Envío Digital
Central American University - UCA  
  Number 218 | Septiembre 1999



Is the Game All Sewn Up? Questions and Contradictions

Is there any possibility that a third force, an honest one with strategic vision, could emerge to counteract the sortsighted electoral mania that goes so far to explain the FSLN-PLC pact? What new contradictions could triggers such an initiative? In what new spaces could it develop? And who might decide to get into that game?

Nitlápan-Envío team

The game board on which Daniel Ortega and Arnoldo Alemán traded pawns for the past year has been folded up and the players are now counting their pieces. On the night of August 17, those two party bosses (caudillos) announced 33 agreements reached by their respective parties, the FSLN and the Constitutionalist Liberal Party (PLC). Each and every accord furthers the interests of the two parties, and above all of the two signatories' loyal circles. Each one is also designed to consolidate a two-party system, or, to be more exact, a two-caudillo system. No one, least of all anyone outside those two circles of power, could stop or even modify the pact's contents. Not even concerned critics inside the FSLN or the voices of alarm coming from thoughtful and influential voices of public opinion or specific social sectors could do it. Not one single agreement expresses concern for the national interest or even reflects some consensus in the search for governability. What all do express, however, is the relative weaknesses of both negotiators and the inability of each to impose his interests on the other without much cost.

The Sandinista Assembly, ostensibly the FSLN's maximum decision-making body, ratified all the pact agreements on August 29, twelve days after they were announced. The media was not allowed into the meeting. The ratification was not very whole-hearted: about a third of the 130-150 Sandinistas present for the vote on a given agreement abstained, and 18 were openly opposed. Among those few brave dissidents, however, are 5 of the party's 36 National Assembly representatives. Ortega made a point of calling upon them to vote with “discipline” when the moment comes to approve the agreements as new and reformed laws in the National Assembly. Some of the legislators acknowledged that they will have to “choose between principles and discipline.” Meanwhile, President Alemán demonstrated satisfaction with the results.

Some things nailed down And some free-for-all

The next steps will be to shape the agreements into law and then reveal the answers to some of the more important questions raised by the pact: Who will be the new electoral magistrates? And who the additional comptrollers? How will the critical legislators vote on agreements they publicly opposed? What will the presidential candidate roster look like now that no one is inhibited?
The pact's consummation has left considerable worry, indignation and confusion in its wake. Will any initiative emerge out of all these frustrations? For now the predominating sentiments are the passivity, powerlessness and skepticism of a stressed-out society. Will it spring back? How much time will it need to heal its wounds before getting back in the game?
Meanwhile, the contest between the party elite goes on, but in a different arena. Since the pact only nailed down elements linked to simplistic electoral aspirations, the PLC and FSLN negotiators seem to have left a lot of other areas as sort of “free fire” zones. This is especially true of the economic spaces still in dispute, as was amply demonstrated just after the agreements were made public.

The new rules of the game

The following 18 agreements establish the new rules of the electoral game or reform existing ones:
* There will now be 7 Supreme Electoral Council (CSE) magistrates instead of 5. The CSE president and vice president will be elected each year, and can be re-elected as well as removed before the term is up. The CSE president's powers are reduced.

* It is specified that the current magistrates' term will end in July 2000 and not in July 2001, which was the term to which they were elected. (This interpretation of which date prevails grants Ortega the early “dismissal” of current CSE president Rosa Marina Zelaya that he sought.)
* The elections are moved from October to the second Sunday in November. (This change actually makes sense since the rainy season is normally over by mid-November, making delivery of ballots and other materials around the country easier and safer.)
* The inhibitions on presidential candidates for reasons of nationality are removed. (This frees the Liberals to put forward some of their most important leaders, who renounced their Nicaraguan nationality in the 1980s to become citizens of the United States or other countries that do not permit dual citizenship.)
* It is established that legislative candidates will be elected from slates, whose line-up and hierarchy are determined by the parties. (This is particularly important to the FSLN, because it ensures that no “dissident” can run individually identifying with the party name. While slates have always been the practice, the more democratic alternative of being able to exercise voter preference for a specific legislator is now legally foreclosed.)
* A new formula is established for applying each party's “residual” votes, those that do not fill the quotient required in a given department to elect one of its allotted legislators. The formula will not be applied to the 20 legislators elected at a national level.

* Municipal Electoral Councils will be created. Their presidents and vice presidents will alternate between the PLC and the FSLN, as is already the case in all Departmental Electoral Councils and all polling centers.
* Electoral crimes will be determined and classified.
* State campaign financing will be turned over to participating parties after the elections instead of before, and the amount will be proportional to the number of votes they obtain rather than to their showing in previous elections.

* The parties will be permitted to receive foreign donations and financing, and attempts will be made to establish controls over illicit funds.

* Attempts will also be made to implement absentee balloting for Nicaraguans abroad by the next elections.

* Popular subscription associations--or petition candidates--will no longer be allowed in municipal elections. (This aspect has been particularly questioned for restricting participatory and representative democracy. There were signs of a trend toward increased voting for such independent local candidates between the 1990 and 1996 elections.)
* Parties that decide to create an electoral alliance will lose their own legal status if the alliance does not win a certain percentage of votes.

* Legal standing will only be granted to a party that presents a list of signatures equivalent to at least 3% of the last electoral roll.

* It is established that parties must be national, except in the autonomous Atlantic Coast regions, where regional parties are allowed.

* The constitutionally established prohibition against consecutive reelection is reaffirmed.
* The idea of dividing Managua into several municipalities is to be considered. (This division is absurd for a number of reasons, including the excess bureaucracy it will generate. However, it is of particular interest to the Liberals, who fear the possibility of an electoral defeat in a single Managua and know this would not augur well for their presidential aspirations).

* The proportion of votes needed to win the presidency on the first round is reduced from 45% to 40%. It is further established that a party can win on the first round with only 35% as long as the second-place party does not obtain more than 30%. A second round between the two front-running parties is required if no party meets either of these new stipulations.

Not quite what the FSLN wanted

The most important agreement the FSLN sought was elimination of the second round, as it believed that its captive vote of 20-25% could guarantee it victory if it could reduce the percentage needed to win to 35%. This was in fact the FSLN's main objective in engaging in the marathon of negotiating sessions over the past year or more. Nicaraguan Conservative Party legislator José Cuadra, who was gunned down in Matagalpa in mid-August (see “Nicaragua Briefs,” this issue, for details), assured envío seven months ago that “Ortega is willing to concede everything to eliminate the second round.”
But in fact the second round wasn't quite eliminated. These and other results show either the FSLN's weakness at the negotiation table or the urgency of putting the pact's “economic agreements”--the ones negotiated under the same table--first. For example, though not published as part of the negotiations, it is now known that one of the FSLN's main achievements was to get deeds for over 150 valuable, mainly agricultural companies in what is euphemistically called the Area of Workers' Property (ATP) without having to pay their enormous debts.

The FSLN's business sector--the pact's main promoter--has for some time had its eye on these companies, which grew out of the privatization process of the early 1990s. On hearing about the legalization of their companies and the pardoning of the debts, several workers from the APT sector voiced the opinion that the only ones who will benefit will be the nouveau riche of both parties who will now be able to buy them at bargain basement prices.

Like the solar system

All the agreements effectively focus on consolidating the two major parties and making any small parties that manage to survive the obstacles being strewn in their path orbit around them. In his long televised address on July 19, retired army head Humberto Ortega explained it with a cosmic metaphor: “Ever since I left the army, I have set out to see how we could all come to terms with each other better. I've always said that if the two main forces are incapable of coming to some understanding, we're all headed for chaos. I think that all forces are important here, but the smaller ones also have to understand that they must gravitate around a focal point, without this seeming undignified. For there to be a solar system, there has to be a sun. The Earth has to revolve around the sun, which does not negate the Earth's merit.”
His speech, which was a paean to his political pragmatism, was aimed at convincing some not obviously identifiable sector of public opinion of the need to negotiate with the PLC to “modernize” Nicaragua. At one point Ortega saw fit to include an historic summary of the struggle against Somoza, in which he constantly referred to himself as a major protagonist. envío found the patience to count the number of times he used the pronoun “I”--exactly 339, to which must be added the hundreds of other more indirect allusions to himself.

Will they boomerang?

In a meeting with envío, former CSE president Mariano Fiallos argued that “since all the agreed-on reforms to the Electoral Law are geared to establishing prohibitions and granting permissions, they are not profound, although the law does need profound changes.” Fiallos recalled that the two-party system comes from the Anglo-Saxon political culture and was imposed in Nicaragua by the US invaders in the 1920s and maintained by the Somoza family in an anti-democratic form. It does not necessarily respond to our political culture. “Now,” he stresses, “the pact opts for forced bipartisan politics.”
Mariano Fiallos believes that guaranteeing electoral victories in a bipartisan framework is the reforms' only objective, but he does not think they can guarantee this goal. He recalls that many of them were already put to the test in the Atlantic Coast's regional elections of March 1998. The fact that the PLC won those elections calls into question the argument most used by the FSLN to justify the pact to its grassroots base: that it will leave the party in a better electoral situation and even guarantee it victory.

Fiallos also reminded us that in 1995, when the National Assembly was splintered into 19 benches, the small parties approved electoral reforms that gave them the benefits from the party control they imposed on the CSE technical structures for the 1996 elections. But the election results that year didn't go their way either.

Signs of the Pact in the Constitution

The following agreements relate to constitutional reforms that are required to clear the way for the electoral reforms.

* In doing away with the inhibitions to the candidacies of Nicaraguans who at one time renounced their citizenship, it is established that Nicaraguan citizenship cannot be renounced, lost or taken away, thus theoretically establishing dual nationality with any country.

* It is established that the President of the Republic, upon leaving office, automatically assumes a seat in the National Assembly. (Through this mechanism President Alemán can continue directing the party bench and, should the PLC win the next elections, effectively govern the country from the Assembly without having to confront public opinion by violating the non-reelection principle. He will also, of course, enjoy parliamentary immunity.)
* A vote of two-thirds of the Assembly will be required to suspend the President's immunity (this will benefit Alemán now and would apply to Ortega should he win the next elections. Both fear losing their immunity and being taken to court).

* The reforms will involve modifying or throwing out the current Constitution's Preamble in the next Constituent Assembly (which presumes that a Constituent Assembly is being contemplated).

Of all these agreements over constitutional reforms, the one that caused the most indignation among both Sandinistas and non-Sandinistas was granting Alemán a seat in the National Assembly that he did not win by popular vote. Bayardo Arce, one of the pact's spokespeople, justified this concession by saying, “The same will apply to us.” Ortega used a more “social” argument, saying he conceded it to save the state resources, since Alemán had already said that he would run for Assembly, and Ortega was sure he would use public resources in his campaign.

Former Sandinista legislator Daniel Aguirre sees it from a very different angle: “It's an aberration of a continental magnitude; it means getting a legislative seat Pinochet-style, becoming a lifetime senator through political imposition.”

A Constituent Assembly looms

Only 24 hours after the agreements were made public, President Alemán was indeed proposing that the November 2001 presidential elections should be replaced with elections for representatives to a National Constituent Assembly, in whose hands he would place his presidential post. Is this a mechanism designed to get himself reelected and go on governing? Is it a way for him to legally return to an authoritarian presidential system, perhaps enthused by the “Venezuelan model” in which the Constituent Assembly convoked by President Hugo Chávez is being invested with absolute powers?
The FSLN has rejected the idea in principle. Given how it is modeling its pragmatism according to the vicissitudes of the moment, however, it could well end up accepting if it is offered enough in return.

More top posts to divvy up

Other agreements requiring constitutional reforms refer to state institutions:
* The number of Supreme Court justices will be expanded from 12 to 16, and they will now be provided with high-salary alternates.

* The running of the Office of Comptroller General (CGR) will be made collegial, with five members elected by the National Assembly. The comptroller and deputy comptroller will be elected from among the five for a one-year term, and can be reelected.

These last agreements are what provide the negotiations with the unequivocal stamp of a pact. By Daniel Ortega's own definition, among others, the main characteristic of the pacts that abound in Nicaragua's political history is an increase in the number of top posts to thus share out quotas of power among the groups that climb on board. There is certainly no other justification for the new posts in the current case. It is quite clear that the slow dispensing of justice, among other evils of the system, does not depend on how many justices are at the top but on how few qualified and well-remunerated judges and secretaries there are at the bottom, in the local courthouses.

Swapping Heads

The agreement to create a joint, or collegial, management team for the CGR is perhaps the FSLN's most negatively important concession to Alemán, if indeed it was even a concession. Ever since he came into power, the President has been trying to shake off the scrutinizing gaze of the comptroller's office, and especially of its titleholder, Agustín Jarquín. Only a lack of political desire in the FSLN's upper echelons to seriously fight corruption can explain the fact that Alemán has finally succeeded. Whether in the “opposition” or in some future government, the Sandinista leadership appears to feel just as uncomfortable as Alemán having a watchdog institution around that takes its mission seriously.

When information began to filter out about the pact and what the Sandinistas and Liberals were negotiating, it was said that, alongside the priority logic of improving their electoral chances against each other and third challengers, the two caudillos were also looking to “swap heads.” Ortega let it be known publicly as well as privately that he wanted CSE President Rosa Marina Zelaya's head, while Alemán made equally clear that he wanted Comptroller General Jarquín's. The pact cuts Zelaya's mandate by a year and puts the comptroller's office under group control. “The different institutions and their officials will be subject to negotiation,” acknowledged Jarquín once the pact had been completed. “One party focused on one official and the other party on another one, then they set about trying to cut a deal, as in the end they did.”

With their days counted

Before the pact was finalized, Jarquín had announced that he would resign as CGR head if the collegial scheme perverted the nature of its current oversight function. He also renounced his immunity so he could go to court and respond to the “Parrales case,” in which President Alemán is personally and profoundly committed to manipulating an error by the comptroller's office to make it appear to public opinion as a crime meriting prison. Jarquín and his team have basically decided to go on working until it is clearly established how the collegial CGR will be set up and how it will function, and until the suit involving the executive and the comptroller concludes one way or another. If the days are counted for a comptroller's office autonomous of the executive--a concept that has only been functioning for three-and-a-half years in Nicaragua--and for those who have run it effectively and with dignity, the most coherent decision they could make is precisely that: keep working. Investigate, point out, control, resolve, discover, probe and prove. They are all ways to show the population just what it will lose with the pact negotiators' decision.

CGR Annuls BANIC Privatization

On August 30, amid all the confusion following the pact's final announcement, the CGR issued a bold resolution that could have been expected, but was not. It annulled the privatization of 51% of the stock (36,000 shares) of the state-run Nicaraguan Bank of Industry and Commerce (BANIC), a capitalization effort begun in 1997 and consummated in January 1999. After months of investigation sparked by charges from bankers and national media, the CGR was able to demonstrate serious irregularities throughout the process, concluding with the hasty creation of Inversiones Iberoamericanas, a corporation through which the Hamilton Bank of Miami, among others, bought shares. A large majority of those implicated in the illegalities and anomalies spelled out in the CGR resolution are members of President Alemán's closest circles.

The CGR investigation also shows that, before the anomalous operation, BANIC granted huge and irregular loans to cronies of the President and to the corporation that has been buying lands for the presidential family all over the country in recent years. Other CGR reports also show that the outgoing BANIC directors--some others remained--illegally approved over 20 million córdobas worth of bonds, indemnification, compensation pay and salary overdrafts for themselves during the capitalization process. The CGR requested that President Alemán and the BANIC president apply sanctions to the officials charged with the fraud. The implicated officials rejected all the imputations, and the foreign bankers now in control of BANIC after the illegal operation announced that they would sue the comptroller's office. It was unquestionably the most significant resolution of any the auditing institution has issued since last February, when it revealed an exorbitant increase in the President's family holdings. That action has been on hold ever since, waiting for the President to comply with the law by declaring to the comptroller's office just how much they have increased and how.

In its resolution about BANIC, the CGR presented as evidence the thickest and most visible threads of a whole web of influence peddling and discretionary decisions. The most critical part, however, is the involvement of a US-based bank, which permitted the comptroller's office to request that US Attorney General Janet Reno investigate to see if the illegalities involved in the financial operation violated not only Nicaraguan law but also US federal law. These laws are very sensitive to the foreign operations of domestic banks that could be linked to drug money, since drug trafficking is an important aspect of US foreign policy. Will the US government participate in clearing up the activities charged in Nicaragua? The answer to this question will be crucial.

World Bank stands back

The “US connection” and the World Bank's decision to back away from the operation being carried out in BANIC after the CGR published its resolution put the Liberal government in an extremely delicate position. The comptroller spoke of “discomfort” and “unease” in the World Bank, which agreed to provide his office with information on the case.

The World Bank is the international institution that supervises the structural reforms the countries of the South must comply with to obtain credits in the adjustment programs they are implementing. The most important of these reforms is the privatization of state assets. As an independent economist explained to envío, “The most fundamental thing to the World Bank is that the privatizing process be conducted transparently and based on market criteria, not with the obscure handling and mafioso dealings that the comptroller's office is revealing in the BANIC case. The same kind of thing was attempted a few months ago with ENITEL and the Miami telecommunications company belonging to the Mas Canosa family, a privatization process that the comptroller's office also annulled.”
It won't to be easy for the government to wriggle out of the BANIC case; the questions arising out of it will enmesh the President and several of his top officials for some time to come. Then, with this thorny case still fresh in everyone's mind, another one emerged that reveals further irresponsibility in the legal handling of state goods. Seven properties of ENITEL, the state telecommunications company, including its headquarters, have been mortgaged to a construction company belonging to the Mas Canosa consortium for $100 million. This maneuver was probably connected to Mas Canosa's purchase of state bonds for that same amount over two years ago, which the government was in no position to honor when the due date arrived. The government just goes from one scandal to another, and it's hard to get a grip on the logic behind each one, hard to figure out which is largest and which less deplorable for the country's future.

New financial laws

Only a few days before the CGR released its resolution, other contradictions, also financially motivated, were showing up on the presidential game board. On August 24, President Alemán surprised not only his FSLN allies but other private bankers with a package of new financial legislation. That day he sent three bills to the National Assembly: the Organizational Law of the Central Bank; the General Law of Banks, Non-Banking Financial Institutions and Financial Groups; and the Law on the Superintendence of Banks. The bills were marked urgent, which indicates that certain steps--including committee review--are to be skipped, even though, taken together, the three amount to a complete reorganization of the financial system. The legislation would remove the Superintendence's autonomy by putting it under full control of the Presidency, give the Central Bank president more economic-financial power, and establish new regulations on private banking and all financial institutions regarding initial capital, credit provision, approval of banks, substitution of their board members, etc. All imply important changes in the rules of the finance game.

The bills created commotion in opposition political circles and in economic sectors both for the strict regulations imposed on the banks and for the concentration of discretionary power granted to the Superintendence of Banks, even though it now answers directly to the Presidency. The first to react were the bankers grouped in the Association of Private Banks, who questioned the urgency label and called for a period of discussion and consultations in the legislative arena. President Alemán met with the bankers on September 2 and agreed to withdraw the urgency condition and to make some aspects of the legislation more flexible.
The bills' critics, including bankers, politicians and business interests, used terms such as “financial dictatorship” and “economic terrorism.” Deputy Comptroller General Claudia Frixione referred to the issue of banking confidentiality, which would be endangered once President Alemán applied the law and turned the Superintendence over to Central Bank president Noel Ramírez, who is also a member of the governing party's executive board. “By making the Superintendence into a docile institution and putting it in party hands,” she said, “the President of the Republic could ask for a private report on any citizen who does not share the government's politics.” William Báez, president of the Nicaraguan Development Institute (INDE), argued that “it is contradictory to seek to make the office of comptroller collegiate so one person can't have all the power, then provide such absolute banking powers to Noel Ramírez that he can review even the private accounts of any Nicaraguan.”

Against what privileges?

The bankers are also worried about other dispositions of the new bills. Among them, one puts a 10% ceiling on the number of shares that each stockholder can hold in a bank so as to avoid situations such as the recent bankruptcy of BANCOSUR. Another establishes limits on the loan amounts that banks will be able to approve for businesses that have family links to the bank's directors.

Both of these dispositions seriously affect Nicaragua's private banks, since, like those in the rest of Latin America, they all fit the obsolete profile of an oligarchic banking system at the service of family groups that have wielded economic and political power for centuries. But these same dispositions are actually very positive because, like the one that favorably regulates the activities of micro-credit intermediaries such as Nitlapán and many other NGOs, they serve to democratize financial power.

For that reason, there were certain grounds for President Alemán's claim that the new laws would be “revolutionary” in his annoyed response to the bankers' criticisms. Alemán went on to accuse the bankers of having established a “privileged monopoly” in these few years--private banks only got started again in Nicaragua in 1991Cusing national savings to favor their own friends with loans, while forgetting the peasants and the poor.
But the overwhelming dose of demagogy in his arguments was bared only a few days later, when the BANIC case came to light. The comptroller's investigation demonstrated that, to compete with the “oligarchic privileges” he had so excoriated, the Liberal government used BANIC to capitalize high-level officials of the presidential circle in a preferential way. And thus the Alemán government cronies have repeated with BANIC what the Chamorro government oligarchic cronies did with BANADES: use it as their own personal spoils.

The official arguments this time were a repeat of those that preceded approval of the new tax law in 1997. Behind the President's anti-oligarchic speech and fiery defense of “the middle classes who also have rights” lurks the state-as-spoils conception that Alemán shares wholly with his competitors from the traditional oligarchy.

No democracy and no market

The bankers and the sector of the FSLN involved in the pact didn't expect these finance bills. The government didn't expect the BANIC revelations. And the multilateral organizations, those that design and monitor the progress of Nicaragua's economy, didn't expect either one. As incredible as it may seem, fundamental aspects of the new financial legislation did not have the go-ahead from the World Bank or the Inter-American Development Bank (IDB).

In all countries of the South, the World Bank is working to establish solid market democracies that will favor globalized capital. In Nicaragua, this multilateral institution finds itself dealing with a country that barely knows what democracy and laws of the market are, and with a government that dons the technocrats' democratizing and modernizing rhetoric about globalization and the rule of law, then turns right around and applies the old law of the funnel: what's in the wide bowl is for me and what's in the narrow neck is for you.

After the Asian crisis

The multilateral institutions are not just trying to establish the logic of a more transparent and democratic market. They have also been analyzing the financial crisis in the Asian countries--those once called “tigers”--and have concluded that the collapse was due to very lax--if not virtually non-existent--regulations on their financial systems. Based on that conclusion, they are now visiting all the countries of the South with a recipe which, while not new, is being discussed with a new sense of urgency: controls on private banking must be tightened in all developing countries.
The multilaterals have always thought Nicaragua's banking system fragile, as it only started up in 1991 and has had very benign regulations designed to quickly generate a large number of banks. Now, bringing this already grown banking system under firm control is the number one priority for the World Bank and the IDB. The strategy of these two lending institutions has to be developed in two stages: in the first one aim for strong national institutions and only in the second seek their autonomy. From this point of view, concentrating the functions of the Central Bank and the Superintendence, as the new legislation proposes, could respond to their proposed design.
The Liberal government took advantage of this conceptual framework to try to push through a new law that takes away the Superintendence of Banks' autonomy. This institution was set up as an autonomous state entity only eight years ago, just before private banking was reinstalled in the country, precisely to ensure transparency and control over the processand, of course, as a condition of the multilateral institution's endorsement.
The new Superintendence bill does not have the World Bank's endorsement, but that did not stop Noel Ramírez, who is also on the Superintendence board, from sending it to the National Assembly anyway, thus opening up a conflict that will prove difficult to conclude. It is just one more sign of the government's authoritarian brazenness. Nonetheless, the accumulation of contradictions that Arnoldo Alemán has been generating with all economic sectors that are not part of his circle of power will prevent him from getting these bills passed as they were originally drafted. He will have to make them more flexible. So who will come out on top in this free fire zone?

Alleviating the crisis

The game is going better for Alemán on the government board. In macroeconomic terms, the Liberal administration's performance has been good. This means a good mark on its record with the international institutions, and may even in Alemán's mind justify his daring bank reforms. The country has also now been admitted to the initiative for highly indebted poor countries (HIPC). Although cancellation of 80% of the bilateral foreign debt will not have much real effect on the economy given that Nicaragua pays very little on it each year, the country's mere entry into the initiative gives it yet another good mark on its international record.

Even in the most important indices for the population, some sectors are no longer feeling the crisis quite as hard as they were, which of course gives the government a good mark on its domestic political record. There is no question that the deterioration of real wages is tremendous, and that Managuans are feeling a serious pinch due to the rate hike in public services. But it is also true that unemployment--especially in construction, the axis of urban economic reactivation--is down somewhat, and that millions of aid dollars agreed to in the Stockholm donors' meeting in May are beginning to flow in, allowing the government to inject resources into visible social programs. The resource flow will be even greater in 2000, because it will be a full year.
In August, according to the latest CID-Gallup poll, the government's positive opinion rating in the rural zones outside of Managua rose to 40%. It's logical. Mountain roads are being improved, health posts are being installed in some places, cattle and agricultural inputs are being subsidized for the poorest peasants, schools are being repaired, rural teachers are being subsidized as a way to increase their salary, etc. Improvements are visible in many places, more than during the Chamorro government. They are only relative improvements, passing and partial, mere drops in the bucket, but with enough drops even buckets get full.

Unsustainable development: Foreign aid and family remittances

There's more development in more zones. The problem is that, though this development papers over or alleviates some--even many--problems, we are not talking about sustainable development. Nicaragua's economy is not sustainable. Its trade debt (imports minus exports) keeps right on growing year after year. What is sustaining the country isn't development, but foreign aid and the family remittances of hundreds of thousands of emigrants.
It is calculated that some twenty percent of the Nicaraguan population has emigrated. The money sent back to relatives every year by those who went to the United States, Canada, Costa Rica or elsewhere, who work on tour ships and the like, is now well in excess of annual export income. The UN Economic Commission on Latin America calculated the amount of remittances sent into Nicaragua in currency in 1998 at about $800 million. And that doesn't even contemplate the tons upon tons of in-kind remittances”--shoes, clothing, household appliances and other products--that come in and do so much to assuage the hard living conditions of so many.

The social time bomb capable of blowing the lid off of governmental stability, demonstrating that its economic model is not viable because it is not sustainable, has been defused. The strands of the fuse are no longer even in Nicaragua, but are scattered all over the hemisphere. The remittances they send home are the most effective social compensation mechanism to make Nicaragua governable. And because not only Managuans emigrate, but people from all over the country thanks to an established migrant stream that makes survival possible for non-pioneering waves, dollars from the emigrants reach the furthest corners. The remittance money is beginning to translate into some improvements in the quality of life even among rural families.

It is an unsustainable development, but to say that is only to state a structural truth. It will be proven out over the long haul, but such truths do not mobilize. Nicaragua is spinning around in a spiral caused by the shortsightedness of governors and governed alike. The former are blinded by their determination to make a quick buck and the latter by their determination to survive another day. These activities do not permit either side to think or act according to long-term criteria.

Municipal elections: The last big opportunity?

It was no secret that the Liberal government wanted the FSLN negotiators to agree to combining the municipal elections scheduled for next year with the presidential ones the following year. President Alemán suggested it openly, arguing that separate elections are way too costly for such a poor country. Some FSLN leaders echoed the idea, and it was assumed that it would become part of the pact. But when the agreements became public, this one was not among them. The only agreement around dates was to move both elections from late October to late November. Everything suggests that at least for the upcoming period the two elections will not be joined, barring some unforeseen development. On the other hand, one always has to be prepared for the unpredicted in a country like Nicaragua.

Presumably the elections will remain separate this time because the negotiators would have to reform the Constitution to modify the terms of the elected officials. Doing so would mean that from the year 2000 forward all elections will always be held in one single event, even when that means six separate ballots, as in the chaotic 1996 elections.
It is not clear whether the opposition of some in Ortega's group led to the decision to keep them separate, or the overridingly electoralist nature of the pact convinced both groups to use the upcoming municipal elections as a “test.” Their results will serve both sides as a good indicator of public intention, and give them a chance to fine-tune the decisions they will have to make for the 2001 presidential campaign.

Whatever the reason, it is largely positive that the two elections will probably remain separate, despite both the cost and the fact that election years are tremendously disruptive to local projects, because the skilled people working on them tend to get pulled into the partisan campaigns. These next municipal elections are perhaps the biggest chance--maybe even the last one--to effectively organize the concerns, the indignation and the criticisms that the pact generated but that could not stop it. Electoral wins by local leaders of whatever political stripe who oppose the shortsighted and corruption-prone bi-caudillo philosophy that promoted the pact would be the most encouraging thing that could happen, and could get a different game going on the board.

It wouldn't be an easy move. The two parties to the pact will take great care to impose candidates loyal to their philosophy. Given this pressure from the strongest players, is it possible to imagine the emergence of solid alliances among the remaining parties? Is it thinkable that they could jointly promote authentic local leaders--whether from their respective parties, dissidents from the two major ones or independents--with the aim of consolidating that much-needed third force locally, even though at a national level it still seems so far away?
The pact has altered the electoral rules of the game, making this possibility more difficult--if not impossible--by repealing the possibility for candidates to run under popular subscription. All candidates must belong to, affiliate with or be backed by a political party. Will the unity, responsibility and strategic vision needed to surmount this and other limits be possible on this newly-designed game board?

Creating a third force depends on civil society

It will not depend only or even mainly on the political parties to surmount it. It will depend on civil society, on its organization and its capacity to pressure and propose leaders and programs to the political parties. It will depend on its visionary capacity and its knowledge of how to play the game. There is some precedent for this, with the cross-party coalition of women candidates in 1996 pushing for a better gender line in their respective parties and the formation of a women's agenda and later a minimum agenda for the coast to put pressure on the platforms of the different parties. In the end, all these organized initiatives came to nothing, but they will not have been in vain if they were carefully and honestly analyzed and their weaknesses taken into account.
The rarified atmosphere fostered by the pact and the ethical erosion of the two groups that negotiated it might just provide the wake-up call for civil society at a local level. This is the first time in Nicaragua's recent history, and might just be the last, that citizens will be voting only for representatives to their municipal governments. This allows them to cast a more conscious, informed and decided vote in response to concrete realities that are close to home, without the confusion that the avalanche of publicity images dominating the national elections seeks to create.

The municipal elections will put the strengths, weaknesses and representativeness of all organized civil society groups in the country's municipalities to the test. In over half of these municipalities the majority of the population lives in conditions of extreme poverty, which, according to the UN Development Program's latest report is rapidly evolving toward chronic poverty. In other words, they are living an interminable post-Mitch crisis.

Opting for the long haul

Some say that civil society's organizations in Nicaragua are very atomized, tend toward clientelism, are excessively dependent on foreign cooperation and do not have a clear political position. Others retort that this analysis is no longer as relevant and is too centered on the situation in Managua in any case. As we all know, Managua isn't Nicaragua.

Will the municipal elections serve to reveal this “other” civil society that has certainly been emerging, both in and outside of Managua? It is perhaps too early to know. A year may also be too early to find out, although that is all we have until the municipal elections. Perhaps the first thing to do is renounce the shortsightedness and the cult of hard-hitting--and ephemeral--images and appearances that contemporary culture imposes on us, leading us to seek immediate successes for today without stopping to learn the lessons from yesterday's profound failures.
Perhaps for a third force that can break up the dirty bi-caudillista game to become a reality, people will be needed who are willing to get down in the mud of crude national reality and spend a long time promoting educational and organizational processes at the grassroots level, people who are willing to begin at square one and wait five, ten or many more years for results, if necessary.

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