pose legitimate questions about this particular variety of class-bound "ethics".

Ethics and fundamental loyalties
When Oscar Rene Vargas suggests "real power no longer lies with the political class but rather is wielded by the economic class via opinion moulding and "manipulating" political professionals"(6), he might well be alluding to the plethora of stakeholders in Nicaragua's continuing neo-colonial subjugation, including the academic, intellectual and "non-governmental" managerial classes among whom sympathy for the MRS is strongest. It is striking that the labels they apply to the FSLN - "undemocratic", "authoritarian", "opportunist" - conform closely to concerns expressed about the FSLN in North American and European government pronouncements supplemented faithfully by commentary in those countries' corporate media.

When FSLN opponents appeal for liberal social democrat political and economic arrangements in Nicaragua they neglect a deep historical fact. Namely, the countries currently enjoying such Panglossian arrangements are only able to do so on the back of centuries of racism, slavery and colonial pillage - a record sustained to the present day via debt, "aid" and inequitable terms of trade locked into place via the World Trade Organization and "free trade"-in-your-sovereignty deals. The FSLN won the election in 2006 on promises to improve the material conditions of life of the impoverished majority of people in Nicaragua resulting from that history. They are unlikely to be able to do so by adopting the very structures, standards and logic that have sustained Nicaragua's immiseration since the 19th century.

Essentially, the political argument in Nicaragua is between the right and centre on one side arguing that Nicaragua is best off colluding faithfully in the designs of the imperial powers and, on the other side, the FSLN and nationalists like Jaime Morales Carazo who seek to broaden available economic options through links with the various integrationist models being worked out in Latin America. So the MRS academic and intellectual class string along with their right-wing allies' diffidence about the ALBA development cooperation agreements between Nicaragua, Venezuela and Cuba. They prefer existing models like the development cooperation agreements with the European Union which tend to be seen as more benign than those of the United States.

One of the leading representatives of the European Union countries in Nicaragua is Eva Zetterberg, Sweden's ambassador who helps manage some effective development projects in Nicaragua via Sweden's development cooperation programme. In an interview she gave me in September last year, Zetterberg discussed varieties of intervention including those of the US, the EU and Venezuela. Zetterberg remarked in passing that the EU intervention in Nicaragua was necessary and important because Nicaraguans have been unable to manage their affairs successfully on their own. However well-intentioned such a remark may be, especially from someone so clearly committed to doing their best for Nicaragua's people, it very clearly indicates the colonialist attitudes that still underlie contemporary development cooperation relationships with member countries of an imperialist bloc like the European Union.

While differences of emphasis and style certainly exist between US diplomats like ambassador Paul Trivelli and his European counterparts, all of them prefer the pro-free market policies of the MRS and all to a greater or lesser degree have reservations about the FSLN, whatever diplomatic niceties may be exchanged for public consumption. During the election campaign Trivelli consistently contrasted the "undemocratic" FSLN with the "democratic" MRS and with right-wing banker Eduardo Montealegre's Nicaraguan Liberal Alliance party (ALN). So at that fundamental ideological level the MRS tends to identify with the designs of the governments of the United States and Europe to keep Nicaragua securely within their imperial orbit. One might argue about the ethics of that.

Ethics and neo-colonial perception management
Beyond that fundamental moral question - why should the interests of Nicaragua's impoverished majority be subordinated to the neo-colonial designs of the great powers? - critics of the FSLN in Nicaragua also seem to be ethically-challenged when it comes to reporting specific events and their context. In 2005, during the week of the vital vote on the Central American Free Trade Agreement (CAFTA) I met up with Canadian writer Jonah Gindin of Venezuela Analysis. He had just come from one of the Thursday morning information briefings run by members of the local North American solidarity and development community in Casa Ben Linder. Jonah asked me why the FSLN supported CAFTA.

Perplexed, I explained to him that in fact the FSLN legislators had voted unanimously en bloc against CAFTA on the Monday of that very week. Jonah had spent a 90-minute briefing on CAFTA and emerged from it without being told the FSLN had clearly opposed the measure in the National Assembly. Not everyone is as determined to get the whole story as Gindin. The disinformation campaign on that issue mounted by the MRS and its sympathisers was consistent and thorough. To his credit, Sergio Ramirez has subsequently clearly acknowledged the fact of the FSLN's vote against CAFTA. Others, in particular Monica Baltodano, seem deliberately to have spread the falsehood that the FSLN supported CAFTA. The hypocrisy of this takes some beating since both the MRS presidential candidates, Herty Lewites and then Edmundo Jarquin, supported CAFTA themselves.

Any fair coverage of Nicaragua's recent political history would explain that since 1990, the FSLN, while always being Nicaragua's single largest political party, has never had a majority in the National Assembly. They have always been out-voted by the combined Liberal parties and have only succeeded in promoting legislation of their own through deals with whichever of the Liberal parties has been inclined to work with them. That is the origin of what critics of the FSLN and the PLC call "El Pacto" (the Deal) - supposedly the epitome of anti-democratic under-the-table chicanery. (It may be worth noting that no politicians in Nicaragua, either right or left, are prepared to foment violent conflict to force radical change.)

Critics of the FSLN never refer to the fact that in the 2006 election the "pacto" parties of the PLC and the FSLN won over two-thirds of the vote while the "anti-pacto" parties won just 35%, including a bare 6% for the MRS. That may well be interpreted as the Nicaraguan electorate blowing a huge raspberry at MRS and ALN hypocrisy, since those parties themselves made a little publicised deal in in Miami, along with the PLC, in June of 2006 agreeing to cooperate against the FSLN. That particular arrangement with the right-wing mirrored an MRS funding agreement with the electoral intervention specialists of the US International Republican Institute, including a meeting with IRI board member Jean Kirkpatrick, supporter of mass-murderer and fraudster Augusto Pinochet, Guatemala's genocidal Efrain Rios Montt, the "dirty war" Argentinian military junta and promoter of the US-fomented Contra terror war in Nicaragua. One might think in amongst all of that some ethical problems might suggest themselves .

Another issue which has been manipulated against the FSLN is that anti-abortion vote in the National Assembly, shortly before the presidential elections. Reporting of the vote generally failed to provide context, for example noting that the legislation was presented by Enrique Bolaños under a fast track procedure, or noting the massive anti-abortion march just weeks earlier and the ruthless pressure around the vote from the Catholic Church hierarchy. Instead, much reporting suggested that the vote had been actively driven by the FSLN and ignored the role of the other parties who were indeed determined to pass the measure and were hoping to embarrass the FSLN immediately prior to the presidential vote.

MRS women's activist Sofia Montenegro, a leading member of the local feminist managerial class, has correctly pointed out that Daniel Ortega's politically influential wife, Rosario Murillo, is personally opposed to abortion. Unfortunately for the commitment to democracy espoused by Montenegro and her MRS colleagues, Murillo shares that view with a clear majority of people in Nicaragua. Nicaraguan society remains firmly under patriarchy, with both the Catholic Church and the increasingly influential evangelical churches policing traditional Christian taboos. Montenegro and her MRS colleagues could always try dissolving the Nicaraguan people and electing another one - though the ethics of such a step might be questionable. However, one should not be flippant about an issue which puts the lives of many vulnerable women and girls at risk.

In that case, it may be legitimate to ask, since fierce critics of the FSLN like Montenegro, Monica Baltodano and leading Nicaraguan poet Ernesto Cardenal are genuinely concerned about human life, how many more women might have died untimely deaths as a result of the overall policies of a neo-liberal ideologue like Eduardo Montealegre becoming president rather than a socialist like Daniel Ortega. The June 2006 MRS deal in Miami with Nicaragua's Liberal parties aimed for a win by the ALN's Montealegre or the PLC's Jose Rizo. Ernesto Cardenal agressively and explicitly suggested people should vote for a right wing candidate in preference to the FSLN's Ortega. In fact, the chances of getting the new anti-abortion legislation modified to protect vulnerable women and girls are very much higher under an FSLN government than under one of the right wing Liberal parties.

The vicious personal attacks against the FSLN's Daniel Ortega and Rosario Murillo by leading MRS figures, like Baltodano, Cardenal or Montenegro, find their echo among influential foreign sympathisers. One has to ask what the ethics are of criticising Murillo and Ortega for driving Mercedes Benz - a regular anti-FSLN jibe - when on any Thursday morning in Managua outside the Casa Ben Linder the congregation of SUVs belonging to the local North American solidarity and development outfits mark a lamentable disregard for the planet's ozone layer. Nor are Montenegro or Baltodano famous for their cycling exploits - they too enjoy the material trappings of Nicaragua's political and intellectual managerial class in which they play a talented and important role.

Beyond "ethics" - what is to be done?
While the MRS and its sympathisers work out how far they are prepared to accommodate to the continuing neo-liberal agenda of the imperial powers, the FSLN is trying to work out its own set of contradictions at the same time as coping with the exigencies of government. Influential intellectuals like Carlos Tunnerman have the luxury of putting sententious rhetorical questions about policy direction.(7) By contrast, the FSLN is trying to implement its domestic programme of government as a minority party in an ideologically hostile legislature and in conditions of extreme uncertainty in the international economy. An oil price spike following a US attack on Iran would send most countries in Central America into economic crisis. Even without that catastrophe, market uncertainty about the dollar tends to make economic planning a lottery for a country located in a dollar-dependent region. Nor can the possibility be ruled out that the US government, in cahoots with the international cartel of Central Banks, is managing dollar decline as a Damocles' sword, held over dollar-dependent governments to keep them compliant.

Currently, the Ortega government's credibility is high. The early decision to slash and cap ministerial salaries has been followed up by unequivocal support for moves against corrupt officials, whatever their party affiliation. Sandinista mayors have been among those removed from office for misuse of public funds. With support from Venezuela worth over US$400 million, the government has managed to stabilise the country's long-standing energy crisis. As the rains that herald the planting season draw near, more viable credit arrangements are being made for agricultural producers, especially cooperatives. Increased technical support, assistance with mechanization and the provision of cheap urea for fertilizer should encourage production of basic grains and valuable export crops like sesame seed.

Ortega's recent criticism of President Bush's agreement with Brazil's President Lula on ethanol production indicates that the FSLN is well able to manage a critical policy line between trying to encourage socially responsible private investment while protecting the natural environment and promoting sustainable agriculture. The division of labour between Ortega and Vice-President Jaime Morales seems to reflect the balance the FSLN wants to maintain between a willingness to work with corporate big business and a determination to carve out wider government-managed economic policy options. Infrastructure improvements have already begun on the country's water system and long-neglected highways, like the one linking Sebaco, Matagalpa and Jinotega.

Foreign solidarity and development organizations have a relatively limited role to play in helping rebuild Nicaragua's economy and create employment. It is mostly in the area of social policy that such outfits can accompany people in Nicaragua and work with them to improve their lives. Nicaragua needs these organizations because they bring in foreign exchange, generate economic activity and provide valuable health, education and social services in a country where around 70% of people live in poverty and where government services have been systematically cut back for over 15 years. The policy of many of these organizations starts from the initial question, "Who should we work with?" Their answer is to work with people in partner organizations who tend to think like them and to share the same managerial class view.

It might be more ethical to start with the question "What should we do?" A government is in power committed to working seriously via clear policies to transform the conditions of material life for Nicaragua's impoverished majority. People in Nicaragua cannot afford the vanity with which we in the solidarity and development managerial classes preen ourselves on our dubious moral cleanliness. For once, we should perhaps acknowledge our own contradictions and think about what we can do to help the FSLN government deliver on its policy commitments to Nicaragua's people. We certainly have no business colluding with an unscupulous local social democrat managerial class trying to take ownership of perceptions of what the FSLN is trying to do.

Neo-liberal Nicaragua: Neo Banana Republic
By Tony 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 Bolaños 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 Bolaños in Gordoman's ransacking of the treasury.

In February 2003, in a regional seminar on corruption, US Ambassador 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 Bolaños." Setting the tone of his anti-corruption government, President Bolaños 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?"

Bolaños 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 Agustín Jarquin related how the then US Ambassador 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 weeks to confirm all the results against a background of acrimonious political wrangling. It is possible Garza was confused – maybe he thought he was in Florida.

Perhaps this is an example of what former US ambassador, 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 ambassador 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 sadism. 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 Bolaños; 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

[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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