Envío Digital
Central American University - UCA  
  Number 264 | Julio 2003



How Do We Dig Ourselves Out of the Hole?

Caught up in very negative political traditions, with its economy stagnant, its human development in tatters, and its state institutions controlled by shameless political leaders, Nicaragua is in a deep hole. Who will dig it out? And when?.

Nitlápan-Envío team

In early July, President Bolaños called on the other branches of
state not to make war with him but to help him dig Nicaragua out of the “hole” it is currently in. Have we even reached bottom yet? Although it’s hard to know exactly how far down we have fallen, finding a way out anytime soon seems increasingly difficult.

Political humiliation

It is logical for President Bolaños to request a “cease-fire.” The National Assembly’s election on June 13 of nine new Supreme Court justices for the next five years was a long-range weapon of mass destruction lobbed directly by the FSLN and the PLC into Bolaños territory, fulfilling the worst predictions. The followers of Daniel Ortega and Arnoldo Alemán pre-selected the candidates (five for the FSLN and four for the PLC) from a much longer list, then presented them to the plenary as a single slate, which the other legislators from the same two benches voted for without any debate. Case closed. None of the candidates presented by the executive branch were even considered.

The perpetrators of this deed attributed the President’s defeat to his own oligarchic authoritarianism, which they say rendered him unable to negotiate a few votes for his own candidates. In an even more cynical display of their view of the National Assembly as a battlefield rather than the legislative body of a state, they accused him of “not knowing how to make war.”
In the days before the vote, Bolaños had virtually pleaded with “the two caudillos”—as he dramatically called them for the first time—not to elect justices in line with their own interests alone, but to give his project to impose order on the country “a chance.” There was a certain political logic to electing one or two of the candidates from his list. Surely, Ortega and Alemán offered him this possibility via a three-way pact. But Bolaños apparently did not accept the strings attached, reactivating the logic of the Ortega-Alemán pact, albeit with different nuances.

The two power groups decided to “put Bolaños in his place.” They wanted to show him that he has, and may continue to have, no room for maneuver outside the executive branch, that he reigns but does not govern, and, as he already knows so well, that the PLC and the FSLN are in charge of the real institutionality. Finally but no less importantly, these two parties wanted to teach him that they are unwilling to be “victims of the insolent caprice of groups with no representation,” as pro-Alemán legislative representative René Herrera phrased it.

A game only two can play

Bolaños reacted with palpable disgust, repeating his explicit mention of “caudillos” and calling them by name, while referring to the pact as nothing more glorious than power splitting between the two of them. Various procedures had been violated in presenting the pre-candidates as a single slate and in the voting to elect it. With several jurists even claiming that the Constitution had been violated, there was speculation for days about the possibility that the President or “someone” would file an appeal of unconstitutionality to nullify the election.
The problem is that those who would decide on the constitutionality of the new magistrates’ election are the magistrates themselves. Why bother? Checkmate. Any project to reform the state institutions or the Constitution that is proposed by the executive branch or organized civil society or results from a plebiscite of the electorate will always come up against some obstacle dreamed up by the branches of state that are shared between the two parties to the pact and stamped with their interests.
One constitutional lawyer dared to recommend that, all else failing, the President turn to the Army to dissolve the National Assembly. It was an excessively risky idea that found no takers.

A grim forecast

Without appraising the professional qualities or determination of the newly-elected or reelected justices, no one imagines that any of them will put the law above the interests of the two caudillos who picked them for such a well-paid job.
This new divvying up of the judicial branch will ensure the FSLN “more of the same.” For the PLC, it should lead to the prompt freeing of Arnoldo Alemán from the shackles of his mansion-jail through some maneuver promoted by the Liberal Supreme Court justices, annulling everything accomplished so far. The conspiracy is already underway.

While pro-Alemán groups heckle Bolaños wherever he goes, declarations are beginning to circulate about their boss’ imminent release. Thus lawyer Lino Hernández, member of the ad hoc “Human Rights and Justice for Arnoldo Alemán Committee,” is predicting that Alemán will be free within two months due to the “lack of substantiated evidence against him” and a month later will announce that he is taking on Daniel Ortega for the presidency, since they are the only leaders in the country backed by a real party. The fact that such an eventuality is being openly voiced is a measure of the depth of the hole into which Nicaragua has fallen.

Still sliding down the slippery slope

If the back-room election of the Supreme Court justices was a severe political blow to Bolaños, the equally back-room deal to free Alemán would represent his ultimate political humiliation. According to an M&R poll conducted among 1,600 people between 16 and 65 years old in urban and semi-rural areas across the country and concluded days before the new justices were announced, 57% of those polled feel that the President is “weak and ambiguous” in dealing with national issues. Compared with October last year, there was a 21.2-point increase in those not satisfied with the way he is exercising power, with 63.6% choosing that he is exercising “little” power and another 25.4% that he exercising “none.” Unlike typical polls, this one consistently showed only 1-2% with no opinion or unwilling to answer.

Bolaños’ only consolation is that no one else comes out any better than him, but that is no consolation for a country that is sliding down the slippery slope as fast as its President. What jumps out of the answers to many questions is a growing disenchantment with politics in general and with most politicians. Asked which Liberal forces (pro-Alemán, pro-Bolaños or others) are the most capable of guaranteeing the continuity of democracy and a solution to the main problems, 51.6% responded “none.” Asked to choose the best Sandinista candidate from a list including Daniel Ortega, 35.7% said none (and only 10% named him). Asked whether Ortega, who some dub the “caudillo” of Sandinismo, should retire, 86.2% said he should. And asked whether they believed Alemán is innocent and should be freed, is guilty and should remain under house arrest or is guilty and should be sent to the maximum security prison known as La Modelo, 64% opted for the latter.

The war on corruption has gotten bogged down

Bolaños is increasingly isolated. His war on corruption, which so buoyed his popularity in the middle of last year, has bogged down. Former tax director Byron Jerez, that war’s first and some would argue only real casualty, is not wrong in his constant assertion that he is the sacrificial lamb. Due either to institutional limitations or a dearth of political will, or perhaps negotiations among the Liberals in Bolaños’ government, he got the worst of the deal by far when he and Alemán were indicted.

Apparently to renew faith in the fight, the Attorney General’s Office announced in mid-June that there would soon be a “shower” of new accusations against other figures from the previous government, following what it referred to as only a “strategic pause.” That promised downpour has yet to fall. Even worse, the only drops have been news stories of obscure cases in which the negligence and incapacity of the state’s legal representatives in dealing with the skilled mafias that control land and other properties all over the country is draining even more of the already scarce public resources.

The population stopped “feeling” the fight against corruption a while ago. Only a tiny minority (5.5% in the M&R poll) perceives corruption as the country’s main problem, with the rest seemingly forgetting that Alemán alone allegedly skimmed at least the equivalent of an entire year’s public health budget from the state coffers during his term, with the search still on for other stashes. The majority (45.7% in this poll) insistently point to unemployment as the country’s main problem, with another 30.5% choosing the wider category of poverty in general.

The economy is stuck in neutral, and searching for work is a painful daily heartbreak for huge numbers of people. The few job posts in the new maquila assembly plants—practically the only employment created during Bolaños’ year and a half in office, and still way below his campaign promise—don’t even dent the discouragement felt by the population with no fixed income and no other real option except to risk everything by emigrating.

A disappointing combination of traits

Does Bolaños have any way of politically guaranteeing the continuation of his political project? The proposed alliances and candidacies for the November 2004 municipal elections have so churned up the political waters that the only thing clear is that Bolaños’ initiative to purge Liberalism of its Alemán current so it can beat the FSLN is far from seaworthy. That new political option, which he has dubbed the Liberal Unity Movement, has yet to show any signs of solid organizational capacity, new leadership or fresh ideas.

Despite Bolaños’ rhetoric, his government is perceived as anything but austere. The enormous salaries still received at the top levels of the executive branch, and especially the Presi-dent’s tenacious defense of his sizable pension as a former Vice President, which he receives on top of his presidential salary, undermine his credibility on this score as well.
The lamentable traits that people perceive in the President combine a minimum capacity to get things done and zero social sensitivity with the undeniable objective limitations he faces. One analysis by independent groups contains the following appraisal: “We have gone from mega- corruption to ultra-technocracy; in which officials are busy drafting and circulating documents at the service of the donors. Studies abound and nothing is implemented. There is no true vision of development.” Meanwhile, Bolaños himself must increasingly perceive how inextricably he is caught in the pact’s nets.

Paradoxically, Bolaños continues to enjoy a positive personal rating in the polls (65% against 28% negative in the new M&R survey). This is fed by the negative image accumulated by his two caudillo rivals (Daniel Ortega rated 34% positive and 60% negative and Arnoldo Alemán 26% positive and 70% negative). But while a majority of the population would like to see both those men bow out of political life altogether, this wouldn’t necessarily mean not voting for them come election day. The only explanation for this even greater paradox is a political traditionalism that wears people down and ignores institutions, and the dearth of any attractive alternatives.

Bolaños’ main strength is the backing of the international community, which sees him as the best available option when it comes to imposing some order in a country lacerated by wars, adventurism and corruption. The highest card in this hand is his endorsement by the United States, but unfortunately it does not translate into a ready financial winch to help his government haul Nicaragua out of its economic hole. Among the problems are an undeniably stagnated economy; a foreign debt that while pending exoneration is growing by the day; and a domestic debt burden that the government is beginning to renegotiate, but meanwhile keeps dragging Nicaragua closer to the bottom.

Shameful submission

In order to obtain the US$500 million needed to get his infrastructure projects underway, Bolaños has opted in recent months for shameful submission to US foreign policy. As a result, more than 200 Nicaraguan soldiers will risk their lives in Iraq to legitimize US occupation of that country after its illegal and illegitimate war. And if that weren’t enough, his government signed a bilateral agreement with the United States that will protect US citizens from the newly created International Criminal Court (ICC), in this case legitimizing the impunity of the US ambition to impose its military might all over the world. The National Assembly approved both initiatives through the combined vote of the PLC and Blue and White benches, with the FSLN bench opposed.

Bolaños’ “New Era” government apparently justifies this unnecessary alignment with the United States on the grounds of the economic hole in which Nicaragua is stuck. The foreign policy road seemingly chosen by Bolaños leaves us poor and devoid of honor. Honor isn’t just a question of not stealing, it is also not subjecting the nation to the will of the powerful simply because they are powerful. To boot, this submission has not even meant greater economic support from the single world power. Even in executive branch corridors, some have commented that the only thanks they got were “a few slaps on the back.”

Bankers’ hours

The end of the wars of the eighties in Central America did not bring with it the much touted “peace dividend,” which would supposedly benefit the social sectors most affected by the unjust inequalities that helped trigger the civil wars in our region. In the event, the real peacetime winner was the financial sector, which profited from all the economic reforms promoted by the international lending institutions, while poverty and exclusion only grew worse. An analysis done by the Central American University of El Salvador several months ago indicated that “the sectors linked to finance capital have positioned themselves best, not only in the economic sphere but also in the political one.”
This began to become evident during the Chamorro government, when private banks proliferated, and the FSLN leaders joined the finance game. Attracting capital to fund or consolidate businesses or other property belonging to board members’ families or stockholders through privileged and unregulated access to loans was the “original sin” at the root of the later collapse of several of the banks set up in the early nineties.

The financial river has been very turbulent since then and some have fished it successfully. During the Alemán administration, the PLC-FSLN pact polluted these waters even more, since all aspects of the economy were regulated through ongoing political negotiations between two caudillos actively dedicated to consolidating and expanding the capital of their respective economic groups.

Running scared?

This legacy now weighs heavily on the Bolaños government, which is also a government of bankers—the surviving ones who benefited from the bonds issued to cover the debts of the banks that went under. It was in the context of those never clarified bankruptcies that Banking Superintendent Noel Sacasa submitted his resignation in late June—after having left the country with his entire family.

Some say that Sacasa was “a coward,” not “man enough” to face the adverse results of an operational audit of his handling of the Superintendence of Banks (SIB) by the Comptroller General’s Office or to battle the mountain of court suits resulting from the fraudulent bank collapses during the four years he headed the SIB. It has also been said that Bolaños didn’t want to support him in the suits. In fact, Sacasa had already been indicted in all unconstitutionality suits filed by former bankers affected by the SIB’s measures.

It is even said that Sacasa feared that the FSLN would “get even with him” for the bankruptcy of the Sandi-nista-owned Interbank. This hypothesis was given credence by the declarations of Sandinista leader and former Interbank board member Bayardo Arce, who went so far as to blame Sacasa for all of the country’s bank failures and interpreted his resignation as belated recognition of his incapacity and inefficiency. The Sandinista-aligned comptroller Luis Ángel Montenegro, who promoted the audit implemented by his office, made similar, if more moderate, comments. The FSLN’s influence on all rungs of the judicial branch ladder is obviously enough to spook anybody.

A very serious sign

The government authorities minimized the impact of Sacasa’s unexpected resignation, arguing that the SIB’s Superior Council is ultimately responsible for controlling the national financial system, and that its members can be shuffled to replace him. Their comments sought to leave the impression that Sacasa’s resignation is of no consequence for the country’s institu-tionality.
Whether or not anybody fell for that, it couldn’t be further from the truth. Strengthening Nicaragua’s financial institutionality has been and still is the number one priority for the international financing institutions, and has a determining influence on the national economy. A stable financial system is considered a prerequisite for sustainable economic and social development. In addition, after September 11, the United States has put particular emphasis on the regulation and control of banking operations around the world as a central component of its fight against terrorism.

A major tangle to be unraveled

“I’m leaving because of the lack of institutionality in Nicaragua,” said Sacasa, “because of the judicial insecurity and the legal situation in the country today. Sometimes when one sees danger, the correct thing is to face it, but at others the correct thing is to absent oneself…. I’m under no obligation to be a martyr.” These statements made to the Nicaraguan media from Washington, where Sacasa went in search of a job that would allow him to live outside the country, provide a hint of the inextricable tangle behind the seven banks that went under in the past five years.

Noel Sacasa had earned the confidence of the multilateral lending institutions and enjoyed credibility among national bankers as well. If someone like him has been forced to resign in this way, what are we to think of the nation’s financial institutionality or even its institutionality as a whole? Far more than his resignation, the damage to Nicaragua caused by the situation that led him to resign—which is not known but can be imagined—will have serious short- and medium-run implications for the country. This history has to be carefully pieced together if we are to understand fully the nature of the hole we are in and discover the identity of those who are pushing us continually down, while retaining their voice, power, prestige and opportunity.

Educate and provide an example

Nicaragua’s proven fragility, the wrenching history of these past 25 years with their unassimilated changes, the lack of ethical leadership, the FSLN leaders’ extreme skills—to conspire, to play an ongoing game of double standards, to intimidate—and the political incapacity of most of their opponents all offer daily proof that the institutional and judicial game, not to mention the electoral one, is closed. Meanwhile, the country has touched bottom in an economic game that has no other perspective than the fictitious long-term solution offered to Central America through the free trade agreement with the United States.
The ethical game is still open, however, but it requires a long view. Not a single sensible and honest person in the country sees any encouraging and truly national way out for Nicaragua in the near future. Anyone with those characteristics knows that national solutions, should they appear, will only follow prolonged efforts by many people who, partly through the good example of their own lives, throw their support behind massive education processes that will ensure that we will be led by new generations of intelligent, feeling and honest people years down the road. Getting ourselves out of the hole will require a lot of imagination, a great deal of patience and a very long time.

Two for the US, Zero for Nicaragua

Alliance with the US to justify its invasion of Iraq

On July 2, President Bolaños sent the National Assembly a decree requiring urgent approval to ship 230 Nicaraguan army personnel (sappers, doctors and security forces) off to Iraq to work in demining operations for six months. They will join a contingent of Dominicans, Salvadorans and Hondurans in the central-south area of Iraq to be commanded by the Army of Spain. The US government will cover the operational costs, including travel, maintenance and equipment, while the soldiers’ bonuses and life insurance—both conditions established by the Nicaraguan army— will be covered by donations from thus far unidentified countries. While the US goal is to legitimize its illegal occupation of Iraq to control its petroleum, the Army of Nicaragua prefers to describe its participation as part of the “humanitarian” operations endorsed by the United Nations once the war ended. For his part, President Bolaños declared that it is repayment for the international community’s generous collaboration with Nicaragua.


Alliance with the US to oppose the International Criminal Court

On June 17, El Nuevo Diario reported that the Nicaraguan government, under threat of having its US aid cut, signed a bilateral agreement that neither it nor the US government would hand over a citizen of the other nation found on its soil who is wanted by the International Criminal Court. Although originally denying that it had signed the agreement, the Bolaños government finally acknowledged that it had indeed done so on June 4.


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