Daily Archives: February 18, 2009

A Return to Nicaragua and the 1980s ‘Triumph of the People’: Is This Latin America’s Future? by Gregory Hilton

Nicaragua's Daniel Ortega had a Major Impact on U.S. Politics in the 1980s.

Nicaragua's Daniel Ortega had a Major Impact on U.S. Politics in the 1980s.

A Return to Nicaragua and the 1980s ‘Triumph of the People’: Is This Latin America’s Future? by Gregory Hilton–The foreign policy debate of the 1980’s was often dominated by dramatic events in Nicaragua. This small Central American nation is now rarely in the global spot light, and the problems confronting it are no longer unique. Step by step Nicaragua now appears to be headed for a left wing dictatorship, and it continues to reject free market solutions.
The difference is that Nicaragua is no longer alone. In various forms capitalism is also under attack in Venezuela, Bolivia, Ecuador, Paraguay, Brazil and Argentina. They are all pursuing a mixture of socialism combined with a free market, and their recessions are deepening as export opportunities evaporate. The economic future of these Latin American nations, similar to the rest of the world, is very uncertain.
Nicaragua is an excellent example of what could happen to all of them, but July 19th of this year could well go unnoticed. The date marks the 30th anniversary of the Sandinista revolution. It was then that the flag of the Sandinista National Liberation Front (FSLN) was raised for the first time in Managua, where it would remain for next 11 years.
The Organization of American States (OAS) passed a resolution on June 23rd asking General Anastasio Somoza, Jr., to leave office. He complied with the resolution on July 17th, and along with high ranking officers in his National Guard, he fled to Miami. Over 50,000 people celebrated in the streets of Managua two days later as Nicaraguan Revolution Day was declared on July 19th. The “New York Times” compared the scene to January 1, 1959 in Havana when Fidel Castro came to power.
The Somoza era had finally come to an end, but no one was quite sure what was beginning. Three members of the Somoza family had ruled Nicaragua for almost 40 years prior to their 1979 downfall. The Somoza’s were firm allies of the United States, and their governments consistently voted with America in the United Nations.
Two days after the Pearl Harbor attack which resulted in America’s entry into World War II, Nicaragua declared war on Germany, Japan and Italy, and broke its diplomatic relations with Vichy France. Nicaragua was the first country to ratify the Charter of the United Nations. In addition, the 1961 Bay of Pigs invasion of Cuba set off from Nicaragua in the presence of the clan’s last leader, General Somoza. As Franklin Roosevelt said of his father, “He’s an SOB, but he’s our SOB!”
The bright-eyed revolutionary days were in the summer and fall of 1979. Sandinista leaders were then viewed as young, romantic and idealistic. Allies from around the world soon joined them. Numerous participants from the Paris student uprisings and strikes of 1968 arrived in Managua, along with leaders of “progressive” political parties. They promised to perfect the socialist model which Stalin and Mao had betrayed.
In the late 1970s and early ‘80s the news media often portrayed Sandinista members as crusading heroes for the common good. The euphoria of that distant summer came after thousands were killed in a civil war, and the nation had endured four decades of corruption and abuses.
A popular book was “Triumph of the People: The Sandinista Revolution in Nicaragua,” and there was a widespread belief that all of Central America would soon be transformed. The U.S. debate over Nicaragua would continue for almost a decade and partisanship on both sides was intense.
Many of the Sandinista enthusiasts obviously had good intentions. They had tears of joy at the outset, and a number of them certainly meant well in traveling to Managua for development work. Their outlook was similar to those who cheered the downfall of the Shah of Iran earlier that year, or the Battista regime in the Cuba of 1958.
They wanted to make a difference, and never dreamed the alternative could be much worse. They may have been naïve but today a number of them are among the most effective critics of the Sandinista regime (see below). The supporters of the FSLN, Fidel Castro and the Abraham Lincoln Brigade in the Spanish Civil War, all believed the claims of their heroes. They were blatantly misled, but that is not their fault.
On the other hand, numerous supporters of General Somoza, the Shah or Fulgencio Battista often overlooked valid accusations of corruption and human rights abuses. They were interested in those nations only when they entered the American political fray.
Many vehement backers of the Nicaraguan Contra’s in the 1980s completely abandoned that nation when their candidate, the anti-communist Violeta Chamorro, won the 1990 election. U.S. conservatives were primarily interested in a Sandinista defeat, and when it was secured at the ballot box, the plight of the Nicaraguans was soon forgotten.
In some respects the Nicaragua debate on Capitol Hill was not unusual. In many ideological battles there is a triumph of passion over reason, and I have often found both sides to be intolerant of dissent. Now that 30 years has elapsed, it is easier to view the Nicaraguan revolution in perspective.
Without General Somoza the Sandinista movement would never have achieved prominence. Anastasio Somoza, Jr., served as President from 1967 until 1972, and was re-elected to a second term in 1974. He was a West Point graduate and practically all of his education had been in the United States. His father, General Anastasio Somoza, Sr., was assassinated while serving as President in 1956.
His brother Luis also served as President from 1956 until 1963. Somoza, Jr., had to step down in 1972 because of a Constitutional requirement which only allowed one term. This did not stop him because he still was running things behind the scenes as head of the National Guard.
No one can deny the corruption following the 1972 earthquake which killed over 10,000 people in Managua and left 250,000 homeless. Over 90% of the homes in Managua were destroyed. Foreign aid flooded into Nicaragua but a significant amount never reached the intended recipients. It was diverted by Somoza and members of his National Guard.
General Somoza Enters the National Assembly for the Last Time in 1978.

General Somoza Enters the National Assembly for the Last Time in 1978.

Leaders of Somoza’s own Liberal Party did not want him to run for re-election in 1974 because they knew of past mistakes and the continuation of his family’s rule would not be popular. He defied them and was able to strong arm his way back into power.
Somoza and his cronies lived in luxurious mansions and many of his friends received lucrative contracts. In a devastating interview with the CBS program “60 Minutes,” Dan Rather pointed out that virtually every government contract in Nicaragua was with a vendor owned by Somoza. An accounting of Somoza’s property after the revolution included 168 factories, which represented 25% of the nation’s industrial plant capacity with a value in excess of $200 million.
The General’s second term was controversial from the start. He had to declare martial law in the first year and opposition newspapers were censored. The greatest sin of all was the 1978 assassination of Pedro Joaquin Chamorro, editor of the opposition daily “La Prensa.” The newspaper was censored at times but it was still full of anti-Somoza articles on a daily basis. Critics of General Somoza were also free to travel at home and abroad, and the Catholic Jesuits and Maryknoll priests and nuns became a focal point for anti-Somoza activity.
According to the vehemently anti-Somoza Washington Office on Latin America (WOLA), the highest number of “human rights violations” during the Somaza era was 350 in 1997. No abuse can be excused, but the number of cases does seem small to what would occur in the 1980s. The 1978 U.S. State Department “Country Reports on Human Rights Practices” said “The number of reported abuses and their severity have decreased markedly over the past year,” in Nicaragua. The report also noted that a number of people reported by WOLA as having “disappeared” were actually alive.
Despite the corruption there were also positive aspects to the Somoza era. The General made money, but so did the people. Nicaragua experienced consistent economic growth prior to the imposition of marital law in 1975. The growth rate was especially high during the 1960s and early 1970s, largely as a result of industrialization.
The nation became the most developed in Central America despite its political instability. This economic success story was the envy of its neighbors. Due to its stable and high growth economy, foreign investments grew, primarily from U.S. companies such as Citigroup, Sears, Westinghouse and Coca Cola.
Upon assuming power the Sandinista pledge to restore democracy was forgotten, and a five member Junta was created. Similar pledges regarding a free market, free speech and free association were also thrown out the window.
The most visible Junta member was 35 year old Daniel Ortega, the dashing young revolutionary who electrified leftists around the world. Ortega had been jailed by Somoza and was freed in 1974 after the FSLN held members of the Somoza family hostage at a Christmas Party. The original members also included Pedro Chamorro’s widow, Violeta, and businessman Alfonso Robelo. They both resigned after the first year.
Robelo feared for his safety and went into exile. Two years later he would meet with President Ronald Reagan and urge him to provide funding to remove the FSLN. Mrs. Chamorro said she was manipulated by the Junta, and claimed to be shocked by its “secret socialist agenda.” In fairness to the FSLN, it was not a well kept secret. She returned to the “La Prensa” newspaper which at times had been censored by Somoza. The FSLN went a step further, they simply closed it down in 1986. For a number of years freedom of the press vanished.
Sergio Ramirez was a Junta member who served as Vice President under Ortega from 1985 to 1990. When Ortega was defeated, Ramirez became head of the Sandinista bloc in the National Assembly. Ramirez later split with the Sandinista Party and expressed regret over some of his actions in the 1980s. He founded a new political party in 1995, the Sandinista Renovation Movement, but the FSLN will not it to appear on the ballot.
One of the most high profile Sandinista leaders was Eden Pastora. His father was assassinated by the Somoza regime, and he became the legendary “Comandante Zero” who masterminded the capture of the Nicaraguan Congress in 1975. He later led the Southern Front during the final offensive in 1979. Pastora left the FSLN when they moved into the same mansions which had previously been owned by Somoza and his cronies.
Another key member of the revolution was Father Ernesto Cardenal, who did much to spread the Sandinista mystique around the globe. He was one of the world’s most famous liberation theologians. From 1979 to 1987 he served as Nicaragua’s first Minister of Culture.
Cardenal left the FSLN in 1994, protesting the authoritarian direction of the party. He is now 83 years old but is being prosecuted by the current Sandinista government because he had the temerity to call President Daniel Ortega a “thief” who runs “a monarchy made up of a few families in alliance with the old Somoza interests.”
Fernando Aguero, M.D., was the opposition candidate to Somoza in 1967, and his body guard at the time was Eden Pastora. He received international attention with his documentation of Somoza’s corruption, and was later a leader in the broad opposition front who gave money to the FSLN. It did not help him. All of his property was confiscated after the revolution.
Upon assuming power in 1979, the Sandinista Party did an excellent job of bringing the economy to a grinding halt. The Sandinista platform called for “the equalization of wealth.” They began almost immediately by nationalizing 52% of the land, and this one action alone gave great impetus to the formation of the opposition Contra’s. There had been over 200,000 private property owners in Nicaragua and the vast majority lost their property.
Under Somoza farm land was free to any peasant who would clear it. The FSLN also nationalized sugar, agricultural cooperatives, and many businesses. All banks were nationalized and they refused to recognize or repay any debt from the Somoza era.
Foreign investors fled along with the upper middle class. The money which had been transferred out of the country by the middle class when the war began did not return.
By 1981, the state accounted for more than 30% of the industry of Nicaragua. The government also took control with so-called ‘wildcat nationalizations.’ This action provided the FSLN with control of 20% of the cotton industry, 50% of the tobacco industry, and 60% of the ‘staple cereal’ industry.
They had promised international nonalignment but quickly became a Soviet client state. Even before coming to power the Sandinista movement received substantial funding from the Soviet Union as well as military equipment which was passed through Cuba. The self described Marxist/Leninist FMLN which was trying to overthrow the elected government in neighboring El Salvador benefited greatly from the Sandinista victory.
The best legacy of the FSLN in this era was the campaign to raise literacy rates. The goal was admirable, but it was unfortunately marred because so much of the effort was devoted to propaganda and attempting to win over rural areas. They also deserve praise for finally agreeing to free elections in 1990. This controversial decision occurred for several reasons.
First, the collapse of the Soviet Union left Nicaragua without adequate outside funding. International pressure was mounting, and many countries were imposing heavy economic sanctions on Nicaragua. Second, the contra war, going on for more than a decade, was getting unbearable to Nicaraguans, who wanted nothing but peace, and a chance to succeed in global markets.
Ortega lost but deserves credit for accepting the result with out violence. The victor was Violeta Chamorro of the National Union of Opposition (UNO) who had previously been part of the Junta. Just before leaving office in 1990, Ortega and his colleagues carried out a land grab in which the FSLN looted the government and the private sector before handing over power. The FSLN expropriated private property worth tens of millions of dollars on the slimmest of pretexts, including more than 100,000 businesses, homes, and farms. They stole far more than Somoza had acquired.
Mrs. Chamorro’s government initially received over $500 million in aid from the United States, but the assistance did not last long. Senator Jesse Helms (R-NC), who had championed the Contra’s during the 1980’s, was successful in cutting off aid to Mrs. Chamorro in 1992.
The nation had experienced 12 years of economic free-fall under the Sandinista regime and during the civil war. When the FSLN left in 1990, three successive Liberal Party administrations focused on free market reform as the path to recovery. During this 16-year period, characterized by steady GDP growth, the government made dramatic economic progress. It privatized more than 350 state enterprises, reduced inflation from 33,500 percent in 1988 to 9.45 percent in 2006, and cut the foreign debt by more than half. In 2006, the economy expanded by 3.7 percent as GDP reached $5.3 billion.
Ortega was defeated in two comeback attempts in 1996 and 2001. He patiently finagled his return by scheming with President Arnoldo Alemán, who had defeated him in 1996. Alemán was sentenced to a 20-year prison term in 2003 for embezzling over $100 million while in office from 1997 to 2002.
He and Ortega negotiated the infamous “El Pacto,” in which the two former enemies shared power by changing the constitution to give the Sandinista Party almost an equal number of seats on the Supreme Court, the Comptroller’s Office and in the Federal Electoral Council. Consequently, when Alemán was sentenced to prison, Ortega used his influence over the country’s courts to have the obese and ailing Alemán released from prison to serve his sentence at home.
Sandinistas at the walls of the Esteli National Guard headquarters in 1979. Copyright Susan Meiselas

Sandinistas at the walls of the Esteli National Guard headquarters in 1979. Copyright Susan Meiselas

After 16 years in political exile Ortega regained the presidency in 2006. Many believe Venezuelan President Hugo Chávez supplied the Sandinista movement with as much as $50 million during the campaign.
Ortega said he was no longer a Marxist, and supported the CAFTA Treaty with the United States. He also pledged to respect private banking laws and land ownership, and dramatically changed his relationship with the Catholic Church. For the first time he opposed abortion and at the beginning of the campaign he married his wife of 30 years in a Catholic ceremony.
Ortega received 38% of the vote in a five candidate field in 2006 but this was sufficient because of “El Pacto.” The 1999 Ortega-Alemán deal changed the constitution and lowered the minimum level of popular support a candidate needed to win presidential elections from 40 percent of the vote to 35 percent. The two conservative candidates received a combined 54% of the vote, but their split ensured Ortega’s triumph.
In addition to having a strong alliance with Venezuela and Cuba, Ortega also pursued closer ties with Iran, even honoring Iranian President Mahmoud Ahmadinejad with two of Nicaragua’s most prestigious awards, the Liberty Medal and the Rubén Darío Medal. He continues to openly court Russia, in part to show loyalty to a former political patron—Nicaragua is the only country besides Russia to recognize the rebellious provinces of South Ossetia and Abkhazia as “sister republics.”
The abuses of the Somoza regime can never be excused but the situation today is ironically worse. In 2008, Ortega again reverted to the tactics of a bygone era by trying to impose his will on a political system that in 1990 rejected his autocratic tendencies. Two significant parties were arbitrarily denied the right to participate in the most recent election.
By eliminating his challengers, leaving only the FSLN and the Liberal Party to compete, Ortega has laid the foundation for his continued electoral victory and a greater chance to change the constitution to allow for reelection. This move further consolidates his power to deepen his control over other institutions, including the army, the police, and the judiciary.
Ortega has also been promoting “Citizens Power” as a solution to Nicaragua’s endemic poverty. These Citizens Power Councils are neighborhood committees. They are controlled by the Sandinista party, and they were established despite a vote against the plan by the National Assembly.
Some of the president’s opponents charge that the Citizens Power Councils are nothing more than patronage mills, channeling government largess to supporters of the party. Opposition leaders complain the councils smack of similar party-controlled organs in totalitarian governments like Cuba’s, where local committees of party loyalists not only influence who gets government benefits but also spy on political opponents.
Another major problem is energy. Global fuel prices have been reduced considerable but Nicaragua continues to have a significant problem. It is a problem the nation never experienced before. Before the 1979 revolution, more than 70 percent of Nicaragua’s energy was hydroelectric. Today, thanks to a lack of state planning by the last four governments from the right, left, and center of the political spectrum, the trend is going the other way fast.
Today Nicaragua is Central America’s poorest country—and the second poorest in Latin America, behind only Haiti. The past 30 years has seen massive emigration rates and equally massive dependence on remittances and foreign aid. The income inequality is far worse than it was under Somoza.
In addition, 27% of the people are malnourished, which quadruples the rate during the Somoza era. The widespread poverty prevents children from attending primary school, and these youngsters swell the ranks of child workers – who now number more than 230,000.
The average lower-income family of six has to work more than twice as many hours each month to maintain its 1979 standard of living. Between 1981 and 1992, gross domestic product (GDP) per capita decreased by roughly half, dropping to a dismal $425.

There Will be No Obama Drama in Canada by Gregory Hilton

President Obama’s first foreign trip takes place tomorrow, and in a very wise move he is now back tracking on his campaign promise to renegotiate or pull out of the NAFTA Treaty. Hillary Clinton made her “shame on you” speech in response to Obama’s ad which portrayed her as an avid NAFTA supporter prior to the Ohio and Pennsylvania Democratic primaries.
Obama threatened to force the Canadians to renegotiate provisions of the statute — even if that meant unilaterally pulling out of the agreement. All of that has now been forgotten. He told the “NY Times” yesterday, “There’s $1.5 billion worth of trade going back and forth every day between the two countries. . . .It is not in anybody’s interest to see that trade diminish.”