Envío Digital
Central American University - UCA  
  Number 385 | Agosto 2013



Notes written beneath the trees of life

The contradictions of Daniel Ortega’s speech at the celebration of the revolution’s 34th anniversary give food for thought about various uncertainties for the country at this time.

Envío team

Is Nicaragua emerging from poverty? Will the interoceanic canal be built or is that megaproject only a fortune cookie prediction? Is the government responding to the economic and social problems and to the political discontent its model is triggering? Does it feel vulnerable to some imminent risk? It’s impossible to find clear responses to these questions in President Ortega’s always confusing words, but we’ll give it our best try.

“Faith mobilizes us”

The decoration of the venue where the governing party now celebrates the anniversaries of the revolution is more lavish each time. This year the esthetic novelties included a profusion of costly blue roses in the floral arrangements and eight 42-foot-tall stylized gilt “trees of life” flanking the stage, evoking the design of this universal allegory by Austrian painter Gustav Klimt.

First Lady Rosario Murillo, the event’s hostess, pointed out that the tree of life symbolizes “the faith that mobilizes us.” This July 19 it was obligation, not faith, that “mobilized” all state employees in the country to Managua to avoid problems holding on to their job.

Between these public employees and the old and new FSLN sympathizers, a reported 300,000 Nicaraguans filled the John Paul II Plaza of Faith on the banks of Lake Xolitlán to hear the President’s message. For those who spilled out into the adjacent Avenida Bolivar, massive screens had been installed to make sure no one missed a thing.

The Snowden case

The traditional celebration this year began on July 7 in a delayed commemoration of the June 27, 1979, tactical retreat from Managua to Masaya during the final days of the massive uprising against Somoza. Ortega made front-page news around the world the same day with his announcement that Nicaragua would give asylum to former CIA and National Security Agency employee Edward Snowden “if circumstances permit.” With no further explanation even of what those circumstances might be, Ortega simply lined up behind Venezuela and Bolivia after they said would study the case following Snowden’s request for asylum from 21 countries.

It wasn’t hard to interpret the asylum offer as rhetoric to stir up the anti-imperialism of those listening that afternoon, but Ortega’s words sparked alarmed declarations from his business elite allies. Clearly riled, they pointed out that even if the presidential offer never comes to anything, merely voicing it could affect trade relations, exports, free trade zones and incoming remittances.

“They know it’s only a pose”

In response to that reaction, Onofre Guevara, one of Nicaragua’s most piercing and honest analysts, wrote this commentary for El Nuevo Diario: “They are afraid of losing the remittances and seeing the free trade zones disappear because that would make their own incapacities and responsibilities for not having assumed the country’s economic development without foreign tutelage more obvious to people…. They have gotten used to being a subsidiary of large foreign capital and to seeing the State dependent on loans from the financial agencies the United States controls, not to mention the political subordination that brings with it. Nor is this government itself outside that orbit, so the business leaders know Daniel is only posing, that he has it all coldly calculated: he never believed Snowden would take asylum in Nicaragua, so there was no fear of US reprisals. The interests Ortega, his family and minions have created while in power keep the brakes on any materialization of the rhetorical declarations with which they disguise their business with the State. The business chambers know the Ortega formula: “revolutionary” rhetoric and personal enrichment. The business leaders know it well and share in the results.”

We’re quoting this here because it’s not just any old text: it was never published in the newspaper it was written for because the paper’s new banker-owners vetoed it. The FSLN as a corporation reportedly owns 13% of El Nuevo Diario and was poised to purchase another 61% two years ago when the paper was in severe financial difficulties, but Banco de la Producción president Ramiro Ortiz Mayorga stepped in instead. The censorship was the last straw for León Núñez, a lawyer, writer and lucid critic of power, hired by the banker-owners themselves as the paper’s director over a year ago. He promptly handed in his resignation.

So the Snowden case, which has not come up again, produced an unexpected and revealing result in Nicaragua, a country where paranoia is growing, even among the powerful.

On the list of poor countries

Also unexpected, but only because it was so unusual, was President Ortega’s emphasis on Nicaragua’s poverty in his July 19 speech. “There’s still poverty in Nicaragua!” he worriedly proclaimed. “There’s still extreme poverty in Nicaragua! There’s poverty in 83 countries, 8 of them here in Latin America: Bolivia, Dominica, St. Vincent and the Grenadines, Grenada, Guyana, Haiti, Honduras, St. Lucia and Nicaragua!”

According to the most recent household poverty measurement survey by Nicaragua’s International Foundation for the Global Economic Challenge (FIDEG), conducted last August-September but only released this June, 42.7% of the population lives in poverty. The figure was 44.7% in 2009, which is very minimal improvement given nearly seven years of unprecedented amounts of foreign aid, particularly from Venezuela, to promote transformations in the country’s economic structures.

Even more to the point, that minimal progress was documented precisely in the four-year period in which the Venezuelan aid began flowing in torrents.

And the extreme wealth?

According to the FIDEG survey, the reduction in poverty has had little to do with internal factors such as government policies, national investment efforts, technological innovations, important budgetary reallocations, better resource distribution, increased productivity or anything of the sort. The two most influential factors have been the remittances sent home by Nicaraguans who found work abroad after failing to find it here and the improved prices for our traditional export products in the international market the past couple of years.

It’s not irrelevant to repeat how scandalous it is that the poverty suffered by nearly half the population and the extreme poverty now increasing again in rural zones, both documented in the FIDEG survey, coexist with extreme wealth. According to the 2011-2012 World Report on the Ultra-Rich, prepared by Wealth-X, there are now 180 “ultra-rich” Nicaraguans, a category defined by personal fortunes of at least US$30 million. The number passed El Salvador’s 140 during Ortega’s term in office.

Is he trying to sell a dream?

Why did the President suddenly choose to emphasize how poor we still are? Could it be that making us feel so poor allows him to more successfully sell the dream that the canal will pull us out of poverty?
Or is it a subliminal warning of the economic difficulties Venezuela is grappling with, which have already determined or will determine a reduction in the cooperation Nicaragua receives from Caracas?

Is the President preparing us for a situation in which he’ll have fewer resources for the social programs that generate expectations in a certain percentage of the poorest population, because that would also help sell the canal dream?

“Thanks to Chávez”

At another point in his speech, Ortega’s allusion to poverty took on a notably religious tone: “It’s true that Nicaragua doesn’t have enormous material wealth,” he reiterated. “We’re definitely there on the list of the most impoverished countries, but Nicaragua has enormous moral wealth, bequeathed us by Sandino, given to us by God, by Christ, because with Christ I’m sure that the problems will be solved, as we’ve been doing, miracles will be achieved, just as when light came to our country again thanks to Chávez, whom our Lord Jesus Christ put in our path.”

Is such insistence on adorning all official speeches with religious allusions a way of expiating the “sins” of the eighties or even more so of today? Or is it a way to foster more and more resignation in the population, which usually goes hand in hand with depositing hope in magical solutions such as the canal?

The allusion to the “miracles” promoted by Chávez’s “light” is also evidence that the hundreds of millions in oil cooperation have drained the Ortega government of any new ideas, initiatives or proposals to combat poverty in the rural sector. The Zero Hunger project has now hit its ceiling and in recent months the government has offered no creative responses either to the fungus affecting coffee plantations or to the bean crisis, two rural tragedies that have increased the already high poverty levels in the countryside. Did the government’s creativity mount and adapt itself to Chávez’s light, and has that light ended up blinding it to any more feasible and possible initiatives than the canal? Does routine rule “thanks to Chávez”?

Is the canal just a “complementary element”?

After Chávez, another figure “appeared” on Nicaragua’s path: Chinese entrepreneur Wang Jing, to whom President Ortega granted a concession loaded with wide-reaching powers to build an interoceanic canal and eight other related megaprojects in Nicaragua.

Since the signing of that concession on June 14, government spokes¬people have repeatedly spoken about the canal in interviews, speeches, Power Point presentations, declarations and spots. Each time, they reiterate, as Ortega did that day, that it’s Nicaragua’s path out of the “desert” to arrive finally at the “promised land,” which in layman’s language means definitely emerging from poverty.

In that context of triumphal optimism, it was noticeably strange that the President chose to remove the canal’s halo in his July 19 speech. “I want to make the following clear,” he began. “We set the goal of overcoming poverty even before the possibility that the canal would be built through Nicaragua…. We have enough human capital, enough productive forces in the countryside and the cities, workers who know how to work the land, who know how to produce food… that even without the canal, Nicaragua has real possibilities of moving forward, defeating poverty. And a canal through Nicaragua won’t divert us from that course…. Whether the canal starts to be built will be determined by the studies currently being done. But we can’t be negligent, we can’t neglect the productive activities we control, which culturally we’ve succeeded in developing and are bolstering today. That can’t be neglected…. The canal is just a complementary element.”

His references to the canal were similarly moderate in an extremely lengthy interview for RT, a Russian television channel. “I insist that a project like this must not distance us from Nicaragua’s existing human development program,” Ortega began. “It doesn’t mean we’re going to leave agriculture, food production, cattle ranching and small-scale industry aside to all run to the canal. That would be a very serious problem for Nicaragua.”

Voices of alarm

Why did Ortega downsize the canal from a panacea to just a “complementary element? Was it just a characteristic slide in his rambling and confusing speeches or the first steps back from a megaproject that was born opaque, is developing in uncertainty and may never happen?

Doubts about both the canal’s financial and environmental feasibility and how real the project is have continued growing since Ortega signed the concession over to Wang Jing. Many authoritative voices don’t believe it will actually be built, but are convinced that many things will be done or are already being done in its name, ranging from the millions in consultations and studies supposedly being conducted to expropriations, confiscations or accelerated property buy-outs, some of which are reportedly also already underway.

What the government isn’t allowing are any debates about the canal in public universities, which of course adds even more uncertainty to the megaproject. In mid-June, the Managua campus of the National Autonomous University refused permission to use two of its auditoriums for a forum debate. Despite the difficulties it faced, Nicaragua’s Academy of Sciences held a first debate on July 12 and a second on August 13 so the population can hear dissonant voices explaining and sounding alerts.

“In Panama we don’t have
earthquakes or hurricanes”

Listening to Dionisio Rodríguez, engineer and founder of the Institute of Geology and Geophysics of Nicaragua, explain Nicaragua’s geological formations, the closed system of tectonic plates, the seismicity and volcanism of the territory we’re standing on is pretty scary given that building the canal would mean opening a half-kilometer-wide gorge from east to west in our territory’s geological underpinnings.

Rodríguez detailed a long list of studies that would be needed before doing so, among them geological cartography studies, which would form the basis for the rest of the studies, given that barely 20% of Nicaragua is mapped; stratigraphy studies of the structural tectonics, given that Nicaragua’s territory interacts with six plates; not to mention studies of the geomorphology and air, land, marine and lake geophysics, plus geo-environmental studies. He went on to stress the need to take into account Nicaragua’s geology but also the shared Central American geology. The many risks he said must be considered include earthquakes, tremors, volcanos, tsunamis, landslides, floods and hurricanes, all of which have already been experienced in our country.

Given this inescapable reality, Panama’s Foreign Minister, Fernando Núñez Fábrega, recalled a relevant piece of historical information in an interview this month on the BBC Mundo: “We didn’t build the canal, the Americans built it. And the reason they eliminated Nicaragua is because there are earthquakes there. The second is because there are hurricanes there. And in Panama we don’t have either.”

Wang Jing speaks

None of the information reaching us about the “advances” of the canal is coming from Nicaragua. And that just buttresses the perception that Nicaragua won’t have any participation in what would be one of the largest engineering works in Latin American history.

HKND Group, Wang Jing’s company, is now in a phase of strategically projecting itself in the international media. On July 3, a Beijing interview with Wang Jing appeared in Britain’s prestigious The Daily Telegraph, the most influential newspaper with the Conservatives governing in London today. The obvious intent was to send international investors a message of “seriousness.”

Feeling in possession of wide-reaching powers, as he effectively is under the terms of the concession signed over to him by Ortega, Wang explained the canal route (from Bluefields, presumably along the Río Escondido, to the small town of Morrito on the eastern coast of Lake Cocibolca, then across the lake passing close to the island of Ometepe and on to Brito Bay, south of San Juan del Sur). He assured the interviewer that he was “one hundred percent sure” the work will get started by the end of 2014 and be completed in 2019, that some 5,000 people are now doing the feasibility studies and that they already have major investors (banks and other institutions) on board from China, Europe and the United States. He denied that the Chinese government is participating in the project and announced that in two months he will reveal the confirmed investors so far. Will he reveal who the Nicaraguans are? So far they are unknown and hidden under the recently created Managua-based Great Infrastructures Development Company (EDGI).

Three days after Wang Jing’s declarations, HKND’s own spokesperson denied that the canal route is defined. “Various routes are still under consideration…. The decision about the final route will be based on technical, environmental, trade and community studies and other investigations being developed.”

Contradictions and confidentiality

If we’re in the feasibility study phase (on land?, by satellite?, from offices abroad?, based on the 2012 studies done by Holland? or on studies done years ago?), that means there are already many contradictions.

In his July 19 speech, Ortega said the previous studies had cost US$400 million, but days earlier Wang Jing had told The Financial Times that just one of those studies, which he termed the “viability” one, had cost US$900 million. Bolivian Ronald McLean, HKND’s spokesperson, in turn declared that they now have US$100 million for “the first part” of those studies. And if that wasn’t enough, Bill Wild, the Australian engineering consultant and Wang Jing’s main adviser, declared in a recent interview for the South China Morning Post that HKND only has half a dozen employees in Hong Kong and now a dozen in Nicaragua.

The most alarming part of the pre-construction phase we’re supposedly now in is that the studies, whatever they are and whatever they cost, whether they’re being done by 5,000 people or a dozen, won’t be made public, so there will be no chance to learn about them or debate them. As engineer Víctor Campos, deputy director of Nicaragua’s Humboldt Center, explained to envío last month with obvious concern, “A very strict confidentiality clause in the Framework Agreement with Wang Jing establishes that all information generated for the canal construction will be confidential.”

Sandino and the canal

It is paradoxical that Ortega tried to legitimize this obscure canal project in his speech by quoting Augusto César Sandino’s 1927 vision for a canal through Nicaragua, since it openly contrasts with what Ortega did with Wang Jing nearly eight decades later. “Civilization requires that the Nicaraguan canal be made,” Ortega quoted, “but that it be done with capital from the whole world, not exclusively the United States…. At least half the value of the constructions must be done with Latin American capital and the other half from other countries in the world that want shares in such a company… And Nicaragua, my homeland, will receive enough income to cross our entire territory with railroads.”

Wang Jing obviously doesn’t represent Latin American capital. More paradoxical still, in the June 27-29 meeting of the Petrocaribe countries in Managua, President Ortega didn’t even mention the canal project to his Latin American colleagues. Only one Latin American head of State, Dési Bouterse from Surinam, briefly alluded to the canal. This silence about a work of the magnitude being proposed is very strange, apparently suggesting that Latin America isn’t welcome in the project.

Back in 1927, and more forcefully two years later, Sandino declared that the Canal should be Latin American, via an alliance of all Latin American States. That alliance, said Sandino, “is the only one with the capacity to implement the work of opening the canal.” He further argued that “all of the rights for the construction or establishment of the works will be reserved for that alliance,” not permitting any alienation, sale, cession or lease… that compromises the stability of Latin American sovereignty and independence to a power or powers not of Latin American nationality.”

These objectives clearly contradict what Ortega has agreed to with a Chinese businessman now seeking US investors.

“In law and in justice”

Didn’t Ortega realize these obvious contradictions? Or is he unaware of the extent of the concession granted to that foreign businessman? Is he underestimating the population’s intelligence? Or was it just another blundering manipulation?

The allusion to Sandino didn’t just come from the President that afternoon. A caption on one of the government web pages—el19digital.com—justifies the concession to Wang Jing with this sentence by Sandino, lifted from an interview with Carleton Beals: “Personally, I would want the canal to be built by a private company, in which the government retains part of the shares in exchange for the rights acquired, so that instead of loans made by bankers with ruinous conditions we would have income with which to build railroads and schools and generally improve the country’s economic condition.”

The concession to Wang doesn’t even contemplate Nicaragua receiving any taxes for an entire century, even though Sandino believed our country should get them “in law and in justice.” Instead the concession establishes that Nicaragua will receive 1% of the shares per year until it acquires them all after 100 years. Meantime, it says the concessionaire will “endeavor” to pay Nicaragua US$10 million a year. Is that anywhere close to what Sandino had in mind?

Latin American integration?

Latin America’s “silence” was so resounding that Nicaragua asked the Sao Paulo Forum, which met at the beginning of August in Brazil, to finally talk about the canal. In one of its final resolutions, the leftist parties and other organizations participating in that forum “greeted” the canal project, “urging all Latin American governments to participate in this gigantic initiative, which will contribute to the integration of our peoples.”

Integration for collaboration or raw competition? For now, at least in the case of never-integrated Central America, both Guatemala and Honduras rushed to follow Nicaragua’s canal project announcement with announcements of their own involving “dry canals”—i.e. interoceanic freight corridors by either highway or rail—that are less costly, less environmentally damaging and requiring less time than Nicaragua’s ship canal.

So what do the people think?

Given all these mixed messages, what does the population think of the international canal option? According to a national survey conducted by the M&R polling firm between June 21 and July 4, 70.1% of the 1,600 people asked say they believe the canal “will pull us out of poverty.” This optimistic expectation rises to 84.3% among self-acknowledged governing party sympathizers.

But here’s the rub, implicitly demonstrating yet again Abraham Lincoln’s adage that you can’t fool all the people all the time. To the question “If the canal project is realized, would you maintain your decision to emigrate?” 54% of those polled said they would still leave.

The afternoon’s big surprise

Among all the contradictory messages in the President’s speech, as he stood surrounded by the resplendent trees of life, he reserved the greatest surprise for the end.

Right there on stage he signed a decree reforming the Social Security regulations and reestablishing the legal right to a “reduced” old-age pension for people over 60 who haven’t paid into social security for the total number of weeks established by law for a full pension. At the current exchange rate the monthly amount will range between $45 and $110, depending on the number of weeks paid in.

Ortega’s decision was the result of persistent pressure by the retired men and women in the National Unity of Older Adults (UNAM). In June, they capped more than five years of demanding that Ortega’s government pay the portion of the pension to which they have a legal right by occupying the Social Security Institute (INSS) headquarters in Managua. The Chamorro government, arguing lack of funds, had decreed that right suspended in 1994 and none of the three succeeding governments, including this one, ever reinstated it, although they also never removed it from the social security law.

The “old folks”
outdid the President

No sectoral struggle in recent years been so persistent: marches in the capital and various departments, hunger strikes, street pickets… Nor has any other demand found such an echo in society. In the final phase of that struggle, the peaceful takeover of the INSS building by dozens of elderly people, captured the spontaneous solidarity of previously passive university students.

It seems strange that, while that solidarity was important but hardly tumultuous, the government seemed genuinely worried by what happened in Managua’s streets and universities over the course of that week. Was it because youth solidarity was mounting by the day thanks to the social networks?

Manuel Díaz, an expert in information technology and more specifically in social networks, says that while more and more Nicaraguans are using Internet each year, still only 18% of Nicaraguans are connected. Facebook has 800,000 users in Nicaragua and Twitter 400,000. Although the participation of university students in solidarity with the elderly pension seekers in June was strengthened by the social networks and the creation of the #OcupaINSS hashtag, Díaz believes it got “blown out of proportion” since it only involved “around a thousand people.” Nonetheless, he admits it “will mark a milestone in Internet history in Nicaragua.”

Proof of the government’s concern was that Ortega finally had to back down, even after police repression of the demonstrators and a halfway measure that at least calmed the demand. Despite poorly read legal documents and a confusing hodgepodge of incoherent words, it was very clear the afternoon of July 19 that he had ceded to UNAM’s demand even though he in no way acknowledged the protagonists’ exemplary struggle. He instead tried to appear, as usual, as the magnanimous ruler giving more handouts.

Social security’s
uncertain future

Ortega’s buckling on the retirement pension issue for this group of people has raised various questions. The State has been accumulating a debt to INSS since Somoza’s times that has now reached US$600 million and is impossible to recover. Given that barely 19% of Nicaragua’s workers have formal jobs and thus pay into the system, INSS has trouble covering the payments it makes every month, including retirement, disability, accident and death coverage. Experts calculate that it will have used up its reserves by 2020, making it unable to meet its obligations to all those who will be insured at that time. The institution’s situation is so fragile and so affects the national macro-economy that the International Monetary Fund (IMF) has made a structural social security reform ensuring the institution’s sustainability a condition for signing its new three-year agreement with Nicaragua starting next year.

While the retirees were in the streets demanding their right to a partial pension, INSS Director Roberto López organized a conference to demonstrate that INSS wouldn’t be able to come up with the funds to pay it. He claimed that there are some 56,000 potential recipients, while UNAM itself says there are fewer than 15,000. FSLN legislator Edwin Castro said this demand could be met “once we have the canal” while his colleague Gustavo Porras, shouting in his standard overbearing way, discredited the demand of the elderly and the young people’s solidarity as “a strategy of the Right to bankrupt INSS.” It was a strange take on things from someone who had actually helped the pensioners organize UNAM.

As if it wasn’t already a morass of confusion, two weeks after the presidential decree was signed, Treasury Minister Iván Acosta said that the reduced pension for even 8,000 elderly was already “pressuring” the INSS finances. Bayardo Arce, Ortega’s economic adviser, went even further, claiming that there are no funds to pay the “old folks” and that if the INSS reserves were already going to run out in 2016, it will now happen even sooner. Yet on August 5, the first pension check was issued to nearly 11,000 elderly based on Ortega’s decree. Are there funds or aren’t there? And if there are, how many are really eligible? In a country in which secrecy and the centralization of official information generate constant confusion, these questions just add to the uncertainties already weighing on INSS.

Why did Ortega back down?

Ortega never backs down, so what was different this time, particularly after such a determined effort by government and party heavyweights to show that INSS can’t afford it? Once his stopgap measure to give them an off-the-books stipend using the Venezuelan cooperation funds failed to silence their demand, did he fear that a large-scale conspiracy was brewing and that the youth-supported protest by the elderly—in the streets to boot—was the beginning of something bigger that had to be stopped in time?

Did the open repression of both old and young by the National Police during that week and the vandalism by governing party activists against the youths in the pre-dawn of June 22 reveal such fears among Ortega and his group? Was the fear and perhaps surprise magnified by the publication in those same days of a forceful manifesto against the canal and in defense of national sovereignty signed by important figures from a broad spectrum of political positions ranging from conservative banker Eduardo Montealegre to former FSLN National Directorate member Henry Ruiz?

Did Ortega issue the decree in good faith or did he sign it in such an auspicious way to publicly come off as the good guy in the flick, knowing that the economic big guns would soon scapegoat the pension recipients, undermining public support for them, or that it will all get rolled back next year as part of the conditions set by and blamable on the IMF? Who knows? All we know is that Ortega backed down, at least for now.

The two annual US waivers

The government is preparing for the arrival of the IMF delegation in the last quarter of the year confident that the new three-year agreement will be successfully negotiated and signed. The main stumbling block is always the US government’s property waiver, as refusal to grant it would prohibit international financial institutions such as the IMF, World Bank and Inter-American Development Bank from granting loans to Nicaragua. But like last year, the Obama government again decided to renew this waiver for Nicaragua given that it resolved problems related to another 66 properties confiscated from US citizens in the eighties. More than 250 remain to be resolved.

Also like last year, however, the US State Department denied Nicaragua the “fiscal transparency” waiver due to the Ortega government’s failure to meet the United States’ “minimum standards” in this area. This second waiver is less economically ominous in that it only prohibits US bilateral aid, which is now relatively low. However, implying that the US government considers Nicaragua “juridically unsafe” is a kind of “moral condemnation” that deteriorates Nicaragua’s image and can influence how investors view Nicaragua.

Both Bayardo Arce and Daniel Ortega belittled this waiver’s economic consequences. Arce said “they haven’t given it [US aid] to us and we haven’t asked for it…. It has no effect because they don’t even give us enough for salt for a jocote.” Actually the loss of over US$3.2 million a year for governmental nutrition programs in preschools and epidemiological monitoring of crops and livestock rearing is a bit more than salt for a jocote. Ortega shrugged it off with a remark more in the style of a crass nouveau riche than a self-proclaimed revolutionary governing on behalf of the poor: “”I’m building a $40-billion canal and you’re cutting off $3 million... I spent that on flowers at the contract signing.”

Both Ortega and Arce are seasoned and constant practitioners of an anti-US discourse evoking the anti-imperialism of the eighties that appeals to the governing party rank-and-file. For those who pay attention to more than just rhetoric, however, this stance is belied by the good relationship both men maintain with Washington on the issues of real interest to the US… and to their own bank accounts.

At bottom it’s a
problem of political will

The looming social security reform will become a topic of debate and increased tensions in the coming months. Arce has already said it will be instituted by decree and won’t increase retirement age or the number of weekly payments required for old-age pension eligibility, but he warned that it will increase the quota paid by both employees and employers.

The reform’s underlying problem isn’t just mathematical or technical; it’s the country’s economic structure. The fact that not even 20% of the working population pays in means that eight out of every ten people have informal jobs with no fixed salary and thus no social security. As economist Adolfo Acevedo has repeatedly argued, the real problem is one of political will: “The dilemma will only be resolved in the best possible way if the development pattern is changed and the economy starts to generate more jobs with greater productivity, quality and remuneration, increasing the number of formal workers who pay into the system.”

The interoceanic canal won’t generate those jobs. It’s an illusion, a fantasy, a magical solution, as Acevedo analyzes in his article in this issue.

We need an
equitable tax reform

Acevedo also points out that, given the conditions of Nicaragua’s labor market, what is needed is an equitable tax system that limits the privileges, exonerations and special treatment granted to the most privileged. A system in which those with more income contribute proportionally more is “an inescapable complement” to a social security system that guarantees “basic social protection” to all elderly people, whether or not they’ve paid in.

The tax reform put into effect in January, which was designed exclusively by the government and the business elite, doesn’t have those characteristics. The way it was drafted showed that there’s no political will in either the government or the business elite to change that.

A bogged-down model

Explaining the symbolism behind the trees of life she had placed on either side of the stage for the 34th anniversary of the revolution, Rosario Murillo said they also express that the project she so singularly represents and speaks about publicly every day involves being “guardians of life.”

If “life” is always “evolution,” the Ortega-Murillo project’s model of life seven years down the line appears routine, reiterative, bogged down, lacking in imagination after so much time enjoying Chávez’s unconditional support. There’s a superficial sense of creativity because there’s no end to the government’s application of new glitzy touches—gilded trees of life, Christmas tree lights lit 365 nights a year along Managua’s main thoroughfares, landscaping of avenues, inspired naming and renaming of things and projects and organizations.... But these attest more to Murillo’s own frenetic energy than to any tapping of the population itself for genuine, self-perpetuating answers to both the accumulated and new challenges.

As we shake off the soporific effects of years of government propaganda about all its Venezuelan-funded largesse—Zero Hunger, Zero Usury, Roof Plan, Houses for the People, etc., etc.—and prepare for the post-Chavéz future, we must ask what has actually been accomplished in these 7 years—not to mention the other 16 in which the FSLN was in the opposition? Are people more enabled? More empowered? More listened to and taken into account? Are they better prepared, in other words, to be the guardians of their own life?

Print text   

Send text

<< Previous   Next >>


Notes written beneath the trees of life


Just how communal are rural communities?

The canal and the illusion of development

34 years of blameful forgetfulness, 23 of interested memory (part 2)

A resounding NO to the PRI's education reform

Following the money trail: Implications for regional security
Envío a monthly magazine of analysis on Central America
GüeGüe: Web Hosting and Development