Envío Digital
Central American University - UCA  
  Number 113 | Diciembre 1990



The International Limits of Concertation

Envío team

While Nicaragua was engrossed in its highly charged and polarized electoral campaign, the rest of the world was undergoing a radical and rapid transformation. Thus, in addition to dramatic internal changes, Nicaragua also begins this new stage with the world context considerably altered. Not until after our elections did Nicaragua become aware of the depth of these changes, and only today can we begin to measure the degree to which they directly affect us.

What is the new framework in which Nicaragua's current concertation process—a negotiated social and political pact—can be understood? (See “National Dialogue: Stalemate or Truce?” in this issue for more on the concertation process) What limits does the new international setting impose on the negotiating parties? Did it in fact force the different parties to the negotiating table? And what long-term perspectives does Nicaragua's concertation process have when the North continues to refuse to dialogue with the South?

An "ideal" case study

Nicaragua offered an ideal opportunity for the United States to show the world that substituting a neoliberal economic model for "communism" can translate into economic prosperity for the people. Selling this line is too costly and not very convincing in the Eastern European case. Those countries need billions of dollars to effect industrial and commercial transformations, without making major cuts in the social services their people have become accustomed to. It would have been just as costly and perhaps less feasible to demonstrate that neoliberalism equals prosperity in the critically impoverished African nations.

Nicaragua, on the other hand, would have been cheap and relatively easy. The depth of the economic crisis and accompanying deterioration in the country's infrastructure notwithstanding, the resources required to make Nicaragua a showcase for US democracy would not have been excessive: the UNO government had calculated $1.8 billion over three years.

Nevertheless, the US government, after much delay and many excuses, granted the Nicaraguan government $30 million in emergency assistance and Congress approved $300 million for 1990. Bush promised an additional $200 million for 1991, but in September there were signs from Washington that this could be cut or reduced given problems linked to the Persian Gulf crisis and its own budget fiasco.

During the US war against Nicaragua, US security interests would have prevailed over all other considerations, but in the 1990s, the "need" for a "structural adjustment" of Nicaragua's economy takes precedence.

If US security interests in the classical cold war terms had still been in effect, Violeta Chamorro and her team of technocrats might have seen their administration's most pressing financial problems resolved, making it unnecessary to look so insistently for some sort of accord with the FSLN. The government's economic program, particularly privatization, would have been much more palatable to people if the currency had stabilized and inflation had been contained without a recession. The stimulation of both the public and private sector would have created further employment and permitted an expansion of health and education programs. The price tag would have been just one state of the art fighter plane a year.

Washington's logic after the elections

US assistance would not only have been a sign of generosity to a people who turned their backs on the FSLN at the polls. It could have been justified by the responsibility the US should have felt on seeing its coalition of parties—which not even the most pro-US sectors thought would win—take office. The UNO, created, nurtured and held together by the US, surprised virtually everyone with its electoral victory. The US owed it something.

The new government in Nicaragua rightfully claimed its "peace dividend." It asked for far less than the billions of dollars the US invested in its war against Nicaragua, or in military assistance to the region's military and police forces, justified in US terms by the "Sandino-communist threat."

In this sense, Nicaragua's elections were as disastrous for the other Central American governments as for the Sandinistas. During the 1980s—the decade of the US-sponsored anti-Sandinista crusade—US allies in Central America received more than $9 billion in military and economic aid, not including the billions spent on ongoing military maneuvers and espionage flights. In the last 18 months—which have seen the end of the cold war, the FSLN's electoral defeat and the Persian Gulf crisis—US assistance to Central America fell dramatically. Costa Rica's aid dropped from $231 million in 1985 to the $68 million requested for 1991, while El Salvador, Guatemala, Honduras, Nicaragua, Panama and Belize together will receive $360 million less than the $1.2 billion total of six years ago. The $200 million promised to Nicaragua is not guaranteed, and Panama will receive no US assistance in 1991.

In a different historical moment, the US would have invested whatever it took to meet its strategic long-term objective in Nicaragua: the definitive elimination of the revolutionary option represented by the FSLN. What the US has invested to date has yet to bear fruit as the FSLN's electoral defeat is only a partial victory for the US. The Sandinistas are still Nicaragua's key political force, and the organizations and ideals identified with the revolutionary nationalism expressed by the FSLN remain intact. They represent 41% of the Nicaraguan electorate and maintain a significant presence in the National Assembly, the judiciary, the armed forces, the police force and the media. The FSLN also enjoys international prestige and legitimacy after carrying out highly scrutinized and praised elections. It is a young, but maturing force and nobody dismisses the possibility that it could return to power through elections. That would constitute a historic defeat for the US—presumably, a defeat to be avoided at all costs.

In addition, the political conditions were ripe for the US to fulfill its anti-Sandinista objectives. Yet it failed to take advantage of an ideal political moment in which a relatively small investment could well have yielded a bountiful harvest. In the months immediately following the election, Washington could have prepared and implemented an emergency plan that would have permitted the new government to capitalize on its "honeymoon," both domestically and internationally, by bringing people some immediate relief from the economic crisis threatening to strangle the country.

But stabilizing the UNO government and trying to do away with the FSLN for good would have required the US to put its geo-political interests above the current ideological and budgetary precepts of capitalism. It chose to deny the needed funds, condemning the UNO government and the entire country to instability.

The UNO government forced to negotiate

Given the crisis facing the UNO government, made more pressing by the high expectations of economic improvement raised by Chamorro during her campaign, new credits became the key to economic recovery. But to obtain these credits, Nicaragua must pay $300 million it owes the IMF and the World Bank, and since September, the country has had to budget $10 million more a month for its oil. The adjustment plan initially decreed by the government, with its exaggerated emphasis on stabilizing the country's currency, was soon revealed as little more than an illusion. With neither a repressive apparatus to contain the protests that the new measures generated nor the necessary US assistance, the government was unable to ensure implementation of its plan.

With the myth of "economic recovery in 100 days" in ruins, the technocrats who pushed out the ideologues made clear that the country's economic future and, in fact, the future of the government itself, depend on two key items: an agreement with the workers and their political representatives, and the response of donor countries to Nicaragua's economic crisis. A new alternative was posed, to appeal to the international community and the multilateral lending institutions with consensus as the basis from which to request assistance. In this context, FSLN support was seen as the key condition to move the government's economic program forward—not just to pacify the unions and the popular movement, but also to guarantee international support.

The framework in which a legal and civic opposition can work, to say nothing of whether or not Nicaragua is even governable, has been thrown into question by the country's deepening economic crisis. Neither the FSLN's political force nor its militancy is responsible for the Chamorro government's lack of real power. Foreign dependence and US miserliness forced the UNO government to tone down its most reactionary instincts and consider the opposition. Little by little, the government began to realize that it could not ask Sandinista supporters to renounce their interests and all the rights and laws acquired during the revolution, including the Constitution, in the name of economic stability. But without stability, it will be extremely difficult for Nicaragua to receive the financial assistance it so desperately needs.

The FSLN pushed to negotiate

With the maturity and militancy gained through its revolutionary experience, the Nicaraguan working class put forward the most organized, tenacious and responsible resistance seen in Latin America in response to the disastrous neoliberal economic policies sweeping the region. Nicaragua's workers made it clear that, as they understand it, democracy is not a blank check allowing the government to implement its destructive economic program.

Being in the opposition is as great a challenge for the FSLN leadership as being in government is for UNO. The Sandinistas are confronted with the challenge of assuming some responsibility in managing the economic crisis that has been hitting the country's poorest sectors hardest since well before the elections. Co-administering the crisis in an unfavorable period both domestically and internationally forced the FSLN to be flexible in some of its class positions.

The speed with which the economic crisis has worsened these past few months, far from strengthening the FSLN, presents it with unprecedented dilemmas. The issue was not whether the FSLN proposed to topple the government, but whether or not it would prevent the government's imminent collapse—although for the far Right, there is little difference between the two. In this context, pro-Sandinista political and union forces were faced with the task of preparing and negotiating an alternative plan with the government to combat the crisis. Based on a similar budget and relatively devoid of ideology, the plan's political and financial viability was predicated on a new concept, which the government eventually accepted: Nicaragua needs and deserves special treatment from the international community because of its post-war situation.

In an effort to forge national consensus, the old rightwing tradition of imposing economic plans virtually at gunpoint and then smashing any social rebellion finally came to an end. At the same time, the leftwing thesis that contradictions should be left to simmer until they boil into a social explosion and a power vacuum, even if it means greater suffering for the people, was also discarded.

Hyperinflation and the threat of massive unemployment, however, worked against the efforts and strategies of this "new Left." It was a tremendous challenge to the FSLN to reconcile the search for support for capitalist measures to solve the crisis with the need to back the spontaneous resistance to these same measures by its base in the cities and countryside.

The FSLN accepted, de facto if not formally, the responsibility of working to make the situation more governable in both political and social terms. In exchange, it negotiated substantial modifications in the government's economic program and in the very character of the government itself.

Thus, just as the government was forced to deal with the opposition, the leadership of the popular forces also had to accept as necessary the implementation of an economic adjustment plan corresponding to the grave economic situation facing the country, always struggling to assure that the country's poorest sectors not bear a disproportionate share of the crisis. The organized strength of the Left as well as its experience in governing facilitated an accord with the government, at least with respect to the starting point: Nicaragua as an exceptional case deserving preferential treatment.

Both purely monetarist visions and those focused primarily on assuring subsidies or labor force stability have been losing ground—the former because of their lack of political viability and the latter because they are no longer accepted by international organizations. The government was forced to democratize its decision-making processes somewhat in order to be more politically viable and thus more able to deal with the restrictions imposed from outside. Although at the risk of losing some of its traditional powers, the government must serve as an intermediary between the population's needs and neoliberal economic guidelines. By doing so, it opens up greater domestic space with which to counteract the closing international space given the new political and economic conditions across the globe.

Nonetheless, the fundamental problem is not reaching consensus about the nature of the country's crisis or the measures that must be taken to deal with it. This option does not offer total security against chaos, nor does it assure viability to the government; a significant injection of foreign assistance is the indispensable condition for any kind of long-term stability. Economic stabilization plan, economic adjustment plan, or post-war emergency plan? Given Nicaragua's economic conditions, no economic plan can really be viable without both preferential treatment from the developed countries and multilateral lending institutions and a minimal domestic consensus.

The international limits of reconciliation

Conditions exist in Nicaragua to try to reconcile not only the country's different political forces but also the Nicaraguan population with international capital. If this is not achieved, the choice is clear: social explosion or economic collapse.

The crisis confronting Violeta Chamorro's government today is not substantially different from the one the FSLN faced in 1988, a crisis that would certainly have worsened had the Sandinistas won, even taking into account that concertation was already an accepted political line.

If the electoral results had been different, the new Sandinista administration, legitimated by international scrutiny during the elections, militarily strong in its confrontation with the contras and recognized as the force leading the great majority of the country, would still not have been able to obtain the financing necessary to stimulate production and recover at least minimal monetary stability.

Both domestic and international pressures on Daniel Ortega's new government to reach a broad agreement with the opposition on its economic policies would have been very similar to those the UNO government faces today. The socialist camp, Nicaragua's principal source of assistance since 1988, had virtually ceased to exist and the US government had already made clear that the normalization of relations with Nicaragua depended not on the elections but on the "future behavior" of a re-elected Sandinista government.

The European Community, focused almost entirely on Eastern Europe, could no longer be a realistic source of emergency funds for Nicaragua. In many senses, a Sandinista victory pointed to economic collapse. Many people suspected this, and the contras knew it, too, making their demobilization in the event of a Sandinista victory very unlikely indeed. Under these circumstances, the Sandinista leadership would have eventually come to the same critical crossroads at which the Chamorro government now finds itself: collapse, or concertation with the hope of attracting greater foreign resources. An understanding with the United States in which a quota of power is conceded to the Right, or a war economy in which the historic scheme of political pluralism and a mixed economy is jettisoned.

The US population is now paying the price of the strategic, fiscal and monetary policies that financed the Cold War and the defense of worldwide US hegemony—a price exacted through the current fiscal crisis and dramatic deterioration of social services in the United States. Latin America and the Third World, too, are forced to foot part of the bill through the hugely increased interest rates on the foreign debt. In the context of the current capitalist avalanche, any Nicaraguan government, just like other governments in Latin America or anywhere else in the Third World, is losing its real power to formulate national policy. The countries are ceding ever more sovereignty to international capital, which will now receive not just cash, but also payment in kind through the privatization and free market schemes taking root throughout the Third World.

If it has been difficult for the Chamorro government to bring about the military demobilization of the contra forces and even harder to obtain significant US funding, it is unthinkable that the Sandinistas would have had more success in either area. The Chamorro government's lack of a real or organized popular social base was supposedly to have been compensated by the ease with which the new "democratic" government, like its counterpart in Panama, would receive aid from the US and the rest of the world. But it was not to be: the UNO government fared relatively poorly at the June 1990 Donor's Conference in Rome, much as the Sandinistas did at the one in Stockholm a year earlier. Both governments received credits and promises, but very little hard cash.

The international context promoting Nicaragua's reconciliation is incapable of financially sustaining this effort. It would appear that the country has touched bottom, as it were; even with the internal reconciliation, the external limits seem immutable.

Costs of the East-West thaw

Only 10 years ago, the fight against the "Evil Empire" assured a huge cash flow from the US to the Central American region. It was enough for the US to see "threats" to its security in Central America, or anywhere else in the world, to ensure significant military and economic aid to the region. Similarly, "socialist-oriented" governments like Nicaragua could count on the socialist camp for significant military and economic assistance. The collapse of the socialist regimes in Europe changed everything, jeopardizing both rightwing and leftwing governments throughout the Third World. While resources to fight "communism" existed before, once it ceased to exist, those resources dried up, and the collapse of the Eastern bloc meant that alternative resource flows also began to run dry.

The conditions for stability and worldwide development are at least partially given in East-West terms and potentially exist in the nations of the South, devastated by conflicts during the last decades. But there are no indications of any significant modification in North-South economic relations. If there is no modification, all efforts at concertation by moderate political leaders could be condemned to failure and our societies condemned to social explosion. The old order is dying, with no viable new order to replace it. It is not a question of the failure of the Left or the Right—the days of the new neoliberal orthodoxy are numbered as well—but rather that no Third World government is viable when faced with economic and social crises it cannot deal with despite all its civic, political or military efforts. Insofar as the powers in this rapidly shifting world do not feel their interests directly affected—it is not worth appealing to either their political responsibility or ethics—our governments will not have the backing they need to prevent otherwise avoidable wholesale collapse. The resulting crises will, more than ever, be the direct responsibility of the owners of world capital.

Where do the Third World, Central America and Nicaragua itself fit into this new scheme of things? We should have no illusions. The East-West thaw and the resulting move toward greater interdependence do not imply modifications in the unjust model of unequal exchange currently in place between North and South. The new powers neither want nor are able to change the basic laws of the world capitalist market, which are the same rules that allowed them to emerge as powers.

Tokyo's and Bonn's political lenses are trained on very specific geographic zones, which, in addition to representing potential markets, constitute their traditional "spheres of influence." Germany is expanding its presence in Central and Eastern Europe, while Japan looks towards China and Southeast Asia. Latin America is not on the list of priorities for either of these new powers and has declined as an area of political interest at the global level.

In this context, it is worth asking if the new framework of inter-capitalist competition will be politically and financially able to promote concertation processes in different nations. In other words, will the current world changes decrease the US ability to impose its short-term interests and very restrictive conditions on us? Can the US attempts to destroy any Latin American efforts to work towards authentic diversified dependence be stopped? Will we be able to strengthen our sovereignty and attract the understanding, maybe even competition, of other powers to address our social and economic problems?

The neoliberal model insists on pegging economic collaboration to political "liberalization" and the adoption of privatization and free market schemes by the countries of the South. The European Community, Japan and the multilateral lending institutions all back this new model, although not with the traditional rigidity and geo-political criteria historically used by the US in its relations with our countries.

In fact, the European Community recently let the US know that it would not subject its cooperation with Central America and the Caribbean to the US political criteria reflected in the Baker Plan. Thus, the "allies," including the Soviet Union, which the US invited to assist Central America and the Caribbean, have no reason to adopt the US strategy of bolstering friendly governments (Panama and Nicaragua) and isolating antagonists (Cuba). For its part, Japan disagrees with the lack of US assistance to Panama because of the danger this represents to the canal's functioning. Up to now, however, these are only minor discrepancies, rendered even more insignificant by the Persian Gulf crisis.

The Monroe Doctrine iIn the age of perestroika

Independent of the Gulf crisis, the world may well be on the brink of a new regionalism characterized by the formation of competitive economic blocs. It is revealing—and suspicious to some Europeans—that the flashy Bush Plan "for the Americas," which proposes market integration "from Alaska to Patagonia," attempts to exclude third parties, opting instead to strengthen bilateral links between each Latin American nation and the United States.

We are facing a double-edged reality. On the one hand, US assistance to Latin America is increasingly meager. On the other, by trying to impose its rules and standards on the economic game, the US effectively continues to claim Latin America as its sphere of influence, both undermining collective integration within our region and trying to condition the assistance offered by other industrialized countries.

It is just like a century and a half ago—"America for the Americans"—but without the cost. Neither the Baker Plan for Central America nor the Bush Plan for the hemisphere earmark huge amounts of money for the region, yet Washington insists on functioning as the "coordinator" of all aid for Central America from the Group of 24, reaping political benefits while others shoulder the economic burden.

The Bush Administration's response to the challenge posed by the new world situation, and more specifically to the economic and social crisis plaguing the region, was to divert attention away from painful economic adjustment programs by citing protectionism as the root of all evil and trumpeting free trade zones as the region's salvation. The dangers in this plan are clear. Canadian and Mexican nationalists warn that their countries risk becoming vassal nations, subjected forever to the US transnationals due to the free trade agreements both nations signed with the US. These treaties give the transnationals greater participation in drawing up national economic norms. It is alarming to note Mexico's distancing from the rest of Latin America in its embrace of the Bush Plan and its quickness to move toward a common market with the United States.

A recent study by the Latin American Economic System (SELA) pointed out that the Bush initiative should be understood not as the product of "US generosity" but as the "result of a US need," given that the US has in recent years suffered a sharp economic, technological, financial and commercial decline. SELA warns that the Bush plan could become a US instrument to obtain "asymmetrical benefits," setting in place a new, even less equitable trade relation. It would not be a new model, but more of the same: more pillaging and more dependence.

Regional integration, not hemispheric subordination

The condition set forth in the US proposal—that the countries involved favor the private sector and deny the state both a regulatory role in the economy and its social responsibility—should not be accepted without objection. If the proposal is to respond to the region’s interests, Latin American governments should make sure that conditions for receiving assistance and paying the trade debt are loosened up. But the most important point is to assure respect for the multilateral efforts currently underway for Latin American integration. Insofar as economic integration also serves as a framework for reconciliation and concertation, this would work in favor of efforts to link the subregional common markets, as well as to achieve bilateral accords between Latin American countries and the countries of the European Community.

In this context, the processes of political concertation directed towards social stability and foreign assistance are increasingly linked to efforts at regional integration and concertation. Joint negotiation mechanisms, at both the regional and subregional levels, could allow for the adoption of adjustment processes under better conditions that are also more in tune with the region’s particular needs. At the same time, regional concertation opens the possibility of assuring greater access to international markets, negotiating the foreign debt, better trade and foreign financing terms, as well as access to the technology necessary for the transformation of the productive structure with minimal social upheaval and under conditions of greater sovereignty.

Given the common nature of the crisis affecting Latin American nations and the common prescription written for us by the developed world, it is logical and imperative that we develop our own regional responses to give ourselves more political space domestically and strengthen our negotiating hand internationally. This is even more urgent because, notwithstanding the economic "decline" noted by SELA, the Soviet Union's retreat translates to strengthened US power throughout the world, and more so in Latin America than anywhere else. If it is true that worldwide competition is becoming more economic and the US is losing ground in this battle, we cannot discard the possibility that the US might resort to political pressure to obtain exclusive privileges in its favorite area of expansion and hegemony, Latin America.

The Third World at a crossroads

Now that the simulated class struggle at the international level has been suspended, what of class struggle within Third World nations? How does this change the domestic correlation of forces? Are new forms of struggle being taken up? Or do all governments pay the same price, independent of their ideological bent?

The 90s began with the hope that an East-West political concertation would be complemented by a North-South economic concertation, which in turn could lead to political solutions and concertation processes inside and among the countries of the South. The tendencies to de-ideologize conflicts, toward pragmatism by the Left, and recognition by some rightwing forces of the collapse of the oligarchic models all constitute favorable elements for these national and subregional concertation processes. The resurgence of civil society, demanding stability and social programs, tends to take away strength from sectors of either the Right or the Left that use violence to achieve their goals.

Pragmatism could take root among political leadership as a product of both this historic opportunity and the needs arising from the severe economic crises. Although these crises polarize society and can lead to violent protest, they do not result in sustained support for alternatives that assume the long-term existence of armed movements. These movements, even when they triumph, are not able to offer immediate solutions and, if prolonged, might lead many people to associate guerrilla movements with economic agony. Democratic demands for economic improvement, stability and jobs, under the threat of making a nation ungovernable, force the leaders—whether from the right or left—to adopt more moderate stances, and can even result in the contemplation of shared responsibility in the administration of power.

In Nicaragua today, as in so many other Third World countries, responsible political forces realize that it is imperative to adjust the country's economic structures and eliminate distortions in the productive apparatus in the face of new challenges imposed by the international market.

The debate is still open as to what the structural adjustment program should look like. The international financial organizations insist that, in the name of "economic growth," the adjustment policies should take little stock of the tremendous social costs paid by the great majority of people. Can that be avoided? Is there a negotiated alternative that, without imposing even greater sacrifices on people, can obtain the critically needed foreign political and economic support?

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