|Central American University - UCA
Number 337 | Agosto 2009
Major Signs of Crisis, Minor Signs of Flexibility
Nicaragua is in the eye of the international hurricane for serving as a base of operations for the deposed but legitimate President of Honduras, Manuel Zelaya. This exceptional scene is generating solidarity, fear and rumors. Meanwhile the national scene is whipping up its own storm. The FSLN government is going through hard times, with its increasingly acute economic crisis and ever more confused political project.
The 30th anniversary of the in-surrection that ended half a century of Somoza family dictatorship found the FSLN government limited by an escalating economic crisis. Signs of flexibility are urgently needed to deal with what’s already happening and what’s yet to come.
A few weak signsThe anniversary deserved a public commemoration more in keeping with the meaning of the event it marks. The celebration in the plaza brought tens of thousands of FSLN sympathizers plus tens of thousands of public employees obliged by their superiors to attend. Unlike other years, no Latin American heads of state were on the stage; not even President Zelaya, who was in Managua that day, or any appointed representative of the FMLN, which took office in El Salvador just a month and a half earlier. No explanation was offered for these unexpected absences.
As has become the norm in recent years, the presidential couple dominated, hosting a party that increasingly resembles a family get-together rather than the memorial of a national effort in which thousands of people gave their lives. But there were some positive novelties. For a start, it began at the appointed hour for the first time ever. It was also totally secular; it didn’t begin with a prayer or sermon by a Catholic hierarch and there were no religious authorities on the stage or any religious allusions in the script prepared by first lady Rosario Murillo. The stage itself was more sober than in previous years, with fewer flowers and simpler decorations, and because it was a daytime event, there were no fireworks. The nation’s blue and white flags held their own against the FSLN’s red and black ones and the gigantic Pepto Bismol pink billboards with Daniel Ortega’s face ringing the plaza were conspicuous by their absence. Were they signs of rectification following repeated criticism about events starting hours late, religious manipulation and costly extravagance?
Remittances, exports, A lot has changed in 30 years. In its second round, Ortega’s government isn’t being battered by the penuries of war, compensated at that time by generous international cooperation. With the country now at peace, it’s being constricted by the consequences of the international economic crisis, aggravated by problems with international cooperation triggered by the government’s own behavior.
The national budget that went into effect in January 2009 has already suffered two cuts and as soon as the anniversary party was over the government announced it would be cut again before year’s end. Tax revenues have shrunk drastically due to the drop in consumption, remittances, imports, exports, production credit and investments. There are also rumors that tax revenues have decreased due to the dismissal of skilled technicians for party reasons, not to mention the layoff of 26,432 workers in the free trade sweatshops (maquilas) as of May. Despite criticism regarding working conditions and treatment of workers, these assembly plants for re-export have cushioned the country’s generalized unemployment in recent years and given the young women who are the majority of the workers—mainly single mothers burdened by paternal irresponsibility—enough salary to get by.
The government made The government prepared the 2009 budget forecasting 3.5% economic growth, without considering the effects the international crisis would have on the country. Even though Nicaragua’s high birth rate has dropped, which is all to the good, the country needs an annual 5% growth to make any real progress in lowering its high poverty rates.
a few miscalculations
The government is now calculating that the country will only grow 0.5% this year, while some economists believe there could be negative growth of up to -2%. Things have been further complicated by last November’s electoral fraud, also cooked up by the governing group without thinking about its possible economic repercussions. As a result, the countries of the Budgetary Support Group have made no further disbursements to help balance the national budget.
Those two serious miscalculations give the government every reason to feel overwhelmed, although it hides it, downplaying the crisis. It lacks both hard cash and the international credibility to get it. It’s debating what measures to take and what signs to offer to extricate itself gracefully from its dilemmas.
The greatest fiscal The budgetary reform approved in June, following one that went into effect in April, cut public investment in health and education, while curiously increasing the current spending of the presidency, the inoperative Comptroller General’s Office and, even more curiously, the thoroughly discredited electoral branch, even though there are no elections this year. The government is trying to cover the fiscal deficit by issuing government bonds, thus increasing the country’s already scandalous domestic debt. And it’s replacing the donations lost because of the fraud with loans, thereby increasing the foreign debt as well.
deficit in recent years
With an underfinanced budget (the fiscal deficit is already over 7 billion córdobas, most of it generated in recent years), the International Monetary Fund is starting to get seriously worried about the country’s macroeconomic stability; it still hasn’t given its green light on the review of the 2008-2011 program it signed with the government. It is keeping frozen both the $35 million that it should release after this review and Nicaragua’s access to the special funds the G-20 assigned to the IMF to support countries most vulnerable to the effects of the international crisis. According to economist Adolfo Acevedo, Nicaragua could access up to $150 million of those funds.
There’s evidence in this money crisis that the millions in Venezuelan aid are having a limited impact on the national economy. As the government consistently refuses to incorporate the amount and destinations of that aid in the budget, no one can either complain or try to control it; all they can do is wonder and suspect.
Negotiations on In June the government mentioned several measures it would take to reduce the huge fiscal deficit, including reducing the tax exonerations for non-productive sectors and not indexing social security pensions to the dollar. It’s not clear whether these measures were proposed by the government in its conversations with the IMF or the IMF demanded them, but in any case the government has since backed away from them, worried about their political and social cost.
the edge of an abyss
It’s known that since 2007 the IMF has been suggesting a tax reform that would include reducing exonerations, which experts say are way out of proportion in Nicaragua. But not only has the government not touched the unjust national tax system in its two-and-a-half years in office, it has also promised big private enterprise it will do nothing in this area for the next two years, i.e. until its term is over.
In the push and pull to get the IMF’s “approval” in the past several months we’ve heard President Ortega again calling the IMF the “International Mortality Fund,” railing that it “wants to treat us as slaves” and “push Nicaragua to the edge of an abyss.” We’ve also seen Central Bank President Antenor Rosales make two hurried trips to Washington (in June and July) to try to convince IMF officials of the difficult situation Nicaragua is experiencing. On the second trip, Rosales was flanked by three top business leaders, among them Carlos Pellas, the maximum representative of big Nicaraguan capital but not a regular on such trips by this government. “We went with them so so they’d defend us,” said Rosales.
Finally a tax reform? At such a tense moment, the govern¬ment’s only achievement in Washington was that the US government renewed its “waiver,” a legal disposition allowing it to override a congressional ban on aid to countries issued countries in which US citizens have suits pending for confiscated properties when it is demonstrated that they are making progress on resolving those suits. Sticking to the practice of the three preceding governments, the FSLN government has continued resolving the hundreds of such cases (48 in 2009). Getting the waiver was crucial to the IMF being flexible with Nicaragua, as the United States has enormous influence in that body.
Following the Washington trips, the official anti-IMF rhetoric and the waiver, an IMF delegation decided to spend a week in Nicaragua in early August for talks with the government. At the end of it Antenor Rosales announced a new budget cut and a “comprehensive” tax reform that goes beyond just reducing non-productive exonerations; the government agreed to design a less regressive tax system than the one that now hits salaried workers and the poor so hard. It also pledged to discuss the plan with all sectors in what it promised will be a “great tax concer¬ta¬tion” that will result in a more equitable, efficient, productive system. We’re thus now in a “standby”… after teetering on the edge of the abyss.
Microscopic steps with international cooperationThe conflicts with the international donor community began with insults and effrontery by the Nicaraguan government in early 2008 and culminated with the international agencies cutting some project aid and freezing budgetary aid in response to the electoral fraud. There have since been negotiations with the ambassadors of the European Union and other cooperating countries to secure the release of that aid.
If the government’s goal is to get liquid resources to deal with the budget imbalances, the issue for international cooperation is governance, a concept that includes transparent and reliable elections. Cooperation’s only condition for renewing the budgetary aid is guarantees for the 2011 general elections.
The talks have continued, but are low profile, virtually on standby. In public, the government officials involved in these talks just smile and insist that they won’t discuss the electoral fraud with anyone, much less correct it, but that the talks are “very positive” and going in the “right direction.” Off the record, foreign diplomats admit that the government’s “flexibility” is expressed in microscopic steps and no concrete electoral commitments have been achieved.
While the government is negotiating the reestablishment of the budgetary cooperation with the European Union, refusing to discuss the fraud and making no progress on how to avoid similar events in 2011, the Institute for Development and Democracy (IPADE), currently headed by former FSLN National Directorate member Jaime Wheelock, published a new report on the November 2008 municipal elections. It provides abundant evidence of fraud in 46 of the 146 municipalities involved in the elections and shows there was no single pattern to it. “A sum of acts altered the popular will,” said IPADE director Mauricio Zúñiga. The report demonstrates that the PLC acted in complicity with the FSLN to help the latter “win” races in which the real winners were mainly candidates from the We’re Going with Eduardo [Montealegre] Movement (MVE), which ran them on the PLC ticket in a supposed alliance.
There are still clouds The government has given only mini¬scule signs that the 2011 elections will be transparent and trustworthy. FSLN legislative representative Alba Palacios said the government would agree to clean the electoral roll of voters known to have either died or left the county if the Europeans would foot the bill. The FSLN is the only party that hasn’t commented on the important proposal by the Group Promoting Electoral Reforms (envío, March 2009) to change the Electoral Law that grew out of the pact.
on the electoral horizon
The only “microscopic” steps the government has taken with the cooperating community is to allow international electoral observers to oversee the elections for the autonomous Caribbean region governments in March 2010 and to invite European observers to the general elections in 2011. It has not agreed to permit national observer organizations, the only ones capable of putting people in all voting centers and with accumulated knowledge of how Nicaragua’s system works.
The National Assembly’s election by qualified majority of up to 30 top posts in the state institutions in 2010 offers the chance to give a real sign of rectification, as the seven Supreme Electoral Council magistrates and their alternates are among those whose five-year terms are coming to end, and their non-reelection is a critical condition for reliable elections. Among other posts also up for election are four Supreme Court justice seats, the Public Prosecutor General, the National Assembly directive board and the authorities responsible for overseeing the public services. Given that these parliamentary votes will not only give the cooperating community a sign, but also test the post-fraud correlation of forces within the Ortega-Alemán pact, Supreme Court Justice Rafael Solís, a frequent spokesperson for Ortega, has made it understood that the “healthiest thing” would be to reelect them all. It was not a good sign.
In the celebrations marking the 30th anniversary of the revolution, First Lady Rosario Murillo offered another oblique but macroscopic sign about the future electoral process. She announced that the FSLN now has over a million militants. More exactly, 1,109,037 people now have FSLN membership cards, handed out wholesale in urban barrios, rural districts and, under pain of reprisal if not accepted, state institutions. It’s not off the wall to think that the government is already preparing the conditions to translate those cards into votes in the 2011 general elections—if not actually at the ballot box, then later in the counting process.
The manual and the planIf the government is taking miniscule positive steps regarding future elections, it has given international cooperation slightly larger, but still minimal signs of flexibility in other areas. One has been to shelve the manual for financially and politically controlling international NGOs. The government backed off in response to strong protests by Nicaragua’s civil society organizations and the international NGOs themselves, all of which would be affected by the raft of bureaucratic obstacles and requirements laid out in the proposed law. Putting that manual into practice would risk losing even more resources for development projects that would help alleviate the crisis. International NGOs channeled $267 million in 2007, the most recent year for which data is available.
It’s also possible that the back-pedaling responds to one of many internal debates reportedly taking place in the halls of power. Analyzing the situation during the FSLN’s second time around in government, Jaime Wheelock pondered why the government “has labeled as adversaries NGOs that at one point wanted to cooperate in the social programs and weren’t permitted to do so.” Wheelock is well aware that the directors and workers in many NGOs were professionals in the first FSLN government.
Another little sop to draw the cooperating community back is the government’s claim to have “improved” the National Human Development Plan it has been working on since 2007—albeit still with no consultation with civil society organizations. The cooperating countries respond that, while it is indeed better, it still errs more on the side of rhetorical discourse than on concrete mechanisms to achieve the poverty reduction and economic growth targets.
And therapeutic abortion?Decriminalizing therapeutic abortion again—an ongoing issue for European diplomacy—is another expected step, but the government still hasn’t taken it. Rumors come and go, including that the Catholic hierarchy would excommunicate justices who rule in favor of the dozens of writs of protection filed with the Supreme Court by human rights and feminist organizations.
Almost three years after the right to therapeutic abortion was overturned, Amnesty International executive director Kate Gilmore visited Nicaragua in July to talk to doctors, health professionals, women’s organizations and victims of the legislation. Despite various requests to meet with President Ortega, she was received only by the health minister, who did not endorse her dramatic view of the issue.
In Mexico City Gilmore announced that AI was launching a worldwide campaign for the decriminalization of therapeutic abortion in Nicaragua. At the same time she released a report denouncing Nicaragua as having one of the most worrying rates of maternal mortality and pregnancy of young girls. After describing the dramatic situation of “the poorest, the youngest, the sickest and the most isolated and the most violated of pregnant women and girls,” she explained the objectives of the campaign: “Immediately repeal the law that bans all forms of abortion; guarantee safe and accessible abortion services for rape victims and women whose lives or health would be at risk from the continuation of pregnancy; protect the freedom of speech of those who speak out against the law and offer comprehensive support to the women and girls affected by the law.”
Gilmore concluded her moving presentation of the campaign with these words: “This week, I looked into the eyes of a child mother who, on her own, without family support and in the face of community prejudice, must now raise her daughter/sister. Under her gaze, no adult could feel anything but shame. But she said to me, ‘I tell you my story [of incest] because I believe that you can tell others so that somewhere, some how, some other girl will not have to live with what I have to live—everyday.’
“Today, because she asks us to, AI asks the world to look deep into the eyes of the Nicaraguan authorities and demand dignity for the women and girl children whom they have pledged to protect from preventable maternal mortality but whom, through their laws and policies, they are defiantly betraying.”
In presenting the international campaign to decriminalize therapeutic abortion in Nicaragua, Gilmore referred to Nicaragua’s Penal Code as “a callous and cynical artifact of the political wheeling and dealing that took place in the country’s 2006 elections,” adding that “it punishes women and girl children for seeking life saving medical treatment and doctors for providing it.”
For a government that has implanted into the speeches of all its officials the reiterated slogan that it is working for the “restitution of rights,” restoring the right that Nicaraguan women had for over a century and saw snatched away from them by political-electoral calculations would be a significant sign.
Montealegre’s fatal error?If the economic negotiations with the IMF and the political-economic ones with the cooperation community are getting difficult and dragging on too long, keeping the government on edge waiting for the resources it needs to reduce the budget gap, the FSLN’s political negotiations with Constitutionalist Liberal Party (PLC) leader Arnoldo Alemán, its partner in the pact, also seem hard up. Ortega has been waiting all year for the 56 votes he needs to reform the Constitution and thus be able to run for President again, and/or move the country to a parliamentary system in which, as prime minister, he could be reelected indefinitely.
The PLC leadership’s complicity—now indirectly acknowledged by Alemán himself—in the electoral fraud that allowed the FSLN to walk away with 105 mayoral seats last November (close to half of them disputed, including Managua) has fed the reticence of enough of that party’s legislative representatives to block the constitutional reform. It has also created an anti-Ortega fury in the Liberal rank-and-file that the party leadership is finding hard to manage. Regrettably, this rage doesn’t yet equal sufficient rejection of Alemán’s leadership. A recent opinion poll shows that 22% of Nicaraguans still see him as an “opposition leader.” Still more regrettably, opinion-shapers from the rightwing La Prensa newspaper, blinded by making “everyone against Ortega” synonymous with democracy and with the only solution for the country, have gone so far as to propose the need to follow Alemán if the Liberal opposition manages to unify around his badly tainted leadership.
Alternative Liberal leader Eduardo Montealegre suffered a hard blow to his political image this month. Although no government or international institution in the world has recognized, much less backed, Honduras’ de facto government, Montealegre went to Tegucigalpa to meet with post-coup President Micheletti and on his return declared that there hadn’t been a coup in Honduras but rather a “constitutional succession.” Perhaps wanting to feature as the brave lone voice that cries out in the wilderness, he assumed a wrongheaded, unnecessary and even ridiculous role. It’s hard to imagine who could have counseled him to take that leap into the void.
The revocatory referendumSidestepping his difficulties in being allowed to run for reelection, President Ortega re-launched his project at the 30th anniversary celebration, using new bait to attract interest in the issue. He let it be known that his reelection would be accompanied by a revocatory referendum to “intensify direct democracy”: “On this historic day I want to make a call to all Nicaraguans, all political forces, to work together for a better Constitution. What would it mean if the Constitution establishes the idea of a revocatory referendum? It would mean that the people could get rid of the President, if they so decide.”
Enthused by the Fourth Ballot Box project that ended up getting Manuel Zelaya overthrown by a coup and exiled, Ortega said: “Here we could perfectly well include another ballot box, one for the people to vote and say whether they want to reward or punish, whether or not they want to get rid [of the President and other elected officials]… People need to have that right, and we’ll continue struggling for people to have it.”
Who will count The President intentionally and very calculatedly muddled things. He needs a constitutional reform to be reelected, but that opportunity appears to be slipping away. On the other hand, calling for a referendum to ask whether the public wants to revoke him or not doesn’t necessarily involve reforming the Constitution, whose article 2 mentions “other procedures” in addition to those specifically established in it—the referendum and the plebiscite, neither of which have yet been held in Nicaragua.
and who will pay?
Whatever the modality, the plan’s viability and credibility are threatened by two obstacles. First, the Supreme Electoral Council (CSE) would count the votes deposited in any ballot box, and it is thoroughly discredited. Second is the economic cost of these revocatory consultations. According to Ortega, they would be held frequently to revoke not only the President, but legislators and mayors, yet any time anyone has proposed a referendum in the country, including the one the opposition has suggested to approve or reject the FSLN’s planned constitutional reforms, our poverty and limited resources get dragged out as an excuse not to do it.
One clue to the results of a possible referendum is provided in the M&R poll of June 20-28, in which 60.8% disagreed with continual presidential reelection. And 78.8% agrees that the CSE should be made up of people independent of both the government and political parties.
A minimalist government?The government is giving minimal signs of flexibility while the economic crisis shows maximum signs of advancing. So are we being ruled by a “minimalist” government?
This term, heard so often in the halls of postmodernity, has various meanings. One is the tendency to get rid of excessive elements, reducing something to its essentials. This is hardly true of this government, which has an excess of rhetorical foliage that prevents many people from grasping its authoritarian essence. Another is the minimalism equivalent to asceticism, to austerity, which is why groups or individuals who keep their belongings to a minimum are called minimal¬ists. But the top governmental echelons are precisely the opposite; they are busy accumulating maximum power and the greatest number of properties.
In another meaning, minimalism is also the tendency to simplify everything to the minimum expression, strip it down so far it causes “short circuits” in those who try to approach it. In this and only this regard, the government is definitely minimalist: it has simplified the causes of the economic crisis affecting us and the history of the revolution it lays claim to, appropriating and privatizing it. And with all that it’s sparking short circuits, serious breakdowns in the Nicaraguan social fabric.