Envío Digital
Central American University - UCA  
  Number 210 | Enero 1999



100 Days after Mitch: Any Sign of a Change of Attitude?

Will Mitch turn out to be the unexpected opportunity for the change of attitudes a European diplomat wisely called for? Or a golden chance for opportunists adept at fishing in turbulent waters? The answer is not yet clear, but those with the greatest responsibility toward the multitudes who lost everything don't seem to have changed much. They are doing a good business selling optimistic images.

Nitlápan-Envío team

It has become a tradition among political journalists to evaluate recently elected governments a hundred days into their administration. Can this same analytical cliché be applied to hurricanes and the destruction left in the wake of their passage through a country? Surely not, but the questions the international community is asking of Central America require just such an evaluation. How are things going now, three months after Hurricane Mitch stormed its way across the isthmus? And the victims, are they getting over the trauma? How is the aid being used? Is it really getting to those who need it? What has been rebuilt and what is still down? Will these countries truly reconstruct themselves or will they repeat their terrible cycle of "more of the same"—or worse—yet again? Although these same questions run through many conversations inside Nicaragua as well, a hundred days is not enough to see whether the scale is tipping towards new opportunity or old opportunism.

New experiences, risks and danger

Agents of change, promoters of development and builders of solidarity of all stripes and ideologies have been working in the zones devastated by Mitch. From that local level they all speak optimistically about positive new phenomena such as the awakening of a civil society that up to now has been weak and passive; brand new experiences of solidarity and of organization, participation and empowerment by groups created in the aftermath of the emergency; greater conviction about longer-term projects; even personal "conversions." At the same time, they point out dangers and problems: rivalries sparked by the arrival of unexpectedly large amounts of money; leadership disputes over the new projects; land speculation in the disaster zones; "foreign interventionism" in the design of projects; political, ideological and religious polarization; and a return, or at least temptation to return, to the culture of subsidies and donations.

Everyone agrees that it is still too soon to draw the bottom line and begin to tally the accounts of the post-Mitch period. What is clear already, however, is that the hurricane, with its devastating winds and torrential rain, drew a line of its own. For a long time to come in Nicaragua, and even longer in Honduras, everything will be defined as "before" or "after" Mitch.

A state with little institutional capacity

Has anything of the rural economy hit so hard by Mitch been reactivated in these first hundred days? The responses vary substantially from place to place. The victims in Posoltega, the area that has become the symbol of the tragedy, are said to be short of water and food and still don't have land to resettle on, despite all the resources earmarked for them. Meanwhile, local organizations combined with outside resources seem to be bearing fruit in places like Villanueva, Dipilto and Condega.

At least some state institutions are showing a genuine desire to provide some sort of response, but the state simply doesn't have the capacity. A neoliberal state, with its social services dismantled and its other activities pared to the quick, no longer has the wherewithal to deal with emergencies of this kind. And in our case, a neoliberal state in the hands of Nicaragua's Constitutionalist Liberal Party (PLC) adds to this structural handicap the myopic political logic and personal ambitions to which it subordinates virtually everything else.

Immediately after Mitch, the government launched a program with abundant credits and facilities to expand the third and last round of planting in this year's agricultural cycle. It was well designed and its results were good in areas that enjoy the climatic conditions to permit a third round. The glaring question now is: what, if anything, has the government designed to follow this short-term burst? Since nothing seems to be following it so far, uncertainty reigns in the countryside.

A more basic question was on the table even before Mitch, and an answer now seems crucial: what kind of real and concrete backing exists within the government for the country's rural development and especially that of small and medium producers? The essential problem is that the neoliberal model, at least as applied in Nicaragua, does not support that development or include those producers. The practice so far has been the opposite. The government dismantled the National Development Bank (BANADES), the only institution that, however minimally, played that role. The Rural Credit Fund is supposed to replace it, but it shows no sign of providing a genuine alternative. In fact it has yet to offer much of a track record at all, a full year after it was created, since its populist regulatory structure has not attracted many funds from foreign cooperation.
Post-Mitch reconstruction begs some substantial modification of the neoliberal model, but the government has not even taken its first step in that direction. Although some in the PLC would favor opening up opportunities to small and medium producers from the countryside, technocratic dogma has had the last word. As a result, the PLC will be unable to turn its purported macroeconomic successes or the donated projects it is now flaunting into rural votes later, when they will count.

NGOs tempted to subsidize

Since the state lacks the institutionality (a term covering everything from structures to mindsets) to respond adequately to Mitch's aftermath, NGOs have increasingly filled the void in the areas where the tragedy hit. But the NGOs have their own limitations and weaknesses.

Perhaps the root of some of these problems is that most NGO representatives belong to the world of the urban middle classes. This is an even more glaring problem now, since Mitch did its greatest damage to the world of the impoverished rural classes. The logic of the urban middle class—need it even be said?—is very different from the logic of the rural poor.

Some NGOs are also reinforcing the dangerous culture of subsidy in their activities. This works directly against the culture of sustainability, which is more urgently needed than ever right now, when the vulnerability of many zones of the country has been made so painfully evident. This subsidy-sustainability tension could be pointed to as the main problem that the NGOs are grappling with as they try to respond to the devastation left by Mitch.

The culture of subsidy was born of religious charity, but the Sandinistas raised it to an art form during the years of the revolution, along with the culture of solidarity. Even though subsidy and solidarity are nourished from the same roots, however, they are neither synonymous nor equally laudable. Unfortunately the former still thrives alongside the latter in a large number of national NGOs, and Mitch is making it far harder than before to break with it. Each of Nicaragua's many tragedies gives new and even coherent justification to the subsidy temptation.

Civil society comes together

Meanwhile, Mitch sparked the immediate creation of the Coordinadora Civil para la Emergencia y la Reconstrucción, which its member organizations are calling in English the Non-Governmental Emergency Relief and Reconstruction Coalition. It is an agglomerate of various networks, unions and associations representing over 300 organizations. Among its other initial activities, this new coalition pulled together its own 22-page outline for an alternative reconstruction proposal in the two weeks following the hurricane. The urgency was to take it to Washington in time for the government's meeting on December 11-12 with a special consultative group representing 50 donor countries and international financing agencies set up to deal with the hurricane's effects on the region. The drafting of the document was a Herculean effort of democratic participation by organizations with normally very different agendas and a not insignificant history of rivalry and political differences, but the fruits of that democracy and perhaps of the greater cause showed. With a coherence that was little short of remarkable given the time constraints and the organizations' inexperience working together, the document offered a holistic set of general programmatic issues and approaches for their treatment that combined economic with environmental alternatives, and social with psychological ones. In Washington, coalition representatives met with Consultative Group members, a few key congresspeople and representatives of international financing agencies. They have also circulated the document to international NGOs and bilateral donors within Nicaragua.

One of the coalition's next steps, which is already underway, is to flesh out more concrete development policy proposals and forge consensus around them. While that will hopefully mean opening themselves up to a self-critical dialogue about their own practices, the goal is not to end up with a non-negotiable program chiseled in stone. On the contrary, their bottom-line demand is the same one made by organized civil society since the Liberal government took office: participation in the design of the country's development policies, moving beyond the animosity that the Alemán government feels toward civil society in general and NGOs in particular. The Coalition's documents and the public stance of its representatives have carefully avoided any show of reciprocal animosity. In a country so marked by opportunism in actions and unbridled hostility in words, the maturity shown so far by this new phenomenon of civil society is a breath of fresh air. It remains to be seen whether it will be able to maintain and expand the participation of its own membership and define its future tasks as a coalition in such a way that they complement rather than compete with those of individual members.

Many national NGOs have contributed to rebuilding what was devastated locally. For the most part, they are administering honestly the money that has been coming in through them. If there is a problem with these funds, it is rather that they are being dispersed too much into multiple small projects, generating sometimes erosive levels of competition among the institutions themselves in a given locale. In that respect, another ambitious project of the Coalition is to carry out what it calls a Social Audit of the hurricane relief and reconstruction work being done by both civil society and the government, which will involve interviewing various beneficiary populations. It is already working on the questionnaire and preparing to train survey takers at a national level. If this effort is designed and implemented well, it should teach a lot about how development work is done, and how it is viewed on the ground. The other aspect of this initiative will be to do a financial audit of the funds and resources received by all the NGOs, unions and social organizations that voluntarily join the initiative, under the auspices of an outside auditing firm.

Foreign cooperation's ambiguous role

What role is international cooperation playing with respect to all the contradictions running through the disaster relief and reconstruction work in Nicaragua? Its role, in a word, is ambiguous because, like everyone else, it has its own contradictions to deal with. The discourse in cooperation circles is focused on long-term sustainability, yet many institutions and governments continue to provide loans and donations to Nicaragua's Liberal government knowing its shortsighted views, the self-serving electoral spin it puts on all aid and its notorious lack of accountability. Because most of the international institutions are reining in their desire to see immediate benefits from their cooperation, wagering that it will result in sustainability over the long haul, they keep trying to help untangle some of the knots that make it hard for Nicaragua to climb out of its crisis and get on the road to reconstruction. The societies these institutions and governments represent, however, are more worried about that future, and have been looking for concrete results from their aid for some years now.

Optimism for sale

Meanwhile, the government is blithely promoting optimism, whether warranted or not. At the start of 1999, Central Bank president Noel Ramírez, chief spokesperson for the government's economic policy and also the governing party's organizational secretary, announced that the Gross Domestic Product had grown 4% in 1998. That figure was raised as a banner of victory, as an especially resounding proof that the economy is genuinely on the move, even after the Mitch crisis. Ramírez went so far as to predict to the Consultative Group in Washington that Nicaragua's growth in 1999 would double that at 8%.
The government trotted out other economic triumphs in the period following the emergency as well. President Alemán returned from Washington announcing with great glee that Nicaragua had gotten much more in loans and donations than had been expected or even requested from the aid package that the international community has pledged for Central America's reconstruction. With respect to Nicaragua's unbearable debt burden, Alemán announced on January 6 that the "Three Kings" had brought a "beautiful gift" to all Nicaraguans: the Paris Club member countries, which are the wealthiest in the world, had "deferred" service payments on the foreign debt for three years. Stripped of its glowing praise, that amounts to a moratorium on—not even the cancellation of—$111.7 million. He also announced that Nicaragua would have the privilege of early entry—June of this year, at the latest—into the initiative designed by the international financial institutions to restructure the debts of highly indebted poor countries (called HIPC, in their honor).

"Everything's just fine here"

The government, and particularly its permanently grinning President, have attempted to display an air of triumphant control over the post-Mitch situation, a kind of "everything's just fine here" elan. This theater of the obscene is not particularly hard to pull off given that the peasant economy and the hefty segment of rural families that are Mitch's main victims were not allowed onstage even before the hurricane. All it takes are announcements like the above packaged in costly publicity campaigns, the visits by international personalities attracted by the catastrophe "of biblical proportions" as it is now fashionably being called, and flashy inauguration ceremonies for all the myriad "works of progress," many of them unfinished or barely begun.

There is no end of theater, and Ramírez's announcement seems to have been part of it, a calculated governmental attempt to maintain the image that Nicaragua's economy is growing at a sustained rate. Even the 4% figure was well chosen: just slightly above Nicaragua's growth rate of over 3%, to make it appear that even the per-capita GDP is growing. The problem is that the overall figure assumes that the agricultural sector, which has the greatest weight in the national GDP, grew by at least 4% in 1998, and that has since been challenged. Shortly after Ramírez's declaration, technical experts from the Agriculture and Forestry Ministry reported that an on-site survey their ministry did across the country with World Bank financing revealed that its own initial estimates of the hurricane losses in agriculture had been way below the mark. Based on the reality they saw, they now calculate that the agricultural sector closed 1998 with –4.6% growth. That shoots a fatal hole in the official triumphalism, since there is no way to claim overall growth of 4% if the balance in the agricultural sector is negative.

Image games

The government is playing with images. Such a huge contradiction in figures—never publicly acknowledged by Noel Ramírez—indicates that his declarations were more political than technical and that in this post-Mitch period, just as before, the Liberal government is working only to create and consolidate positive images, not to inform the population about reality. This has been Ramírez' typical style: he appears in the media from time to time as the official voice of optimism, like someone vested with the mission of shaking Nicaragua out of its pessimism and giving it, at last, a dynamic vision of its future.
These images have been used to foster public opinion that the country is growing like never before, surpassing any progress that may have occurred under the Sandinistas or Violeta Chamorro. Furthermore, this government is thoroughly convinced that attracting foreign investment depends on healthy macroeconomic figures. So, if the figures don't square, manipulate the one's you've got. This ignores the fact that foreign investors don't care nearly as much about a country's macroeconomic figures as they do about the level of government corruption. And this is the only place Nicaragua's government gets genuinely high marks: it ranks right up there as one of the most corrupt in the hemisphere.

"Another" Comptroller's Office after all?

The government shows no desire to run a more honest administration. Concerns were voiced from the outset of the emergency about accountability in managing the international aid coming into Nicaragua. The Office of the Comptroller General of the Republic (CGR) reports that the in-kind donations that came into the country by air, sea and land up to the end of December—which the government calculates at a bit over $17 million—were handled in a "reasonably" correct form. But it is easier to track the use of material aid than aid that arrives as money or projects.
The CGR sent dozens of its officials to supervise the incoming aid in customs reception centers around the country. Considering some "incidents" they observed in the receiving and distributing process, the CGR announced that it would publish a manual with the procedures on the use of public goods that should be followed during such emergencies and the requisites that should be met in the public contracting of services. The fact that no such manual exists is one of the country's many institutional shortcomings.

President Alemán took the opportunity of the Consultative Group meeting in Washington to try out on the international community a plan he has had since taking office: de-legitimate the Comptroller General's Office and ultimately dismiss Agustín Jarquín, its head. Alemán formally requested support from President Clinton to create an "independent" body to supervise and control the post-Mitch reconstruction process. This body, Alemán stressed, would complement the CGR and would be made up of both Nicaraguans—he already has his list drawn up—and representatives of the countries that cooperate with Nicaragua. The government would contract an international auditing company to carry out this work. Once back in Nicaragua Alemán urged this same idea on the National Assembly on January 10, at its first formal session for 1999, when he presented his report on the second year of his administration.

The President had reactivated his war against Jarquín two days earlier, by sending the Attorney General to the still-reconvening Assembly to reiterate the serious accusations he had made against Jarquín before Mitch, and to lobby for "punishing" the comptroller. It falls to the Assembly's new Anti-Corruption Commission, controlled by the Liberals, to decide the case.

In what could turn out to be a minor upset to this plan, Jarquín was elected president of the Central American and Caribbean Organization of Superior Auditing Entities on January 14. Upon taking up his new post, Jarquín said that "if there is a genuine desire to reduce poverty in the world, the effort has to begin by dealing with the problem of corruption." The watchdog organization Transparency International gives Nicaragua a 3 on a descending scale of 10 on the corruption issue. It also listed Nicaragua as one of the most corrupt countries in Latin America and ranked it fourth from the bottom out of the 65 countries investigated.

Jarquín reacted to the President's now familiar threat with his characteristic caution, reminding everyone of what they already know: according to the Constitution, the CGR is the state's maximum auditing entity and enjoys autonomy. He stressed that the most important thing in Nicaragua is to respect the judicial framework established by law and to strengthen the institutions that already exist. He requested a copy of the proposal to create the new institution from the President, but received nothing. Several weeks later it was learned that, from his new regional post, Jarquín will promote a proposal to have post-Mitch aid audited at the Central American level aided by an international auditing firm that will coordinate with the region's auditing bodies and respect each country's institutional and legal norms. This project will be presented to the Consultative Group when it meets again in May, in Stockholm.

The President's land

This administration's dealings have become no more transparent in recent months; in fact they have become murkier. It is hard to tell whether Mitch has accentuated this tendency or not, but a rash of charges since Mitch have clearly put the President, his family and cronies at the head of a series of highly irregular deals in which their government positions give them unfair advantage. The charges that have appeared in the newspapers every day for over a month now relate to thousands of acres of land that the President has been acquiring in different areas of the country over the past few months. The pattern seems to be that his public functionaries engage in lightning-quick transactions to buy up the land for an immediate cash payment in amounts ranging from a pittance to a substantial bundle, depending on how desperate the seller is.

As it turns out, some of these lands just happen to be situated near important future tourist projects. Others are near the Chacocente ecological reserve, which is a valuable and now very rare dry tropical forest. It suffered irreparable damage when Alemán ordered that a highway be built there. Some of the highways leading to these properties were built by companies owned by the President's relatives and friends, using the "emergency" caused by Mitch to request a waiver of open bidding. Other improvements—new highways and roads, the installation of electricity and building of wells, all provided by public service institutions presumably using state funds—immediately increased the value of the President's new lands. It is a big-time scandal with a wide reach.

A "jealous oligarchy"?

The President admits buying the land, but without explaining where the money is coming from. He refers to the improvements around his property as "works of progress," leaving no doubt about who benefits from this "progress." He ridiculed the media for taking up the issue, and told the diplomatic corps that what he called the media's "lack of respect" is due to the "oligarchy's" power in them. "We are a government that knows how to make progress," he argued, "one that knows how to use its works to diminish the gap between rich and poor, that knows how to combat the oligarchy's vestiges without falling into populism, to combat those vestiges that are so entrenched in sectors that never were, are not now and never will be capable of using power to build a more just, strong and stable country like we are doing. This is the essence of what lies behind these new articles that are so frequently appearing against the government."
When Comptroller General Jarquín requested detailed information from the President about his patrimony with respect to these purchases, the President's personal secretary sarcastically suggested that the Comptroller get his answer from the property registries that exist all over the country. He referred to Jarquín's attempt to investigate the issue as "children's games." The abandonment and exclusion to which the rural population has been condemned in the 1990s is facilitating the concentration of the country's land back into few hands, including those of Alemán and his relatives. Many of those who have sold their land to the President—or to top FSLN leaders who have now become big entrepreneurs, or to any other former big landowner—were peasants benefited by the agrarian reform of the 1980s or army or contra veterans benefited in the early 1990s. Today, with no access to credit or technology, without even the most minimum opportunity, they are obliged to sell. Being a farmhand to some big landowner again looks better than being a member of a bankrupt cooperative or the owner of a plot of land with no future.

Who will halt the corruption?

How can this concentration of land back into big estates, which is largely being propelled by governmental ambition and corruption, be stopped? Among Mitch's numerous consequences was that a Nicaragua that the world had nearly forgotten in recent years is being reopened to international scrutiny. But this doesn't seem to deter the President. Perhaps he and his allies know they have a lot of maneuvering room and thus a lot of impunity.

Any reconstruction project that the international community promotes in Nicaragua must take into account the level of corruption in the country and the immunity-impunity complicity that runs through the entire political system. If this is not done, it could well mean collaborating in the "reconstruction" of personal fortunes. Can pressure from foreign cooperation have any effect? It theoretically could, but there isn't much room for hope. Stopping the corruption of those at the top and getting those at the bottom to finally say no is an eminently "national" challenge.

One reason for this has to do with how things function in the globalized international economy. When the government reaches an agreement with the IMF, the agreed-upon loan is immediately disbursed. The only condition is that the government stick to the economic policy accorded. What is called foreign cooperation—aid from donor countries, "friends" in the international community, etc.—bases the disbursement of its own loans or donations on whether or not the IMF and World Bank endorse the way the government in question is managing its economy. The criteria for that endorsement are generally based on the behavior of the macroeconomic indicators. If, say, the government fails to meet the 5% target set for the fiscal deficit, letting it rise to 6% instead, the IMF does not give the government the green light. Depending on how serious the government's failure to fulfill the agreement is, all disbursements could even be suspended. When the international institutions give a country a bad evaluation and suspend its funds, it produces a chain reaction; foreign cooperation does the same.

But the sanctions are never as severe if the government abuses the funds it receives from the international agencies or from foreign cooperation, or uses them inefficiently. In fact there are virtually no sanctions. Even in this current reconstruction context, the government runs a serious risk if it fails to meet its agreements with the IMF. But if it diverts funds, manipulates projects, favors cohorts in contracts or tries by all means to discredit or fire the Comptroller in order to get his careful auditing work off its back, few in foreign cooperation will negatively evaluate the government's economic administration or criticize the effects of these actions on the economy.

Oxygen for the building industry

The extraordinary resources that Mitch has brought into the country could generate maxi-corruption and a mini-economic boom. According to Roberto Lacayo, president of the Chamber of Construction, 1999 will be a much better year for this sector than 1973 and 74 were, following the Christmas 1972 earthquake that destroyed Managua. He says that Mitch's arrival gave the building industry "oxygen" just in time, since the growth it has enjoyed since 1995 has begun to flag.

Lacayo spoke of the close coordination that exists between the government and the building companies for the country's reconstruction, but also noted that there is some mistrust over the letting of contracts. Lacayo calculates that the potential work load is great enough that each builder could invest two million dollars just to acquire enough equipment to "get in the game" but that many of them will opt not to do so unless they see the government playing by clear rules. Since the best time for construction is in the dry season that runs roughly from November through May, definitions have to be made quickly. All evidence suggests that the only rule that the government is respecting in this sector—as in all other economic sectors—is "donkeys tied and tigers run loose."

Everything is Mitch's fault

The challenges that Mitch laid down to both the state and society are long-term. But one of the Liberal government's chief characteristics is its notorious shortsightedness. As the government's economic spokesperson, Noel Ramírez gave a perfect example of that less than sterling government quality. At the same time he announced the 4% economic growth, he was asked what solution would be provided for Nicaragua's trade gap in 1999. He pleasantly responded that there was no choice but to let it expand, since imports will have to expand to reconstruct the country. Once again, it was a political response, and as such debatable, but coming from the president of a country's central bank, it was inconceivably inappropriate.
Such a response would perhaps be justifiable if Nicaragua had maintained a more or less acceptable deficit in its trade balance before Mitch. But it was already gravely out of whack. Last year closed with exports of some $600 million ($100 million less than forecast because of Mitch) and imports of over $1.5 billion. The government would like to attribute all the imbalances and inflation increases to Mitch, but the pre-Mitch imbalances had already cast doubt on the success of the whole economic policy that is being followed, since one of its golden goals is to increase exports.

Furthermore, Nicaragua's enormous trade deficit means that the country's indebtedness is also rising again. The official government propaganda is that the partial cancellation of Nicaragua's foreign debt once the country is admitted into the HIPC initiative will be the seal on the triumph of its current economic policy. But it must be kept in mind that the bulk of foreign resources coming into the country as a result of Mitch are in the form of loans. They are coming with very soft conditions in terms of interest and repayment periods, but they are still debts. And, worse yet, the majority of them are being contracted with the multilateral lending agencies, which, as we are learning from the highly lauded but perhaps not so laudable HIPC process, "do not pardon debts."

Are CBTs the solution?

Why aren't exports growing at the expected rate? In addition to the low added value of our exports, one line of interpretation blames it on the Liberal government's decision, in an agreement with the IMF, to stop issuing Tax Benefit Certificates (CBT), an incentive measure used in Costa Rica and El Salvador to stimulate new nontraditional export categories.

According to an explosive investigation done by the Comptroller General's Office and made public in January of this year, the use of CBTs during the Chamorro government, which benefited 155 companies, generated a chain of corruption that may even have included money laundering. That could be controlled with totally transparent management, but the CBTs would still not be the solution. Behind the argument that magnifies their importance is the conviction, which the current government shares despite its decision on the CBTs, that big business is the only sector that can get the country moving. It has forgotten that most of the national export volume comes from small and medium producers—mainly in traditional categories, though to some degree even in the nontraditional ones. Once that important fact is conveniently forgotten, it is not hard to forget that the problem for these producers is not whether CBTs exist or not, but rather their limited access to credit and technical assistance services. Yet again, the essential problem is that the government has no interest in or appropriate structures for supporting small and medium production.

The government announced in January 1999 that it has received 100 million córdobas (some $90 million) from foreign cooperation for credits to small and medium rural producers affected by the hurricane. But the government's decision on how to use this aid revealed once again that its policies and priorities simply do not support that sector. Initially the government said it would be channeled not only through private banks but also through NGOs dedicated to working with credit, but in the end, it decided to turn the funds only over to the private banks, which would like to receive them through the Nicaraguan Investment Financing Institute. It permits a higher interest rate on credits than is legally allowed the Rural Credit Fund, ostensibly created to serve precisely these rural producers.
Neither before nor after Mitch have the private banks shown any interest in funding small and medium businesses. This along with the fact that the banks have few branches in the disaster zones means chances are pretty good that the money will come to rest among the better off middle-level producers who suffered some damage on their farms because of Mitch and are already clients of the banks. Despite all that, the amount to be circulated is quite substantial, and will surely have the political effect of consolidating some new electoral votes for the PLC.

Alemán-Ortega Pact

Mitch made a mess out of the national political agenda, focused since August on negotiating the pact between President Alemán's Constitutionalist Liberal Party (PLC) and general secretary Daniel Ortega's FSLN. With the hurricane, the pact was temporarily put on hold, which allowed new contradictions to emerge over the already supposedly firm agreements. In addition, although the agreement on reforms to the electoral law remained virtually intact, last year's legislative session came to a close before these top-level party negotiations over constitutional reforms could be drafted as legislation and introduced into the National Assembly for the first round of passage.

In fact, there is not yet clear agreement on what or how many reforms the Liberals and Sandinistas would make to the Constitution. José Cuadra, a legislative representative from the Conservative Party of Nicaragua, assessed the evolution, contents and current status of the Alemán-Ortega pact for envío. According to Cuadra, President Alemán didn't need any pact with the FSLN between January 1997, when he took office, and June 1998, which was when the discussions between the two parties first began to be broached privately. The Liberal Alliance bench's 42 members and another 12 from independent parties transformed by "continual privileges and perks" into what Cuadra wryly referred to as "unconditional partners" gave Alemán votes to spare for any law he wanted approved and only two votes short of the number needed to push through any constitutional reform. But in mid-1998, eight dissident legislators led by Eliseo Núñez withdrew from the Liberal bench as the result of a leadership crisis. Alemán recovered the votes of four of them over time, but was also starting to have problems with some of the independents, who kept upping the price of their "unconditionality."
Cuadra believes that "this split in the Liberal bench accelerated the pact between the PLC and the FSLN." According to him, the pact "is in Alemán's interest because it gives him a better chance of guaranteeing basic governability and is in Ortega's because it allows him to guarantee spaces of power. Both men agree that assuring a bipartisan system is necessary for both goals."
Cuadra confirmed for us that Alemán is wedded to a package of constitutional reforms that includes allowing him to run for reelection in 2001, while the FSLN is debating a few reforms but is likely to adhere to all those that strengthen the presidentialist system and centralize power. Cuadra insists that "only one reform really interests the FSLN, and would make it capable of conceding everything Alemán asks for. The only thing the FSLN really wants is to eliminate the second electoral round for President."

All eyes on the elections

Everybody with anything to say on the subject is thinking about the elections. The climate is already quasi-electoral with over a year and a half still to go even before the municipal elections—that is, if the pact does not postpone them. The FSLN is convinced that it will never get more than the 45% minimum vote the Constitution requires to win the presidency on the first round. Daniel Ortega seems equally convinced—and one can only wonder how many in the FSLN share this conviction—that it is his "mission" and his alone to fight Alemán for that post in 2001 after conceding him the right to run again. Ortega reads into all the recent polls that he would retake power in this contest, identical to the 1996 one, as long as it depends on getting the plurality of votes in only one round. His conviction is not sustainable if there is a runoff round between the two top vote getters, himself and Alemán.

By the time of those elections, the FSLN and PLC hope to have reforms to the Electoral Law in place that consolidate a two-party system and get any possible third-party contenders off the track. It is quite an interesting concept, particularly since all polls indicate that over 55% of Nicaraguans no longer identify with either the PLC or the FSLN, or with their two top leaders. To strengthen, or induce, the two-party vote, both negotiating teams seem interested in delaying the municipal elections from October 2000 to October 2001, the same day as the presidential elections. The idea is to join—or jumble—all elections into a single day so voters will again have to mark a number of different ballots and will thus be less likely to split their ticket. Both parties also seem interested in reforming the Constitution to expand the municipal government term from four years to five (in the 1995 reforms it was reduced from six to four), for no other reason than to allow this pressure to mark ballots alike affect all future elections as well.

Crisis in the FSLN

The Alemán-Ortega pact is causing a deep crisis within the FSLN, especially among the Sandinistas elected to the National Assembly and the better-informed grassroots members. This crisis falls on top of many other still unresolved ones of both a political and ethical nature that have been hushed up with anti-democratic procedures.

The most evident sign of today's crisis is found in the contradictions between the discourse and decisions of Daniel Ortega and those of Víctor Hugo Tinoco, who headed the FSLN bench in the national Assembly up until January. The issue of the pact exacerbated pre-existing tensions among the party's diverse economic and political groups—which are variously represented by Ortega and Tinoco and several others—and culminated with Tinoco's removal from his leadership post on the legislative bench. Ortega will now occupy that post himself to assure that the 36 Sandinista legislators vote the way he wants them to, and to close the door to any idea of running Tinoco as the party's presidential candidate in 2001, as is being proposed with increasing insistence.

The government's mismanagement of the country would be inexplicable, in fact impossible, if there were an organized opposition with coherent leadership. Given so many excesses by the government, which is reviving Somocista practices, the FSLN is the logical candidate to head this opposition. But those who control the party don't want to play the role of spoiler. They only aspire to power themselves, and at any price.

The FSLN's vices

In what way is the FSLN any different from other parties now? It certainly seems no longer to be a revolutionary party. There is an outside chance that it could return to power in 2001, but it would bring all the vices it has cultivated over these years. One of the most courageous analysts still within the Sandinista ranks offered this view of what some of those vices are: "What is weakening the FSLN is the moral disintegration of a large number of comrades who have filled managerial posts at all levels. In other words, the crisis has been caused by their eagerness to impose decisions in a top-down, authoritarian manner, the sectarianism that the political leadership of a structure assumes, the mafioso procedures to silence those whose thinking diverges from the party line, and the corruption of certain intermediate and national party cadres."
"The most serious part," he adds, "is that there are no signs of any desire on the part of the general secretary [Ortega] or other FSLN political leaders to correct all that. This has led to generalized discouragement among Sandinistas, many of whom are opting to distance themselves from the structures and the organic life of the party, seeing that there are no possibilities at the grassroots level to analyze the situation, or to discuss the decisions of the party leadership, criticize them and propose alternatives."

A change of attitude

This is the tough situation the country finds itself in as it faces the need to design and undertake its "reconstruction" with international support. After the Emergency Consultative Group meeting in Washington, which pledged to provide US$6.3 billion in humanitarian aid, technical assistance, concessionary loans and foreign debt relief to the Central American region as a whole, another will be held in Stockholm in May. That meeting is seen as a second step, which will give the Central Americans enough time to draw up more concrete projects and programs to present for funding. It is expected that these will also have a more social and more regional character. In Nicaragua's case, the Non-Governmental Coalition is also preparing to sit at the negotiation table with its own voice and its own projects, which would mean a major stride over the Washington meeting.
Sweden's former Prime Minister, Pierre Schori, currently minister of cooperation, said in Washington and again in Managua that Central America's reconstruction requires, more than anything else, a "change of attitude." He could not have been more right. There is nothing the region needs more right now, and nothing that seems harder to come by.

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