Nicaragua on a Dollar a Day…Forever?

Visiting areas of Nicaragua hard hit by Hurricane Mitch in 1998, one steps unmistakeably into the vicious colonial class war being waged by corporate plutocrats and their political and institutional fronts against the world’s poor. Despite the current disturbances in the capital Managua, it is still not a shooting war as it has been in Haiti since teh coup against President Aristide. But even so, conditions in rural areas around departmental centres like Somoto and Ocotal, in urban barrios in those towns and in larger urban centres like Esteli and Matagalpa, reveal widespread immiseration.

The pitiful legacy of 15 years of neo-liberal barbarism is a national phenomenon. The inhuman effects of extreme poverty spread far beyond the sprawling slums of the capital Managua. A more thorough indictment of the role of the World Bank, the International Monetary Fund and the Inter-American Development Bank would be hard to imagine.

And it is all deliberate. Not in the sense that the living-dead managerial class who draw their salaries in those institutions set out intentionally to starve millions of people and deny them access to education and healthcare. Like the bureaucrats of Stalinist Russia, Nazi Germany or imperial England and France, they just obey orders and care little about the consequences.

Poisonous Gradgrind

These imperialist enforcement agencies impose suffering on hundreds of thousands in Nicaragua because their corporate masters decided decades ago that North American big business needed a huge pool of slave labour in Mexico, Central America and the Caribbean. They needed to cut costs so as to compete with emerging economies in Asia and undercut European competitors. The principal means to achieve that aim have been to seek to try and destroy those countries’ domestic agricultural economies and to privatize their State sector resources.

The ruthless execution of those “free market” interventions created plentiful disposable slave labour for multinational corporations and facilitated the concentration of wealth divvied up between multinational corporations and local client elites. Perhaps the most vivid example of how this class war against the poor has affected people in Nicaragua is the Nemagon scandal that left thousands of Central American banana plantation workers and their families with their health destroyed as a result of indiscriminate use of dangerous pesticides. Decades on, workers and their families still seek compensation from giant agri-chemical multinationals.

Among many other things, this process has guaranteed ill-educated lumpen-electorates amenable to spurious exercises in “democracy” carefully controlled and manipulated by blatant foreign intervention. Where the voters fail to play ball, as in Haiti, the US and allies like Canada and France resort to old fashioned military coups. This regional process has also invariably accelerated already existing trends of environmental failure.

The fact that none of this is sustainable politically, economically or socially is of little importance to the policymakers and managers who make it all happen. They regularly take their cut and move on insouciantly to the next racket – in Iraq, Eastern Europe or Central Asia. In their wake, impoverished millions suffer regardless.

Who’ll pick what’s left of the coffee?

That neo-colonial rationale is why, in the 1980s, the Nicaraguan revolution had to be destroyed, just as the Cuban and Venezuelan revolutions face systematic escalating assault now. An emblematic place to begin looking at the results of that reality is the small city of Ocotal. It is a typical Central American market town close to the Honduran border in an area where US airmen first honed their skills at bombing civilians during the US colonial war against Sandino in the 1920s and 1930s.

In an area famous for its pine forests, now much depleted, the city lies in a valley about 640 metres above sea level. Entering the town, one drives over a high bridge over the Rio Coco river that runs on out to Nicaragua’s Atlantic Coast marking the border with Honduras. People will tell you that work is hard to come by in Ocotal, the departmental capital of Nueva Segovia, one of Nicaragua’s best coffee growing areas.

Rural areas here depend heavily on coffee for seasonal employment. But, as in other coffee growing areas, the volatility of coffee prices in recent years has severely disrupted traditional employment patterns. Huge numbers of small farming families and day workers have migrated elsewhere They move either to more fertile agricultural frontier areas closer to Nicaragua’s Atlantic Coast, to urban centres or to Costa Rica, in search of more stable work.

In 2004, as many as 800,000 Nicaraguans were estimated to work in Costa Rica alone. That statistic explains why family remittances from overseas are Nicaragua’s biggest source of foreign exchange. Local people have few options. Such large scale migration means that every year it is harder for Nicaraguan coffee growers to find the skilled workers necessary to pick coffee efficiently.

Nicaragua on US$1 a day, forever?

Other work is equally precarious. A nurse with a local NGO said she works for US$35 a month because her choices are either that or total indigence. She is relatively lucky in fact. In the local community of Santa Rosa about 15km from Ocotal on the road to the famous maize growing area of Jalapa, people get by on US$20 a month. It seems inconceivable that things could have gotten worse than they were around the time of Hurricane Mitch. But they have.

A visiting paediatrician from Boston doling out albendazol to mothers and children in these communities asked rhetorically, “What’s the point of treating for parasites when they just go back to drinking from contaminated water supplies?” There is a health post in this community of about 550 people. But it has no nurse or doctor and no medicines.

The relief and reconstruction effort that brought brief interventions from international aid agencies, USAID and the European Union petered out in just two or three years. A typical income in rural communities like Santa Rosa or Nuevo Dipilto or other communities around Ocotal is under US$25 a month. Unemployment in much of Ocotal itself runs at over 60%, just as it does in the marginal barrios of every large urban centre in Nicaragua.

Santa Rosa, a community of over 500 people has no electricity despite attempts by aid agencies to provide power with wind-turbines. Seven years ago, the pre-school was supported by a European NGO. Now other foreign organizations assist. But still, the diesel power generator mostly lies idle for lack of fuel.

The primary school and the pre-school have been painted up and equipped by Operation USA, a California based NGO. But their effort has ended too. Few NGOs have resources to sustain such support. What sense does it make to talk about sustaining educational, health or social services in communities abandoned by central government where people earn less than US$30 a month?

Mothers and babies die; World Bank heart melts, a teeny-weeny bit.

That reality means those much needed services lurch from one resource crisis to the next, from dearth to glut and back again to zero. True to the neo-liberal model, the existence of central government can only be inferred from its empty symbols – like the health post with neither staff nor medicine. Democracy in Nicaragua means that every 6 years people get to elect a different set of corporate flunkeys to sell off the country over their heads in deals approved by the World Bank and the IMF. Meanwhile their own basic needs go neglected.

So it is ironic to discover that the Sandinista revolution’s Casa Materna program for expectant mothers in rural areas has survived. Dedicated women health workers sustained this integrated health program in Ocotal and elsewhere throughout rural Nicaragua out of sheer commitment throughout the 1990s. Recognition of the program’s value by successive Liberal Alliance government health ministers did not translate into government funding.

When the Casas Maternas finally did get belated funding from the World Bank it was not for salaries, but for infrastructure. Apparently, even the World Bank cannot stomach maternal and infant mortality figures that slump too far below Cuba’s brilliant example. But they still expect the program’s health workers to live on air.

Let them eat mobiles…..

Dipilto Nuevo is somewhat different to Santa Rosa. Being higher up, its climate saps one’s energy somewhat less. The surrounding pine forests stubbornly sustain a beautiful presence, despite persistent burning by rural families desperate for space to cultivate and losses from recurrent infestation by timber pests. But, as everywhere else, the climate is changing.

Talking to local community promoters one learns that average temperatures have increased several degrees over the last five years – from around 26 centigrade to around 32. The desertification, so much more noticeable around the town of Somoto further west, is steadily encroaching eastwards towards Dipilto. Western-lying communities find water resources scarcer year by year.

A new feature since Mitch on the road south from Ocotal is the number of communications towers. Their red and white painted steelwork makes them easily visible on one hilltop after another. As in other countries, mobile phones have become both a style accoutrement and a necessity for large numbers of people in Nicaragua.

An Ocotal drugstore in a Spanish colonial era building, the ornate cornices of its high ceilings belying dilapidated adobe walls, offers top-up cards for US$3. That’s three days’ income for a typical family in Santa Rosa, Dipilto Nuevo or one of Ocotal’s marginal barrios. The incongruity speaks eloquently the grotesque and unsustainable inequalities generated by over a decade of bogus “free market” capitalism.

Plan Puebla Panama softly softly, sealed with a CAFTA

When one starts asking why all this has happened, everything points to the subordination of peoples’ well-being to corporate profit. Corporate neo-colonial practice necessarily offers death, sterility and destruction in return for ripping out the guts of a country’s resources and people, leaving behind burnt-out, sour dregs. The infrastructure projects of Plan Puebla Panama – whose key components are being quietly and determinedly implemented throughout the region – is emblematic of that.

Plan Puebla Panama, funded with loans from the Inter-American Development Bank treats the Central American isthmus as a kind of race-track transit area. The main aim is rapid shipment of local raw materials and goods made by local slave labour off to their masters’ lucrative operations in the North. High-value imported consumer goods come back the other way.

One just has to stand on the Panamerican Highway and watch the endless round of container trucks whizzing ceaselessly to and fro night and day to realize this. Step off the asphalt highway onto a local rural road and speeds drop to around 30km an hour. So for big business, costs are slashed. For local agricultural producers, communications infrastructure remains hopelessely inadequate.

The annual chorus of complaints from agricultural producers in Nicaragua on this score is a time-honoured ritual now. The priorities could not be clearer. To confirm the sell-out of local agricultural producers, local farmers confirm that credit of basic grain production is non-existent.

In tandem with all this, the United States uses trade measures like the mis-named Central American Free Trade Agreement (CAFTA) to guarantee an investment framework enabling US corporations and their local clients to exploit Plan Puebla Panama infrastructure and local slave labour to the limit. It is puzzling why so many people in the United States seem to think these arrangements will benefit them. The whole idea is to shift business out of the United States to where costs are cheapest.

Central America is such a place. Not only does most of its population make do on subsistence wages. They also pay the infrastructure costs of the multinational corporations through indirect and direct taxation that is repaid to the Inter-American Bank for further corporate-friendly loans further down the line. For big corporations, what could be sweeter?

Herty Lewites. Ambassador Moore gets something right, maybe….

In that context, last year’s municipal elections gave the US embassy in Managua a fright. The Sandinista FSLN party swept the board, winning all but a handful of the country’s municipal authorities. Subsequently, the usual US clients in the Liberal Alliance and the Conservative Party look less and less likely to deliver the electoral goods readily when the next presidential elections are held in 2006. A Sandinista presidential victory in 2006 could spoil the party for Wall Street shareholders and dividend-croppers and mess up corporate plans for the region, a lesser reprise of the overthrow of the Somoza dictatorship in 1979.

Looking around for a likely heavy-hitting champion, US ambassador Barbara Moore is currently smiling fondly on former FSLN mayor of Managua, Herty Lewites. Lewites may be the most astute political embodiment of the fatal embrace in which Nicaragua is held by international monopoly capitalism. He is a soft neo-liberal businessman, who still claims to be a party member of the FSLN, despite being rejected as such by the FSLN party authorities.

In the 1995 municipal elections he ran against the Sandinista candidate in Managua, allowing the hard right Liberal Alliance to win the country’s capital. By the next round of municipal elections he had returned to the FSLN and won Managua as a Sandinista candidate. But he has since trodden a path well worn before him by dissident Sandinista figures like former guerrilla hero Eden Pastora and prize-winning novelist Sergio Ramirez.

Lewites “Golden Oldies” hour

Pastora and Ramirez in their different ways turned against the FSLN and subsequently faded into irrelevance. Now Herty Lewites is challenging Sandinista leader Daniel Ortega by making the same well-worn claims as Pastora and Ramirez before him. The indictment always runs the same: “Ortega is an autocrat, Ortega stifles democratic debate, Ortega is out of touch.” In fact, Ortega behaves no more undemocratically than Tony Blair, Silvio Berlusconi or Jacques Chirac, though Daniel Ortega himself might not welcome such comparisons.

Lewites’ only strong argument points to Ortega’s three-time failure to win the Nicaraguan presidency. Ortega, argue Lewites’ supporters, is a loser. But last year’s municipal election results cast doubt on that claim. In fact, whether or not Ortega is ever elected President in Nicaragua for a second time, his political achievement since he lost the 1990 election has been doggedly successful and enduring.

Ortega’s opponents, so quick to question his electoral record, omit the obvious. Last year’s FSLN victory in the muncipal elections was a triumphant vindication of his political leadership. They made the hugely well-resourced attempts by traditional political parties backed by the United States to destroy Ortega and the FSLN look foolish. The best efforts over twenty five years of US governments from Jimmy Carter to George W. Bush, with everything in their favour, have failed.

Will he do the splits?

So now the US government is backing Lewites either to divide the Sandinista vote or to patch up a kind of Liberal-Independent electoral frankenstein creature for the greater glory of US-style “democracy”. So far Lewites has mobilised some support among disgruntled Sandinistas, many of whom have legitimate concerns about continuing contradictions within the FSLN leadership, But his most fervent support lies inside the US embassy over by Managua’s Batahola Sur. As for Pastora and Ramirez before him, the alternatives for Lewites are simple.

Either he can serve like Sergio Ramirez merely to split the Sandinista movement for a brief moment of electoral prominence leading to ultimate political oblivion. Or he can make the small ideological hop necessary to join his natural partners in the wealthy corporate-client class represented by the traditional Liberal and Conservative parties. The latter is a more likely move for the opportunist which even Lewites’ friends acknowledge him to be.

For the Embassy, a presidential campaign ticket running Lewites together with a serviceable Liberal candidate like Eduardo Montealegre or the somewhat milder Jose Antonio Alvarado would be a handsome prize. Lewites is quite capable of performing the dainty political gymnastics necessary to fall swooning into the arms of the Liberal Alliance. It all depends how badly he wants to be a United States embassy manservant wearing the Nicaraguan presidential sash in Managua.

Ecuador and Bolivia: grinning skull and crossbones

But as the conditions of material life for the poor majority in Nicaragua continue to decline, such political calculations may well be overtaken by events. Politicians in Nicaragua are well aware of the recent overthrow of yet another president in Ecuador before completing his term of office. By way of additional poltical memento mori, popular protest in Bolivia is also a constant warning that popular patience is by no means infinite.

Alarmed at possible unrest in the face of continuing sharp price rises the government recently authorised a nugatory, not-yet-implemented 15% wage rise for workers throughout Nicaragua. The pay rise won by teachers by their strike action earlier this year has still not been paid as agreed. Meanwhile, petrol and diesel fuel, gas for cooking, cement, zinc roofing and steel rebar for basic house construction, along with a host of other basic goods and materials, all doubled in price through 2004.

The price of electricity – a privatized monopoly – rises relentlessly. These examples are totally representative of inflationary trends in Nicaragua, however the Nicaraguan Central Bank may try and massage the statistics. Sure enough, the irrelevance of a 15% wage increase to the lives of ordinary people living in this neo-liberal slave economy soon became apparent in last week’s violent protests.

Those protests have sharpened and increased in the last few days, with many protesters and police suffering injury. The crisis began after fare increases in public transport in Managua from US$0.15 to US$0.18. Note that figure.

A US$0.03 cents increase in bus fares was enough to spark violent protests throughout Managua. Government and other Liberal politicians were quick to accuse the Sandinistas of fomenting the disturbances. In fact people have had enough of the neo-liberal slave economy they have been living in for so many years.

This is another indication of how far the Nicaraguan political classes are behind the flow of popular feeling. The huge rise in people’s basic living costs is as much due to the continuing weakness of the dollar as it is to the rise in the price of oil. Only government regulation can protect people’s basic living standards.

Many people fear that last week’s disturbances in Managua may be simply a mild taste of what’s to come. The dollar continues to lose value as a secure reserve currency and oil prices will remain high for years to come. The arithmetic is simple. US client politicians in countries like Nicaragua may soon face popular protest following similar patterns to the mass mobilization familiar in Argentina, Bolivia and Ecuador.

TONI SOLO is an activist based in Central america – contact via