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/* ---------- "#29:Nicaragua still not stable" ---------- */
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Nicaragua: Stability Still Eludes Capitalists
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from the Militant, vol.59/no.29 August 14, 1995
BY FRANCISCO PICADO
AND SEBASTIAN O'GRADY
MANAGUA - Five years after Violeta Chamorro and the U.S.-
backed Opposition National Union (UNO) coalition won the
elections here, their dreams of capitalist stability are
still far from being a reality.
The government was virtually paralyzed recently by a
four-month-long constitutional battle between a majority
of the National Assembly and President Chamorro. Although
an agreement was finally reached June 15, in part under
pressure from international aid donors, the underlying
causes of the conflict have not gone away.
Land disputes in the countryside continue to smolder. On
one side are peasants who received land from a Sandinista-
led government placed in power by the popular armed
insurrection that overthrew the Anastasio Somoza
dictatorship in 1979, and those who have occupied land in
more recent years. On the other are the previous large
owners who want the confiscated land back, new landowners
who were given large holdings in the aftermath of the
electoral defeat of the FSLN (Sandinista National
Liberation Front), and both government and private-owned
banks, which have been slow to give loans to those who
obtained land through the revolution.
Austerity measures and free market policies - initiated
under the FSLN at the end of the 1980s and deepened since
1990 under the current regime - have battered working
people in the city and countryside. Many refuse to give up
their "Sandinista roots," as one telephone worker
described the gains made during the revolution.
The Chamorro government points to the new factories in
Managua's free trade zone as a glowing success for the
free market and capitalism in Nicaragua. Sergio Novoa,
Human Resources consultant for the government-run Free
Trade Zone Corp., said in an interview that things have
been improving since the defeat of the "Sandinista
communist government."
Since 1991 employment in the zone has jumped from 900 to
more than 6,000. Even the old prison at the outskirts of
the zone has been converted for the 15 businesses there.
Owned by U.S., Taiwanese, Korean, and Nicaraguan
capitalists, the shops mostly make clothes for export to
the United States for J.C. Penny, Wal-Mart, Sears, and K-
Mart.
Until 1990 most of the factories there were government
owned. Now they are all private.
`An abundance of peasant women'
"Foreign investors are really impressed when they see
what we have here," Novoa said. "We have an abundance of
peasant women who come from having done nothing but milk
cows all their life, to running industrial machinery. They
learn fast, and become agile, rapid, versatile, high-
quality workers.
"And a big part of the attractiveness is how cheap labor
is," boasts Novoa. "It's cheaper than in the Dominican
Republic, Costa Rica, or Mexico."
But there are still problems, he added. "Some investors
come from New York trembling with fear. We have to
convince them that the Sandinistas and the strikes of tire-
burning workers are a thing of the past."
There is not one union in the free trade zone, even at a
shoe factory owned by a member of the FSLN.
Three workers at the new enterprises in the zone,
formerly employees at the state-owned ENAVES garment
factory, were taking their lunch break as these reporters
were leaving.
"It's the same now," one of the women said. "Except that
in 1990 we received a free lunch every day, free
transportation to and from work, and a package that
included rice, beans, soap and other essential items each
month, and there was a bus that picked us up every
morning. Now all those things have to come out of our
wages."
"That means it's not the same," added another worker. "I
only make 140 co'rdobas a week (about $19). Do you know
what it means living on that?"
"We've been forced to speed up our work. And any one who
talks union is fired," said the first woman.
Carlos Borge, a leader of the Sandinista Workers
Federation (CST), said that the CST has lost 50 percent of
its membership in the last five years, mostly due to
growing unemployment. At the same time, he noted, the
Ministry of Labor has blocked union recognition including
in the free trade zone.
Strikes are harder now, commented Mario Malespin, head
of the Enrique Schmidt Telecommunications Union and a
leader of the CST. "Workers are afraid to lose their
jobs."
Few new unions have been formed. "This is true even in
the many businesses now owned by the FSLN," Malespin,
himself a member of the FSLN, said. "As far as I know not
one of them is union. They are just like any other
recalcitrant capitalist."
A fight is now brewing at the state-owned phone and mail
company Telcor. The government is planning to sell
Telcor - one of the most profitable companies in the
country - ostensibly to raise money to compensate
capitalists for land that was confiscated and turned over
to peasants and farm workers during the revolution.
"We're fine just the way we are," said Veronica Wayman,
a cashier and operator at Telcor in Managua. "Privatizing
would mean layoffs and a loss of benefits." Phone workers
make triple and quadruple what garment workers in the free
trade zone make and they still get free medical, dental,
and eye care, and a food package each month.
"I'm not against compensating the old landowners," she
said. "But not at our expense."
In 1990 Telcor workers went on strike in spite of
opposition from the FSLN leadership.
Headache for capitalists: land disputes
Ongoing land disputes in the countryside are at the
center of the problems the capitalist class in Nicaragua
faces trying to establish some kind of stability.
In the early to mid-1980s, the Sandinista-led government
confiscated the landholdings of capitalists tied to the
Somoza dictatorship and some other large capitalists.
Thousands of acres were distributed to landless peasants,
most to cooperative and collective farms. Other large
estates were organized into state-owned enterprises.
After its 1990 electoral defeat, the FSLN distributed
additional farm land to peasants and lots in the city for
housing.
Chamorro, during her campaign for president, promised to
give land back to many of the previous landowners or
compensate them. Some small factories have been returned
to the previous owners. But in the countryside, for the
most part, Chamorro has not tried to evict peasants from
the land they won or occupied. Instead she offered
government bonds to the expropriated capitalists, many of
whom refused the offer. Unable to get any financing or
other assistance a number of peasants have sold their
land.
In early July former U.S. president Jimmy Carter brought
the opposing sides together and worked out a deal. The
Chamorro government agreed to recognize the titles of the
peasant and peasant cooperatives and guarantee a major
portion of the bonds with dollars in part by selling off
Telcor. Some capitalists still insist on getting their
land back and have refused to back the accord.
State-owned farms, however have already been divided up
in a process that began several years ago. According to
Jose Adan Rivera, an executive committee member of the
Rural Workers Association (ATC), the government, the ATC,
the FSLN, and others agreed to a four way division: 29.5
percent of the farms were returned to their old owners,
21.3 percent to former contras, 17.2 percent to Sandinista
Army veterans, and 32 percent to farm workers and the old
state farm administrations.
All sides agreed to maintain the same benefits and not
to fire current employees. But many former owners, and new
owners, have violated this agreement, Rivera said. Farm
workers are in bitter disputes over these lands.
Many farm workers and small peasants complain that most,
and the best, of the land destined for veterans and former
contras, was given not to rank and file soldiers, but to
Sandinista Army officers and high-ranking ex-contras.
The other problem has been credit to work the land. The
government has refused to recognize the titles of many
cooperatives and state farms. Without titles, the private
and state-owned banks refuse credit. Without credit, small
peasants and other farmers cannot buy what they need to
farm.
Thousands of peasants led by the National Union of
Farmers and Ranchers (UNAG) marched in Managua June 16 to
demand that the government recognize the titles of all
those who received land.
Farm workers and peasants, with the support of the ATC,
have been camping out on the grounds of the University of
Central America in Managua to highlight their demands for
titles and credit. Twice a day, 150 rural toilers block
the street in front of the university. Every week, some
head back to their farms and others take their place. The
"sit-in," as they call it, began in May.
"The government is fighting for the bourgeoisie," said
Santos Paez from San Juan del Rio Coco, who works at La
Dalia coffee plantation, formerly a state-owned farm that
is now formally owned by the farm workers. The workers
were forced to "hire" the old administration, which in
turn has the power to hire and fire, and to set wages. The
government "doesn't care about the peasants. We want
titles and credit."
FSLN promises `stability'
In the midst of the deepening economic crisis and
continuing resistance, 40,000 people overflowed the Plaza
of the Revolution July 19, the anniversary of the
Sandinista revolution.
Workers, students, and army veterans, many dressed in
the red and black colors of the Sandinista flag, some with
home-made signs, turned out to hear speeches by FSLN
leaders Toma's Borge and Daniel Ortega. The latter is
expected to be the FSLN candidate in the 1996 presidential
elections.
"The FSLN is the only alternative for those of us that
have nothing," said Alcino Benavides.
Ortega portrayed the FSLN as the party that can bring
stability to Nicaragua.
The FSLN is "the poor peoples' front, the peasant front,
the workers' front, the front of the hungry, the
unemployed, the barefoot and the humble," Ortega said.
"But that is not enough," he added, calling for unity
among everyone including professionals, merchants, and
"capitalists who stayed in our country and are willing to
really work for Nicaragua."
The former president of Nicaragua also said, "The FSLN
is willing to indemnify all of those who should be
compensated," for land that was taken from them.
Dozens of FSLN leaders, led by former Nicaraguan vice-
president Sergio Ramirez, recently split from the FSLN and
formed the Sandinista Renovation Movement (MRS). Almost
the entire FSLN faction in the National Assembly are with
the MRS with a few exceptions. Former FSLN leaders in the
new party include Dora Maria Tellez, Carlos Zamora, Daisy
Zamora, Reynaldo Tefel, and Rene Arce. Other long-time
figures have left the FSLN without joining any other
party, including Ernesto Cardenal.
Several leaders of the MRS have stated that they will
never form an alliance with the "corrupt" FSLN or the
government.
Constitutional crisis
Ortega said little about the still simmering
constitutional crisis. For months Nicaragua in effect had
two constitutions. Neither President Chamorro nor the
National Assembly majority would recognize the validity of
each other's actions. After months of negotiations
involving Cardinal Miguel Obando y Bravo, a behind-the-
scenes deal led to a version of the National Assembly
reforms finally being adopted.
This deal includes limiting the presidential term to
five years instead of six, prohibiting the election of
anyone to president for more than one term in a row,
prohibiting relatives of the current president from
running for office in the election immediately following
the term, and strengthened the role of the assembly. The
reforms also call for increasing the Supreme Court from 7
to 12 justices and dropping the word "Sandinista" from the
name of the army and the police.
The FSLN deputies in the assembly abstained on the final
vote, while the MRS voted in favor.
Few workers saw the debate over the constitution as
something that mattered to them. But the constantly
shifting alliances, along with the splits in the FSLN and
the traditional bourgeois parties, underscore the
continuing inability of the capitalist class in Nicaragua
to resolve the deepening crisis in their favor.
To get an introductory 12-week subscription to the Militant in the
U.S., send $10 US to: The Militant, 410 West Street, New York, NY 10014.
For subscription rates to other countries, send e-mail to
themilitant@igc.apc.org or write to the above address.
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