National Dialogue: Stalemate or Truce?
After dominating the headlines for over a month, the national dialogue between workers, producers and the government known as concertation dropped out of the news almost immediately after the final accords were signed on Friday, November 2. What was built up as an urgent and overriding imperative to save the nation's economy culminated in little more than a six-month truce between the unions and the government. What was it all worth? Next month's envío will take an in-depth look at the concertation process, while this Update will summarize some of the issues it raised.
The national dialogue officially began on September 20, but without the participation of organizations linked to the FSLN, or the far left unions that had no intention of negotiating with the bourgeoisie. While the Sandinistas recognized the importance of a serious national dialogue, some feared that the government would simply use the concertation forum to impose its austerity plan on the unions—either forcing the workers to ratify their own demise or, if they refused, making the Sandinista unions appear to be the intransigent obstacle to economic recovery. Unspoken was the fear that real concrete alternatives for reducing inflation did not exist. The grouping of Sandinista union confederations called the National Workers' Front (FNT) took the lead in refusing to participate in what it called a "show" for the International Monetary Fund (IMF), expected to meet with government representatives the following week.
Several statements by government representatives shortly before the 20th confirmed Sandinista fears. Deputy Minister of the Presidency Antonio Ibarra was quoted in La Prensa saying, "If we have to sacrifice half the public employees in order to rebuild the economy, we will." From Mexico, President Chamorro announced the government's plan to layoff 25,000 state employees, including 10,000 from the armed forces. And the night before talks were to begin, Minister of the Presidency Antonio Lacayo stated on public television that with or without the workers' agreement, the government would "take the measures it had to take." Lacayo's words, said Daniel Núñez, head of the pro-Sandinista Union of Ranchers and Farmers (UNAG), who up until the last minute planned to attend the talks due to the specific needs of his rural constituency, convinced even him that the process was only a show.
Instead of attending the inauguration of the process, the FNT staged a demonstration outside the Olof Palme Convention Center. The FSLN's National Directorate called on the government to take the steps necessary to give the unions reason to believe it would negotiate in good faith, criticizing its record of not complying with accords previously signed with the FNT in May and July. After several days of quiet negotiations with the FSLN and FNT, the government issued a 10-point statement on October 2 promising that all previous accords with the FNT would be reviewed and fulfilled, that people benefiting from properties distributed before February 25 would not be affected and that no layoffs would take place before a joint agreement was reached in the concertation.
The debate beginsOn October 4, for the first time, everyone invited was present at the talks. While the participants were officially divided into government, workers and producers, the fundamental divisions were between the far Right, represented by the business association COSEP; the moderate UNO faction, represented by the government; and the producer and labor organizations linked to the FSLN. The government's key proposal was to halt inflation by slashing state spending, including the 25,000 layoffs, and strict limitations on credit—a typical IMF structural adjustment "shock treatment." It also promoted privatization, liberalization of foreign trade and the full introduction of the córdoba oro at one-to-one parity with the dollar once inflation is under control. The Sandinistas' fundamental demand was a more gradual reduction of inflation—firmly opposing recessionary measures that hit the poor hardest, such as layoffs, credit restrictions and cuts in the health and education budgets. They also called for privatization in the workers' interest and, again, protection of land given out before February 25. COSEP's basic demands were full and rapid privatization of the state sector and return of confiscated properties to their former owners.
The government's proposal to lay off 25,000 state workers met with sharp opposition from not just Sandinista but also pro-government unions. FNT leader Dámaso Vargas told the Managua-based monthly magazine Pensamiento Propio that even leaders of the pro-Chamorro General Workers Confederation (CGT) were forced by dissension in their own constituency to move closer to the FNT position. The FNT says that the workers have already paid a high enough price, arguing that unemployment is too high now and that the government should seek foreign assistance and force the private sector to repatriate its capital.
The government offered workers four options: a 10% salary cut, a lottery system to determine which workers would go, subsidies to the private sector to hire laid-off workers and an "occupational conversion" program where workers would be given credit to start their own small businesses. The unions categorically rejected all of these proposals, the last sparking the most discussion. With unemployment at an official 40%, Nicaragua already suffers from an over-abundance of people trying to eke out a living through small informal businesses. Since most people have little disposable income, many of these businesses are already folding. Promoting 25,000 new ones would be absurd. Even COSEP opposed the occupational conversion plan.
With respect to privatization, COSEP president Ramiro Gurdián demanded that confiscated properties be returned to their former owners as part of Decree 11-90 and that Sandinista decrees 85 and 86, giving those receiving confiscated properties before February 25 the legal right to ownership, be annulled. Throughout the negotiations, COSEP remained intransigent on these demands, as did the FSLN in opposing them.
Another controversial issue related to property was the formation of the National Agrarian Commission to address land concerns. The commission was formed by presidential decree during the concertation process and includes representatives of UNAG, COSEP and others present at the talks, in addition to the moderate former contra commander "Franklin" and army chief General Humberto Ortega. COSEP opposed the formation of this commission and continues, along with some contra leaders, to demand that a "real agrarian" commission be constituted—with fewer Sandinistas, without General Ortega, and substituting Franklin with a hard-line contra commander such as COSEP ally "Rubén."
Agreement reached—but on what?In the final days of the concertation, daily newspapers cited government sources saying that the final document would simply not address the controversial issues around which agreement could not be reached. In other words, some show of unity would have to come out of the process, even if without much substance. As it was, COSEP, whose fundamental concerns were among those not addressed, refused to sign the accord.
FNT adviser Arturo Grigsby comments, "The final accord doesn't say anything. The concertation was, above all, a political show. It was obvious that with so many participants it would be hard to reach unanimous accords. More than anything else, it was a forum for in-depth discussion of the nation's economic problems, which the government used intelligently to transmit its perception of the situation."
The accord can be more aptly described as a six-month truce than a substantial agreement. Privatization is virtually not addressed, except to say that "the acquired rights of the workers will be taken into account." The already-constituted land commission stands. Credit, foreign trade and even the minimum wage are addressed so generally that they are open to broad interpretation. The workers, says Grigsby, simply postponed their problems while the government postponed privatization.
What agreements were made? Whose demands were met? In an interview with Pensamiento Propio, Lucio Jiménez, head of the FNT, said of the outcome, "The government gained time, and so did we." Principally, the FNT won a more gradual implementation of the economic recovery measures—particularly the postponement of layoffs—and the deferral of privatization; the unions ceded on salary demands, which, says Grigsby, "permits the government to manage the fiscal deficit situation relatively well." The Sandinista organizations also won maintenance of the health and education budgets, the general acceptance that the córdoba oro will be in full circulation sooner rather than later and not on a par with the dollar, and, again, respect for properties distributed before February 25, 1990. Grigsby adds that the FNT also won certain legitimacy as a negotiating force—a legitimacy heightened by COSEP's refusal to sign.
Presidential minister Lacayo described the most important aspects of the process as underscoring dialogue as the forum for resolving problems and the agreement to request that Nicaragua be given exceptional and preferential treatment from international financial organizations based on its post-war situation. This point of consensus took the place of the government's original plan to qualify for aid by implementing harsh economic structural adjustment measures. As a sign of the government's willingness to comply with the accords, Central Bank president Francisco Mayorga, architect of UNO's original economic plan, was removed from his post during the final days of concertation. Mayorga was a key proponent of the "shock treatment" policies and of holding the córdoba oro at parity with the dollar, whatever the social costs.
The final concertation document is important principally to demonstrate to the international community that Nicaragua offers the stability necessary to attract investment and foreign aid. Said Jiménez, "We could say that we've produced a vital truce because we're all interested in bringing in [foreign] resources. All that we agreed to in those accords is worthless if there are no resources. What we have proposed is to generate the minimum conditions to attract resources, and when they come, to fight for how they're distributed."
There was some concern that COSEP's unwillingness to sign might affect foreign aid requests. Lacayo predicted that it would not. COSEP, however, does not appear to care if it does. When asked if he thought aid would be affected, COSEP leader Gilberto Cuadra simply responded, "That's not our decision." And as envío goes to press, COSEP is backing the Region V disturbances strongly criticized by Lacayo for, among other things, their detrimental effect on foreign investment (see “Nicaragua Briefs,” in this issue for details). The far Right is undermining the stability required to attract foreign aid, "certified" by the concertation accord.
The concertation accord is clearly not the end of negotiations. The FNT's Dámaso Vargas said, "The concertation is simply an instrument but not the main weapon. The fundamental one is struggle." The struggle has barely begun on many fronts and promises to intensify in the months to come.