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 . 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
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.
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
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.
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.
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.
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.
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.
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
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
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,
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.
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."
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
- neo-business as usual
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.
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
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.
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
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.
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.
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
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.
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."
this is globalization
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.
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
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.
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
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.
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
importance of Nicaragua
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.
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.
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.
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 . 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.
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."
Solo is an activist based in Nicaragua and can be
reached at firstname.lastname@example.org
 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.
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.
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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