Nestor Avendaño: Where Is the State’s Role in the National Development Plan?

A respected Nicaraguan economist shares his critical reflections on the pardoning of Nicaragua’s foreign debt as part of the initiative for highly indebted poor countries (HIPC) and on the huge gaps in the National Development Plan, all against the backdrop of CAFTA.

Néstor Avendaño

It is now being announced that in December Nicaragua will finally reach that elusive culmination point in the initiative for highly indebted poor countries known as HIPC. Even Indian economist Anoop Singh, director of the International Monetary Fund’s Western Hemisphere Department, confirmed during his visit to Managua in October that “it is now very near.” Let’s hope it’s true this time. In my view, the best cooperation the international community can offer Nicaragua in the short and medium term is this write-off of a substantial part of its foreign debt.

Who gets the credit?

Reaching what the HIPC initiative’s authors call the “culmination point” is not an achievement that can be claimed by this government alone. A string of earlier government officials have participated in the task of reducing the foreign debt, both within the HIPC initiative and outside of it. The list includes Erwin Krüger during the Chamorro government, Noel Ramírez, head of the Central Bank during the Alemán government, and now Eduardo Montealegre, Bolaños’ treasury minister.

I believe that one reason Montealegre didn’t resign his government post when the Constitutionalist Liberal Party (PLC) told him to do so or leave the party board was that he wants to be seen as the person who got Nicaragua to this moment, however wrongheaded such an idea is. While his signature will appear on the HIPC agreement, it won’t be a personal achievement, or a success attributable to just the Bolaños government, or even the past ones I mentioned. Civil society organizations need to let the public officials know that the real credit goes to the entire Nicaraguan nation, which had to make tremendous sacrifices over 16 years of continuous economic adjustments to reach this culmination point.

What debt will really be pardoned?

Many people think that the entire debt will be pardoned, and even the government propaganda and the politicians state that 80% of Nicaragua’s debt will be written off when it reaches the culmination point. But neither is quite true.

The extended HIPC initiative, discussed by the Group of Seven in Cologne, Germany, in June 1999, upped the pardon for qualifying countries from 80% to 90%, or even more if need be. That’s the good news, while the bad news is that not all of Nicaragua’s debt is eligible for this pardon. It is applicable only to the part subject to restructuring, which means the debts contracted up to October 31, 1988, according to the Paris Club. The debt we’ve been acquiring since then is ineligible because it was granted under very concessionary terms: payable over 40 years with a 5-10 year grace period, and annual interest rates ranging from the 0% that the World Bank is charging us to the 2% being charged by the Inter-American Development Bank (IDB). Nicaragua has no capacity to contract debts on the international market, and can barely assume responsibility for such “soft” loans as these.

Nicaragua doesn’t earn enough from its exports to pay its foreign obligations. Whether right or wrong, the HIPC initiative’s criterion is that a country’s foreign debt balance cannot exceed 150% of the annual value of its export of goods and services and still be sustainable. Nicaragua exports US$850 million in goods and services annually (US$600 million in goods alone). Using the HIPC criterion of 150% of our exports, a sustainable debt balance would be about US$1.3 billion. But Nicaragua still owes US$6.4 billion even after past governments, particularly Chamorro’s, negotiated the cancellation of much of the more than $11 billion debt both inherited and newly created. To bring this totally unsustainable amount back into line, some US$5 billion of our debt would have to be written off.

The HIPC initiative will only pardon the debt’s unpaid principal, which is around US$4 billion. While that adds up to US$5 billion for the creditors, considering the interest payments on that debt they will also lose, Nicaragua will still have a debt of some $2.4 billion. It is important to keep this in mind because Bolaños government officials occasionally try to pull the wool over our eyes by falsely boasting that their New Era government has made such a huge effort that it got another US$1 billion pardoned.

What’s left before reaching the HIPC culmination point?

What do we still have to do before reaching the culmination point? The general condition is that Nicaragua maintain its macroeconomic stability. To do so, the government pledged to raise at least US$50 million by selling off the assets of those banks intervened by the Superintendence of Banks. This would help the Central Bank raise at least US$70 million to buy back the Negotiable Investment Certificates (CENIs) held by private banks. [The banks bought up these bonds, which were issued by the various governments at very attractive interest rates over the past decade to cover different crises. Because they are now starting to come due, they constitute a domestic government debt that is even more unsustainable and inflexible than the foreign one.] This operation was in fact the backbone of the 2003 monetary program, which the government failed to fulfill. Nonetheless, we haven’t heard any public mea culpa from the government for its failure and there are even signs that it won’t be an obstacle to reaching the culmination point.

In addition to maintaining price and exchange rate stability and getting a grip on the domestic debt balance—which are the main elements of macroeconomic stability—the government still has to meet a couple of other conditions before reaching the culmination point. It must get the 2004 budget approved with significant spending cuts; sell off the remaining 49% of state shares in ENITEL, the telecommunications company; privatize the HIDROGESA hydroelectric plant; and ensure the legislative passage of the Civil Service Law and a law on both foreign and domestic public indebtedness.

Will Nicaragua be able to meet all these conditions in such a short time? The fact that they are all in the hands of politicians, legislators in particular, suggests that they will be met only once every drop of personal and party advantage has been wrung out of the situation. Of all the conditions, the privatization of HIDROGESA threatens to be the most conflictive, because it is linked to the broader issue of privatizing water, around which social awareness is growing. Nonetheless, the politicians of the FSLN—the official opposition party that actually acts more pro-government than the PLC, which is nominally the ruling party—have declared that the IMF will be “flexible” on the HIDROGESA issue. That declaration surprised me, because as long as I’ve been an economist I’ve always known the IMF to be an inflexible international financial policing operation. In fact, no good police officers are flexible: they apply the law, period. This is one of the IMF’s few virtues: to implacably require fulfillment of the conditions it imposes—leaving aside the issue of whether they are correct—without letting itself be bribed or cajoled.

Where is the interim relief going
and where was it supposed to go?

Nicaragua’s arrival at the HIPC initiative’s culmination point is also linked to the National Development Plan and the Poverty Reduction Strategy that preceded it. According to the international community’s current principles, poor countries are having their foreign debts pardoned so they can reduce their human poverty, not so they can pay the domestic public debt to national bankers. I stress this because in early 2003 I publicly charged the Nicaraguan government with diverting interim foreign debt relief resources to pay on the domestic public debt. What is interim relief? It is the pardoning of 80% of the annual interest and amortization owed to Paris Club countries and other specific creditors by a country that is meeting its conditions within the HIPC initiative. The creditor countries also established that what a HIPC country saves through this gesture must be assigned exclusively to projects aimed at reducing human poverty. Nicaragua earned this relief starting in 2002.
In 2003 the Paris Club countries, the World Bank and the IDB pardoned US$215 million in interest payments as interim relief for Nicaragua, but the government only earmarked US$90 million of this for poverty reduction programs. Where did the other US$125 million go? We have reason to believe that it was used to pay part of the domestic public debt. Why did the IMF complacently authorize this violation of the agreement with the European countries to pay a debt that has three major illicit origins: the unjust confiscations of the eighties, the fraudulent bank failures of the nineties and some of the open market operations in the latter part of the Alemán government?
And it’s happening again this year. Of the US$200 million in interim relief being pardoned for 2004, only US$120 million appears to be assigned to poverty reduction projects in the budget. Where will the other US$80 million end up? In the accounts of the bankers, who are already the country’s wealthiest people? Why did the allocation of resources freed by the debt relief not show up transparently in the budget proposal sent by the executive branch to the National Assembly? The international community’s representatives should respond to concerns about such a serious matter as the government pledging to dedicate resources to one purpose then diverting them to another, particularly since the government itself has been unwilling to give us an answer.

The current government boasts that it uses its resources very transparently, but I think it formulates the national budget very opaquely. Transparency doesn’t end by saying I earn US$19,000 a month, as the President states, because that’s not what Nicaragua needs. We need transparency in the earmarking and use of resources for the poorest part of the country’s population, starting with the formulation of the annual national budget.

How does HIPC plug into the NDP and
how does the NDP plug into poverty?

Because the HIPC initiative links the foreign debt write-off to poverty reduction, we can link it to the National Development Plan (NDP) unveiled by President Bolaños and his Cabinet in mid-September. While it was presented as a “proposal” that the government pledged to submit to debate over the course of a year, in little over a month the NDP is already being referred to as an established plan and part of it is even being implemented. This hasty shift is highly inappropriate for several reasons, not least that it represents a lack government respect, because we deserve accountability, not impositions.
Over 1.3 million Nicaraguans, a full 25% of the population, do not know how to read and write, have no access to health and education services or clean drinking water, suffer from severe malnutrition and have a high mortality rate before reaching 45 years of age. Diplomatically, these people are called the “extremely poor,” but in Cervantes’ Spanish, they are “miserables.” Why use two words when one will do?
What is the state’s policy to pull all these Nicaraguans out of their impoverishment? The surprising part of the National Development Plan is that it excludes these people from development because they live in areas that don’t produce anything according to the NDP assessment, which focuses the country’s development on the creation of different productive “clusters” in six geographic areas, following the theory formulated several years ago by Harvard professor Michael Porter.

What happens to those in the excluded areas?

There are two ways to deal with “los miserables”: rescue them from their misery or leave them to their fate. Officially, the government seems to have opted for the tragic second route in the NDP. The plan’s coordinator, Mario de Franco, argues that there will be no problem because the population in the zones rejected by the NDP as unproductive—virtually the entire central strip of the country—will migrate to the productive zones where the clusters are located. But that will happen only if a dictator forces the population to leave! Why would you want to move 1.3 million Nicaraguans from their place of origin to the development poles that the NDP will promote? Is the idea to have satellites of poverty revolving around the huge productive units and the assembly plants for re-export, with all their good technology coming from abroad?
And there’s another enormous gap: where’s the Caribbean Coast and its peoples in the NDP? Where are the poor communities along the banks of the coast’s great rivers? They aren’t even mentioned.

In Nicaragua, we don’t need the population to move. We have to stop migration rather than encourage it. We should not only stop people from going to Costa Rica and the United States, but also from the countryside into our own cities, which can’t even provide for the internal migrants already flooding into them.

What can detain this internal migration flow? Making the areas categorized as “unproductive” more productive, starting with adequate public investment programs: drinking water, schools, health centers, basic services, a market… There are infinite rural areas in Nicaragua that don’t even have a market. You go there and ask, “Where’s the market?” And they answer, “It just went by; there it goes!” It turns out that the “market” is nothing more than a pick-up truck that passes by every so often loaded with food and clothing.

The NDP is an orphan

I’ve read the 500-plus pages of the extensive NDP document and, in my opinion, the plan has two major defects that jeopardize its future, on top of this exclusionary philosophy that is so debatable from a humanitarian viewpoint. First, it hasn’t been discussed by Nicaraguan society, and second it doesn’t enjoy political backing. Right from the start it is in trouble due to a symbolic detail: the document’s cover page and media propaganda display the “Bolaños Government, New Era” seal. Nicaragua doesn’t need a plan with some government label, it needs one stamped “property of the nation,” so it will be accepted by the country’s future governments.
The NDP is an orphan. It was formulated and drafted without consulting the country’s main economic agents, the national producers, who have no idea why the Plan is banking on these particular productive clusters (tourism, coffee, beef and dairy, forestry and wood products, fishing and aquaculture, mines, textiles and clothing, and energy). Nor does any important political force claim familiarity with the plan, which is very worrisome, because it proposes important institutional reforms—which I for one totally agree with—that are doomed to failure without political consensus.

These two problems make the NDP very vulnerable. It was designed at a public desk then dropped down on the Nicaraguan population as an indelible and inevitable fait accompli. Given these characteristics, another surprise is that the government, seeking political support and financial aid, presented the NDP in late October to a Consultative Group of dozens of international aid representatives meeting in Managua. We could ask these representatives how they can come to Nicaragua to learn about a development plan that the majority of the Nicaraguan population still knows nothing about, when they themselves preach the need for increased civil society participation in solving the economic and social problems of the countries they are aiding.

Participation by whom and how?

The principle of civil society participation in governmental planning emerged from the same Group of Seven meeting in Cologne. At that time, they used the word “empowerment,” referring to the fact that civil society would empower the official plans. I prefer the word “appropriation,” by which I mean that civil society should appropriate or take ownership of these plans and proceed to act like their owner. The international community can’t go around violating its own principles, yet the Consultative Group meeting in Managua expressed political backing for the Nicaraguan government’s plan. So here we have an outrageous and inadmissible situation, in which the international community continually stresses the need for greater coordination in providing resources to Nicaragua, yet acts without coordinating with the Nicaraguan nation, which still knows little or nothing about the plan.
To ensure that civil society would read and debate the NDP, the government posted the text on a web page. It even paid for ads in the newspapers announcing the site. I consider this an offense to the Nicaraguan population. How many people in this country have a computer or access to Internet services? Considering that the document is very long and not an easy read, the government should have synthesized it in a simplified summary for publication as a supplement in the two major national newspapers. The government is not honoring its obligation to make truthful economic information available to the entire population. Even those of us with access to Internet services can’t find out last week’s inflation rate because there’s a whole month’s delay in the information the government puts out on its web pages. If, as the government keeps reiterating, the market is wise, what is a market without information?

What should the state’s role be?

There are positive things in the NDP that can be rescued, however. For one, it is the best compendium of economic and social assessments prepared by any of the past five governments. This government succeeded in pulling a great many national assessments into good order, suggesting certain ways of achieving development. And this merits applause. But the NDP doesn’t offer the most essential thing: public policies to help Nicaragua develop. What one reads in the NDP are a few disconnected ideas and measures rather than a coherent body of public policies.

What role will the Nicaraguan state play in promoting economic growth? The response to that crucial question is totally diffuse in the NDP, which fits right in with the logic of the Washington Consensus: not only reduce the size of the state but also its influence on the economy.

Analyzing Nicaragua’s current economic situation, we can see that it hasn’t changed very much in 16 years. Nicaragua has lived through 16 consecutive years of adjustment, since the Sandinista government took the first step towards macroeconomic adjustment on February 14, 1988, by decreeing a change of currency. With no external financial cushion, the Sandinista government implemented an adjustment that the UN’s Economic Commission for Latin America and the Caribbean called the most draconian carried out in Latin America. Yet despite such continual sacrifices, the adjustments to Nicaragua’s public finances have not yet been concluded; and that thankless political task falls to the current government. It will be even more thankless if the extremely high social and political cost of adjustment is combined with some of the NDP’s more exuberant ideas, such as the construction of “smart highways,” when what Nicaragua urgently needs are smart people and old-fashioned all-weather access roads so those in the center of the country can get their production to market.

As a professional whose studies and work have been closely related to the Nicaraguan economy, I think that if the state wants to promote economic growth and development for the purpose of reducing our human poverty, it must fulfill five roles as an economic facilitator and must also create markets where they don’t exist it.

Role One: education. The state’s strategic role must be to concentrate on middle- and high-level technical education to increase labor productivity, but that does not mean devaluing university education or claiming to lack the resources even for primary education. The current government keeps repeating that Nicaragua is the most attractive country in Central America for direct foreign investment because its labor force is so cheap. That’s a very offensive attitude. The government should concern itself with raising the technical quality of the nation’s labor force and not ingratiate itself with investors by offering them good investments here because our workers are cheaper…only because they are the least educated.

Role Two: technology transfer to the owners of micro, small and medium businesses. Big private enterprise has the chance to buy technology, but doesn’t share it; it uses it only for its own benefit. Nicaragua has a huge number of single-owner small and micro businesses. They are the majority. But who’s taking responsibility for massively transferring technology to them? It has to be the state. This fundamental idea appears nowhere in the plan. What the NDP does propose is a decided role for the state in attracting direct foreign investors to the “highly-productive” territories selected to host the clusters, only to develop the typical production model that works best for the free trade agreement with the United States: the maquiladora plants that assemble imported goods for re-export.
And this raises another crucial question: where in the NDP is any expression of governmental desire to regulate direct foreign investment, among other things to link it into local Nicaraguan production chains? Nowhere. I’ve asked the business interests represented in COSEP, the big business umbrella organization, why they so strongly support the NDP if it is only concerned with facilitating conditions for foreigners, and not national business. I remind them that all the facilities are aimed at attracting foreign investors to come and set up shop in this country as if it was their own backyard, with no regulations and no guarantees that they will foster economic growth. Naturally, the hope is that they will “generate more jobs,” as President Bolaños insists, but we don’t just need more jobs, we also need better ones.

The fact is that real direct foreign investment has not yet come to Nicaragua; we’ve only seen investment in maquila plants (free trade zones) and changes of owners in existing productive plants. The Italian transnational company Parmalat began operating in the country by buying the Nicaraguan La Perfecta dairy plant, complete with its entire productive infrastructure. Cargill did the same thing by acquiring the productive infrastructure of Nicaragua’s Tip-Top chicken company, and so did the Spanish transnational Unión Fenosa, which bought the state-run electricity grid without even extending it. We shouldn’t call it foreign investment when a business simply changes hands from Nicaraguan owners to foreign ones. Genuine direct foreign investment should expand our national productive apparatus, hooking into and therefore strengthening our local production.
Parmalat has admittedly done that by transferring technology to our milk producers, and that is positive. But the same company has put carton-packed fruit juices on the local market, without developing links to national fruit producers. Instead, it imports juice concentrates from the United States to sell here! Cargill imports almost all its inputs from the United States as well. Who’s responsible for this de-linkage that is affecting our economic growth and development? The state is, because it doesn’t regulate direct foreign investment. Among other things, such regulation should ensure that foreign investments link into the local production chains to generate income for the population, especially in rural areas. Agricultural experts insist that Nicaragua has very little land that is apt for agriculture in the interior. That land is best suited to forests, which would be more productive if they were sown with timber-bearing and fruit trees. Couldn’t all these rural areas discriminated against in the NDP because they are supposedly unproductive be encouraged to produce fruit and thus initiate a chain of local production linked to this transnational that is now selling us imported fruit juices?
Role Three: construct, expand and improve the country’s economic infrastructure. What the NDP proposes instead, as part of the wave of privatizations, is private highways: in other words toll roads! As if Nicaraguans had enough per-capita annual income to be able to pay tolls. You can get away with something like that in Costa Rica, which has a per-capita income of US$4,300 a year, but it is only US$730 in Nicaragua, according to the Central Bank’s new national figures. And remember that this is a fictitious figure, an average, which means that many earn much less than that while a handful earn fortunes.

Are we going to present this and other NDP projects to the international community and ask for funding? If Nicaragua reaches the HIPC culmination point in December, is it realistic to think that the international community is going to pardon US$5 billion then turn around and loan us a couple of billion more next year for such NDP infrastructure projects as these? A request of this type doesn’t seem feasible or realistic to me, particularly for a plan that enjoys neither civic participation nor political backing.

Role Four: strengthen the national financial system. The financial system will never grow stronger as long as it remains exclusively under the control of private bankers, as the bank collapses several years ago already demonstrated. The state should remember that the only growth that private banks ensure is in their own profits. This is especially true in a country like Nicaragua, because in other countries, especially developed ones like France, the state banking system functions like a private bank but without forgetting its social function. I think it’s necessary for the state to suggest having a role in the national financial system again. There are a few ideas about this floating around in the NDP, but no clear definition.

Role Five: environmental protection. Again, this is mentioned in the NDP, but without any real precision. Both economic progress and economic backwardness damage the environment, and I think that the latter is most harmful. Let me give you an example. The NDP expresses great concern about the deterioration of Nicaragua’s forests, but then limits itself to saying that deforestation has to be stopped, without formulating even the simplest public policy to do so. I’m no expert on environmental issues, but I think many poor people from the rural areas cut trees to provide firewood for cooking or to sell to others so they can cook. If we want to stop the destruction of our forests , we have to find substitutes for firewood. Propane gas is too expensive, but what about kerosene, which is a cheap byproduct of petroleum? How do we get it to the rural zones? Tanker trucks? That would jack up the cost of the fuel too much. Simple pipes from the refineries out into the rural areas? How much investment would such a pipeline network require? What the state should be doing is throwing out questions like that and seeking responses in order to formulate, propose and implement public policies.
The NDP’s predecessor was much worse
That’s just one example, but the NDP offers no coherent public policies to resolve any of the problems that this compendium of assessments presents so well. It is clearly impossible to provide a response to all of Nicaragua’s problems at the same time because we don’t have unlimited resources. But it’s also clear that there are basic but essential priority tasks that demand rapid responses with a real impact. But the NDP doesn’t lay them out.
The National Development Plan was preceded by the Strengthened Economic Growth and Poverty Reduction Strategy, which was strongly criticized for a variety of reasons, not least because the original draft was written in English, approved in Washington and only then brought to Nicaragua, translated and discussed. One of the strongest critiques was that it promoted paternalistic handout programs to cushion poverty while basing actual poverty reduction on economic growth. It argued that the country needed an annual 4.8% growth in the gross domestic product (GDP) between 2001 and 2005 to reduce Nicaragua’s level of human poverty by 3%. If one of my economics students presented such an idea in a degree thesis, I wouldn’t pass it, because there’s no automatic link between economic growth and poverty reduction. Income redistribution policies are just as important as economic growth. Resolving inequities is a guaranteed way to reduce poverty. And it’s equally important to define where the country’s future growth is going to be centered. Will it be concentrated among the poor to eliminate their poverty? The strategy didn’t respond to any of this. It was also criticized because its coordinator, Luis Durán, came to Nicaragua from abroad and earned US$23,000 a month to develop this poverty reduction strategy. I publicly charged him with really pushing a strategy to reduce his own poverty, and he’s still at it under the same guise, although now in Paraguay.

There have been advances since that program. The NDP wasn’t drafted in English and its pulling together of all the best assessments prepared by Nicaraguan professionals in Nicaragua is very positive. Nonetheless, it still has a foreign influence. When I looked at the plan’s first draft, I immediately warned that all the parts related to Michael Porter’s “clusters” theory were a reordering of different sections downloaded from Harvard University’s web page and dolled up with photos and statistical charts of Nicaragua’s situation. Many of us, the international community included, criticized the government over that, so it had to redraft the plan, giving it another face, although the influence of Porter’s theories is still obvious.

The free trade agreement links up with the clusters proposal and thus with the National Development Plan. The design of these clusters or productive poles, which is central to the NDP, is totally compatible with the maquiladora “development” model the US-Central American Free Trade Agreement (CAFTA) will bring us, with the difference that these assembly plants will pay taxes to the state rather than being quite as “free” as those in the free trade zones today. Plan Puebla Panama also fits perfectly into this design because it is charged with providing infrastructure to the Central American region—a road network, expanded electricity grid, telecommunications—precisely to lower production costs for the foreign companies that will set up shop here.

What can I say about CAFTA?
Any free trade agreement implies risks as well as the advantages that the government is lauding in its propaganda. We have to assume the effort of minimizing those risks. The main ones I can see correspond to the agricultural sector and the labor market.
CAFTA will generate labor problems in both Central America and the United States. US citizens complained about the unemployment triggered by NAFTA when many companies moved to Mexico, which has lower wages than the United States. And with wages in Central America far lower than those paid even in Mexico, what reaction can we expect from the US unions? And how will US legislators supported by the union movement respond? Our new ambassador in Washington, Salvador Stadthagen, has declared that his first task is to lobby some 40 congresspeople to approve CAFTA. How ridiculous that the priority of one of the 41 poorest and most indebted countries in the world is to try to convince the legislators of the most powerful country on earth to sign a free trade agreement with our region. Our government’s first concern should be to negotiate funds with the United States to increase labor productivity and technological business investment to make Central America’s businesses and production a little more competitive. It is equally important to negotiate funds to retrain the Nicaraguans who will be laid off when CAFTA brings US products that while benefiting the consumer—an advantage we can’t forget for those with purchasing power—will also edge out local products and destroy jobs.
CAFTA will also generate huge problems for the agricultural sector. At the end of the penultimate round of negotiations (October in Houston),the government announced the “good news” that Nicaragua had obtained the free introduction of its industrial goods into the United States. But Nicaragua is an agricultural country, not an industrial one, so what does that even mean? It was also presented to us as a great achievement that the US products defined as “sensitive” [read devastating to our national production] won’t be able to enter Nicaragua duty free for another 15 years, to protect nationally produced equivalents. But can we possibly be ready to face the avalanche of “sensitive” US imports in 15 years?
The United States needed more than 120 years for its agricultural economy to reach its current competitive level, to get its farmers where they are today. The federal government’s gigantic investment to promote US agribusiness has been going on for decades, yet here we are celebrating the fact that they’re giving us a 15-year “head start”! Will that be enough for a Nicaraguan peasant who plows his land with a couple of skinny oxen to become competitive with a US producer who plows his with a couple of John Deer tractors, doesn’t even sweat because the cabin is air conditioned and receives an enviable subsidy from his government? How are we supposed to change this abysmal inequality in 15 years?
A Japanese cow receives the equivalent of US$15 a day in subsidies, a European cow US$12-13 and a US cow just under $3, while half of Nicaragua’s human population takes home US$1 or less per day. Are we going to change that in 15 years?
We have to be clear: CAFTA is not going to encourage greater competitiveness from our agricultural sector; nor is it even meant to. Its aim is to facilitate the introduction into Central America of US agricultural companies that will conquer our markets, exploit our natural resources and, in the worst of cases, could even bring their own labor force to avoid transferring technology to our peasants. As soon as the starting shot for CAFTA is fired, we’re going to see major problems in Nicaragua’s agricultural sector, and the Nicaraguan Development Plan has no answer to them. It is simply preparing the way.

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