Envío Digital
Central American University - UCA  
  Number 119 | Junio 1991



US Demands Devaluation--Of the FSLN

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Although Daniel Ortega visited Washington several times during the first months of the revolution, and was even received in the White House by President Carter, he was never invited for an official visit. In fact, this "honor" has only been bestowed on a Nicaraguan head of state once. The year was 1939 and the subject of such pomp and circumstance was Anastasio Somoza García, who had been requesting the visit. One reason for granting it was that His Majesty George VI of Great Britain was about to be received and the ceremonies needed to be rehearsed. Although many condemned the dictator's reception in Washington as hypocritical, President Roosevelt shrugged it off with his famous remark, "Somoza's a son of a bitch, but he's our son of a bitch."

This year it finally happened again; on a three-day trip in mid-April, President Bush gave President Violeta Chamorro an official welcome, a motorcade down Pennsylvania Avenue and a state dinner. To justify it this time, Bush made the circular argument that it was the first official visit of a Nicaraguan head of state in more than half a century. He was not modest about the decisive US role in changing Nicaragua's government, another glorious chapter in its offensive to support "transitions to democracy" around the world.

None of the abundant ceremonies and distinctions bestowed on President Chamorro, however, were matched by greater financial aid commitments, the main objective of her visit. She had hoped to nail down funds to bolster her government's questionable monetary stabilization program and cancel its back debt with the international lending agencies to become eligible for new loans. The Bush Administration promised no new funds but said that, as a show of good will, it would urge other countries to contribute to the debt fund. As in the Persian Gulf case, the Administration would insist that the cost of its triumph in Nicaragua be shared among allies who had also cheered the UNO electoral victory.

President Chamorro's reception by Congress in a rare joint session to hear her speech was even more discouraging; only 25% of the legislators showed up. To assure the necessary applause, the speaker of the House had to fill the seats with congressional aides and visitors. Humiliating though this was for the Nicaraguan delegation, it was not a boycott by rightwing sectors to protest what they call the Chamorro-Sandinista co-government. After so many years of acrimonious debate and debilitating political confrontations over the issue of Nicaragua, most legislators simply prefer not to think about this tiny nation's existence, much less its problems.

The content and tone of President Chamorro's speech to Congress was predictable: self-congratulation, unbridled criticism of the Sandinista administration, syrupy gratitude for US generosity, and a plea to the legislators to put more money where their consciences ought to be. She also tried to soften them up by appealing to the shared democratic values of both nations. Her prostration before a government that had financed and directed a decade of war in Nicaragua caused a major stir back home, and was even a bit much for Washington. One legislator remarked to The New York Times that "the speech could have been written by the State Department."

While those present gave her dutiful ovations, some later commented publicly that as long as there are major budget cuts for domestic social programs, the US government cannot go on being a sugar-daddy for every government that sings a reconstruction and democracy tune. The Nicaraguan government had made a miscalculation in assuming that pressure from Congress and liberal friends would open the US aid valve. After her whirlwind rounds in Washington, a New York Times editorial, remarking on the gallant treatment she had received, noted that "her people can't eat bouquets." The editorial called it "embarrassing" that Washington has disbursed only $207 million of $541 million "pledged to a democratic regime that honors human rights and seeks economic reform."

Despite all the mutual adulation, the US government is clearly not satisfied with the Nicaraguan government's performance. In US power circles, those who defend Minister of the Presidency Antonio Lacayo's peaceful coexistence with the Sandinistas still feel significant pressure from anti-Sandinista conservatives. Some members of Congress and the Administration, with differing levels of subtlety, let President Chamorro know that the time has come for her government to bow to the wishes of AID and US private enterprise.

Not too surprisingly, these wishes coincide with those of anti-Sandinista sectors inside Nicaragua. The Chamorro government, and to some extent the FSLN, had underestimated how strong the gears of the US and Nicaraguan Right could be when engaged. Although both had been briefly neutralized, they had powerful allies whose positions had permeated the official US government attitude and that of many members of Congress. They do not forgive the Chamorro government for not having destroyed the Sandinistas, and used the President's trip to pressure the State Department and Congress.

While some State Department officials have said they see no alternative to the "pragmatic" line of Lacayo's "Las Palmas" group, this does not mean that they will pass up an opportunity to push for major renegotiation of the rules of the game with the FSLN. Based on an interpretation that the correlation of forces inside Nicaragua permits giving more power to rightwing interests, this "renegotiation" would translate to abandoning the March 1990 Transition Protocol framework.

The Bermúdez case;
the World Court case

Two current campaigns illustrate the US obsession with extirpating Sandinista influence on the government, military structures and society as a whole. One is pegged to the murder of former National Guard Colonel Enrique Bermúdez, the other to negotiations regarding the World Court decision that Nicaragua has a right to indemnification from the US for "illegal" war damages.

The campaign around Bermúdez's assassination in March had gained strength in both the major US media and private conversations by the time of Chamorro's trip. The thrust of this campaign is to accuse General Humberto Ortega of being the intellectual author of the crime and the government of negligence and sloppiness in the police investigation. In essence, the campaign aims to show up the Chamorro government's supposed "dependence" on Sandinismo. Washington obviously cannot pardon Humberto Ortega for having headed an army that withstood the CIA and the counterrevolution. Nor can it accept that President Chamorro ratified him in that position. Even though she has promised several times that the post is "temporary," some insist that a year is long enough.

The US government had already pressured its Nicaraguan counterpart to accept US intervention in the case. President Bush himself wrote to Bermúdez's widow to say that "we are supporting the efforts of the Nicaraguan government to resolve the assassination of Enrique and have offered technical assistance in the investigation. It is a crucial point that the authors of this odious crime be found and judged, for justice and for true reconciliation in Nicaragua." For their part, 34 Congressional representatives signed a letter to President Chamorro offering technical help and demanding that an independent investigation commission be named. Although she acceded to their request, it dug up no new clues. The crime remains shrouded in mystery.

To reduce frictions with the United States around the World Court case, the Nicaraguan government took a domestically costly political step. On April 4, arguing that governments and times had changed, Chamorro sent a bill to the National Assembly repealing Law 92, passed by the Sandinista-dominated legislature during the transition period. Titled the Law of Protection of Nicaraguan Goods, it prevents any future President from unilaterally renouncing the right to compensation granted by the World Court or accepting a disadvantageous agreement in bilateral negotiations with the US government regarding the amount, which the Sandinista government estimated at $17 billion.

The Nicaraguan government took both these steps with an eye to its Washington visit and another meeting with donor countries in May to consider Nicaragua's financial requests; it hoped to please both its political and economic creditors. President Chamorro, referring to her bill to repeal Law 92, said in her speech to Congress, "We are restoring Nicaragua's friendship with the United States and we must establish a strong common commitment for the future of our countries and peoples."

Her argument against the Sandinistas regarding the World Court claim placed realpolitik above the principle of national sovereignty; she hoped that renouncing an indemnification that the US government would never pay in any case might be rewarded with more economic aid. But Violeta Chamorro is a bush league realpolitik player up against world champions who are playing for higher stakes.

Privatization schemes in dispute

Among those stakes is a fundamental modification of Nicaragua's property scheme in favor of large capital. The "interruptions" in US aid disbursements this past year and the unwillingness to increase that aid reflect US impatience with the slow pace of the economic reforms pushed by the Chamorro government. The US Agency for International Development (AID), as the formulating and executing agency of US government aid programs, is the main lever of US pressure on a government when its efficacy is measured in the economic camp. Although there is no essential contradiction between the Nicaraguan government and AID regarding the need to implement the neoliberal package, discrepancies arose with respect to the speed and social and political cost to be paid in the course of implementing it.

The problem lies with Nicaragua's cumbersome political system, in which Sandinismo is now an essential piece of the culture and the political economy. Any privatization campaign in Nicaragua would encounter more resistance than in the other countries where this formula is being applied. Taken to its logical extreme, privatization in Nicaragua is tantamount to counterrevolution.

The FSLN, however, had already resigned itself to not opposing the privatization of state lands and businesses in general terms. Many cooperatives and businesses could not survive without government subsidies in any case, although some state farms and factories are profitable. The Sandinistas insisted instead that workers in the countryside and cities should also be beneficiaries of privatization, as should contra and army veterans.

This position was the crux of the discrepancy. Both AID and capitalists in the rightwing business association COSEP were operating on the premise that the state properties should be "returned" only to their "legitimate" former owners. Even some US Congressional representatives had phoned down to President Chamorro to demand that the properties of exiled Somocistas and other landowners expropriated by the Sandinista agrarian reform be returned.

The Chamorro government, however, began to distribute state properties in a way that did not satisfy Sandinistas, confiscated landowners or former contras, and only generated competition among them. Unlike AID and COSEP, the government had a political criterion: it took into account its commitments in last October's concertation agreements to respect the rights workers had acquired over the years. It also responded to the urgent need to assure increased production, especially at the start of the new agricultural cycle.

AID and the World Bank mission, which came to Nicaragua in April, reminded the government that the international resources it had requested depended on implementing the adjustment program to end inflation and assure real incentives to private production. Although in Washington President Chamorro stressed the achievements of her monetary conversion program, new legislation related to foreign investment and new openings for private banking, she satisfied neither the United States nor business interests nor pro-Godoy politicians. Like the World Bank and COSEP, the US government wanted the property situation defined once and for all, insisting that there could be no economic recovery as long as private producers could not get "security" guarantees for their property and their exploitation schemes.

As for the FSLN, despite Lacayo's conciliatory speeches, two things undermined the government's credibility and unleashed popular mobilization. First, President Chamorro expressed her visceral anti-Sandinista sentiments in an interview in the Nicaraguan weekly magazine El Semanario by insisting that Daniel Ortega should give up his house, which is being claimed by its old Somocista owner. "If he is an honorable person, he has to vacate that house," she said. "Here everyone has to give in, if they are honorable people—not only Daniel, but many." The second, more serious, event was that representatives from the ultra-right National Conservative Party, a member of the UNO coalition, introduced a bill in the National Assembly to repeal decrees 85 and 86. These laws gave legal security to all families who had received farmland and urban lots and houses over 10 years of Sandinista government but never received legal title. This caused a seismic rumble among broad sectors of the population, for whom the mere threat to repeal these laws amounted to a virtual declaration of war and an end to the security that up to now the government had promised to maintain.

The FSLN's reaction was not long in coming. Daniel Ortega warned that the Sandinista bench would withdraw from the National Assembly if the UNO bills were even discussed there, much less passed, and demanded that the President veto them if the UNO majority did approve them. The FSLN also warned that the idea was to wrest lands not only away from Sandinistas but also from former contra members, to give them to returning Somocistas.

The campaign against the property security of thousands of urban dwellers and peasants had begun earlier. All over the country, denunciations of threats and actual attempts to throw people out of their homes were multiplying. In the least of cases, occupants were being pressured to sign new leasing agreements with the bank and pay 10 years' back rent, thus negating the validity of the property titles issued by the Sandinista government. In some cases this offensive was promoted by pro-Godoy municipal authorities behind the back of the government, which, in conformity with the concertation accords, was committed to taking the workers' rights into account in the privatization process and in the return of businesses to their old owners.

Antonio Lacayo distanced himself from the extreme Right's initiative to repeal the two laws, calling it "a blunder that does not have executive approval." But municipal authorities, encouraged by entrepreneurs eager to get the best deal possible in the government's privatization and redistribution plans, only increased their pressure on those benefited by these laws. "Committees to Defend Private Property" were organized in various regions, bringing together agricultural producers, industrial cattle ranchers and business sectors "alarmed by the constant aggressions against private property and by military officers' failure to obey the orders of competent authorities."

According to La Prensa, "All the most expert lawyers in the country have opined that decrees 85 and 86 issued by the Sandinista government impede the normalization of the country's legal situation, owing to the tremendous confusion that the Sandinistas created by falsifying documents, inventing legal situations and divvying up whatever they wanted outside of all legal proceedings." The businesspeople and landowners particularly wanted title to the more lucrative properties, precisely the ones workers were refusing to return after years of state investment and personal effort to develop them. The Confederation of Cotton Grower Associations of Nicaragua denounced "the illegal distribution of lands" in state hands being awarded to new owners, among them former contras, army veterans and Sandinistas in cooperatives.

Faced with US blackmail and the start of the new agricultural cycle, the government's back was against the wall. Although Lacayo insisted that "whoever has something given by the Sandinistas can keep it," pressures intensified to force the return of properties to old owners, privatization in favor of new capitalists and the handing over of lands, factories and houses to private entrepreneurs. In the words of COSEP leader Ramiro Gurdián, the government began to function like " perestroika-style Sandinismo," finally giving mixed signals of wanting to "rectify" its behavior.

The US government's role in this privatization campaign was anything but subtle. AID's assistant administrator for Latin America stated publicly that he had advised the government on the privatization process and fully agreed with COSEP on the preparation of the privatization plan. The government, he said, "is on a good road." The New York Times was even clearer when it indicated that future US aid disbursements depended on privatizing the economy and banking and that these factors accounted for the only partial disbursement of the $541 million already promised.

Meanwhile, tensions and land takeovers multiplied in the countryside, as did forced evictions and other violent actions, sometimes supported by the police and sometimes by armed bands of ex-contras, former soldiers or peasants. US and ultra-rightist Nicaraguan pressure on the government coincided, suspiciously, with that of groups of former contras who took up arms again to protest the government's failure to comply with its commitment to give them land and assistance for their productive settlements. According to journalists, cells of men with heavy military weaponry are operating in the north. They have faced off against the police and want Vice President Godoy to replace Violeta Chamorro.

Antonio Lacayo held Godoy responsible for manipulating the demands of the former contras. Godoy admitted having met with a group of 40 ex-contra chiefs a few weeks prior to this uprising in the north, but the Civic Association of the Nicaraguan Resistance denied that its members contemplated returning to the mountains to renew armed struggle. It did not, however, deny the existence of bands of "criminals and thieves," including some former contras. There were also continued reports of killings in the north. The Sandinistas insisted that they were the work of those already dubbed "recontras," while demobilized contras alleged that the killings had been done by Sandinistas dressed up as contras. Still others claimed that they were "part-time" units, who used their weapons from time to time then hid them away again.

Repression of strikers replaces negotiation

Both the United States and COSEP insist that, given the lack of foreign aid, the government has no other alternative than to raise production through a system of "incentives" to private producers. "We can't eat freedom of expression," Ramiro Gurdián pronounced. "The economic adjustment plan will only be successful if production increases, and there won't be any results if property is not respected." Finding itself at the crossroads between the logic of the Right and the logic of the people, the government is being pressured to take the role the United States wants. It already announced the economic programs and put the laws in place, but, given Sandinista pressure, the programs are being modified in practice and the laws not upheld. For such staunch defenders of private enterprise as the United States and COSEP, this is unconscionable.

In April, the country's schools were paralyzed by a teachers' strike to protest not having received the salary adjustments promised at the time of the monetary change. But the constraints of the economic plan and US political-economic conditions have limited the government's ability to continue offering salary increases and guaranteeing property to striking workers and the poorer sectors.

The moment that fatalists of all political stripes had predicted, feared and/or waited for had apparently arrived: a clash between the neoliberal program and the revolutionary legal and social framework safeguarded by the Transition Protocol and the Constitution. The revolutionary wardrobe was cut too small for neoliberalism, which needed a coercive element not only to protect property but also to guarantee the "public order" threatened by the victims of the IMF adjustment policy. Repression was needed to impose neoliberal order in the country and provide national and foreign capital with the "securities" they were demanding. The government's response to the mounting demands was thus to use the police against the most intransigent strikers, even though it had to disrespect its own vocabulary and its carefully nurtured democratic image by doing so.

Dismantling the revolution and reducing Sandinista influence in society and in the government itself would be impossible as long as army and police commanders insisted on negotiating before repressing. Clearly, Sandinista police officers were not the ones to put Sandinista forces "in their place." The government finally came to the same conclusion that Washington and the rightwing extremists had some months earlier: it needed its own military force to assure property rights according to its own determinations. The existing force was too unwilling to take measures against workers and peasants.

National police or neoliberal police?

In the midst of this explosive social situation, it was not surprising that the cord between the government and the FSLN began to fray at its most delicate and contradictory point: state monopoly over the legal use of force. Although the army's role was defined by the possibility of international conflict, that of the police is not defined by the class struggle spilling out into the streets.

Last year, in the first stage of protests, the government and police could resort to dialogue to avoid direct and violent confrontations. Once the government had repeatedly violated the Concertation Accords and real salaries had drastically deteriorated, both popular protests and the government's decision to repress them got more hard-line. Ever more frequent orders for repression increased tensions inside the police force, whose members are mainly from humble origins. But tensions also grew between the police and the government, and between the police and the workers they were ordered to repress.

The most violent confrontation to date took place the day after President Chamorro's return from Washington, when the police obeyed government orders to remove striking Olof Palme Convention Center workers, who were peacefully demonstrating alongside a section of the route about to be taken by visiting Spanish royalty. The strikers wanted not only to communicate their position to King Juan Carlos and Queen Sofía, but also to add their voices to the predictable wave of popular protests building up after the launching of the economic plan. In the previous days, the government had refused to acknowledge their legal demands. In the battle between nervous police and angry workers, several participants on both sides were hurt, including two women who miscarried because of the tear gas used. Of course, both the US Embassy and rightwing extremists applauded this attempt to convert the National Police into a repressive force. (In his speeches, King Juan Carlos praised the government's reconciliation and economic concertation policies, and defended Nicaragua's request for "exceptional" status to receive financial aid from the international community. Spain decided to provide Nicaragua with a $75 million bridge loan to help cancel its $360 million arrears with the World Bank and Inter-American Development Bank.)

The government's intention was to match the workers' militancy with equal or greater force, and to test the loyalty of both the police and the FSLN itself to the principle of subordinating the military to civilian authority. It was one of the most dangerous and confrontational steps the government has taken since assuming office.

The constitutional subordination of the National Police to civilian power, reinforced in the Transition Protocol, limits police alternatives until it is determined that workers are breaking the law, for example by forcibly occupying a public building. Sandinistas had been alarmed by the violence used against strikers occupying customs buildings the previous month, but on that occasion former Minister of the Interior Tomás Borge had publicly warned workers that such illegal actions put the police in a difficult position. This was not the case with the Olof Palme workers; for the first time, the government had repressed a peaceful and perfectly legal protest, and the level of violence shocked Sandinistas.

A few days later, the Chamorro government leaked its decision to relieve René Vivas as National Police Chief and begin purging other high-level officers. It planned to announce the change formally at its first anniversary celebration, in the presence of Venezuelan President Carlos Andrés Pérez. But the decision was never made public or official; the government retracted it at the last moment after the commotion it caused and after the emphatic positions taken by the National Police Council and the FSLN National Directorate.

Following an emergency meeting on April 26, the Police Council, made up of 82 officers ranging from 9 lieutenants to 30 commanders, issued a communiqué expressing total support for Police Chief Vivas. It reminded the government of the stabilizing role played by the police up to that point, and evoked the government's obligation to respect both army and police ranks, officers' rolls and the command structures, as established in the Transition Protocol. For its part, the FSLN National Directorate openly warned the government that dismissing Vivas would also violate the Constitution and open the doors to instability, since a violation of one aspect of the transition agreement would annul the others. Shattering the framework defined by the government and the Sandinista opposition would in turn sow tremendous chaos at the very moment the country needed greater stability to face the economic situation.

Rightwing journalists, politicians and others immediately called the police pronouncement unconstitutional, characterizing it as an expression of military rebellion. The Sandinistas countered that the government was the one challenging the Constitution. In any event, the contradiction was more political than legal. By deciding not to deal with the government behind closed doors on this issue, the FSLN was probably trying to block any future attempt to convert the police into a repressive force, given the government's new willingness to impose its authority violently on a popular and insurrectional civil society trying to "govern from below."

Tensions mounted by the hour as it became clear that the standoff between the Sandinistas and the government meant that the country could end up with no police protection because, if Vivas went, the entire police force might follow. As Barricada phrased it, "The consequences that would come in the wake of introducing an explosive instability factor into the police force while the country is going through a social crisis would leave governors and governed at the mercy of the law of the jungle."

The end of coexistence?

If the goal of the President's visit to Washington was to increase her government's political and financial space, the results were precisely the opposite; it lost even more of the little autonomy it had. The President's kisses, hugs and rhetoric could not hide the fact that, after a year of government, Washington's patience was at an end; it was insisting that the time had come for the Chamorro government to define itself in favor of a counterrevolution.

With little money and little foreign political support, the government will have great difficulty buying the subordination of the Right and, at the same time, responding flexibly to workers organizing for better wages and job stability. It can no longer "capitulate" to the unions, signing new accords with them, since, from the perspective of finance capital, this would be the same as giving them veto power over the application of the monetary and fiscal prescriptions.

Nor can friendly third governments respond by injecting some financial viability into the proposal offered by a rightwing government that sought coexistence with a powerful Left. Mexico, Venezuela and Spain only offered bridge loans that Nicaragua will have to repay as soon as the international lending agencies put new loan money into the pipeline. Neither the "transition to democracy" argument, nor the special requirements implied by an "exceptional postwar situation" nor active lobbying could bend the conditions of commercial banks, the World Bank, the Inter-American Bank or the International Monetary Fund, all of which insisted that a rigorous adjustment plan be adopted—instability be damned. The economic structural adjustment would have to be complemented by a political one in order to achieve a stability based more on foreign support than on an accord with the grassroots forces—an option already rejected by political and business extremists. The revolutionary attempt to leave Sandinismo in place had come up against the limits of tolerance.

Nicaragua is thus moving into a new stage of crisis, characterized by a loss of confidence in the Chamorro government by all national forces as well as by the United States and the international financial community. The transition framework, carefully woven together and defended by both the government and the FSLN for more than a year, has begun to unravel. The basic national understanding that it reflected was also a reflection of the correlation of forces at that moment. But the United States, Nicaragua's extreme right wing and even some government sectors believe that balance has been shifting and now favors the government. They think that, with peace and monetary stabilization in place and various currents emerging within the FSLN, conditions now permit the government to break out of the straightjacket the FSLN has "forced" on it.

The rebellion of the extreme Right against coexistence is reaching the point of no return. Neither they nor the more extreme sectors in Washington ever accepted the political accords underpinning the concertation and the relative stability that allowed Nicaragua to make the transition from war to peace and from a revolutionary government to a rightwing one. During the political and constitutional crisis in April, there was open talk of the possibility that Godoy could end up occupying the presidency. The Vice President, interviewed in La Prensa, indirectly accepted that possibility, noting that President Chamorro "appears a virtual prisoner of the military and the police, before whom she is incapable of doing anything."

The April crisis also demonstrated that the Sandinista ranks are not inclined to unilaterally observe an accord and a legal framework that the government decides—or is forced—to disrespect. The "rebellion" in the police and the threat by FSLN representatives to withdraw from the National Assembly demonstrate this clearly. The creation of the Front of Popular Struggle, which brings together all the organized grassroots forces—unions, women, students, market vendors, historic combatants and others—is another indication that the Left has accepted the challenge and the opportunity to fight for the definition of a new equilibrium point that truly respects the rights the people acquired during the revolutionary years. The Left is just as unwilling to accept being straitjacketed as the Right.

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US Demands Devaluation--Of the FSLN


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