Envío Digital
Central American University - UCA  
  Number 175 | Febrero 1996



Nicaragua Needs a Miracle

Some were expecting almost a miracle from the Pope. Nothing less than a miracle would bring about a new relation between the state and civil society, and elections that provide the chance to create a nation in which there was room for everybody.

Nitlápan-Envío team

Nicaragua received pope John Jaul II on February 7 in a mood of peak political and social tension, as well as of peak hope. Many summarized their expectations this way: "What do I hope? To see the Holy Father heal this country." It's like hoping for a miracle.

Thirteen Years Later

On the plane trip to America in March 1983, the Pope had referred to his upcoming visit to Nicaragua as a "mortal leap." Now, 13 years later, he defined the circumstances of his return as "completely distinct." In his brief speeches in Managua, he gave two concrete examples: "Nicaragua's inhabitants can now enjoy authentic religious freedom" and "Peace has returned to Nicaragua and all of Central America." Several times the Pope evoked that earlier visit, at a time when, in his words, Nicaragua and Central America "were only a polygon of the superpowers." He also stressed how much he had been wanting to return to Nicaragua.

The centerpiece of his 11 hour visit this time was an open air Mass in a huge plaza on Lake Managua's recently refurbished boardwalk. It drew a crowd estimated at up to 400,000, about 27,000 of whom had come in caravans from other departments. Improvising at the end of the Mass, the Pope said, "Today it can be seen that you, Nicaragua, you, Central America, are the subject of your own human, Christian sovereignty."

While in Managua, he wished all of Central America "lasting peace and progressive development." Only at the very end, as he was about to board the plane to Guatemala, did the Pope make any reference to Nicaragua's socioeconomic crisis. "With the civil war and the temptation of totalitarian forms now in the past," he began, other "plagues" still roam the country: poverty, unemployment, ignorance, extremely needy families, and children and youth without instruction. He urged the international community to cooperate in solidarity with Nicaragua. The diplomatic corps and government representatives listened to his words then bade him farewell.

An Attack on Alemán

The Pope's visit came at the opening of what is finally Nicaragua's official electoral year, although an intense and confusing pre campaign has been underway since even before 1995. Many fear the elections, seeing in them the height of political opportunism. Others are trying to view them as an opportunity perhaps the last one to achieve a national consensus that could get the country moving toward this miracle so many pray for: development based on equity and national unity.

Tensions sparked by the daily maneuvers of almost all political leaders to move the goalpost closer to their side of the electoral field are now adding to the more profound tensions that have been building for years due to the country's grim economic and social situation. On the eve of the papal visit, two new events raised tension levels even higher: a confusing campaign trail ambush of presidential front runner Arnoldo Alemán on January 25, followed the very next day by the surprise resignation of Supreme Electoral Council president Mariano Fiallos.

Alemán, candidate of the four party Liberal Alliance, was heading back from a campaign tour through the northern municipalities of Quilalí and Wiwilí when a dozen armed men attacked his eight car caravan. One policeman, a Sandinista, who was providing protection for Alemán was killed; a second was wounded, as were two members of the political caravan.

Alemán backers working for the rightwing Radio Corporación immediately fingered "Sandinistas" as responsible. But local residents at the ambush site, civilian and military authorities and even the historically anti Sandinista Permanent Human Rights Commission (CPDH) identified the perpetrators as a group of drunken recontras headed by "El Lobo." Amid the confusion, some of the attackers said their objective had been to turn in their weapons to Alemán in a show of support. There was also speculation that Alemán had staged the whole thing to get publicity, based on a rumor that he had stopped the caravan only minutes before to switch cars, reportedly leaving the very one hit in the attack.

Alemán himself, who usually pulls somewhere over 30% in voter opinion polls (45% is required to win the presidency on the first round), blamed the government for actions of this kind, since it promised social benefits to contra veterans, then consistently reneged, thus pushing them to rearm. Alemán also used the opportunity to project his new peaceful image, downplaying the visceral anti Sandinismo that marked his first years as Managua's mayor.

It will probably never be known whether the event was fortuitous, criminally motivated, politically prompted, or even a propaganda gimmick, and if the latter, by whom. In any event, it was a net gain for Alemán, whose assets now include the aura of "noble victim." Before the campaign is over, however, he may well have to share that "honor." Given the tensions and uncertainty and the resurgent polarization between Sandinistas and anti Sandinistas, not to mention the personal greed motivating many politicians to run for high office, no one is discarding the possibility of future attempts to eliminate rivals.

Even beyond the electoral context, the ambush reminded urban Nicaraguans of the instability and armed violence that extensive rural areas have been experiencing without respite during these years of "peace." Such violence produces an average of just over a death a day in the northern and central parts of the country. According to a year end army report, armed bands operating there caused 372 deaths (207 of them civilians) and 163 wounded (55 civilians) in 1995, while 132 people were kidnapped. This leaves out innumerable other deaths, kidnappings or intimidations that were never made public because some of the victims lived in remote areas, others had "no voice," and still others opted to remain silent for security reasons. Army operations to deal with the bands involved 3,000 troops; in the 132 skirmishes that occurred, 136 rearmed veterans cum bandits were killed, 81 wounded, 385 captured and 175 turned themselves in.

Responding to the attack on Alemán, Waslala's parish priest, Father Carlos Pinto, spoke of the terror sown in the region by "El Charro's people," of whom "El Lobo" is one. He denounced the atrocious murder of 40 Waslala peasants in recent months and the constant rape of women and young girls by rearmed men in the districts he covers.

Estelí's bishop, Abelardo Mata, referred to more than 50 reports he had received of bloody acts committed by a group of about 80 Miskitos in Jinotega. Bishop Mata's charges were very awkward for the army, which had allegedly armed these people some time earlier to defend themselves against the criminal bands, only to see them turn into one themselves.

This persistent violence is expected to mount as the October 1996 elections draw nearer. As the turbulent electoral waters penetrate the country's every pore, the rearmed groups in the rural areas are likely to be hired as electoral pressure groups or even shock troops by political leaders of one party or another.

Resignation by Fiallos

All public opinion surveys show a growing loss of government credibility, with the judicial branch in first place, followed by the legislative, then the executive close on its heels. Only the electoral branch has been spared this crisis. The confidence the Supreme Electoral Council (CSE) enjoys has been won through its extremely professional work and the enormous personal prestige of its head, Mariano Fiallos Oyanguren. Both Fiallos and the CSE can always be found working on their tasks with capacity, dedication, honesty and patriotism. These qualities inspire virtually the only solidity people feel toward the elections.

Fiallos' unexpected resignation and the commotion it caused in the country's fragmented institutions sparked another of US Ambassador John Maisto's meddlesome public comments: "We want Dr. Fiallos to remain in that position." A number of ambitious Nicaraguan legislators and party leaders, on the other hand, immediately began salivating over the powerful post he would leave vacant 20 of the 92 legislators, all from the smallest and most rightwing parties, insisted that a new CSE president should be elected. The arguments Fiallos gave for his decision, and media speculation about other possible motives, introduced new uncertainty into the electoral process, which did not abate when he withdrew his resignation 72 hours after having submitted it.

Fiallos had left that door open by saying he would reconsider if several articles of the new electoral law approved on December 5 but only promulgated two days before his resignation were revised and the CSE were guaranteed an adequate budget for organizing the elections. Through no fault of its own, the CSE has already run up a $24 million deficit. But even though there did not appear to be enough votes in the National Assembly to push through the reforms, Fiallos backed off with only a stern warning that the law should be "expeditiously" reformed. For its part, the executive branch promptly sent the Assembly a reform bill that incorporated all of the CSE's suggestions.

Ever since the exhausting executive legislative crisis began in 1995, Fiallos had been patiently but forcefully warning that his organization had a number of legal, administrative and financial requirements if it was to guarantee fair and open elections. For months his was a voice crying in the wilderness of political disputes and back room dealing; no one paid him any mind and some even criticized him for insisting "ad nauseam." The National Assembly's extended delay in passing the new electoral law was frustrating and costly the original plan had been to change the existing one to conform to the constitutional reforms, but in committee it had been decided to draft a whole new one. The additional delay in publishing the law, without even communicating it to the CSE, was the last straw.

One of the articles of the new law that most upset Fiallos and the other 10 CSE magistrates repeals their right to name the heads of the 17 departmental and regional electoral councils; it must now elect them from lists prepared by the political parties.
Fiallos argues that only a professional and not politicized administrative structure can guarantee transparent elections.

Was Fiallos' resignation a test he conceived to measure the support for the one stable branch of a feudalized state? Or to measure his own backing, since he will be called upon to arbitrate a polarized process strewn with pitfalls? Was it to alert the nation to the fact that some articles of the new electoral law, which he had opposed and said he would not work with, could abet the growing polarization? Was it a last ditch way to pressure for the budget he needs and was not getting? Was it simply the reaction of an honest and anguished man watching his country fall apart? If it was a bit of all of these, did he decide, after measuring the error of his calculation, to pull back precisely so he could continue to contribute to understanding and the nation's dignity?

At the least, both his resignation and his retraction finally made everyone sit up and take notice. But will anything be done? Will there be enough consensus in the Assembly to push through the electoral law reforms demanded by Fiallos and his colleagues in time? Will the CSE finally get a budget big enough to cover the election's needs? Will the demarcation fights affecting 30 of the country's 146 municipalities be cleared up in time to avoid affecting the October vote? The fact is that Fiallos returned to his charge with the same or similar questions he had been asking for months, as well as with new ones that his own resignation introduced in a landscape already riddled with the ambitions of political leaders and old and new capital.

Parties in Action

The Pope touched on the country's "pre electoral period" by urging those who "aspire to the magistracies of the state" to make an "ethical commitment." Many today so aspire party activity aimed at sewing up the elections is absolutely feverish but ethical commitment is in short supply.

At the time of the Pope's arrival, the multiple Conservative parties were grappling with generational, political and economic tensions as they prepared for the convention that will elect their presidential candidate. The Nicaraguan Resistance Party (PRN) had just held its own conflict ridden congress, in which former contra leader Enrique Quiñónez had edged out radio owner and PRN secretary general Fabio Gadea Mantilla by only 3 votes; a furious Gadea went into action to reverse the results. Arnoldo Alemán had just come back from a trip to Washington in search of political and economic support for his Liberal Alliance; he was received mainly by the most hard line Republican legislators.

His alliance leaves out two of the seven Liberal parties former Vice President Virgilio Godoy's Independent Liberals (PLI) and a new one called PUL, formed by businessman Haroldo Montealegre.

Will all this feverish competition finally lead to a "blue and white triangle," a single bloc of Conservatives, Liberals and the Resistance to oppose both the continuation of the current government and the return of Sandinismo?

As all this jockeying was going on in other quarters, the FSLN was fully absorbed in organizing its primary campaign, which was producing an interesting competition between "old tigers" and "new cats," in other words, between veteran leaders and politicians from the official structures and new leaders coming out of the grassroots. On Sunday, February 18, Sandinista members and any other citizen who feels inclined to cast a vote in this open primary, will register their choice of FSLN candidates for all levels of public office. Municipal councilor and FSLN National Directorate member Mónica Baltodano said in a radio interview that this would be the first primary of its kind in Latin American history.

While those chosen for municipal and departmental offices will be the FSLN's official candidates, a party by law stipulates that candidates for national office must be chosen by the FSLN Congress, currently scheduled for April. When written, the by law was conceived mainly with respect to the presidential ticket, but it now also applies to candidates for the Central American parliament and the 20 seats in Nicaragua's legislative body that last year's constitutional reforms reserved for at large candidates.

The party's three presidential hopefuls are using the primary as an opportunity to test their support, even though the results will not be officially divulged prior to the Congress. Throwing their hat into the ring in January were Managua lawyer Alvaro Ramírez and Nicaraguan Human Rights Center president Vilma Núñez de Escorcia. They joined FSLN general secretary Daniel Ortega.

Vilma Núñez's proven integrity and her longstanding and active commitment to the poor has awakened enthusiasm among Sandinistas and non Sandinistas alike. As a high profile FSLN activist for many years, she's hardly a "new cat," but she has always shied away from a professional politician's role, so her decision to give the "old tigers" a run for their money is bound to shake them up a bit. Speculation about a possible Daniel Vilma ticket is also beginning to make the rounds.

Sergio Ramírez's Sandinista Renovation Movement (MRS) is starting to announce some of its candidates, while insistently continuing to seek alliances with other parties. Ramírez's decision to turn down Daniel Ortega's invitation to even discuss the possibility of a MRS FSLN electoral alliance sparked William Ramírez, an old tiger who had switched to the MRS, to defect. In refusing to meet with Daniel, Sergio claimed that it would be illogical to ally with a party from which he had just split for principled reasons. He preferred to continue courting the PLI, the Christian Democratic Union and two other smaller parties that had worked together in 1995 to push the constitutional reforms through the National Assembly. So far, these parties are strongly but politely insisting on seeking their own alliances.

Meanwhile, former Minister of the Presidency Antonio Lacayo seems not to understand some part of the word no. On January 11, he officially announced that he would be the presidential candidate of the National Project (PRONAL), a party he created last year, despite the constitutional reform prohibiting a relative of the incumbent, even by marriage, from running. "I could never forgive myself," he piously explained, "if, by not participating, I were to see the country fall into the hands of people who want to return us to the past." He is flooding TV channels and radio stations with costly and sophisticated hyper personalist campaign spots.

On February 8, just short of a month after his announcement, the Supreme Court of Justice finally handed down its verdict on an appeal of unconstitutionality filed by Lacayo's wife President Chamorro's daughter against the reform preventing his candidacy.
The court concluded that it is "notoriously contrary to law" to claim any part of the Constitution is unconstitutional, but left the decision to the Supreme Electoral Council. It applied the same courageous "solution" to a suit that public officials filed against the reform obliging them to resign a year before the election if they want to run for high office. Lacayo selectively bowed to that reform without a quibble by resigning last September.

The award for the most meteoric rise of a new party so far goes to Arriba Nicaragua, whose founder and presidential candidate Alvaro Robelo launched an image blitz in all media, papered people's yards with leaflets and even floated a dirigible over Managua. His main campaign promise is that he will bring huge investments into the country, naming the European consortium Airbus, Japan's Toyota and Suzuki and other transnational corporations. He even said they would be willing to invest in a natural medicine firm in the Atlantic Coast that could discover a cure for cancer in our country.

Since all parties and electoral alliances must be registered and have turned in to the CSE their list of candidates for all offices by May, the over three dozen parties have less than four months to firm up their electoral strategies. How many candidates will voters have to choose from? Probably only two will be real options, four at the outside. In this country so in need of a miracle, the number of variables makes it too early to be able to offer an analysis. The general feeling is that anything could happen before May and after it as well.

The Struggle for 6%

The most heated social conflict when the Pope came to Nicaragua was the university struggle to secure 6% of the national budget for higher education. This yearly student mobilization, which was particularly forceful in 1992, gathers strength toward the end of each year, when the national budget is approved. At the end of 1995, it cost two lives, consumed enormous energy among the youth and generated a spiral of destabilization, in which the papal visit was merely a temporary truce.

The battle for 6% reflects the crisis of Nicaragua's society and state. But so much rhetoric has been let fly around the issue that not even the direct rivals are sure what they are fighting about any more. Since the rest of society doesn't understand what is at stake either, it is important to clear up the terms of the debate.

Sidestepping the Issue

The conflict illustrates yet again the price the nation pays for its habit of avoiding serious debate about the essence of problems, of instead confusing public opinion with a battery of superficial arguments. In this case, the government most notably the minister of education himself has argued that university education is less profitable than primary education, that the universities are inefficient, and so on. Nicaragua unquestionably needs to deal with the crucial issue of reforming its educational system, and the universities indeed ought to be improved. This should be part of a serious discussion about the overall approach to an educational program that Nicaraguan society requires, but it is not the bottom line issue in this conflict. It is tragic to manipulate such a crucial issue just to avoid the real problem of the moment: how the public subsidy to higher education is calculated.

It is a ploy against comprehension to simply repeat the same unproven arguments that World Bank ideologues are spreading around the planet: that if universities are given the amount they demand, it could trigger a crisis in primary education. Pitting public institutions against each other over the budget has never been the most democratic and transparent way to distribute it. But pitting educational subsystems against each other could prove even more dangerous.

What good does it do for the government to brag that its spending on education increased from 9.61% to 12% of the total budget between 1990 and 1994, when per capita spending dropped by 9%? In those same years, transfers to the universities dropped from $30 million to $25 million, while the number of students rose from 32,000 to 36,000, a 26% per capita reduction. The reality is that Nicaragua should give greater priority to its whole education system. All other arguments lead us away from this inescapable duty.

It is also distorting to pit private education against public education, and debate which universities should or should not benefit from government subsidies. In Central America, only public universities are subsidized, but that is a false criterion. What should guide the state's contribution is not an activity's ownership structure but the character of its public service. Society could even decide to subsidize private money making activities if it considers that they make positive social contributions that should be rewarded.

The argument about higher education's "elitism" also aims to confuse. The fact that the university student body represents only a small proportion of the population does not change the debate in any way; the importance of a given group's contribution to the social edifice as a whole is not measured by the laws of arithmetic. If it were, how could the government explain that it gave a few sugar refinery owners a direct subsidy that was double what the universities receive. They also got a very important indirect subsidy, thanks to state control over imports, in which the Nicaraguan people ended up paying twice the international price for their sugar. And what about the huge subsidies to a handful of private cotton growers that have had such serious ecological costs in the northwestern part of the country? But even these arguments sidetrack us from the real issue.

Two Laws of Dubious Merit

The root of the problem that is setting the government against such a sensitive social sector as the university student body can be found in the National Assembly. In August 1992 it took great but irresponsible joy in satisfying university pressure groups by passing an unenforceable law. Law 151, whose own language defines it as "the authentic interpretation of article 55 of the law of autonomy of higher education institutions" (Law 89, passed in April 1990), stipulates that the state contribution to universities "should be not less than 6% of the General Income Budget of the Republic, which should be calculated according to the total of ordinary and extraordinary income established in the General Budget of the Republic for the corresponding year, independent of the origin of said income."

The reason the law cannot be enforced is that the Assembly had no real power or effective control over the budget at the time. It was probably simply trying to trip up another of the executive branch's political skirmishes that year. In any case, Law 151 provided continuity to the spirit of Law 89, which had first introduced the 6% disposition without anyone contemplating the feasibility of applying it.

Neither the Sandinistas, who passed Law 89 just before leaving office, nor the UNO dominated Assembly that passed Law 151 in 1992 were overly motivated by the goal of fostering higher education. Both were trying more to preserve quotas of political power than to improve the quality of university education or give it greater autonomy.

Both the relevant article from 1990 and its interpretation from 1992 were then given constitutional rank by being included in the 1995 reforms. Article 125 of the revised Constitution now says: "The universities and centers of higher education, which the state must finance by law, will receive an annual share of six percent of the General Budget of the Republic, which will be distributed according to law."

As a result of other constitutional reforms, the Assembly is now really responsible for approving the budget, but it has few criteria for how to do it. Since it cannot increase the year's overall budget ceiling, it can only reapportion amounts from one line to another. This implies heavy political costs and lends itself to electoral horsetrading, in which the university budget and the Constitution itself become part of the stakes.

Disguising the Budget

The Ministry of Finances is largely responsible for the current confusion. Up until last year, the public budget the Assembly saw and approved was far smaller than the one actually implemented. Government officials most commonly answered questions about the budget's lack of transparency by saying that it was "due to the 6% for the universities." Since the government had no way to provide 6% of its real income, it had to "disguise" it. But that was only half true. It indeed couldn't afford a real 6%, but more to the point was that disguising the budget also suited the Ministry of Finances, given its relationship with the International Monetary Fund.

Last year, information was provided about what had really been implemented the previous year and no one protested its abysmal difference with the budget that had been approved. In 1993 95 the Ministry did not fulfill Law 151, despite agreements reached after massive university demonstrations at the end of 1992. University transfers showed up as 6% of the spending budget sent to the National Assembly each year, as is logical and economically sound, but since that undervalued the income received and implemented, it was significantly less than 6% of total ordinary and extraordinary income. For example, as table 1 shows, in 1995 the universities got 6% of approved spending but only 3.9% of real spending.

It should be pointed out that the transfer to universities had been steadily dropping even before 1992. The 1990 figure has little reference value, given the hyperinflation that year. The inflation acted as a tax that meant that the state took away with one hand what it gave with the other.

By l995, the IMF was finding the Ministry of Finances' budget masquerade increasingly awkward, since control of fiscal policy is a key piece of the IMF's Enhanced Structural Adjustment Facility (ESAF). Finally, the IMF demanded a real budget for 1996 that was slightly lower than 1995's that is, lower than the one implemented, not the one approved. While the IMF pushed from its side, a constitutional reform obliging the executive to negotiate a real and transparent budget with the Assembly pushed from its.

Since the Ministry of Finances was forced to declare the real amount of the 1966 budget, it needed another artifice to avoid increasing the university transfer by the amount due it with no tricks. This artifice has been in the wind since mid 1995, when the executive and legislative branches negotiated the Framework Law to break their impasse with respect to the constitutional reforms. In essence, the government decided to change the names of things rather than try to change the law "of authentic interpretation" (Law 151). With everyone's attention on the controversial inhibitions against Lacayo's presidential candidacy, the executive slipped Article 11 into the Framework Law virtually unnoticed. This article stipulated a reform to the budgetary language of Law 51, "in which will be included, among other modifications, the concept of budgetary income and the definition of current, ordinary and extraordinary income and capital income, as well as of deficit financing such as loans and donations."

Tax income would be called "ordinary income," and the definition of "extraordinary income" would be limited to current non tax income and transfers. The stipulation in Law 51 that the 6% would be calculated on the basis of "ordinary and extraordinary income of the nation" was thus limited to the government's current income, which, as everyone knows, is infinitely smaller than its spending. (The fiscal deficit resulting from the gap between the two is covered by foreign loans and donations.) It had been previously understood that extraordinary income also included capital income and donations, and occasionally even part of some foreign loans. It matters little that capital income is excluded; it is tiny since the privatization of almost the entire public patrimony ended up costing far more than it brought in to the public coffers. The real issue is the exclusion of donations and loans, which significantly lowers the base on which the 6% is calculated, as table 2 illustrates.

To leave no room for doubt, the executive explained that it is impossible to calculate the 6% on donations because donors are not in agreement and this could discourage future foreign aid. The Ministry of Finances even told a meeting of the diplomatic corps in the Olof Palme convention center on December 13 only minutes before the first death occurred in the student struggle that including loans in the calculation would mean paying twice, since loans serve partly to amortize debts resulting from the payment of 6% in the past. Blind loyalty to an ideology is the only explanation for such disrespect of others' intelligence.

The 8 Line Income Budget

The central government budget is financed by various sources, which are classified into eight lines:
1) Taxes;
2) Other current income (transfers from public enterprises and others);
3) Transfers from the sale of public assets, for example the privatization carried out by CORNAP;
4) Foreign donations (=transfers);
5) The sale of Treasury bonds to national and foreign investors who want to buy them;
6) Foreign loans;
7) The operations of the open market (the purchase of Treasury bonds by the monetary authority); and
8) Direct financing within the margins permitted by macroeconomic balances.

In any country with a grown up economic policy, in other words one not parented by the IMF, Central Bank financing of the public sector through lines 7 and 8 is perfectly normal. By international accounting convention, the first four sources are considered income and the last four deficit financing i.e. the deficit that results from programming total spending that is greater than the income defined in the first four.

National accountants know perfectly well that the source of funds can never be directly related to their use. When a government repairs a street, it doesn't do so with funds from a specific tax or the sale of a certain amount of bonds. It just does it and the whole of its spending mounts until it constitutes the budget total.

On the other hand, certain outside resources are tied to specific projects. The parenting of our economic policy is not only seen in monetary policy, but also in the definition of public projects. But this doesn't change the issue a bit. Specialists refer to the "fungibility" or substitutible nature of foreign financing for a given project; it allows us to spend other income on activities that could not be covered without such foreign aid. So even though funds are directly tied to a project, they indirectly finance any public activity or spending. Economists who have studied the foreign aid going to developing countries know very well that, in Africa, for example, the countries that have received the most assistance for social projects or investment have also increased their own military spending the most. It's logical: the more that socially necessary activities are financed with foreign aid, the more the public budget can be earmarked for other things.

Why, then, spend such energy trying to convince us that "foreign aid can't be touched"? The answer is that such an argument makes sense to grassroots sensibilities because it conforms to their own daily practice, the same way that equally fallacious comparisons between a government budget and a household one "make sense." A peasant family, for example, uses precisely such a simple but effective method, which is perfectly rational in its context: "With the sale of my bean harvest, I bought tiles to fix my roof" or "I paid for my daughter's 15th birthday party by selling a calf." A peasant's money isn't very "fungible"; each bit of income goes back out for a precise expenditure, and in a rural society without credit cards, a budget imbalance is virtually impossible. But we shouldn't fall into the trap of thinking that the Ministry of Finances is limited by such a primitive accounting system.

The painful aspect of all of this is the legal juggling of official language with the malicious intent to defraud calculating the 6% based on an undervalued spending budget. Table 3 shows that the transfer to the universities was even greater than 6% of current government income as the Ministry of Finances now defines it. Only when the procedure was on the verge of being discovered did the ministry invent this subtle trick, which goes against all logic, common sense and economic
science. And, above all, against the rule of law.

The "Miracle" We Need

What is the best way to calculate the state subsidy for universities? No fixed percentage of the total budget, however defined, seems a very appropriate method. Not because of any of the arguments the government puts forward, but because such a method is too rigid, and is inefficient to boot. In principle, the budget should be calculated on the basis of estimated costs to attain given goals; and that applies to all public spending lines. Next should come arbitration based on the overall limits of available resources. It is counterproductive for public officials to feel obliged to disguise the budget even when the relationship between the branches is more harmonious than it is today because it means less economic democracy for all and threatens the rule of law.

Only through openness, honesty and mutual concessions can a culture of consensus and tolerance, a democratic culture, begin to take root. Only then can the profound crisis between society and state in Nicaragua be surmounted, a crisis in which the struggle for 6% is a mere episode, a symptom of a much deeper ill.

University students have ended up fighting and even dying, not for something that is being taken away from them but for something they never had. Nonetheless, it is only fair that they have what they are demanding: good quality higher education within reach of all those with the capacity to make use of it. Nicaragua needs a "new generation" to build a society that is different than the politically polarized and economically paralyzed one we have now. In other words, a genuinely democratic society. Somehow, right now that seems like wishing for a "miracle."



The organized and active mobilization of university students all over the country to demand 6% of the budget continued unabated throughout December and January. Not even the Christmas recess caused it to lose steam.

On December 12, over 1,000 youth occupied Managua's airport for four hours before voluntarily giving it up. In previous days, offices of the education and finance ministries, as well as of TELCOR, had been taken over.

On December 13, well armed police met 3,000 students marching peacefully toward the National Assembly with four hours of repression that included abundant tear gas. This violent police operation left a University of Agriculture worker dead after being shot in the head, at least 49 students with bullet wounds (one of whom died a week later and another whose leg was amputated six days after that), and at least 9 policemen injured by rocks thrown by the students. While reports varied significantly on lesser injuries the National Police claimed a total of 86 of its own members and the Nicaraguan Human Rights Center reported 66 students and 29 police no police injuries were from firearms. The disproportionate police violence angered the population.

Two days later, the National Assembly debated only briefly before approving the 1996 budget which contains a 40% deficit in its last session of the year. By a 39 37 vote, it also established that the 6% assigned to universities must be based only on ordinary income, excluding foreign loans and donations.
It further decided to include the Catholic University (UNICA), headed by Cardinal Obando, and two other new private universities on the Atlantic Coast (URACCAN and BICU). The National University Council rejected this "interpretation" by the legislators, which encouraged the students to continue their mobilization. On January 8, UNICA turned down its part of the 6% in a communique in which it reported having 2,587 students, 840 of whom are on scholarship.

Several massive marches followed the violent events of December 13. The students renewed their activity immediately after Christmas, even before classes resumed. On January 6, 10,000 students and supporters from other social sectors demonstrated in Managua. Another sizable march was held in the capital on January 16, after students drummed up support in a house by house campaign. Then, on the afternoon of January 30, about 200 students occupied the Ministry of Foreign Relations, holding a number of staff and foreign diplomats hostage. The police evicted them early the next morning, injuring dozens of students and detaining 107. The latter were released on February 2 and 3, after being booked and giving their declarations. With the Pope arriving in a matter of days, the students announced a "truce" in their struggle, so as not to mar his visit.

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