Envío Digital
Central American University - UCA  
  Number 196 | Noviembre 1997



An Accord Besieged by Discord

Political pact? Accord between two economic groups? Agreement between head honchos? At least an understanding? Who won? Who lost? And how with the national future be affected by this agreement between the government and the FSLN regarding property?

Nitlápan-Envío team

National politics took a significant turn in early September, when the teams of government and FSLN jurists who had been meeting for months to forge a solution to the property problem finally reached their goal. On September 5, they dotted the last i and crossed the last t on a document, drafted as legislation, that was endorsed by the heads of both the government and its major opposition.

When Attorney General Julio Centeno Gómez, who led the government's legal team, handed the text to Daniel Ortega that day, the satisfied FSLN secretary general said, "This resolves everything." And when former Central Bank president Joaquín Cuadra, who led the FSLN's legal team, handed it to Arnoldo Alemán, the satisfied President said, "It is a transcendental feat."
Has this agreement ushered in a new political stage? And if so, where is it headed? How much discord was resolved with this accord, and how much remains?

"I am sacrificing my image"

This isn't just any old accord. It appears to be the basic agreement between the Alemán government and the FSLN leadership, about the basic problem: property.

The bill had very restricted circulation for the first few days. At that time, the agreement's importance could be measured by the perplexed reactions of both Liberals and Sandinistas upon hearing the news. Once the text began to be studied in depth, that perplexity did not subside.

When President Alemán presented the agreement to the two-month-old National Dialogue on September 8, his words made clear how much of a turn signing this agreement with the Sandinistas represents to the Liberals in office. "I invite you to study the accord," said Alemán in a tone even more dramatic than the usual one he has adopted for reading speeches, "and I ask you with all respect that we spare the country any disillusion in our assessments. Let's be positive and seek in the accord what unites us, what makes us viable as a country.... To gain stability risks must be run and costs must be paid. As governor of this nation, I am obliged to run those risks and assume those costs, rather than keep the nation up in the air, suffering stagnation and ongoing uncertainty.... I must govern for all, giving priority to those affairs that affect the country's poor majorities. I do not deny that I am making sacrifices to my personal image with certain groups, in exchange for stability and governability for all." The President had never before spoken like that in his nine months in power.

On the Sandinista side, the silence of its leaders and an avalanche of speculations and uncertainties in the most thoughtful of the grassroots sectors filled the weeks after the accord was announced. This, too, confirmed that we are witnessing a "turn."

A Pragmatic Agreement

The title of the new bill is "Law on Urban and Agrarian Reformed Property." It has 109 articles and establishes how to streamline the procedures to provide definitive titles to some—not all—of the poor who were benefited by the social transformations of the 1980s and early 90s. It sets norms for correcting some—not all—of the abuses committed under the umbrella of those transformations. It also stipulates how some—not all—of those affected by these same transformations will be indemnified. And finally, it orders how the houses greater than 100 square meters will be paid for by all—not some—of those benefited by them.

The law essentially pulls together the contents of the Agrarian Reform Law and Laws 85, 86 and 88 (the latter three pushed through by the Sandinista government just before leaving office to protect properties given previously but never deeded), plus the dispositions on them included in the Chamorro administration's Law 209. All these laws were made by other groups in power, but the new one bears the Liberal stamp.

In the economic sphere, the Liberal government has already shown that it has no plan and is resolving things with pragmatic improvisation. The same is true with property. This new law expresses the pragmatism of a governing body which is beset by an extremely tough political and economic situation.

What the Chamorro Government "Resolved"

The disputes sparked by the changes made in the property structure during the revolution were never totally resolved following the change of government in 1990. (See "The Problem of Property and Property Owners," in this issue for an historic reflection on the property problem and further analysis of the new agreement's contents.) The Chamorro administration only dealt with some of these disputes, and then through executive decrees and administrative bodies set up for the purpose. It "resolved" them based on political pressures, family reasons or the economic interests of its top officials—or didn't "resolve" them for exactly the same reasons, acting very myopically and with little transparency. For example, some previous owners of confiscated properties received them back under the guise of "privatization"; other were compensated—in cash—with no express indemnification law as a guide. Still others received indemnification bonds, while others refused them as valueless and would settle for nothing but a return of their property or a highly inflated compensation amount.

An express legal ordering of all this was necessary. But by the time Law 209 was drawn up with active mediation by former US President Jimmy Carter and passed in December 1995, it was a bit late. The country was already catching election year fever. Furthermore, Alemán's Liberals rejected the law. In practice, then, it was barely implemented.

While all of the Chamorro government's actions around property were administrative, the new agreement calls in the judicial branch to resolve problems for the first time, and even empowers it to create new arbitration courts to streamline the litigation.

Displeased and Defrauded

Since the agreement legitimates the actions of both the Sandinista and Chamorro governments, it was logical to expect immediate discord, tension and criticisms from the Liberal camp. The Association of the Confiscated—which actively financed and promoted Alemán's electoral campaign—immediately registered visceral rejection of the new law.

These hard-core opponents of any compromise solution felt ideologically defrauded, politically excluded from the debate leading to the agreement, and economically very displeased. Managua's Catholic Church hierarchy backed their positions, calling them the "third force" in the conflict.

A good portion of the bill is dedicated to establishing mechanisms for registering claims and obtaining indemnifications, but the confiscated are unhappy with the value of the indemnification bonds and with the fact that "lost earnings" (those that would have been generated from their properties over the past 18 years assuming there had been profits and that they would have been plowed back in) are not contemplated. Julio Ruiz Quezada, adviser to the association, stated that "the citizens did not expect the government to be willing to surrender or become hostage to Sandinismo. Yet that's exactly what happened."
Of the 41 Liberal representatives to the National Assembly, 20 of them had properties confiscated and have claims pending; 17 of those have apparently expressed to the President in private that they will not vote for the bill. Alemán's own Vice President, Enrique Bolaños, distanced himself from the agreement and criticized it. Bolaños is claiming indemnification of over $2 million for his own confiscated properties.

The new US Ambassador in Managua, Lino Gutiérrez, also showed serious concern about the agreement since he represents over a thousand "US" citizens who were confiscated and have claims pending for more than three thousand properties. Most of these claimants are Nicaraguans who lost their properties before they became citizens, and in many cases were confiscated because they were Somocistas. Ambassador Gutiérrez has insisted privately and announced publicly that the US government will cut all aid to Nicaragua if these cases are not satisfactorily resolved. The new agreement says nothing whatever about them.

"There's no going back to 1979"

The National Dialogue participants, who were not as effective in reaching agreements as the bilateral dialogue had been, discussed the property accord for two weeks. While they paid little attention to Alemán's request to find what united them, the debate at least rejuvenated their flagging energies. The Association of the Confiscated, a member of the National Dialogue, presented 28 modifications to the accord and announced that it would make use not only of the Nicaraguan courts, on grounds of unconstitutionality, but also the Congress of the United States.

In the National Dialogue, Deputy Property Minister Guillermo Argüello Poessy, himself confiscated in the 1980s, challenged the Association on its bitter disagreement with the accord. "The confiscated are not the main property problem," he charged; "the main problem is titling. If the confiscated had participated in these talks from the beginning it wouldn't have taken us six months to reach an accord; it would have taken six years; or maybe we never even would have begun to talk." Argüello Poessy is said to have let Ambassador Gutiérrez know that this group of confiscated will only be indemnified if the United States underwrites the funds for such a costly operation.

Attorney General Centeno Gómez was also hard on the Association. "One sector of those confiscated," he said, "insists on overturning everything done by the revolution and returning to the situation prior to 1979. It is not possible."
There were property laws during the revolution, but not everyone recognizes them. The instability resulting from an accumulation of unresolved property problems affects the national economy. An agreement that validates the essence of the previous laws and deals with the main problems can help calm a country that has become extremely tense over the past two decades due to the intense two-year insurrectionary war, the social revolution that followed, the US-financed war that it unleashed, the unexpected change of government, the equally unexpected major changes at a world level that came at the same time, and the devastating economic adjustment that the Chamorro government introduced. Nicaragua needs peace, stability and distension.

The property problem isn't a party problem; it's a national problem. Nonetheless, it was resolved in a bipartisan manner, between the Liberal and Sandinista leadership.

Why Did Alemán Do It?

Signing the accord with the FSLN seriously compromises the Alemán government's cultivated image as the "anti-Sandinista avenger" that came to power to put the Sandinistas "in their place." While some may be perplexed about why the government would endanger an image that has brought it economic and political dividends, the reasons are fairly clear.

First, the Liberal government's credibility and popularity ratings were already dropping precipitously, as shown both in the polls and on the street. Though a strong anti-Sandinista strain runs through Nicaraguan society, that was not the only issue that got Arnoldo Alemán elected. The beneficial measures—in fact, the near miracles—promised by the new government to attract voters who are not particularly anti-Sandinista never materialized. Those voters watch the Liberal functionaries line up at the banquet table daily, cutting themselves fat slices of the cake, while the government, which is neither popular nor populist after all, doesn't even drop any crumbs for the poor.

Signing an agreement with the FSLN that will provide titles to tens of thousands of poor people—though not all—whom the revolution turned into property owners will give Arnoldo Alemán an image as a statesman, as a President who not only is concerned for the poor, but is also able to pardon and conciliate. Such an accord could turn his popularity ratings back around and even help give a good push to the economic take-off that is always being announced but never happens.

The government is facing a very tough economic situation which, according to all analysts, will become especially critical at the beginning of 1998. It is also at the edge of an abyss due to its own squandering (political payoffs and a complete lack of austerity), incoherences and inefficiencies (among other things by the firing of experienced technicians and professionals for political reasons), lack of an economic plan and murky financial operations. This has forced it to buy a little governability with this accord, in the sense, for example, of fewer protests organized by the FSLN, greater definition in the armed forces, and less uncertainty for the benefited sector of the poor.

What's more, it has to sign a new structural adjustment program with the International Monetary Fund in the next few months; an IMF mission arrived in Nicaragua in mid-September to negotiate the contents of the new Enhanced Structural Adjustment Facility (ESAF II). What better to present to the IMF functionaries than an accord with the government's principal adversary, the FSLN, about the main problem that has been generating political and economic instability?

And Why Did the FSLN?

The reasons the government had to make this "sacrifice hit," to use the baseball argot, are clearer than the FSLN's reasons, if one sticks only to the text of the agreement. The accord could be read as something of a Sandinista victory over a right that never accepted as legitimate any of the revolution's social transformations, least of all the property redistribution or the laws that accompanied it. Lest there still be any confusion, the Alemán government is that right, and it has now had to accept the legitimacy of the Sandinista laws, as Violeta Chamorro did earlier with Law 209. The accord is a concrete expression of a conviction that has been winning reluctant converts within the government: the country cannot be run on such extreme anti-Sandinista sentiment. Something of the past must be accepted to preserve power in the future.

But this Sandinista "victory" is only relative. The fact is that Alemán was always prepared to provide titles to thousands of the poor benefited by the revolution. It even politically suited him to do so, though he has tried to drag his feet so the photo opportunities of him handing over so many deeds would coincide a bit better with the next electoral campaign. But since he was feeling the pinch of the crisis, he had no choice but to get on with it.

The problem for the FSLN is that the new law leaves unprotected a vast number of the poor that the party has always claimed to represent when speaking of "defending the gains of the revolution." In the rural area the accord presumes a review of the entire agrarian reform process, and in the city it is calculated that at least twenty thousand families in some seventy poor settlements of Managua will be evicted in the name of the urban planning criteria of the "new" Managua. Some properties benefiting society—neighborhood centers, cultural centers, children's dining halls, women's centers—have also been left out in the legal cold.

In arguing that the FSLN should not now abandon so many of the poor that it benefited in the 1980s, one important fact must be remembered. After seven years of "free market" economics applied with voracity, thousands of the small-scale beneficiaries of the revolutionary transformations have already been forced to sell out to bigger fish, including high functionaries of both the government that won in 1990 and the one that lost.

Why did the FSLN leadership leave so many at risk? In exchange for what? One need not be particularly cynical to suspect that another, unwritten, agreement must exist around certain properties of strategic importance to certain Sandinista leaders. But if there is such an agreement, the government will have signed away too much in exchange for fewer unruly demonstrations and a better image to present to Nicaraguans and the IMF.

The "Moment" of the Accord

The timing of presenting the agreement to the public surprised the more analytical Sandinista base. In the FSLN's public strategy—the "street" strategy, which the population understands best—the Liberal government has been painted for months as "illegitimate" due to electoral irregularities. Daniel Ortega called on the people to bring down the government for the first time in April, during the "crisis of the barricades," and similar calls have peppered his speeches in the succeeding months.

In July, the FSLN proposed a national accord, which suggested that it was trying to pull together a broad opposition alliance with non-Sandinistas to confront the government's authoritarianism. Right after that, Ortega launched the idea of organizing a plebiscite so that Nicaraguans, made desperate by both the economic and political crises, could decide whether the government should continue or not. As Ortega explained at the July 19 anniversary rally, "Rotten fruit doesn't need to be pulled down, it falls by itself."
Only a few weeks later, however, the FSLN, which had refused to participate in the National Dialogue in part because the Alemán government "doesn't keep its word," reached this very important agreement with that government in a bilateral dialogue. The agreement legitimizes the government, presumes that it will keep its word and, to a certain extent, disarticulates the opposition offensives that have been genuinely or artificially created during the previous months.

Another worrisome signal is that this "unexpected" bilateral agreement came only days after another bilateral, and genuinely unexpected, agreement was made public: the Sandinista and Liberal benches in the National Assembly reformed the Electoral Law with an eye to the March 1988 elections on the Atlantic Coast, giving themselves major advantages and ignoring all protests or suggestions from the other party benches.

Both of these agreements between adversaries who address each other so acridly in the theater of the media followed similar procedures. In both cases, the two sets of leadership managed the initial approaches and the negotiating of understandings with the utmost discretion, if not secrecy.

In Exchange for What?

Immediately after the property agreement emerged, its "secret" procedures, its text and the entire context surrounding it began to trigger speculation about a supposed unwritten agreement. As days passed, the speculation extended to even broader fields.

In addition to buying the government short-term stability and better ratings, did its signature also buy a project with a longer reach? Did it, perhaps, buy a joint plan with the FSLN to make new reforms to the Constitution that will reinstate its old presidentialism and allow Alemán to run for reelection as President?
The controversial reforms to the 1987 Sandinista Constitution made by the National Assembly in 1995 were mainly aimed at balancing the excessive power bestowed on the executive branch with a healthy dose of legislative power. Those reforms never received the backing of the Alemán Liberals and were tenaciously rejected by the FSLN leadership.

The powers that the reformed Constitution gave the National Assembly are not being fully respected by President Alemán, who, like any good authoritarian, is discomfited by a balance of powers among genuinely independent branches of government. Consciously or unconsciously, Alemán tends to violate this balance on a daily basis with unilateral decisions, surprise decrees, crass and obvious pressures on legislators—both his and the opposition's—and flurries of corruption in which he buys individuals, votes, favors and consciences, not to mention his trick of sending legislation through special channels with an "urgency" tag, thus avoiding normal deliberation in committee. Now that military dictatorship is out of the question, Alemán's style requires at least a presidentialist Constitution. And the political project of Alemán's Liberals requires his reelection for another term.

The FSLN's Strategy

Even if it signed this accord in exchange for a constitutional reform and a shot at reelection, the government still looks like either a traitor or a wimp to one sector of its political and economic supporters in Nicaragua and Miami. Naturally the game was worth the candle for a political pragmatist like Alemán. He hasn't put the Sandinistas "in their place" according to the most extremist thinking, but he has put them right where he wants them.

In a pot whose stakes are the nearly all-inclusive powers that the Sandinista government enjoyed in the 1980s, the FSLN has to be betting that it won't be Alemán who wins the presidential elections in 2001, but itself. But if it made a pact of this sort just to promptly stabilize some property problems linked to certain economic interests, it is a huge electoral gamble. The already eroded FSLN still has no clear opposition strategy, little organized grassroots work, weak links to the social movement, no transparency in its decision-making, and a severe loss of moral authority.

All of the above is speculation, hypothesis, calculations born of an intense history of raw realpolitik, but it has its logic. If the FSLN leadership has indeed put its money on an electoral strategy and on using these five years to resolve the property conflicts that are most affecting its economic and political interests, and if Alemán has indeed given up his anti-Sandinista extremism, then national politics has unquestionably turned a corner.

Bipartisanship: Splitting the Spoils?

Such a turn would be more dangerous for the nation than it may appear at first glance. The consensus reached between the FSLN and the Liberals to reform the Electoral Law and resolve the property problem led other parties and social sectors to sound the alarm about the possible installation of a new bipartisanship in the country.

Many Latin American countries have a real and/or formal bipartisanship, in which very similar parties alternate in power, just as they do in the United States. But "bipartisan" has a specific historic connotation in Nicaragua, as does "reelection." Somocismo was a political formality based on reelections and bipartisan pacts. Somoza's Liberals and the "zancudo" (mosquito) Conservatives negotiated and decided on everything. All political and economic decisions moved on the rails of these "historic parallels" and there was no room for anyone else. One of the great political achievements of the revolution was to break with this bipartisan exclusion and inaugurate political pluralism.

The nation's history thus teaches that bipartisanship is a dangerous game. And today's polls show how exclusionary it would be: a third of Nicaragua's population does not identify with either of today's two big political groupings.

FSLN leaders have tried to slough off the accusation by Conservative legislators that they are the "new zancudos." Victor Hugo Tinoco, one of the younger and newer National Directorate members, argued that "the property accord does not reflect FSLN aspirations and points of view a hundred percent, but it is a good frame of reference. If we don't come to agreements, they call us tire burners, and if we do we're dubbed zancudos."
Is this in fact the gestation of a new political bipartisanship? The reality is that an incipient economic bipartisanship already exists in the number of profitable joint businesses—especially in the construction branch—between old and new capital of ex-Somocistas and Alemán Liberals on the one side and new Sandinista capital on the other.

What Will Be the Correlation of Forces?

Many property problems remain beyond the reach of both the paper agreement and any invisible one. The future of the cases not covered by the law will be elucidated by the political, economic and social correlation of forces that emerges with this shift in national politics.

Attorney General Centeno Gómez has made it understood in various declarations that the Sandinistas are responsible for "three piñatas" and that the accord only takes up the second one, carried out between February and April 1990, during the transition from the Ortega government to the Chamorro one. Any still pending claims regarding what was done during the revolutionary years (the first piñata, according to Centeno), will be resolved in the courts. What Sandinista and Chamorro business interests did in the privatization process (the third one) is touched on in only one article of the agreement, which deals with the case of some of the privatized companies. The outcome of the rest of these companies will depend either on court decisions or on new negotiations.

One very clear example of how the correlation of forces will influence all the property problems that the accord does not deal with is the Victoria de Julio sugar complex, whose privatization the government has been unable to reverse, even with the President exerting his own show of power on the case. He is up against an unfavorable correlation of forces because one of the significant stockholders is a very powerful British sugar trading firm which also has other investments in Nicaragua.

And the Somozas?

It was initially said that the agreement would legitimate what had been confiscated from the Somoza family under Decree 3 but not what was confiscated from its colleagues and friends under Decree 38. The following phrase, in fact, was attributed to Centeno Gómez: "Only the Somoza family is not 'de-confiscatable'; the rest of Nicaragua is." But, in the end, not a single word is said about the properties confiscated under either of these decrees.

Both relatives and colleagues/cronies of the Somozas hold posts in today's Liberal government. They are found in embassies, ministries and municipal governments. They are, in fact, present in all structures of the new government.
Shortly after taking power, Alemán irresponsibly boasted of paying the Somoza family for the contribution it had made to his campaign by inviting it to return to Nicaragua and claim its confiscated properties. The first ones took him up on it in April. They also came to sniff out the business possibilities.

On August 27 a house and land belonging to Federico Alberto Mejía, the last general in command of the Somocista National Guard, was returned by an agreement signed by President Alemán himself. The agreement is in open contradiction with Decree 3, under which the properties not only of the Somoza family but also of his military officers and government functionaries who abandoned Nicaragua at any time after December 1977 were confiscated.

In early September the boldest of the lot, grandson of Somoza García (the first Somoza in power) and nephew of Somoza Debayle (the last), announced officially that he and several other direct family members who accompanied him were coming to claim all their properties. He said that the family's only interest was in investing and giving jobs to Nicaraguans. This economic argument could turn into a siren song for people starving for work and pushed into penury, who see their personal salvation in secure jobs and the nation's salvation in the myth of investment from abroad.

Will the decision about this specific and transcendental property problem—the only one that the vast majority of Nicaraguans thought had already been resolved forever—end up in the hands of Nicaragua's historically weak and currently vulnerable judicial branch?

The Workers' Companies

The agreement gives new opportunities and facilities to some of the confiscated companies privatized in the 1990s—nominally with shareholder participation by their workers—to legalize their situation. This governmental tolerance explains the criticisms made of the government-FSLN agreement by Rosendo Díaz, president of CORNAP, the government holding company that negotiated the privatizations.

The situation has not been resolved for all the companies privatized during the Chamorro government. Behind each one lies a complex history, and each history is different from the economic, political and judicial points of view. Some companies were left decapitalized and bankrupt by the Somocistas who had administered them. During the revolution huge financial investments by the state and personal investments by the workers went into making them profitable again. The privatization process opened the opportunity to set in motion "socialist" experiences of popular economy in some while the opportunism of the new owners was imposed in others. Yet all of them have been affected one way or another by the weight of the crisis that the neoliberal economic model has triggered in the country, making it hard, to a greater or lesser degree depending on the case, to meet the payments agreed to with CORNAP. The future of some of these companies will also be determined by the correlation of forces.

First Solka, Then Intercasa ...What's Next?

According to Sandinista trade unionists, the government is looking for a way to get back 22 companies privatized with worker participation. This is the context for the case of the Solka pharmaceutical company, in which control is being disputed between the workers and a former majority stockholding family named Solórzano. The Solka case is emblematic. The company was confiscated in 1979 because 20% belonged to Somoza and 80% to the Solórzano family, a Somocista ally. It had been mortgaged to the hilt and left in ruins when its owners fled the country in 1979. According to an audit done at the time, the Solórzano's patrimony was valued at the equivalent of US$191,456. With important investments by the revolutionary government and dedicated work by the factory's own employees, Solka became a lead company not only in the country but in Central America, worth over 17 times its 1979 value.

The Solórzanos are leading the fight of the hardline confiscated for indemnification or return of shares valued not according to the messes they left behind but to the "lost earnings" concept, which in the Solka case is real, not hypothetical. The Chamorro government is on record as having calculated in 1994 that the family's original holdings only entitle it to 40% of the company's current value, yet in June 1996 it indemnified one member of the family with $887,076 (in cash, not bonds), which is 25.3% of the company's current worth, the same percentage as his original ownership. Five months later, the National Confiscations Review Commission authorized the return to the other family shareholders of stocks equivalent to another 54.7% of the company's current worth, thus granting the family today's full value of their 1979 patrimony. A further complication is that, by unilaterally granting them anything, the government violated a law passed in April 1996 forbidding it from disposing of any state goods with a capital value of more than roughly $20,000 without National Assembly approval.

After one judge had already accredited an individual acceptable to the workers to intervene and manage the company on behalf of the state until the dispute is settled, Solórzano got another judge to accredit former Nicaraguan Resistance member Fernando Avellán, currently vice president of what was during the revolution and is still today called the Industrial Corporation of the People and also reportedly a trustee of the Solórzano shares. On Saturday, September 27, at President Alemán's written urging, Avellán showed up at Solka armed and accompanied by another 40 armed paramilitaries. When the workers refused to allow him to replace the other person managing the company, Avellán and several others opened fire, wounding four workers. After Avellán was finally detained and taken to jail, the government laid economic siege to Solka: orders for medicines by the Ministry of Health were cancelled, raw materials for the preparation of medications were held in customs, etc. Meanwhile, a still pending judicial process would guarantee the workers all legal documentation to give them control.

The President, in the name of the state, and the already-compensated former owners are determined to solve this and similar property problems in their favor by force, bypassing any negotiations and ignoring the Supreme Court's resolution of the case. A few days after the violence at Solka, similarly violent events occurred at the profitable metallurgical company Intercasa in Granada, also once the property of Somocistas, and in which the workers legally hold 100% of the shares. What will be next?
After the physical violence came verbal violence, as was to be expected. Daniel Ortega called President Alemán a "thief" and a "criminal," and called on people to organize "self-defense brigades" to defend the disputed companies. Arnoldo Alemán called former President Ortega "weak of mind" and a "loafer," insisting that all his actions "respect the law."
Workers linked to various privatized companies who never received their legal documents are accusing the FSLN leadership of having left them in the lurch by signing the agreement with the government. Very soon the dwellers in a sizable number of very poor settlements of Managua, who were also left in the lurch, will suffer identical disillusionment and will also protest. But to whom? The interests that seem to have prevailed are the most shortsighted interests of the upper ranks. We seem to have entered another stage.

More Violence or New Organization?

The government could find itself tempted to act with greater and greater violence. The FSLN could find itself with its representativeness even more eroded. And the country could find itself rocked by new waves of confrontation. There has been no shortage of confrontation over the property issue already. The Communal Movement registered as many as 500 evictions in some months of 1993 and 1994, many of them forcible and many of them forcibly opposed.

The FSLN grassroots, so confused and dispersed over these recent years, still hungers for and clings to the symbols of a glorious history, but without knowing whom to look to or what to do today in such difficult situations. The agreement signed by the Sandinista leadership and the Liberal government offers them either a new motive for confusion and scandal or a great cause for lucidity and organization.

In fact, thousands of impoverished Managuans are now beginning to experience the consequences of what was signed. They have already heard that their neighborhoods are going to disappear, that they are all going to be evieted, that the settlement vouchers given to them by the Chamorro government, which they were told would someday entitle them to a deed to their property, are being cancelled.

New Stability Or More Chaos?

On September 2, President Alemán sent the bill hammered out with the FSLN to the National Assembly for debate and approval. If the 41 Liberal legislators and the 36 Sandinista ones approve it jointly in a short time, with few modifications and little debate, some of the reflections we are making here will be authenticated. But since Nicaragua is the republic of uncertainty, where inconsistency predominates, it could be that that is not what happens. Our task then will be to analyze why the shifts shifted again after such arduous and personally invested negotiations.

Even after the law is passed, the country will face a long uphill road. The titling process for the rural and urban poor who end up benefited by the law—the government estimates 70,000 such families in the cities and another 17,000 in the countryside—will take several years to conclude.

The process in the countryside will be especially complex and long. Many cooperatives have sold off bits of their land to buyers who then sold to others, who later sold to still others. And in most cases, the cooperatives only held collective usufruct title to their land at best, and in virtually no case did individual members latter acquire personal title allowing them to sell their piece. Thus this whole chain of successive "owners"—few if any of whom have legal title—will have to appear in court. The agreement assumes that a land registry inventory will be made and boundaries will be established in the agrarian lands. One expert told envío that it "will be like starting from zero in the country's entire agricultural territory." Can such an ambitious goal be met in peace?
While it will take a long time for the process to conclude, it won't take all that long to see whether the agreement brings the stability it was aiming for. Several analysts agree that in a couple of years, precisely when the country is at the threshold of new elections, it will be possible to measure whether the governability that Alemán wanted to buy with this agreement is a reality or not, whether the law has calmed down the country sufficiently or the violence has remained, increased or has even gotten out of control. Any of these things are possible in Nicaragua.

We'll All Pay

In addition to being long and uncertain, the process will be costly. It is estimated that just the indemnifications to the confiscated will cost Nicaragua's public treasury some five billion córdobas, and that is without giving everything they are claiming. "The claims of the confiscated surpass the capacity of the Nicaraguan state to respond to them," explained Vice Minister Argüello realistically.

Five billion córdobas is a lot. Nicaragua, so punished by the United States in the 1980s for wanting to change things and choose its own road, is now receiving a new "punishment": 600,000 families, the entire nation, will have to work for years just to "do justice" to some 5,000 confiscated families. In a mass held in Nicaragua on September 29 for Anastasio Somoza García, one of his grandsons told the mourners that his family is demanding the return of 342 properties, among them over 235,000 acres of land, valued at roughly $250 million, equal to half of the total 5 billion córdobas.

There is already financial support from the Scandinavian countries to cover the costs of the agrarian titling. But no country or institution, naturally, is willing to contribute resources to compensate individuals who, even after they were confiscated, always had enough resources to live a privileged life and still want more. The indemnification for these people will come from the taxes of Nicaraguans and from even greater cuts in social spending. We will all pay for the indemnifications.

The Drought Calamity

All this uncertainty is occurring at a particularly difficult time for the country. The drought caused in the already dry zones of the Pacific due to the El Niño phenomenon, considered the most acute of the century in some areas, has put aspects of agrarian center stage once again.

The drought is affecting over 18,000 families from 27 municipalities of various departments, who have lost their entire harvest and are experiencing extreme hunger. Over 60,000 other families are partially affected. The government was slow to recognize the drama and then stubbornly refused to declare an emergency, arguing that it had sufficient resources to deal with the situation. During the debate on whether or not to declare a state of emergency, the President indiscriminately accused the NGOs of wanting that declaration so they could "paw over" money from international funds and "put it in their pockets."
The President has not yet heard the end of NGO anger for those uncalled-for remarks. On October 1, the most active and recognized Nicaraguan NGOs sent him a public letter asking for a rectification of his offensive affirmations against them. They also asked him to extend this apology to the donor organizations that cooperate with Nicaragua. The letter further adds that "From the time that you assumed the presidency to date, the NGOs have only received from you disrespectful and offensive allusions, even though you emphasized during your electoral campaign and in your inaugural speech on January 10 that you would respect civil society and its organized expressions."

Ill-Fated Donations

A little history allows us to better understand the dilemma that the drought poses. During its first years (1980-84), the Sandinista government tried to expand the basic consumption of the poor, making available to them a market basket of basic products at subsidized prices. In reality, the major beneficiaries of that policy were the poor of Managua and other cities of the country, not those of the rural areas.

The revolution faced the classic dilemma of any food policy of this type: stimulate food production or expand access to its consumption. Food production grows if attractive prices are offered so that the peasants will produce more. But attractive prices mean that the state has to increase the amount of its subsidies for the basic market basket of those who consume these foods.

The Sandinista government resolved this contradiction by creating an excellent capacity to solicit and get international food donations, but this had ill-fated effects on peasant production. Later the revolution began reducing food subsidies as the big agroindustrial projects demanded more funds and the war intensified. By the end, the only ones benefited by this erroneous food policies were state workers and employees.

The Chamorro government modified this policy by cutting even this last subsidy, but it did continue soliciting food donations to buttress its initial anti-inflationary plan. In those days even chicken parts came in from the United States to be sold at subsidized prices in Managua. Later the food donations served for the social compensation programs that tried to offset some of the effects of the adjustment, largely through food for work programs.

Both the Sandinista government and the Chamorro government had an additional incentive to seek this kind of donation: the sale of these foodstuffs generates counterpart funds that are used to finance other governmental programs. This explains the interest of both those governments and the current one to maintain such programs. Some NGOs have a similar logic, the success of which is measured by its capacity to get food donations to resolve hunger problems, not by its capacity to mobilize national resources to confront these crises at their root.

Cooperation: The Big Question

Taking all this into account, the position of Minister of Agriculture Mario de Franco was a correct one, when he proposed to resolve the food crisis of the dry zones with national peasant production from other areas. This would mean better prices for the peasant products and would resolve the urgent needs of the poorest peasants. The million dollar question was whether international cooperation would have been willing to finance massive purchases of corn and beans from the central part of the country rather than send donations. But it became something of a moot question since the government's right hand began to operate independent of its left: the Ministry of Social Action requested international donations and began to distribute them.

Milk is a clear case. PROLACSA of Matagalpa has the capacity to provide all the powdered milk needed to deal with the massive hunger problem in the drought-stricken zones. This factory, with capital from Nestlé, buys the milk from Río Blanco, Paiwas, Matiguás, Muy Muy and the outlying zone around Matagalpa. If the demand for powdered milk grows, the company benefits, and with that so do the peasants from those zones. The chink in that plan is that international cooperation, above all European, prefers to donate powdered milk from Europe, where they have stockpiles of it.

The essential problem is how to rehabilitate the productive capacity of the peasants in the dry zones, beyond any emergency. Converting the agrarian reform beneficiaries into peasant farmers is a valid way to respond to this question. The answer of both the current agricultural minister and the one under the Sandinista government has been to invest in irrigation, but this investment, which is fine for the zones of capitalist agriculture, is inappropriate for the peasant zones. What is at issue is to recapitalize the peasant economy. Both the former and current agricultural ministers seem to agree on one thing: the peasants from the dry zones are incapable of contributing to national production and are only suitable subjects for social compensation.

The Lash of Cynicism

As the drought withers Nicaragua, incredulity and indignation rages through the population over an issue that is discussed daily: the high salaries of top state officials, their perks, their waste and the ostentatious flaunting of their privileges in front of an increasingly hungry population.

A little bit of history is useful to evaluate this problem better as well. During the Somoza regime, the concept was widely held that public posts were for self-enrichment. The most coveted posts were not those that offered greater power to do good but those that allowed better and faster theft. Being director of customs or of taxes was more attractive than being minister of the economy or of education. The same was true in the National Guard and the Police, armed forces which knew no bounds. Any colonel or general would prefer to be Chief of Transit than to be director of the Military Academy.

The revolution tried to radically change the concept of being a public functionary, whether civilian or military. At the beginning, the policy that was implemented allowed the highest state salary to be no more than 15 times greater than the lowest one. If teachers earned 500 córdobas, the minister of education could earn no more than 7,500. With time this policy was gradually modified due to pressures from high public officials. In the second half of the 1980s, the top officials of the agrarian reform ministry received part of their salaries in dollars and had credit cards paid for by the government. They also had assigned vehicles, which were changed whenever they got a little old. They never went around in Ladas, only in Toyotas.

The justification for this was that these functionaries were contributing a lot to the country and had to be remunerated well to keep them from betraying the revolution or going abroad in search of a better position. In a country with such limited skilled human resources, beware the brain drain, as Cuba in its first years could testify. Since the lowest salaries were dropping in those years due to the galloping inflation, the salary gap began to widen significantly.

The Chamorro government took this policy of the last Sandinista years to the extreme, and added another "justification": top public officials had to be paid very well because they could earn more and do so more comfortably if they worked for private enterprise in Nicaragua or stayed in the United States. The Chamorro government abandoned any principle of social justice and always considered that functionaries who were not part of the government elite did not merit better salaries. In the best "let them eat cake" attitude, it believed that they should be grateful that the government was giving them work. By that argument teachers' salaries remained frozen for seven years, while the perks for upper-level officials never stopped growing.

The Alemán government has used the same justification as the Chamorro one to pay its top officials extremely high salaries, which are also kept hidden as a "state secret" somewhere inside the budget, but certainly not on the salary line. Alemán has embellished the justification, arguing that the high salaries are so that government functionaries "don't get corrupted." There seems to be something a bit wrong with that argument, too, since the corruption of his functionaries is giving the country an unending lashing. The result of this lamentable history is that the top officials of Nicaragua's government today have the highest salaries of any government in Central America, while the bulk of public servants—teachers, nurses and police—have the lowest.

The Agreement for Us All

History teaches. And the first thing that it teaches is that we all helped make it, whether by commission or omission. Today, in the inequality we are living, where some are starving and others are ostentatiously, even cynically, shamelessly, living in luxury, we—civil society, the social movement, the frustrated poor, Sandinismo, even the Liberals themselves—have a major theme to deal with.

Can we, will we, take it up? Can we embrace a new way of doing politics, a more responsible social behavior? Can we agree that, particularly in this difficult moment in the world, honesty and exemplariness are essential pieces of a politics that hopes to be an alternative to the dominant capitalism? Can we agree that social equity is an indispensible condition for development?

The Chamorro government created the Office of Territorial Ordering (OOT) in 1991 to review the cases of beneficiaries of properties that changed hands under laws 85 (houses), 86 (urban lots) and 88 (rural parcels) plus the agrarian reform law. According to official figures, by the end of August 1997 the OOT had reviewed 122,488 cases, determining that only 15% of them did not comply with the laws, and thus should not be issued settlement vouchers. The new property agreement puts the validity of these vouchers in doubt, in any case. It is presumed that they will be annulled if those holding them live in settlements or neighborhoods that, through "urban planning" criteria, are earmarked for other investments: hotels, stores, luxury neighborhoods, etc. The understanding is also that these people will be offered alternative places to live, but that they will not be allowed to sell their property at the market rate to those who will be making these investments. According to the Communal Movement, 70 of the 180 poor settlements in Managua run this risk.

So far during the Alemán administration, 3,546 property titles have been issued and 11 Managua neighborhoods have been fully deeded.

According to data of the Liberal government, its predecessor only resolved 28.73% of the confiscation claims (3,771 properties). There are currently 5,764 claims for 13,916 more properties. The Alemán government has already returned or indemnified 400 claimed properties. Between the two governments, $580 million has already been invested in bonds ($534 million during the Chamorro government) to compensate the claimants. Of this amount, only $134 million has been redeemed.

Guillermo Argüello Poessy, Alemán's Deputy Minister of Property, claims that President Violeta Chamorro indemnified about 30 people, some of them her own friends and relatives, in cash, which is illegal. He mentioned the case of her brother-in-law, Roberto McGregor, allegedly indemnified with 250,000 córdobas and $1.45 million. She also reportedly indemnified some for "lost profits," which is also illegal. The Comptroller General's office is studying the cases.

In 1993, 137 companies were partially or wholly privatized in favor of the workers, according to the Center of Studies for Labor Affairs, with the workers receiving between 25% and 10% of the shares. In 1997, only 50 of the "workers' companies" have managed to survive under the neoliberal model.

According to Attorney General of the Republic Julio Centeno Gómez, only 300 people abused the rural and urban properties under the protection of the laws of the revolution. According to other sources, the process of review over the past several years has detected 4,500 cases of abuses in agrarian properties.

Former agrarian reform minister Jaime Wheelock says that the revolution gave out over 2.2 million acres and that 85% of the agrarian titles that were issued in 1990, during the transition period from the Sandinista government to the Chamorro government, were for lands that had already been given out in previous years. The other 15%, some 59,000 acres, were new assignments. Wheelock emphatically denies any "piñata" in the agrarian sector.

Government data indicates that the cost of agrarian titling will be $18 million and will face difficulties due to the lack of a current agricultural census, since the latest one is 25 years old. According to these same government reports, 50% of the land provided by the agrarian reform--which represents 30% of all of Nicaragua's cultivable land--remains idle.


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