Envío Digital
Central American University - UCA  
  Number 168 | Julio 1995



Government of the Absurd Plays Another Month

In the course of the institutional crisis the people are hardly heard from. There prevails a deep skepticism, within a turbulent and impoverished country. We are already suffering the “Somalia sickness”, wherein the interests of certain groups prevail over those of the nation as a whole.

Envío team

Nicaragua has changed. In the 1980s this small country offered hope and inspiration to many, both at home and abroad. The vigorous enthusiasm of the Nicaraguan people, suddenly thrust onto the world political stage, led them and others in solidarity with them to forgive the bumbling and the errors of leaders making their debut on that same stage.

Today the hope, the enthusiasm, and the forgiveness are gone. The stage has been abandoned to a political class in tatters, quibbling over crumbs of power while, off stage, allied business groups jockey for positions in the fast money lane. The people only get written back into this sordid play once in a while, and then as victim or as public protagonist of the ongoing violence behind the scenes. If the world press reviews Nicaragua at all, it is only when the institutional crisis in its "democratic transition" reaches theater of the absurd extremes, or when the country is rocked by violence people's or nature's.

Cannon Fodder or Ballot Box Fodder

The latest cycle of political turbulence was triggered by the governmental infighting that reached crisis proportions in February with the President's refusal to promulgate the constitutional reforms passed by the legislature. Both branches have been so inflexible that, in four months, they have not come up with any solution that would further either the country's democratization or the population's wellbeing. The country is still hostage to individual interest groups that are putting the consolidation of democracy in real doubt and making the grave problems of unemployment, extreme poverty and productive reactivation even harder to resolve.

The spectacle is exasperating a grassroots population already fed up with being cannon fodder in times of war and ballot box fodder in these new times of "peace" and premature electoral campaigning. Its response is growing passivity, even apathy, peppered with intermittent outbreaks of violence. Meanwhile, few if any crumbs from the money makers' table fall its way.

All of this perpetuates the political culture of authoritarianism and violence, social insensitivity and illicit enrichment that has characterized Nicaragua's history. This history teaches that the voracity of those who come to power and exclude the people from any progress that may occur always ends in episodes of violence and ungovernability. It also teaches that these episodes invite the intervention of outsiders, to put Nicaragua's divided house in order.

The Chamorro Administration: "Everything's Going Well"

Nicaragua's international image as a country worth helping is fading fast. Nicaragua seems to be a bottomless pit, in which ever greater efforts to remedy the situation produce ever fewer results. This has already caused "donor fatigue" among cooperating countries impatient to see tangible results and is now discrediting Violeta Chamorro's administration with the international community. The donors' response is increasingly to interrupt the aid flow.

This may be why the government is investing so much energy in trying to persuade everyone that things "are on the right track." Paid ads in the media gush with optimism about the government's few achievements, just like its speech to the meeting of donor countries in Managua on May 27 and its presentation to World Bank vice president Shahit Javed Burky three days later. In such meetings, Chamorro officials show only the positive economic indicators, and argue that the stagnation persisting since 1984 was finally broken in 1994. They forecast a 4.5% growth in the Gross Domestic Product for 1995.

The Chamorro administration does not appear the least bit affected by the interpretation of many that the open clash over the reforms is an "executive act of rebellion" that is posing a major threat to the consolidation of democracy. Lacayo, for example, usually shrugs off the crisis as a "difference of opinion" normal to the exercise of democracy in a country that enjoys freedom of expression.

But the executive also has its own darker interpretation: that the National Assembly has mounted a "legalistic scandal" due to the personal interests of legislators who have turned their backs on the population's heartfelt concerns. It presents the lukewarm grassroots response to the FSLN's call for a national strike as well as to the Assembly's call for civic marches in support of the reforms as proof.

This interpretation gives the executive an easy excuse not to change economic policy: why do so if there is no mobilization against it and the multilateral financiers so favor it? It also justifies its foot dragging in resolving its "differences of opinion" with the National Assembly: it is much more fruitful to guarantee foreign aid disbursements and convince people that this aid will be invested in construction and employment programs.
A World Bank vice president visited Nicaragua in May to evaluate its institutional crisis. He gave the government the Bank's total approval and backed its economic policy, assuring that the Bank will maintain all its cooperation accords and eliminate any deadline for privatizing TELCOR. He said he was "very impressed" by Nicaragua's advances and claimed that, without the adjustment his organization helped design, unemployment and poverty would be "infinitely worse."
The World Bank thus joined the International Monetary Fund, which has repeatedly given high marks to the government's docile application of its "correct" stabilization and structural adjustment policies. Nonetheless, the Bank's own reports on Nicaragua stress the need to deal with the growing poverty and unemployment levels, and to change the economic policy's pro urban skew by focusing support on agriculture, where the greatest indigence is also found.

If This Goes On Much Longer...

The government is mistaken if it thinks it can buy much more time pushing the line that everything is rosy. A number of donor countries are rejecting this triumphal spin on reality.

Public administration is becoming progressively paralyzed by illegitimacy in requesting foreign aid disbursements, confusion about the domain of the various government branches and the growing legal vacuum. This chaotic situation threatens to eliminate any favorable possibility for the country in 1995, which makes the government's optimism ring quite hollow.

Given the inflexibility of both government branches, the fragility of institutional democracy and the weakness and fragmentation of the domestic social actors, a solution to the fight between the branches can only come from outside of the existing institutions. One exception to this framework of weakness was the Catholic bishops' strong pastoral message in April, stressing the problems of hunger, poverty and unemployment, and tipping the balance in favor of the constitutional reforms. Although this helped finally push the executive into serious negotiations at the end of May, another month was wasted jousting with the legislative branch first.

May's round of tedious thrusting and parrying caused even more alarm in the international community, which led it to shake off its lethargy and reach for the handle on the aid faucet. Of the $42.3 million in liquid foreign exchange programmed for January to May, only $13.4 million was disbursed, all of it by March. Yet, even with no hard currency aid entering the country during April and May, the government insisted on paying some $49.5 million of the $66 million earmarked for the foreign debt.

Even with such a precarious financial situation, the executive tempered its inflexibility only when it was suggested that dragging out the crisis could lead to a suspension of the operations to buy up the country's trade debt. Since this implied a backward step in its negotiations with the Paris Club, the executive reluctantly became more reasonable.

Only a Slight Twist Of the External Screws

While the IMF and World Bank backed the executive, the diplomatic corps in Managua particularly the Swedish, Swiss and US embassies pressured for a legally defensible, negotiated solution to the crisis.

In May the Swedish government warned through its Managua embassy that its economic cooperation with Nicaragua will depend on "substantial progress in resolving the institutional crisis." Sweden has given Nicaragua the largest amount of economic cooperation over the past 15 years. This message was released on the eve of signing the 1995 98 bilateral cooperation accord.

The explanation for the differing positions is that the two finance institutions see a divided house as an opportunity to harden the ESAF conditions and criteria in exchange for maintaining its programmed disbursements, while the donor countries are worried about the institutional crisis and its anti democratic aspects. In any case, twisting only a few screws allowed the executive to wriggle out of dealing with the crisis for a bit longer.

But the executive won no immediate advantages for the economy from the World Bank. Its promise to maintain the disbursements does not improve the country's cash crisis, although the Bank did agree to new government financing tied to low income housing projects and other social and infrastructural works. The government pushed for these because its concern at this point is less to maintain price stability and the economy's liquidity than to guarantee a good electoral campaign for Antonio Lacayo.

This new financing is not enough to launch a populist program, but does provide enough resources for "works of progress" to strengthen Lacayo's "National Project," launched last month. With typical disparaging humor, Nicaraguans are already referring to his Proyecto Nacional by a number of irreverent nicknames: "proyecto personal," "proyecto matraca" (for the children's noisemakers matracas used at the launching of his project) and "proyerno nacional" (yerno is son in law in Spanish).

Paris Is Well Worth a Crisis

For some time, Lacayo's tactic has been to put off resolving the institutional fight until after the mid June meeting with the Paris Club's Consultative Group. The minister of the presidency seemed to want to show up at that meeting with the privatization of TELCOR, the state telecommunications company, in one hand and the image of a democratic dialogue in the other. With those two trophies, he hoped to obtain $440 million in additional financing for infrastructure investments to improve the popularity of his mother in law's administration during his campaign to succeed her.

To comply with the World Bank and undermine National Assembly opposition to the sale of 40% of TELCOR stock, the executive published a decree on May 23 promising that the resources obtained will be used to increase the interest revenue and hence the market value of the compensation bonds given to those whose properties were inappropriately confiscated during the Sandinista administration and are now unrecoverable. Another objective of the decree was to firm up wavering support by government officials who are also bond holders, of which there are a number.

This unilateral decision was made even though the privatization is still pending and authorization of the sale depends on National Assembly legislation. Assembly President Luis H. Guzmán called it a "crass provocation by the President."

The Legislators Lack Clout

With few links to the base, the legislators pushing the reforms prefer to cut deals at the top rather than invite social actors to discuss the issues with them and act in coordination. This weakens the legislators' legitimacy, but not to the executive's benefit. The weakness of the one combined with the inflexibility of the other only results in a waste of time and pushes the country closer to the abyss.

The National Assembly refused to recognize both the "mini Court" and its decision on the reforms. Upping the ante, it began to exercise the new prerogatives the reforms give it: legislators proposed reducing the general sales tax (IGV), scrutinizing the use of foreign cooperation funds and reopening the debate about privatizing TELCOR.

After this initial saber rattling, the Assembly made a perfunctory call to social and political actors who could potentially pull together an important civic movement on behalf of the reforms. The lack of response to its call for "civic marches" laid bare both the legislators' lack of clout with these forces and their preference for "negotiating" the conflict behind closed doors. (Most Nicaraguans have no access to the reforms and have little or no idea what they cover, beyond prohibiting Lacayo's candidacy.)
With the self interested backing of the IMF and the World Bank, the executive was in a position to accuse the National Assembly of irresponsibly endangering the ESAF disbursements and putting more pressure on the fiscal deficit with its proposal to reduce the sales tax. Faced with this offensive, the legislators timidly backed off. Since they had no coherent package of responses to back their strategy of economically affecting the executive, they did not get beyond the threat stage.

The National Assembly also made no effort to open influential spaces for social forces to debate legal options regarding property, economic policy reforms, and democratic ways to administer public affairs. Bold initiatives by the Assembly would have been required, such as civic forums to discuss aspects of economic policy with the social actors and from there design responsible incentive packages to halt the executive branch's tax increases, among other things. The conflict over the reforms would not have been resolved in such forums, but the executive would have been isolated more and civil society would have seen the sense of the National Assembly in practice.

The Culture of Violence is Growing

Few if any actors have played a very distinguished part over the course of the institutional crisis. In a turbulent and impoverished country that looks increasingly like it belongs to Africa rather than Latin America, the population is profoundly dissatisfied with a government so caught up in its internecine fights and the individual interests of some politicians that it is providing no solutions to people's problems. Nicaragua seems to have come down with the "Somalia disease," which consists of putting group rivalries over the interests of the nation.

But the population's profound frustration and skepticism is not translating into organized protest, despite insistent calls in May by the Coordinating Body in Defense of Credit, Property and Living Standards, created by organizations close to the FSLN. It has, however, contributed to increased individual violence, and now to a spontaneous outbreak of social violence.

At the end of the final game of the National Baseball Championship, played in Masaya on June 4, some 700 furious fans of the losing team (Masaya's Fieras del San Fernando) went on a violent rampage. Hundreds of other spectators were trapped in the stadium as several hours of rock throwing at police and fans of the winning team (Managua's Indios del Boer) went on outside. Over 50 vehicles, including many luxury cars and some busses, were destroyed.

In the days leading up to the game, people had become absorbed in the playoffs, a welcome respite from the hard reality battering them and the unending fight between the branches. Much of this shocking event can thus be laid at the feet of sporting passions, personal bets and too much liquor. But it also demonstrated the well of violence made up of social disintegration, corruption and the ostentatious luxury of some and poverty and unemployment of so many others.

The ease with which certain strata of the population can move from apathy to violence was impressive. If a baseball game can unleash such fury, what can we expect from a strident and polarized electoral race like the one coming up? Such a prospect should make politicians reflect on how recklessly many of them have juggled flaming torches over powderkegs.

The Masaya uprising was led by hundreds of youth, a strata severely affected by unemployment and the lack of legal money making opportunities. This shows that the population's apparent passivity is very differentiated and has volatile limits. It could be that the youth of the 60s and 70s have already hung up their gloves, but the 80s generation, trapped in a blind alley, will do what it must to get what the current situation denies it.

The violence in Masaya is also an alert about how weak the cultural changes introduced by the incipient and fragile political democratization really are. The culture of violence has been reinforced rather than diminished. Violence is growing daily as poverty expands and indices of urban and rural insecurity climb. Women and children have been the first victims of this spiral: parents super exploit their children's labor in the streets, and sexual abuse and prostitution are on the rise. Rape cases have also been multiplying for the past several years. According to the National Police, this crime has increased at a faster rate than any other, and is now a "chronic problem." According to police figures, 47% of reported rapes are against girls under 15, and 57% of them occur within the home.

The social fabric is coming unraveled, generating bands of young hoodlums mistreated by their families and rejected by the job market. They are the children of state violence, ESAF's straightjacket and the fast shrinking social solidarity. They constitute a potential for violence in a pure state.

On the other hand, the media's sensationalist coverage of the violence, the lack of any exemplary models in the political class and the government's deaf ear to any civic method, which institutionalizes strength as a means for resolving differences, is feeding the culture of violence. All this occurs while the "change" that the population demands in all polls cannot be reduced to improving the material standards of living, but must also take up the quality of life, in peace, tranquility and with civilized methods of conflict resolution.

The political class has a large share of responsibility. It has offered a bad example, showing that it cannot resolve its disputes with respect for law. Intransigence, deceit, corruption and the use of force and power have been the mechanisms by which it settles its disputes. It is not surprising that a "good guys finish last" culture is being imposed in the country. Getting the most advantageous positions, with astute manipulations beyond the law, is becoming the ideal for a generation of youth whose votes will decide who will govern the country in November 1996.

The majority of the electorate going to the polls then will be young, impressionable and volatile, susceptible to violent confrontations in expressing support for their candidate. If this tendency prevails, the breeding ground of an atomized, disconnected society could turn the "civic festival" of the elections into a violent wrangle that favors the most impressionistic, populist and authoritarian candidate.

Settling Accounts in 1996

The population is tired of seeing its just demands serving as a pretext for politicians to climb on the bandwagon only so they can appear in the media photos "leading" the social protest. The most common attitude of people seems to be to "grin and bear it" until the time comes to present their tremendous bill to the government and its allies in the 1996 elections. If the population perceives that the elections are in danger and accounts can't be settled at the ballot box, this could unleash violent reactions.

On May 11, the FSLN and union federations allied with it called for an escalating strike by all sectors of the country to defend the property redistributed by the revolution and protest the rise in fuel prices and electricity rates, as well as the stiff taxes imposed by the central government and the Managua mayor. The call, reiterated several times, did not elicit the expected massive response.

The call tried unsuccessfully to harness the population's discontent with the economic policy. The weak and segmented response, despite the justice of the demands and strong grassroots sympathy with them, reveals that the heroic chapter of unconditionally surrendering one's personal energies to revered leaders is closed. Few rallied this time to the cry to embark on yet another crusade against neoliberalism. Too many such calls in the past ended in "gentlemen's agreements" that left those in the streets feeling betrayed.

The FSLN continued trying to induce the protest until the May 17 shootout between police and activists from the Parrales Vallejos bus cooperative (see details in the adjacent box on this and other mobilizations during May). The wake and funeral for those killed sparked more violence and led to a poor showing even for the one day national work stoppage set for May 24. Instead of escalating, the strike de escalated.

The lack of clear grassroots support for the variety of activities in May does not mean that people will continue accepting the current economic policy with no resistance. But the current level of social atomization and disintegration, the excited calls to mobilize yet another time against an impervious government and the violence aimed at sparking "instantaneous" protest only contribute to aborting the healthy gestation of a broad movement that could respond effectively to the government.
Provoking protests without viable, agreed upon and widely publicized proposals is an obstacle to regrouping the citizenry. So is the absence of spaces in which the various social actors can come together to strategize about their own agenda instead of just being called to respond to the superstructural demand of legislators promoting the reforms particularly one limited to the juridical sphere. But even if these social actors are not massively participating in the current events, they are paying close attention to them.

A Closed Political System

Part of Nicaragua's big business class has been pampered with government incentive packages. Entrepreneurs of oligarchic family origins still support the executive, recognizing that Antonio Lacayo is one of their own, the best possible facilitator for their businesses and a guarantee that the bonanza they are enjoying today will be maintained.

Such loyalties are hardly solid and enduring, however; the conditional favors that have created them make them very precarious. For the moment, however, the executive's alliance with big business permits it a minimal social base for developing its public administration and allows Lacayo to launch his electoral project protected from the dark cloud of criticism by the country's other social sectors.

Meanwhile, former Lacayo ally Sergio Ramírez formally launched his new Sandinista Renovation Movement in a national convention attended by over 700 delegates from around the country, including the Atlantic Coast autonomous regions. They spent the entire day discussing the new party's statutes and program and electing their national leaders. Ramírez was ratified at the head of the MRS and Dora María Téllez, Norma Elena Gadea, William Ramírea, Reynaldo Antonio Téfel and Leonor de Hupper, among others, wre elected to national leadership posts. Recalling the circumstances that precipitated the split in the FSLN, Ramírez said in his speech that "we renovators are children of the constitutional reform."
Like the FSLN, the smaller political parties also lack a clear civic mobilization strategy, but in their case because they are not participants in the National Assembly debates. Even legislators who nominally represent some of the larger parties have a lot of room for personal maneuver, and do not necessarily represent the will of their parties. In these years of transition, few parties have dedicated much energy to consolidating internal democracy. Furthermore, most of the small ones lack any social base that could effectively mobilize the population they claim to represent.

Even with all of Arnoldo Alemán's charisma, his Constitutionalist Liberal Party took great care not to test its capacity to call out its own sizable base, which is probably as big and as impoverished as the FSLN's. All of this indicates just how poorly defined the various parties' representativity really is, and favors forms of politicking based on smoke and mirrors, not reality.

Such a closed political system, which has deprived social actors of the chance to participate, is the immediate organizational and political problem Nicaraguan civil society should address. It is hard to even imagine a political and organizational reconstruction process by the social actors that does not begin by unlacing the corset of mistrust in which the manipulations and betrayals of many leaders have been trussed.

Unlike what happened in the 1960s and 70s, however, not much enthusiasm can be hoped for from a youth that neither has nor can even glimpse a way out. The effort should begin with the organized sectors that have a national vision, out of which can be structured responsible and viable proposals to improve the economic policy and broaden democratic participation. This is the only way to begin to neutralize the bitter taste of today's governmental and political mismanagement.


The crisis between the executive and legislative branches over the reforms continued unabated throughout May, despite new initiatives, proposals, international pressure, lobbying and an uninspired attempt by pro reform legislators to mobilize the population. The National Assembly is demanding that the executive promulgate the reforms intact, but is willing to negotiate the details of their implementation. The executive refuses to recognize the reforms or any new legislation based on them. It is looking for a way to "reform the reforms," particularly the one that prohibits Minister of the Presidency Antonio Lacayo from running for president in 1996 because he is related by marriage to the incumbent. The fourth branch of state the electoral got dragged into the fray as well in May, as had the judicial a month earlier.

Enter Cardinal Obando

The situation took a new turn when the National Assembly,
the FSLN and other political sectors proposed that Cardinal Obando y Bravo mediate new talks between the two warring branches. This general consensus, combined with Obando's position favoring the reforms, put the executive between a rock and a hard place. The rock is the explicit desire of all sectors that President Chamorro complete her term and guarantee a peaceful electoral transition in 1996. The hard place is her son in law's presidential ambition, which is impeding the country's democratic consolidation and, in the view of more and more analysts, is the main obstacle to any understanding between the two branches. Though the executive initially put up resistance, it finally accepted the proposal and returned to a negotiating table presided by the cardinal at the end of May.

Meanwhile, by a unanimous decision of all legislators, the Assembly held a special session in the new Cathedral on May 25
to decorate Obando with its Gold Medal of Honor for his 37 years in the priesthood, 25 as archbishop and 10 as cardinal. President Chamorro and Minister of the Presidency Lacayo were conspicuously absent, which contributed to an image of executive intran sigence toward a legislature willing to reach some understanding. In his acceptance speech, Obando spoke in favor of the reforms and said of the institutional crisis, "We are swinging over an abyss."

The Executive's Supreme Court Stunt

The path to this abyss has been tortuous. The latest stretch began in April, when the executive accepted just one of the six new Supreme Court justices elected by the National Assembly (three to fill vacancies on the bench and three more to expand it from nine to twelve). The death of a justice just before the vote made it necessary to recover the Court's ability to pull together the minimum consensus required to hand down a decision.

The Court did not have that six vote minimum regarding the unconstitutionality of the reforms without the addition of Rodolfo Sandino Argüello, the only one of those elected by the Assembly who came from President Chamorro's own candidate list.

The correct legal procedure would have been for the President to either accept all six or reject them all on the grounds that she does not recognize the Constitutional reforms, and thus not the expansion of the Court bench from nine to twelve or the right of anyone but the President to submit a candidate list. For image
purposes, however, the stunt had the desired effect. The army, the police, some business leaders and, initially, even US Ambassador John Maisto claimed that the Court could now provide a solution to the conflict.

The Court's decision on the reforms, made public on May 8, was that their promulgation by the National Assembly was unconstitutional, since this responsibility falls only to the President. It did, however, recognize both the validity of the process by which the reforms were passed, and the Assembly's exclusive responsibility for their content (the President has no veto power over constitutional reforms).

In its preamble, the Court reminded President Chamorro that she must promulgate the reforms and exhorted her to do so, but fixed no deadline. Since preambles are not legally binding in any case, the timing is left to the President's discretion. This led analysts to see the finding as designed to buy the executive more time to cut some favorable deal with the Assembly.

At the end of May, then, a weak Assembly, with no strategy or capacity to call forth civic backing, returned to the negotiating table. There it faced an executive armed with a Court decision that enjoyed some institutional support. This shift in the
correlation of forces helps explain legislator Sergio Ramírez's
surprising about face on the reform preventing Lacayo's candidacy. The Sandinista Renovation Movement leader said that if the reform threatened to sink the country, it would have to be eliminated. His comment was widely interpreted as a sign that some back room deal had already been cut on this crucial issue.

The Crisis Hits The Fourth Branch

On June 7, the six year term of the Supreme Electoral
Council (CSE) magistrates expired. The procedure for electing new ones differs between the 1987 Constitution accepted by the executive and the reformed Constitution defended by the legislature.

Shortly before the deadline, the executive announced that it would not recognize anyone elected by the reformed procedure
and proposed reconfirming all the current magistrates to avoid an institutional vacuum. CSE President Mariano Fiallos, however, categorically refused to accept this solution. "The CSE is already preparing the 1996 elections, which means that it would not be a contender in this crisis, but one of its victims," admonished Fiallos. "The CSE does not have to make any decisions about the conflict; it only has to protect itself as an institution so it can guarantee an open and credible process." The executive and legislative branches agreed on June 6 to elect new magistrates by consensus, but established no date to do so, thus leaving the CSE temporarily without elected officials.


The most immediate consequence of the freeze on some cash aid was that the revised commitments with the IMF for evaluating the Enhanced Structural Adjustment Facility (ESAF) in June cannot be met. A visiting IMF mission verified in March that the country
had lost US$42.2 million in international reserves just in the first quarter of 1995. The balance dropped another $8.2 million in April. The IMF recommended setting $28.6 million as the recovery goal, but also redefined the concept of Net International Reserves, discounting foreign currency reserve debits and net placements of bonds in foreign currency.

Under this new definition, the $72.8 million reserves balance as of the end of 1994 became $1.5 million and the $22.4 million balance by April 30, 1995 became $68.3 million. This made the $28.6 million goal even more impossible since, based on the readjusted figures, it really meant accumulating at least $96.9 million. The goals agreed to with the IMF will either have to be reprogrammed and made more flexible or the government will break the ESAF agreement.

Credit Cuts

Domestic credit goals were drastically cut in the effort to accumulate the reserves, producing even more tensions. The
Central Bank's original plan was to provide 152 million córdobas of net credit to the National Financial System in 1995; it will now give no new credit and will require the system to return almost 247 million córdobas to the Central Bank's reserve coffers. In addition, credit to the Nicaraguan Investment Fund dropped from 429 million córdobas more than last year to only 211 million more.

For its part, the National Development Bank (BANADES) must increase its loan recoveries by 200 million córdobas, which
implies that the Central Bank's credit program with it is being reduced by the same amount. Its cuts particularly affect the agricultural cycle starting right now, when demand for agricultural credits is the greatest. Among other decisions, financing for storing the harvests is suspended and short term financing for cattle purchases is reduced. In the coffee sector, even assuming better income perspectives, BANADES plans to cut over 18,000 acres originally programmed for credits as another way to stay within the limits agreed to with the IMF.

The consequence for the agricultural cycle is obvious: far less financial support for farmers from BANADES than in 1994, itself a year of extremely restricted credit.


The legislators want to reduce the IGV from 15% to
10%, but no alternative tax collecting proposals ever address the contradictory fact that opening up trade by slashing import duties has shrunk a major source of government tax collection. If these duties are untouchable and production is stagnant, the easiest and virtually the only way to increase fiscal income is to tax the population more. And this is not the only contradiction: the huge taxes imposed on productive inputs make the little national production taking place more costly and the economy even less competitive.


In addition to its call for escalating work stoppages, the FSLN explored and tested other forms of social protest in May: a Calvary procession through the streets of Managua, grassroots forums, calls to civil disobedience by not paying household water and electricity bills, and civic protests by small landholders who are still without property deeds. These nontraditional protests have had relative success in bringing people out, but none in calling the government's attention.

Meanwhile, the Parrales Vallejos urban bus cooperative in Managua stuck to its old, familiar methods: on the night of May 17, it burned tires and raised barricades at a major intersection in the Rubenia neighborhood, near its own terminal. In a shoot out with the police, two bus drivers and one policeman were killed and
dozens of other cooperative members were hurt. Investigations are underway to determine who was responsible for the deaths.

Another Property Protest

While agrarian reform beneficiaries were protesting the lack of titles, dozens of peasant cooperative members and farmworkers
who have shares in the new Area of Workers Property (APT) enterprises began camping out with their families on the Central American University (UCA) campus starting in mid May. Their objective was to drive home their own property titling claim on behalf of thousands of other APT shareholders. By the end of the month, the protesters numbered in the hundreds, and their squalid black plastic tents had extended across the street to the Engineering University campus and the grounds of the Farmworkers Association (ATC) next door.

In a communiqué, all those affected by the government's failure to deed lands provided by the revolution and by the more recent privatization of rural state holdings explained their problem as follows: "The contradiction is this: 800 Somocistas pledged to reverse the agrarian and urban transformations are going against 300,000 families [120,000 beneficiaries of the Agrarian Reform, 120,000 benefitted with houses and lots by the Urban Reform and 60,000 demobilized Resistance members, retired armed forces personnel and workers who participated in the privatization process]. All these families add up to 2,000,000 people [300,000 x 6.5 family members on average]; that is, half the Nicaraguan
At the end of May, the Farmworkers Association (ATC) brought workers from the banana plantations to draw attention to their own conflict over privatization. But neither this nor the other rural demands brought to the streets of Managua elicited a strong show of support from other grassroots sectors in the capital.


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