Envío Digital
Central American University - UCA  
  Number 307 | Febrero 2007



The Hopes, Dreams and Fears Are Already Starting to Unfold

Nicaragua inaugurated a new government on January 10. Important decisions and announcements of social improvements are feeding long-nurtured hopes among FSLN voters and the poor in general. Venezuela’s generous collaboration was announced with great fanfare, increasing expectations and creating dreams beyond realization. But in contrast to the positive economic and social signs, the first political measures caused fear, uncertainty and even shock.

Nitlápan-Envío team

Each step in the ceremony marking Daniel Ortega’s return to the presidential office on Jan- uary 10 sent out signals that delighted some and worried others. The late afternoon inaugural event, whose dress code was tie-less long-sleeved white shirts, seemed more like a high school stage show than a ceremony befitting the transfer of a country’s governmental mantle from one President to another.

The rites of taking office

Daniel Ortega held up the outdoor ceremony for an hour and a half without offering any explanation to the TV media covering the event live. Not even the Nicaraguan folkloric dancers wait-ing in the wings to bestow medals on all the heads of state were sent on stage to entertain the two thousand already seated guests and official delegations from over 60 countries, including 16 current or former heads of state. As it turned out, Ortega was waiting for Venezuelan President Chávez, delayed by his own inaugural ceremony in Caracas that same morning. When the most honored guest finally showed up, he was positioned right behind the podium, an eye-catching presence with his imposing physique and bright red long-sleeved shirt.

Rather than ceremoniously drape the presidential sash over his succes-sor’s head and shoulder as Ortega had done with Violeta Chamorro en 1990, outgoing President Enrique Bolaños handed it to him as indifferently as if it were a used napkin. Neither he nor the incoming President made a speech. The closest thing to a speech by Ortega was when, in what many considered a breach of protocol in both deed and words, he reminded the police and army brass of their Sandinista origins upon asking them to take an oath of loyalty. He then swore in his new Cabinet members, presenting them as an almost indistinguishable mass to the TV cameras, even though most of them were new faces to the population. Cardinal Obando y Bravo offered the only real speech of the awkwardly disjointed event, urging the kind of struggle against corruption that he always shied away from backing during Bolaños’ administration.

The event was designed and orches-trated by Ortega’s wife, Rosario Murillo, who hovered visibly on stage like the hostess of a family party, attending to all details—the seating order, the dancers, the music, the medals, the podium smothered in spring-colored flowers… And there among the distinguished guests invited by Ortega and given front row seats sat former President Arnoldo Alemán, convicted embezzler and launderer of government funds.

Once these minimalist rites of passage had been executed, Ortega raced off to a nearby plaza with Chávez, Bolivian President Evo Morales and Fidel Castro’s representative, Machado Ventura, leaving the other delegations to their own devices. More than 200,000 people had been filling the plaza since midday, desperate to see their new President and his illustrious cohort. They were rewarded for their seven-hour wait by Chávez, who took over the stage in his glad-handing style, followed by Ortega, who in a customary rambling and ambiguous speech asked the multitude for a raised-hand “vote” on Nicaragua’s entry into Chávez’s ALBA project. And thus it was decided.

Social commitment +
concentration of power

Once in office, President Ortega and his co-planners hit the ground running, and everything seen, heard, suggested and divined in the first 30 days points to a strategic project. A “change of system,” say some. “A change of model,” says Rosario Murillo.

It can be summed up as social improvements + political controls. Or greater well-being for the poor + less democracy for everybody. Or sensitivity and social commitment + the centrali-zation and concentration of power. All within the neoliberal frame and narrow macroeconomic maneuvering room permitted a country like Nicaragua. The project can count on Venezuela’s support to push back those walls somewhat, ensuring resources for the social betterment side of the equation. And as for the centralization of power, it appears to be rolling out the State-Party model of the eighties, expanding it to a State-Party-Family formula. The initial signs from this newly emerging scheme suggest selective compliance with the legalities and institutionality currently in place and selective appli-cation of reconciliation and repression. And secrecy will reign, probably less selectively.

Rosario Murillo,
the power before the throne

The Cabinet Ortega appointed to accompany him on this adventure includes new arenas of power known as “councils.” The most controversial is the Communication and Citizenry Council, which he delegated his wife to head (the Close-up article in this issue details “Who’s Who” in the Cabinet, while Speaking Out offers an initial analysis of this new council). Suffice it to say that from this new and powerful council Rosario Murillo will coordinate ministries, authorize all ministers’ travel abroad and organize the Presi-dent’s entire agenda, as well as direct the new civic participation structure that the presidential couple is calling “citizens’ democracy” or “direct democ-racy.”

The President consternated the media more directly by announcing that he had also decided to put his wife in charge of the publicity budgets for all ministries and autonomous state entities, which will make her respons-ible for around US$5.5 million. Media and journalists of all political stripes fear that she will use this new power, added to what she already has, to assure loyalty to the new government, reward-ing those who provide it and punishing those who do not. Murillo justified her new attribution as aimed at “maintain-ing a communication policy that privi-leges communication from our people to our people… and all with a distinct identity, a different tone and mood, in which it is the people who will do the speaking.” She announced that she will soon release her communication policy in a document she herself has drafted. In a violation of the constitutional prohibition of nepotism in government, Murillo appears to concentrate the greatest power in the new administra-tion and is already viewed as the country’s co-President.

Will the Vatican approve a priest in government this time?

Another council created by presidential decree on January 30 was called the Reconciliation and Peace Council, charged with promoting “the emotional, spiritual and economic recovery” of the victims of the 1980s’ war. During a visit with Cardinal Miguel Obando on February 2, his 81st birthday, the presidential couple gave him a Persian rug and a huge box of grapes, explained the new government’s first steps and proposed that he head this council.

The appointment, which Cardinal Obando announced he was seriously considering, created a stir in both public opinion and the Bishops’ Conference, although Archbishop of Managua Leopoldo Brenes, who replaced Obando in that post upon his mandatory retirement, agreed with his predeces-sor that it is up to the Vatican to decide the issue, as Obando is now a bishop emeritus and thus not under Brenes’ jurisdiction. Many older Nicaraguans recalled the Vatican’s unbending opposition to the four priests who held government posts during the Sandi-nista administration in the eighties.

To top it off for now, various sources are claiming that yet another council is being planned, which like the others will answer to the presidency. This one is called Civic Security, and will report-edly be coordinated by former State Security chief Lenín Cerna and be responsible for the new Municipal Police forces.

These new councils led once-burned, twice-wary skeptics to imagine parallel programs of selective reconcili-ation and selective repression and exclusion, all under the slogan currently adorning the new government’s rain-bow colored publicity: “With Daniel, the people are President!”

The first legal step:
Re-freeze the framework law

The new government wasted no time in taking the first two legal steps toward ensuring a concentration of power. The first was to re-shelve the Framework Law, the product of a year-long institutional conflict in 2005 between President Bolaños and his opponents, the PLC and FSLN. The disagreement revolved around the constitutional reforms pushed through the National Assembly by the two parties in January of that year that shifted some presidential faculties to the legislative branch. The legally questionable compromise law, similar to one employed for like reasons during Violeta Chamorro’s administration, froze the reforms for the rest of Bolaños’ term, on the condition they would go into effect automatically once the new President took office.

Despite Ortega’s pre-inaugural assurances that he still supported these reforms, on January 19 the FSLN legislative bench voted with the Nica-raguan Liberal Alliance (ALN), the breakaway party formed by banker Eduardo Montealegre, to extend the Framework Law to January 20, 2008. The ALN has always opposed the reforms on the grounds that they undermine presidential powers by establishing a stronger parliamentary system. Had they gone into effect, they would have stripped Ortega of certain faculties, including the appointing of a number of government officials, and thus halted or at least complicated the model he is now seeking to impose.

The second stop: Reorganize the executive branch

Immediately upon taking office, Ortega sent the National Assembly a bill to reform Law 290, which estab-lishes the executive branch’s organiza-tion, competencies and procedures. It was marked “Urgent”—the presiden-tial code for fast-tracking it to the Assembly floor without it first being vetted by the appropriate committee. In what was either an extraordinary slip or a gross violation of legality, Ortega had decreed the creation of these councils before the reforms to Law 290 were discussed in parliament.

All the proposed changes were sensitive, but the one that set off the loudest alarm bells practically subordi-nated the army and police to the President. After meeting with Ortega on January 17, the legislators agreed to rush the bill through. Only a few changes were made to the project in the parliamentary debate a week later, reducing Ortega’s control over the army somewhat—less so the police—and cosmetically modifying the attributes of his new councils.

Despite the pressured and impro-vised modifications some legislators insisted on, both the PLC and ALN Liberals backed the spirit of the reform bill and the executive branch was reorganized according to the Ortega-Murillo design. The only opposition came from the three remaining legis-lators on the MRS bench (the other two have gone over to the FSLN), who demanded more deliberation time and denounced the dangerous concentra-tion of power.

Near-total control of power

In the new model the President will not only have more direct influence on the army (he has yet to name a civilian defense minister) and the police (he has veto power over appointments and promotions, which will ensure loyal-ties). He will also directly control the institutes of sports and tourism, the Nicaraguan Investment Fund, and the new fishing and energy ministries. Meanwhile, from her council, his wife will coordinate ministries such as health, education and the family. Between the two of them, they central-ize virtually all portfolios linked to the social betterment they are promising the population.

Another expression of centralized power will have a municipal spin to it, even though the office of mayor itself is an arena of power supposedly autonomous from the central govern-ment. Managua Mayor Dionisio Marenco, an FSLN militant, currently chairs AMUNIC, the association of mayors, and a former Sandinista mayor, Eduardo Centeno, heads the Institute of Municipal Promotion. In addition, Ortega named yet another loyal Sandi-nista mayor, Nelson Artola, to direct the Emergency Social Investment Fund, an entity that distributes resources and projects from the central government to the municipal ones. All this implies a greater alignment of the municipal governments to the Presi-dent’s priorities.

All of this new power comes on top of what Ortega has accumulated since 1999 through the pact with Alemán: the majority of judges in the judicial branch, from the Supreme Court right down to the district courts; a majority vote in the electoral branch leadership; and shared dominion with Alemán in the Comptroller General’s Office. The only arena in which he lacks total control is the National Assembly, but continuing the pact with Alemán would ensure him the PLC bench’s votes, based on an ongoing and now routine parceling out of posts and perks. That would allow him to make any changes to the judicial framework—the Consti-tution included—that he and Alemán agree to.

The pact will presumably last at least as long as two aspects of Alemán’s situation remain intact: 1) he continues to be a political hostage to his pending appeal, to be heard by a court subordin-ated to Ortega, and 2) he continues to be the PLC’s indisputable leader.

Ortega’s current concentration of power is different than that enjoyed by the FSLN National Directorate “nine” in the eighties because Nicaraguan society is different, as are the national and international circumstances. And the FSLN is different too. At its very top we still have Ortega as its general secretary, but now he is a President who personally holds the strings to all the government’s civilian and military levels, while his wife controls those of the structure of participation that is supposed to monitor the government and hold it accountable.

Has Nicaraguan society yet worked out what a thick handful of strings that is? Because the current design is new, only over time will we be able to figure out the consequences and repercussions of all the pieces this implacable man has been moving into place by either inertia or force.

Reelection on the horizon

The fact that the issue of presidential reelection has been floated so soon is a sure sign that the new design is envisioned to have a longer shelf life than the current five-year presidential term. The Constitution permits a single presidential reelection, but only after at least one term out of office. A sizable segment of the population would prefer to see no reelection of any kind, particularly given memories of the Somoza family’s half-century dynasty.

Only days after the inauguration, newly elected National Assembly president and Ortega confident René Núñez began lobbying for “profound” constitutional reforms. Speaking “unofficially,” he said he personally considered a single five-year term “insufficient” to make all the changes Nicaragua needs and declared his support for consecutive reelection, “as in the United States.” Supreme Electoral Council president Roberto Rivas, now an unconditional Ortega sup-porter as well, seconded that opinion.

But the reelection issue was first re-raised by President Chávez on January 11. Upon receiving a doctorate Honoris Causa in Managua, he enthusi-astically stage-whispered to Ortega, “There’ll be no more recesses, right Daniel? We’re here to stay!” The previous day, Ortega had called Chávez his “twin” for taking office the same day—in Chávez’s case after his consecu-tive reelection. Is Ortega hoping to follow his twin’s footsteps in 2011?

On the social side,
free education again

The anti-democratic political design inaugurated so quickly by Ortega-Murillo has been accompanied by positive government announcements of measures to improve the life of most of the population, so long impoverished and left defenseless against the most savage form of neoliberalism.

A presidential decree carried out on January 11 by Education Minister Miguel de Castilla brought an end to what he called the “perverse” school autonomy introduced by the World Bank in 1992. While welcomed at the time by much of the population, it didn’t take parents, particularly poor ones, long to realize that the only autonomy the public elementary and secondary schools had was to charge fees for everything right down to year-end exams to compensate for the slashed education budget. The new decree finally restored the constitutional right to free education by ending all charges for enrollment, grades, activities and the like. Even school uniforms were made optional.

But the school year opened on January 29 without the anticipated rise in enrollment. The delight of poor families was still overshadowed by other indispensable school-related costs, foremost among them the cumul-ative price of school materials. There was also discontent among some of the teachers, who perceived the attitudes of some of the ministry’s new authori-ties as auguring the imposition of changes without dialogue.

A massive new national literacy campaign was also announced for March-August 2007, using the Cuban “Yes, I can” method that has been so successful in several countries, includ-ing Nicaragua in a number of Sandi-nista municipal governments. After the world-famous literacy crusade brought adult illiteracy down from over 50% to just under 13% in 1980, it has again risen to a third of Nicaragua’s current adult population.

Among the applause for the public education aspect of the new govern-ment’s social agenda was this chilling reflection in the news daily La Prensa by educator Cornelio Hopmann, who adds the final 7 years of the Sandinista government, which relegated education to last place in its priorities, to the ensuing 16 years of neoliberalism: “The consequences of over 23 years of in-attention are reflected in the statistics of the 2005 population census. Some 52% of the labor force between 15 and 35 years of age—those who left the public education system between 1990 and 2005—never received any educa-tion beyond primary school and at least half of those did not even finish primary, while another third never saw the inside of a school. There are thus 966,000 youths with no perspectives whatever, since they were denied the right to the most basic education in their time…. The country’s develop-ment for the next 20 years depends on this lost generation—966,000 young people sacrificed over 23 years of waiting for better times—and another 20 years will also be lost if the produc-tive sectors don’t assume the challenge of getting fully involved in labor education (programs of labor attention and skill-building) as a unique oppor-tunity.”

Free health care
and zero hunger

The announcement by Health Minister Maritza Cuan that health services (exams, surgery, internment and medi-cines) will again be free in public hospitals and health centers through-out the country also merited huge applause. She also promised that there would soon be a full supply of essential generic medicines in the entire public health system.

The new government has particu-larly spotlighted the Zero Hunger or Zero Poverty program coordinated by sociologist Orlando Núñez, who since leaving the Agrarian Reform Ministry in 1990 has headed up a rural research and development NGO called CIPRES. He has admitted in his many media appearances that he won’t have his own trained staff to implement his pro-gram; based on his good relations with the dozens of NGOs and churches that have been supporting the poorest segment of the rural population with various projects over the years, he anticipates that they will agree to im-plement this governmental initiative.

Although his figures and imple-mentation periods have not held steady, Núñez first announced that the program would target 75,000 rural families over the next five years, with the state spending the equivalent of US$2,000 on each family, donating seeds, fruit trees, a cow, a sow and a number of hens, as well as a biodi-gester that will cut way back on the consumption of firewood. They will also receive technical assistance and relatively subsidized credits at 10% interest annually. A total of 10,000 families would benefit in 2007, fol-lowed by 15,000 annually for the next four years. The program will thus require an estimated US$20 million the first year, but the hope is that the cost will then begin to drop as the “pay it forward” philosophy catches on, with each benefited family donating a calf, a piglet and a few chicks to a neighbor in the same community.

Mega-salaries slashed

To complete this positive unveiling of the urgent social agenda, President Ortega announced in a press conference on January 24 that he was slashing the executive branch’s mega-salaries, earmarking the approximately million- dollar annual savings to strengthen these and other social programs. From now on the President’s after-tax monthly salary will be US$3,200, in contrast to Bolaños’ US$6,200, while ministers have seen their monthly salary packet drop from US$4,300 to $3,000. The salary table of the execu-tive branch’s other upper echelons (the deputy ministers, secretaries and department directors of the 13 minis-tries, plus the respective top two or three positions in the 37 decentralized state institutions and enterprises) was cut by the same proportion.

Many criticize the indexing of the top government officials’ córdoba salaries to the dollar, a privilege the country’s other workers do not enjoy. Because most people’s salaries aren’t pegged to the dollar, they constantly shrink in value, as the Central Bank devalues the national currency a small amount relative to the dollar every week.

The financial impact of these cuts is relatively limited, but the symbolic impact is enormous after so many years of insensitivity and scandalous, abusive attitudes by top public officials. Ortega invited the other branches of government to follow suit. Days later, he also announced the cancellation of an order for a fleet of new government vehicles and strict controls on executive branch members’ travel abroad in what Murillo called an “emergency austerity plan” that she will coordinate.

Banking on Venezuelan oil

If the drastic political turnaround is designed to concentrate and centralize power in the governing couple, the turnaround in sector-wide public policies aimed at improving people’s lives appears to be based on govern-ment subsidies in education, health, nutrition and rural development.

Where will the government find the resources to get this important social agenda off the ground? The source for turning these justifiable pledges into reality and even strategically trans-forming the country’s infrastructure is quite simply Venezuela. The most spectacular of the many novelties unfolding in the heady first days of the new government was Hugo Chávez’s display of support for Daniel Ortega. He offered a magnanimous package of investments and collaboration.

The first item Chávez brought in his sack of goodies was the write-off of Nicaragua’s debt with his country, some US$33 million. Next was the already expected commitment to cover Nicaragua’s entire oil needs through crude oil sold at market prices, but with concessionary payment deadlines and interest rates. The fly in this ointment is the ongoing conflict between the Chávez government and Esso Standard Oil over ESSO’s cocessions in Venezuela. ESSO owns and runs Nicaragua’s only refinery, an obsolete plant with excessive oper-ating costs. Chávez, who refuses to let ESSO refine Venezuelan crude, original-ly assumed that Nicaragua could store more refined oil than it can, so was forced to cut the amount of crude Nicaragua will receive this year this year.

The Ortega government initially expected to receive its total annual consumption of 10 million barrels from Venezuela, calculating that selling this oil—be it for transport or electricity generation—would bring in some US$200 million for social spending. But that plan went up in smoke with Esso’s announcement. For now, Vene-zuela will only send diesel and bunker, which do not need further refining, but that will only cover a third of Nicara-gua’s total consumption. This shrinks the anticipated income down to US$60 million, also reducing the govern-ment’s maneuvering room to imple-ment its social agenda.

But these weren’t the only Vene-zuelan resources available for health and education. Chávez has also offered personnel and materials to repair and remodel existing public schools and hospitals, a hugely important project not only because of the deteriorated state of Nicaragua’s education and health infrastructure, but also because of the anticipated influx of users now that the services are free.

Three mega-projects

The limits Esso put on refining Vene-zuela’s crude led Chávez—grandilo-quent in both words and proposals—to announce three mega-projects for Nicaragua: a new oil refinery, an oil pipeline and a gas pipeline.

Venezuela is proposing to build the refinery in Monkey Point, on Nicara-gua’s South Caribbean shore, to refine Venezuelan crude for both Nicaraguan domestic consumption and export, sidestepping Esso. Chávez also pro-posed to extend as far north as Nicara-gua the gas pipeline already promised to the Panamanian government. And to round it all off, he announced the construction of an oil pipeline from Monkey Point all the way across the country to Puerto Corinto, on the Pacific Ocean. Venezuela would also use this route to export its own oil, avoiding the cost of transporting it through the Panama Canal, which even after it has been widened will still not be able to accommodate oil supertankers.

Will Chávez’s promises compete with those of then-President of Mexico Vicente Fox in 2006 to build a refinery in either Panama or Guatemala so Mexico could supply its fuel to the whole Central American region within Plan Puebla-Panama? A team of Venezuelan technical experts is already in Nicaragua working overtime to study the feasibility of such a refinery, a US$1.5 billion investment that could process up to 150,000 barrels a day.

These mega-investments aren’t just showy charity or leftist solidarity; they are economically good for both Venezuela and Nicaragua. While still in Managua on his two-day January visit, Chávez announced that Nicara-gua would hold the majority shares in the refinery, which he said would be able to go on line and even export within three years.

Still more strategic projects

In addition to the energy collaboration package, which includes the imme-diate sending of several small electri-city generators to alleviate the energy crisis that is causing continual black-outs, Chávez announced another strate-gic project. He offered to construct a 500-kilometer paved highway between Bilwi and Río Blanco to join the Atlantic to the Pacific at a calculated cost of US$350 million. The actual construction would be a collaboration between the Venezuelan and Nicara-guan armies.

Venezuela’s next announcement—also strategic because it responds to the serious need of so many families—was a commitment to help build 200,000 low-income houses over the Ortega government’s five-year term. The Venezuelans also talked about setting up various factories in Nicaragua, including an aluminum plant. The Venezuelan package also contains liquid resources in the form of subsi-dized credits for the social agenda. During his visit, Chávez pledged to get this project started with US$20 million in low-interest credit for rural pro-ducers and to establish the Bank of Venezuela in Nicaragua to finance productive sectors, public transport and the social housing program.

A “sure” market?

There are signs that we will return not only to subsidies in the rural develop-ment policies, but also to an approach that could be called productivist. As in the eighties, the emphasis will again be to subsidize the rural sector so it will produce more, this time because Venezuela, which imports nearly 70% of the foods it consumes, has promised to buy Nicaragua’s agricultural produc-tion.

Venezuelan officials announced that the country will buy our beans, even though they are more expensive than the Chinese beans they now import, and also offered to buy beef, sugar and other products. There has even been talk that Nicaragua will pay its oil bill with its agricultural prod-uction.

The Venezuelan Congress ap-proved this whole package—assumed to express Nicaragua’s entry into the Bolivarian Alternative for the Americas, or ALBA—by the end of January, although its exact scope is not yet known publicly in Nicaragua. The fact that no document has been made available for analysis or debate is yet another expression of the hermetic secrecy that dominates relations between the presidency and public opinion.

Cutting from from the IMF

In a presentation in mid-January to the diplomatic corps and representatives of the World Bank, the International Monetary Fund (IMF) and interna-tional cooperation, President Ortega surprised all present by reviling the IMF for its neoliberal policies and calling the privatization of state enterprises in the early nineties at IMF and World Bank urging “completely criminal.” They sat stony-faced as he announced that his government planned to cut totally free of the IMF. Was ALBA to be the strategic key to escaping the accord with the IMF that Ortega would soon have to negotiate?

Two days later, Nicaragua’s new Central Bank president moderated Ortega’s pronouncement, affirming that the government did want to get out from under the IMF’s stringent conditions, but that it would take two or three years to do so. The very next day, Ortega received the World Bank vice president for Latin America and the Caribbean, Pamela Cox, thanking her and praising the Bank’s positive collaboration with Nicaragua. Cox pledged $50 million annually in a soft loan to support Ortega’s poverty reduction program

A number of new uncertainties

Are all of Ortega’s jolts calculated or improvised? Do they have an ideolog-ical or an economic underpinning? Has he been dazzled by Chávez’s generous package or are they aimed at leveling the playing field somewhat in the upcoming negotiations with the IMF? Independent of the cause or the hoped-for effect, they raise a number of questions.

How much new debt? In the context of the negotiations with the IMF, is the debt that the Venezuelan aid will inevitably produce, as concessionary as it is, compatible with Nicaragua’s current capacity to absorb new debt? Although the country has benefited by the pardon of much of its foreign debt through the Highly Iindented Poor Countries (HIPC) Initiative, it is obliged to further reduce its foreign indebtedness, which is still very high.

This means the country is not free to acquire all the debt it might like, even if it is for money offered on very generous terms, since doing so would put its commitments to future sustain-ability at risk. For example, Nicaragua will have to begin paying Venezuela for the oil it is receiving in 2009. Naturally, Nicaragua would have more room to acquire new concessionary debt if, as has already been announced, the IDB writes off the debt of Latin America’s most impoverished nations. In our case it would be at least US$800 million.

* What about Iran’s aid? On January 12, the day after Hugo Chávez left, Iranian President Mahmud Ahmadinejad paid Managua a surprising two-day visit on his way from Venezuela to Ecuador for the presidential inauguration in the latter country. Even more surprising to many was the cooperation he promised Ortega.

The Presidents of Iran and Nicara-gua signed commitments to what seems to be a huge collaboration package, but no concrete details are yet known. Ortega later reported only that it included the construction of hydro-electric dams and irrigation systems; electricity production and generation grids; housing, fishing and port proj-ects; fabrication of agricultural machin-ery, buses, cars, motorcycles, bicycles and motors; cement factories; agricul-tural development projects; and both drinking water and waste water treatment systems.

Nor was any information released about the apparent pardoning of Nicaragua’s US$152 million debt with Iran. On a visit to a poor barrio of Managua, President Ahmadinejad simply said, “We’re going all the way with you. We’re hoping for the death of all oppressors and world imperial-ism. We’re no longer alone. Iran, Venezuela, Nicaragua and other revolu-tionary countries will stand together and we’re going to resist together, and God will be with us. Be assured that victory is ours.”

* At the same table? Another uncertainty is the degree to which these new international aid packages will harmonize with what Nicaragua has been receiving up to now. This is particularly relevant regarding the styles and focuses of European aid for health and education, which are different than Venezuela’s and surely very different than Iran’s. In recent years the Nicaraguan government and the international community have worked on harmonizing these bilateral and multilateral policies and there is now a Donors’ Table where international cooperation sits with the government to hammer out the details. Will this Table offer a seat to Venezuela, which is about to become Nicaragua’s main cooperating partner? Will it also make room for Iran, a country so culturally different from Nicaragua and so politically feared by Western countries for its nuclear energy program?

Is there any coherent plan to harmonize such varied projects? Or will there be two, three, possibly even four cooperation schemes: that of the Europeans and Canada, that of the United States, that of Venezuela-Iran and that of Taiwan? If so, how will any future tensions be handled?

* How much pressure will Europe exert? Another pertinent question for European cooperation is whether or not it will support the new focus on subsidies in rural development. In fact, Nicaragua’s state intervention in the rural markets will not be limited to subsidized credit. There is also an initiative to revive and strengthen the state-run National Basic Grains Enterprise (ENABAS) to regulate internal prices and buy and store the production that will be exported to the new market in Venezuela and possibly others.

An additional question that is not limited to economic development is how Europe will feel about the political reforms that the Ortega-Murillo team is implementing. Will it “buy” the new approach to citizens’ participation, which could well under-mine projects in which the European Union’s govern-ments and agencies have invested so much over the past years? Their insistence that the new government reverse the criminalization of thera-peutic abortion—that assault on women’s right to life encouraged by Rosario Murillo and achieved with the vote of the FSLN legislators—is an indication they may be prepared to set requirements that go beyond fiscal balances and other macroeconomic indicators.

* Where will more money come from? Even assuming that the sources of economic dynamism—investments, credits, family remittances, international cooperation, traditional exports—will be preserved despite this sea of uncertainties and possible contradictions, permitting the forecasted growth of between 3.5% and 4% to be reached, we must still remember that for now the new government only has the resources accounted for in the 2007 budget, which was approved by the previous Assembly in late 2006.

The government has three main possibilities to respond to the expecta-tions and hopes of the poorest segment of the population in the short run: reassign the budgeted resources from one line to another, collect more taxes or negotiate additional foreign budge-tary aid.

The government’s maneuvering room in relation to the first possibility is not very great, because the limited amount that can feasibly be moved from one budget line to another will not produce very significant results. As for the second, government officials have made general statements about increasing tax collection, but not a word has been heard about the deep fiscal reform needed to eliminate the abun-dant exonerations favoring the already privileged, to ensure that those who don’t now pay taxes start paying them and to institute a progressive income tax system in which those who earn more pay more. And as for the most promising third possibility, Vene-zuela’s aid at least seems assured, but how and when will it come and how will it be administered: transparently within the budget, or separately, discretionally and without accounta-bility?

In an interview on a morning TV news program even before the new government took office, Orlando Núñez offered a fourth possibility. He said that an analysis of the books in the ministries being turned over to the incoming government showed that a far higher portion of externally financed programs and projects had been under-implemented than originally antici-pated. It was his hope that the agencies supporting these activities could be persuaded to redirect their remaining disbursements to the new programs he is running.

Will the domestic debt be renegotiated? The government also has a shot at creating some breathing room with respect to the domestic debt. This debt, which weighs implacably on the economy, is largely made up of the now maturing CENI bonds issued to cover the bank failures in 2000, and the longer-term BPI bonds issued roughly a decade ago to compensate for properties confiscated in the eighties, which also started coming due last year.

The Comptroller General’s Office might have found a way out in the case of the CENIs. It has been investigating charges of fraud in that bond issue, and the results could offer the new govern-ment a wedge to get the banks that bought up those bonds to accept a favorable renegotiation.

As for the BPIs, it is ironic that Daniel Ortega, again at the head of the government that confiscated properties in the eighties, must now make good to those affected, unfortunately at the cost of limiting his social promises. Although Ortega rhetorically com-plained about this situation, suggesting that he would not pay up, only days later his treasury minister announced that the new government had already issued a new set of bonds to pay US$100 million, half of what the government needs to cover the bond payments this year alone.

There are rumors that once the CENIs debt is renegotiated Venezuela might make good on another of its many promises: to buy Nicaragua’s domestic debt, thus freeing up more money for Ortega. It already did this with Argentina and, says Chávez, made US$300 million into the bargain.

* Will Nicaragua end up a Venezuelan enclave? At every corner we’re turning toward a kind of Venezuelan “colonialism,” assuming its oil, its projects, its discourse—and also perhaps its crises?

On January 10 Chávez came, he promised, he conquered. In addition to offering generous economic collabo-ration in various strategic fields, he also spoke of the importance of presidential reelection to follow through on long-term projects of genuine social change. He explicitly included Ortega among those who want to do so, counting him among those who Bertolt Brecht defined as the “indispensable ones [who struggle not just a day or a year, but all their life].” He assured us that we can sleep peacefully for the next 200 years because Venezuela will provide all the petroleum we need. Chávez’s social and military “missions” are already arriving in Nicaragua to work with the Sandinista organizations of farm workers, educators and construction workers.

Chávez learned to govern based on his enormous popularity and the exist-ing legality. More recently, however, he has started manipulating that legality at will to consolidate his social justice project and the Venezuelan parliament granted him 18 months as of January to govern by decree in strategic areas.

Ortega seems to have been tempted by this same formula. In fact, he’s been experimenting with it with proven success for the last 16 years while “governing from below,” constantly manipulating institutions and laws to favor his personal interests and those of his inner circle. Will this formula now be employed on a grander scale by the new government, backed up with Venezuela’s economic collaboration and inspired by Chávez’s political example? The day Ortega took office, he already had in hand the decrees that changed the state’s organization and sought to co-opt the civic participation constructed in recent years.

A major dose of shock therapy

Given such drastic shifts, some are looking back to the eighties with longing, others are looking to Chávez’s Venezuela for the new god on whom our future will depend, and still others have their eyes fixed on the presidential couple from which the new power is emanating. What reactions can be perceived?

After all the signals that Ortega sent out between his election on November 6 and his folksy inauguration on January 10, big business anticipated and fervently hoped that it would be business as usual in the neoliberal game, with only the party managers changing. They proposed colleagues for the economic Cabinet who would guarantee continuity and expected to see them named. But Ortega’s Cabinet has nothing to do with the business elite’s initial hopes, or with “national unity” or “reconciliation,” as Ortega promised. It responds to the different interests now controlled by the FSLN upper echelons.

All the business sectors and many of the social sectors are already discon-certed by the almost daily shock therapy administered by Ortega in his first month. The prescription seems to be shock-moderation-new shock-new moderation, and this behavior modifi-cation approach is triggering a lot of uncertainty about how to respond, while the new model is being consoli-dated.

There’s a kind of silent, arms-folded business strike against making any investment decisions. The housing construction sector, which has been the most dynamic in recent years and pays its workers the best salaries, is con-tracting, as is the real estate market in general. It is the medium-sized business sector on which the FSLN is banking that is responding the best to the promises of cheap credit.

Hopes and temptations
before an open till

The most impoverished and tradition-ally Sandinista population has high hopes that its genuine aspirations will finally be answered. It is not uncom-mon to hear them saying, “Let the man get on with it; he’s the only one on the side of the poor,” or “There’s no reason to be so critical,” or “Don’t go looking for hairs in the soup.” The rhetoric of Ortega’s partner Alemán is right in step with them: “We have to be patient; if we get the itch to criticize right from the start, nothing will be positive.”

The question is whether the new government’s social policies are intend-ed to make real citizens of all the poor or will only be a charitable alternative to full citizenship, in the style of the neoliberal governments’ “safety net” social compensation policies. Orlando Núñez responds that the objective of his program is to “capitalize Nicara-gua’s food producing sectors. It isn’t just a social assistance program but also a productive one that will lay the groundwork for an agroindustrial project.”

The profoundly anti-Sandinista poor don’t trust Ortega and are afraid he’ll repeat his “craziness” from the eighties. A lot of other people who are neither dyed-in-the-wool Sandinistas nor diehard anti-Sandinistas are de-lighted by the promises linked to participating in ALBA: scholarships to study in Cuba; the possibility of finding cures for illnesses in Cuba or Venezuela, including curable blindness with travel expenses included; government jobs with good salaries; free housing…

The dazzling gifts in Venezuela’s package are generating a great deal of enthusiasm, but some are worried that we could again fall into that deeply rooted and dangerous tendency to play fast and loose when it’s all on the house. There’s a saying in Nicaragua that even honest people dip into an open treasure chest. In a society that is losing its sense of public service, with a popula-tion that is so impoverished, so tolerant even of massive corruption and so tempted by patronage, there’s some justification for fears of how Venezuela’s open treasure chest might affect the country.

Already preparing for
the next elections

The no-longer mollified business elite is working diligently to reunify the Right, aware that Ortega could never have won with only 38% of the votes had the Liberals not been split into the PLC and ALN. That percentage is more or less all the Venezuelan opposition was able to muster when steamrollered by Chávez’s reelection bid.

Despite Ortega’s initial provoca-tions, particularly the presence of the Iranian President on Nicaraguan soil, the United States appears to be banking on tolerance to give Ortega no political justification. The US ambas-sador is maintaining a publicly imper-turbable posture, trying not to repeat the clumsy errors committed during the electoral campaign, while behind the scenes he will continue his efforts to reunite the Right. If he hopes to have any success, he’ll probably have to back off his total rejection of Alemán, who despite everything still controls the PLC.

If, as spokespeople for both the PLC and the ALN have claimed, the November 2008 municipal elections are the goalpost for Liberal reunifi-cation with the aim of winning as many mayoral offices as possible, the FSLN will be sorely challenged to prevent that from happening. It currently governs over 80 of the country’s 152 municipal governments, including the most important and largest. It can’t afford to lose any and in fact must win more, because these elections will serve as a kind of “referendum” on Daniel Ortega’s second government, this time in “peace, love and reconciliation” rather than war. To make a good showing, the Ortega-Murillo govern-ment must reduce to a minimum the initial uncertainties it has generated. It must get a large part of the popula-tion and politicians behind its new political design, whether by force, perks or favors, and will have to produce massive, substantial and highly visible social improvements.

The FSLN has less than two years to do all this. And the Liberals have even less time to patch up their differences, after being scarred by so many political and emotional crises. Given these time limits, might the FSLN and the PLC again be tempted to combine the municipal and presiden-tial elections, adducing budget prob-lems, as they already attempted a few years ago?

The implacable
passage of time

Only time will provide the answers, while adding more questions. It will resolve equations and show us whether our hopes and dreams were pretty baubles hung on the horizon to dazzle us, mirages born of our miseries and our resigned, magic or irresponsible culture, or whether there really are palm trees and springs of clear, spark-ling water at the far end of the desert. Time will provide the measure of our fears, putting into proportion things we still don’t have the capacity to see in their proper dimensions.

Enrique Bolanos, a President who might follow Alemán’s footsteps
While outgoing President Bolaños didn’t bid farewell to the nation the day Ortega took office, he did so repeatedly in the preceding and ensuing days. Here are a few of his gems, no less self-aggrandizing than those of his predecessor, and possibly with no greater justification.

* On December 4 he stated that he was leaving the new government with “the table served,” and added that having done so, “the coming five-year term could end up being Nicaragua’s most glowing.”
* In Bluefields two weeks later he said, “At last I’m going to be free, because I have felt myself imprisoned by Nicara-gua’s affection and by the work.”
* The next day, in a ceremony in which he was decorated by the National Police, he stated that his struggle against corruption had resulted in “the abandonment of my party, which passed into the opposition because it preferred to stay in the gang of the corrupt”

That was not only the most pathetic but perhaps the most dishonest claim of all, because the incoming government officials have been alleging the discovery of corruption in a significant number of state institutions, including the Transport Ministry, the port facility, the Rural Development Institute, the postal company, the Institute of Census and Statistics and the Institute of Social Security. Bolaños himself appears compromised by irregularities in his request for international funds to create an “Alejandro and Enrique Bolaños Virtual Library” and support his New Era Foundation, legally registered last year. He is even looking to finance a new project for the Foundation, which he is calling the Institute for the Formation of Ethical Leaders.

Bolanos also caused commotion by deciding to accept the lifetime non-elected National Assembly seat granted to former Presidents through the Aleman-Ortega pact, a privilege he strongly criticized when it passed into law.

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