Contesting Everything,
Winning Nothing

Presidential candidate Violeta Chamorro surprised her Nicaraguan and U.S. allies, most observers and certainly the incumbent Sandinistas by winning the February 1990 election. Her victory set off a series of conflicts over basic issues of governance, economic policy and ideological transitions that have yet to be finally resolved.

Everything has been contested and, given the historical moment, everything was going to be contested. The conservative Chamorro succeeded a quasi-socialist government that had crafted enormous structural changes in the economy. On election day, the country was at war, with the U.S. financed National Resistance troops, or contras, vowing that an electoral victory of FSLN (Sandinista National Liberation Front) candidate Daniel Ortega could not be free and fair. Many members of Chamorro’s unwieldy, fractious 14-party UNO (Union Nacional Opositora) coalition had recently been contra officials, and the Chamorro campaign was heavily financed by the U.S. The Sandinistas had overthrown, in 1979, the two generation Somoza family dictatorship that had made a burlesque of democratic procedures and institution building. Governing under a liberal constitution adopted in 1987, the wartime Sandinista government had a very strong executive, but weak legislature and court systems. It was opposed by small, ever dividing and weak political parties, some of which had abstained from the 1984 elections.

As Chamorro took office the economy was prostrate. Ten years earlier, surveying the economic damage of the war which defeated the Somoza dictatorship, UN analysts predicted that under the best of circumstances Nicaragua’s economy would not get back to pre-war conditions (which were hardly robust) for a decade. Nicaragua got the worst instead: ten years of war, tempest (historic rains, years of drought and near drought, hurricane, tidal wave), and hunger. Only pestilence was missing from this Old Testament script, and then the cholera and dengue fever epidemics came along.

Despite the much praised 1990 electoral process and Ortega’s gracious concession, political conditions, like economic conditions were worse than in 1980. The ten year war, extreme polarization, a halting peace process, rural areas where residents had fought on both sides of the war, and a palpable desire for revenge, contrasted sharply with 1980 when there was no war, lingering political unity in the aftermath of the struggle against Somoza, and considerable hope for the post Somoza era.

Our title, then, does not reflect a view that a bickering political class is chiefly responsible for the current difficult straits. Nor do we believe that had only there been sweet harmony these past five years, Nicaragua would have emerged from its morass with a healthy economy and polity. Rather, Chamorro, her allies and her opponents faced difficult, contentious conditions. Major conflict was inevitable.

But our analysis is not fatalistic, simply that history has been unkind. In the last five years, political actors and organized groups have made choices, and those choices have made a difference. The level of conflict, the number of bargains which have not been kept, the palpable corruption, the prolonged confrontations over ideology which seem at heart over quotas of power, and the extensive role played by some hardly neutral foreign players have left Nicaraguans (according to polls) highly critical of the political process and economic conditions and those who shape them. While the 1990 election was hotly contested, it was enthusiastic. Voters turned out in large, committed numbers. Now there is cynicism, despair and indifference. Some would argue that the economy is on a better footing now than in 1990, but there has been virtually no economic growth, and for a significant majority of Nicaraguans economic conditions are either no better, or worse. With different choices, results could have been more positive for the majority. And with more consensus and economic policies which fully take into account the material and human damage suffered by Nicaragua results could be more positive in the future.

What has been contested? The most fundamental questions a polity encounters. Who shall control the means to make war? Should the new government recognize the laws and Constitution of its enemies? What is the proper scope of governmental action in the economy? In a severely war damaged and traditionally impoverished economy what shall be the best development policy? How shall those most damaged by the war be helped; how shall reconciliation be achieved? How shall power be shared between the branches of government? How shall many thousands of ownership disputes be resolved? What role in decisions should foreign financial institutions play?

Nicaragua’s contests have been so intense and difficult because all of the questions have been contested during this historically short time and because debate parameters have been very wide and differences fundamental.

The breadth of the questions can be compared to countries in the former Soviet Bloc at the end of the cold war, but Nicaragua’s context is still different and more complex. Unlike the former Soviet Union, Nicaragua was painfully emerging from a decade or more of war. The Sandinistas had been in power just over a decade, not 75 years; those it had defeated were still around, still angry, and were poised to gain political and economic pay backs. The political and economic model that was defeated, Sandinismo, had its vagaries and was itself under change, but organized Sandinista groups were prepared to defend their gains and Sandinismo. Finally, Nicaragua is a weak nation with few chips to play against international powers.

Following the 1990 elections, all Nicaraguan factions were in a weak, or weakened position, which led to a more desperate defense of positions. The Chamorro political victory rested on newly won votes, not an organized base, much less a solid party structure. It was surrounded by international creditors and an anti-Sandinista U.S. on the one side, and the Sandinistas on the other. The FSLN controlled the military and the police, had a solid, though minority bloc of 39 in the 92 member Assembly, and a large, veteran organized base. But the Sandinistas, shocked by their defeat, came to realize that their base was not as organized, efficient or loyal as they had thought. They had lost their international partners, had only minimal financial means, and faced an opposition a portion of which was vengeful. Each UNO group was weak with no organized base, and distrustful of the others. Trade unions, farm workers on state farms, and organized small and medium farmers faced a government bent on privatization and tight credit. The business class was divided. The legislature had been weak and was about to be badly divided. The courts had been passive. With major questions at issue, and weakened desperate players, there was no solid institutional means for resolving conflict. There was, on the other hand, an abundance of assault rifles.

In this report we review the major contests which have embroiled the nation. While in some there is evidence of substantial progress leading toward consensus, in others, particularly economic contests, conflict and lack of reconciliation remain. To the extent that economic conflict has been less severe recently, it is due to the exhaustion or disarticulation of contestants on one side, rather than the true resolution of the issue.

In some of the issue areas reviewed, there was a turning point, when conflict was about to go over the edge, but then a framework for consensus emerged. That is not true in others however, particularly in the case of those uprooted by war whose aspirations for a better future have been thwarted. And where a framework for consensus has been erected, it is everywhere fragile, and there is no clear direction beyond the elections scheduled for October 20, 1996 next year. The candidate who has consistently led in the polls, anti-Sandinista Arnoldo Alemán, has not been a part of the various negotiating processes which have led to a measure of consensus.

The Chamorro administration’s chief decision maker Antonio Lacayo, son-in-law of the President, is a neoliberal. This philosophy was widely shared in the electoral coalition, and, more important, by international donors and lenders.

Application of the neoliberal policies with international support that in comparative terms has been ample has aroused contentious responses ranging from political threats, to demonstrations, to armed violence, to cries of favoritism, and, more recently, even to grumblings from business sectors. The demonstrators have protested massive layoffs, a reduced standard of living, and reduced or more expensive state services.

Neoliberal economic policies have thus far failed to establish an expanding economy of sufficient strength to raise all boats. In perhaps the government’s most signal accomplishment, hyperinflation was halted in 1991 and inflation has been modest since then. But the economy has hardly grown; there has been little new investment; poverty is extensive and deep with indications that it is worse than in 1990, unemployment rates are very high and underemployment rates still higher. Optimists see signs of modest growth and hope that the economy is about to turn the corner.

Supporters of neoliberal policies blame the severe mess the economy was in on Sandinista government mismanagement, and argue that subsequent large or violent confrontations created a climate of insecurity that is anathema to investors. Others blame the war and its perpetrators and claim the neoliberal model has been vicious. Critics claim economic policies led to the very violence and chaos which its advocates claim hinder its success.

International funding institutions, multilateral and bilateral, continue to promote neoliberal solutions, though some have tried to moderate the model. Protests have abated in number, violence and intensity in recent years, but overall there is less, rather than more, consensus over what program can work in the Nicaraguan context.

Few publicly predicted a Sandinista loss in 1990, and no one predicted that within a year or so the new President would have a tactical, if not strategic, working alliance with at least a core of top level Sandinistas, including the Sandinista bench in the Assembly. Though they lost the election, the Sandinistas have remained the dominant issue cutting across all lines of political debate.

Among those at the right end of the UNO coalition, the key political indicator for judging the reliability of other political actors has not been their economic philosophy or approach to issues of private property, but the extent, militancy and consistency of their opposition to the Sandinistas. Presidential candidate Chamorro and Antonio Lacayo were suspect from the beginning because she had been in an early Sandinista government and he had business negotiations with the Sandinista government. The key issue among the new governing coalition became the extent to which the government was going to roll back Sandinista political power and economic changes.

For those on the right, the answers were consistently bad. President Chamorro kept Humberto Ortega as the head of the military, and did not sweep away the Sandinista agrarian reform. With the loss of UNO support, Chamorro and a few (former) UNO deputies gained a majority in the Assembly by dealing with the Sandinista bench and its 39 votes. The UNO coalition claimed to have won the election for President Chamorro and been betrayed; Antonio Lacayo claimed his mother-in-law had swept the unknown UNO parties into office.

U.S. policy contributed to polarization in Nicaragua because for at least two years the U.S. administration, and for all five years Republicans in the Congress, adopted an anti-Sandinista attitude rather similar to that of the UNO right.

Institutional incoherence and fragile governance by ad hoc policy making has been the result. The President, whose electoral coalition had won 51 Assembly seats, could rarely muster a strong majority and relied increasingly upon legislation by executive decree. The National Assembly at times could not muster a quorum, and for over a year was boycotted by an UNO minority which did not recognize the legality of Assembly proceedings. Judicial branch rulings often had no legitimacy with the UNO right because of judicial connections with the Sandinistas or Lacayo. Then, in the last two years, a crisis between the branches of government over proposed Constitutional amendments further confused the picture. For six months this year, different branches of government followed different Constitutions and disagreed over the size and composition of the Supreme Court. As described below, however, this Constitutional crisis finally led to increased consensus.

These institutional battles have been played out among political elites. But Nicaragua was marked during the Sandinista years by formation of large grass roots groups almost all of them organized and led by Sandinistas. Though the degree of autonomy and political role of these groups during the Sandinista years has been the subject of debate, there is no doubt that they changed the political landscape. The Chamorro administration, and even Sandinista political elites, could hardly ignore these organizations amid the wrenching economic changes and institutional struggles. The last five years have been filled with crises for these groups brought on by the electoral loss and hostile relations with the state, layoffs and tight credit, privatization and, at least in rural areas, the search for reconciliation with former enemies.

When Violeta Chamorro won, the rebel contra army, thought that it had won too, and questions of which army would be the army of the new government quickly came to the fore. Critics of the Sandinistas had complained for years that the military was a Sandinista Party army, not of the nation’s army, and pointed to the persistent Sandinista refusal to change the name of the military from Popular Sandinista Army (Ejército Popular Sandinista, EPS) to one reflecting the nation and not the party.

To the Sandinistas, though they had lost the election, militarily they had won the war, and they were not about to hand over military power to a government which would replace them with contras. To them, UNO’s participation in the election signified its acceptance of the legality and constitutionality of the Sandinista government and its institutions. The incoming Chamorro government’s willingness to retain the military and General Humberto Ortega as its chief, and to demobilize the RN, ruptured UNO, without putting the military question to rest. Disgruntled UNO members, Senator Helms and the U.S. government, and former contra combatants continued to press for the removal of leading Sandinista Humberto Ortega as head of the military, to end any aspects of military autonomy and/or to simply eliminate the military altogether. Similar pressures were brought to bear to end Sandinista control of the national police.

The military question has been, after five years, largely resolved with the drafting and passage of a law on the military, with changes in the police leadership and with the 1995 resignation of Humberto Ortega under the terms of the new military law.

An extensive Sandinista agrarian reform took properties of the Somoza family and close collaborators, and, later, properties that were being decapitalized or underutilized. Compensation was, in the view of the confiscados, wholly inadequate. Those properties were transferred to the state sector, or transformed into private, peasant-held cooperatives. Substantial numbers of urban businesses and residential properties also changed hands.

Chamorro backers wanted their properties back. The new government promised property to demobilizing RN troops and then to some EPS officers being demobilized. Beneficiaries of the agrarian reform and workers on state farms did not want to lose their farms. The government has not been able to resolve these conflicting claims or meet its promises. A significant minority of former owners have gotten their property back through privatization and some workers have been able to get a share of businesses being privatized. Other former owners have received bonds as compensation. Agrarian reform beneficiaries, and others, have unclear property titles. Insecurity increased with a wave of land invasions. Finally, the workings of the neoliberal model amidst these crises has resulted in distress sales by agrarian reform beneficiaries to the extent that analysts speak of a reconcentration of land. Though violent land invasions have abated, and there are both titling and compensation processes in the works, great uncertainty and unhappiness remains over legal ownership, slow and corrupt bureaucratic procedures, inadequate compensation, extensive landlessness and lack of credit, and rural violence and crime.

Though the war inflicted severe damage on the economy, its economic and social effects were most severe on those who were wounded, other combatants, refugees who fled over the border, those who were forcibly displaced, and those in rural areas who were caught in the middle between two warring armies. The great majority of Nicaraguans lost friends and loved ones in the combat. Of these groups, special programs have been designed primarily for demobilized combatants, with some additional immediate help to returning refugees. The large displaced population has been largely ignored.

The government, by its own admission, has not accorded these programs sufficient attention and resources. Initially it failed to fulfill promises to those groups targeted for compensatory "reinsertion" programs. The new government was ill prepared to design and promote programs for international funding. There have been policy debates with some international agencies wanting to target not a particular group of ex combatants, but rather entire war-torn communities. The government’s priorities have been elsewhere, and the agencies charged with programs for the war affected have gone through a five year period marked first by major corruption and then by wholesale changes of structure and plans.

This inattention and lack of resources was a primary cause of the violence which erupted soon after demobilization. But given macroeconomic policies and conditions, reinsertion programs for ex-combatants and the war affected, even with better funded programs, would have had difficulty making an impact in an economy with a 50% under and unemployment rate.

One can find in the pages of this report evidence of progress toward reconciliation among former war enemies at the grassroots. The reconciliation is often leavened by a sense on each side of having been betrayed, misled or manipulated by former leaders. As the former leaders of the ex-combatants, in no small part, remain within the upper levels of Nicaragua’s political class, this lack of confidence is another warning sign. But the examples of reconciliation are warming and should perhaps serve as a model to elites in the political class.

We report also progress toward consensus within the political class in various issue areas. But in reviewing the events of the past five years with multiple crises and innumerable bargaining sessions, one can also get the sense that, a deal is never a lasting deal, merely a vehicle to stave off crisis. Making deals only to break them or, sometimes in the case of COSEP, the leading business association, not negotiating at all, can hardly build political confidence or healthy economic conditions.

And, in turn, it has been hard to make lasting deals because resources have been in short supply. Very significant levels of international aid have flowed to Nicaragua, relative to other countries, but, given the historic needs of the country and the war damages, these have not been yet been adequate. The great bulk of these funds have been earmarked for stabilizing the currency by reducing international payment imbalances. These funds have been contingent on Nicaragua accepting the hard bargaining conditions of the World Bank and IMF. We do not here debate the worth of these general recipes. We argue in the Conclusion, that applying the model without fully taking into account Nicaragua’s war time and post war economic social and economic upheavals, providing relatively few funds for the uprooted and demobilized combatants, and tightening credit with no provisions for helping small and medium producers have resulted in, quite apart from the social pain that comes along with the neoliberal bargain’s "strong medicine", unstable conditions of virtually every stripe that have impeded investment.

ECONOMIC RESTRUCTURING

Despite its campaign emphasis on peace and reconciliation, and its initial efforts to reach an accord with the Sandinistas over the transition of government and control of the military, the Chamorro administration opened with highly aggressive moves to return confiscated property and to stabilize the currency. The latter effort was dubbed Plan Mayorga, after Finance Minister Francisco Mayorga who had boasted during the campaign that the inflation problem could be cleared up in 100 days. One hundred days later, the protests against implementation of the plan were so broad and violent that the country seemed on the brink of another war, this time in the streets of Managua.

The Plan included replacement of the cordoba currency with a new Gold Cordoba, pegged to the dollar and to be backed to the hilt by the government, a devaluation of over 100% in May without compensatory salary increases, broad scale government layoffs, increased fees for public utilities charged in the new currency even though the old, devalued currency continued to be used to pay salaries, and executive decrees freeing the government from civil service and union contract obligations. Understandably, Sandinista unions, quite apart from the economic hardship visited upon their members, saw in Plan Mayorga an effort to break them. They launched protests which rapidly spread.

By the end of the year, inflation had risen to 13,000% (though this was in part due to last few months of the Sandinista government), Mayorga was no longer Minister, and the government had negotiated with the unions and the opposition in a Concertación agreement calling for consultation, alleviating some of the layoff plans, renewing its campaign pledge not to take lands away from poor beneficiaries of agrarian reform and, in general attempting to dampen the crisis. Many sectors of UNO objected that Lacayo had caved in to the Sandinistas, and that the Sandinista police and military had been insufficiently aggressive in controlling the protests. Calls for Lacayo’s removal began.

In March 1991, Lacayo announced a second major devaluation to shore up the collapsing Gold Cordoba. Though quantitatively greater, it was accompanied by negotiations with unions, early, though not fully compensatory, salary adjustments, and some social compensation programs — all designed to dampen protest. Though the recessionary effects were and continue to be severe, many point toward this as the leading achievement of the Chamorro administration. Inflation has been moderate; it descended from over 13,000% in 1990 to 866% in 1991, to 3.5%, 19.5%, and 12.4% in each of the subsequent three years. However, large international inflows have made this possible, and they will not be permanent.

The Sandinista’s expansion of the government and its role in the economy has been reversed. Some 30,000 public sector non military jobs were lost through 1994 amounting to a reduction by about one/third in the public sector since 1988. Trade policy has been liberalized with tariff protection reduced, substantially damaging small producers and reducing incentives to invest in the already economically distressed and disadvantaged economy. Lacayo has directed a large scale sell off of state owned businesses. The government appears to have gained little, or no, net income or assets from these sales despite the fact that these businesses (however run down or damaged by the war) used to amount to 30% of GDP. (See "The Property Tangle," below.)

The reasons for this lack of progress on many fronts have been hotly debated. Defenders of the government point to the disaster they inherited and the 12% drop in GNP as recently as 1988. Many analysts point to the severe political instability, armed actions, and insecurity of ownership. Critics of the government argue that the instability is a result of the harsh neoliberal policies suffered by an already destitute, war weary population. Virtually all sectors point toward the need for social compensation programs, but programs which have appeared are very small in dollar terms or job creation potential in comparison to the universe of needs.

NICARAGUA’S POLITICAL TRANSITION:
From Crisis to Institutional Reform

On september 7, 1995 Antonio Lacayo resigned his job as Minister of the Presidency. The Chamorro administration’s chief decision-maker announced he would devote full time to forging the "Proyecto Nacional", the government’s new political party. Asked if he would run for president, Lacayo replied "if the National Project primary next March decides that Antonio Lacayo is the candidate, I will be the candidate." Lacayo’s preparations to campaign clash frontally with a provision of a recent constitutional reform barring presidential bids by close relatives of an incumbent president.

This and other recent events demonstrate that, despite consensual developments leading to substantial constitutional reform earlier this year, Nicaragua’s executive and legislative branches, and larger political forces, remain locked in combat over the rules of the political game.

For example, on September 6, the National Assembly passed a law prohibiting law suits that would claim that newly reformed sections of the Constitution were themselves in violation of the Constitution. But two weeks earlier, 23 high officials of the Chamorro government argued to the Supreme Court against a new constitutional clause requiring them to resign a year early if they wish to run for legislative office.

At some remove, however, parts of the political class have demonstrated a capacity for innovation leading to positive formulas for resolving political and institutional impasses. But progress is by no means sufficient to allay fears and cynicism reflected in the aforementioned voluminous polls. They show majorities who profess that Nicaragua is a more democratic country than in 1990, but that democracy is not delivering the stability or prosperity that its citizens were promised.

The 14 party UNO coalition supporting Violeta Chamorro lacked a stable center and was torn from the beginning by a struggle between Antonio Lacayo and vice-presidential candidate Virgilio Godoy. Lines of cleavage deepened when news of her coming appointments made clear that technocrats with economic and international experience, rather than UNO political stalwarts, would receive top posts.

Though lacking organized support, Mrs. Chamorro and her team entered office with a supremely ambitious agenda. They were determined to bring peace to a war-torn country and effectuate a deep restructuring of the economic system, a partial return of confiscated properties to former owners, and an overhaul of education, all without departing from a formal democratic framework. As her administration opened, the gap between the government’s goals and its base of political resources loomed very large. Her government nevertheless moved rapidly to secure its first objective, the demobilization of the 22,000 members of the Nicaraguan Resistance or contras in June, 1990.

As shown by this report’s sections on the economy, property, and those most damaged by the war, contra demobilization has not spared the country serious trouble. Class based property conflicts, and struggles over distributing the costs and benefits of the wrenching stabilization and adjustment measures pitting unions against a government determined to slash public spending, slough off costly functions and privatize have dominated the political scene.

Processing conflicts of the magnitude of those facing postwar Nicaragua would test the mettle of any democratic system of government. Nicaragua’s has nearly been overwhelmed. Three factors are at play here: the system’s basic underdevelopment, the questioning of its legitimacy by much of the political spectrum, and the dual power situation emanating from the election.

The 1987 Sandinista constitution was basically liberal, enshrining the ideas of individual rights and a separation of powers in a formally democratic system. Before 1990, however, the country had not developed relevant experience with the interplay of liberal-democratic institutions. Instead, reigning practice was expressed in executive dominance, legislative inferiority, a lack of judicial independence, and the absence of controls over the management of the public wealth.

Institutional weaknesses have been exacerbated by the de facto situation of dual power emanating from the election. The 1990 election was fought under the Sandinista constitution. Sandinista forces thus emerged retaining control over the army and police and with important quotas of power in the courts and the media, along with enough seats in the National Assembly (39 of 92) to block important reforms. The incoming Chamorro administration quickly found itself forced to negotiate significant aspects of its program with the Sandinista opposition if it wanted to see its overall project stick.

Nicaragua’s political transition has evolved in two broad phases. In the first phase, the Chamorro government, the Sandinistas, the political parties of UNO, the socio-economic actors, the military, the IFIs and the U.S. fought over the above mentioned transition issues without the benefit of a stable institutional framework. The result was some progress in resolving short term economic and social conflicts. But dissensus over the rules of the game deepened. By the end of this period, in September, 1993, two competing proposals for institutional change had emerged, one promoting reform of the Sandinistas’ 1987 constitution, the other demanding a constituent assembly to draft an entirely new national charter.

The second phase (September 1993 – September 1995) has witnessed the victory of the reform option and a struggle over the content of constitutional reform as a way out of Nicaragua’s political crisis.

By October, the parties resorted to an informal bargaining mechanism ("Concertación") to hammer out what was supposed to have been a consensual framework for subsequent policy. But when that framework proved incompatible with the strictures of the IMF, the government ignored the deal and used its executive powers to negotiate economic policy measures with international financial institutions. Sandinista groups promptly accused the government of reneging, and labor violence recommenced. The government then prevailed over the unions, after making some concessions with its March, 1991 stabilization package.

This crisis displays a pattern. First, existing formal institutions were inadequate to resolve conflict. Ad hoc mechanisms invented on the spur of the moment also failed, although they contained conflict within certain bounds. Both government institutions and ad hoc concertaciones ended up delegitimated in the eyes of at least one of the parties. Second, the government resorted to its "executive prerogatives", enshrined in the strongly presidentialist Sandinista constitution, to make decisions that some party again deemed unacceptable. In response, the aggrieved party resorted to coercion, either in the form of direct violence or by marshalling foreign, extra-system pressures to make its will prevail. But the failed deal generated more conflict.

This pattern has been recurrent. For example, in the struggle over property, dealt with in detail below, the Chamorro government prevailed over former property holders by engineering a crucial ruling from a pliant Supreme Court, and by cobbling together a coalition in the National Assembly composed of Sandinistas and "centrist" deputies whose loyalties, rightist opponents charged, had been bought. The UNO right came away from the fracas disillusioned with the legislature and court system. In retaliation, the former owners lobbied U.S. Senator Jesse Helms to cut aid funds to Nicaragua in a successful effort to exert pressure on the Chamorro government to deal with their claims. Feeling betrayed by agreements struck with the executive, the contras negotiated staring down the barrel of a gun, and also resorted to pressures from political powers in the U.S. These dynamics illustrate an institutional system dysfunctional under the stress of major conflict, and a vulnerability to interference from foreign parties, the latter a traditional and much played political card.

Key tactics allowed the government to prevail over its opponents at crucial junctures. It strengthened its resource base by hewing closely to 1990s neoliberal economic orthodoxy, maintaining the backing of foreign donors and financial institutions. Though it could not quell strikes by force, the government found that through control over the public purse it could outlast the Sandinista unions, whose members’ will power was exhausted in repeated negotiations with authorities who appeared to give in to their demands and then refused to pay up.

Second, it wove alliances and struck compromises with key opponents in order to preserve room for political maneuver. Its most crucial alliance has been with the Sandinista army, whose historic chief, General Humberto Ortega, was allowed to stay on in his job so that the government could exert some degree of control over the behavior of other Sandinistas (and later over the rearmados). The administration also came to terms with the FSLN and Sandinista interest groups over issues such as property and privatization, university autonomy, and power sharing in the Supreme Court, after playing them off against former owners.

Third, the government has used foreign pressures to extract compromises from other power centers. When U.S. Secretary of State James Baker demanded in January, 1992 that "security and stability" in Nicaragua had to increase—and backed his demand by suspending assistance—the Chamorro administration used the pressure as a lever to fire police chief Vivas. A year later, it deflected similar U.S. pressures for greater control of the military toward Humberto Ortega, forcing a negotiation which eventually induced the general’s resignation.

In the successes achieved by the government in this early stage, the political acumen of chief minister Antonio Lacayo, who from the outset displayed unsuspected skill at political maneuver, stood out. In a juggling act initially regarded by many observers as masterly, Lacayo managed supremely well at playing off and deepening divisions among his adversaries.

In so doing he made liberal use of the extensive prerogatives granted to Nicaragua’s presidency under the 1987 Sandinista constitution. The Chamorro government drew up its early economic and privatization policies in secret, without any legislative input. In the opinion of many adversaries, Lacayo has injected elements of corruption to weaken the Assembly and the Supreme Court.

Other institutions fared little better. Unable to resolve basic political disputes, the National Assembly became the scene of frantic maneuvers for control. When a Center Group-Sandinista alliance gained a majority in January, 1993, most UNO deputies began a year-long walkout, alleging they had been illegally deprived of control. The Supreme Court languished on many constitutional challenges put before it, while rulings on others reinforced a perception of submission to the executive’s will. In the face of allegations of its own official corruption, the government turned out the watchdog, the Comptroller General, in January, 1993.

Though the government generally won out, its opponents refused to accept defeat. A result was continued resort to violence. Postwar Nicaragua’s wave of instability crested in the third quarter of 1993 with three major incidents. In July, rearmed Sandinista officers demanding attention to their economic grievances seized the northern city of Estelí, setting off a bloodbath as the Sandinista Army retaliated, retaking the town. A month later, back-to-back kidnappings began when rearmed contras captured a high level government delegation with figures ranging across the political spectrum. In retaliation former Sandinista army officers seized leading rightists. In September, a violent strike by transport workers in Managua backed by FSLN leader Daniel Ortega left two dead, including a popular police commandant, and the FSLN itself on the road to schism.

Added to this, the alienated UNO right called for a constituyente — a new constitutional assembly to rewrite the nation’s Magna Carta. It quickly became evident that they intended a rupture of the system and the ouster of the Chamorro government.

This thrust from the right, combined with the violence and three years of ad hoc deal making and deal breaking did not cause the system to break down. Instead, it sparked efforts to find solutions to basic problems. At the heart of these efforts was a proposal for partial constitutional change that emerged as an alternative to the more radical idea of a constituyente.

A sector of the FSLN based in the National Assembly and loyal to former vice-president Sergio Ramirez took the lead in proposing partial constitutional reform. The shift in strategy by the Sandinistas at this juncture was crucial, and is a noteworthy change in light of the reputation the FSLN had by then acquired of being involved in an illicit "co-government" with Lacayo, as well as its tendency to regard the 1987 constitution as sacrosanct.

Their motive was to reshape the balance of executive-legislative power so as to exert influence over policy, and perhaps to diminish presidential power after the 1996 election. The FSLN had benefited in deals with Lacayo over property, but returns diminished as titling was slow and credits were not available. Their response was to propose a shift in powers to the Assembly, in order to be able to exert at least minimal leverage over an economic policy decided in secret between the government and the IFIs.

A small group of Sandinista leaders who later became the nucleus of the Sandinista Renewal Movement (MRS) wanted constitutional reform as a way to avoid crises, and to fortify Nicaragua’s shaky institutions. This, and the appeal of cutting down Lacayo’s power, attracted some UNO legislators to the reform coalition. In addition, in the aftermath of the violent transport strike, centrist Sandinista leaders were increasingly at odds with the FSLN elements pushing for militant street actions, and Daniel Ortega, burned by criticisms from trade union rank and file that the Sandinistas had been too close to the Chamorro government’s economic policies, was increasingly drawn toward the more militant wing of the party.

The reformist Sandinistas were soon joined by UNO moderates not tied to Lacayo led by Christian Democrat Luis Humberto Guzmán and Conservative Miriam Arguello, who deserted the rightist coalition demanding a constituyente. The reform coalition scored a relatively quick victory in the Assembly which undermined the UNO boycott and permitted election of a new leadership dominated by the reformers. This effectively killed the call for a Constituent Assembly. After extended bargaining in 1994, by the time the reforms came up for an initial vote, a coalition embracing 70 out of 92 Assembly deputies had been forged to pass them.

The content of the reform package was bound up with the political interests of party factions and leaders in ways that diminished consensus. While fully justified given Nicaragua’s tradition of corrupt and nepotistic rule, prohibitions on political candidacies by close relatives of the president were clearly directed at squelching a presidential bid by Lacayo, and opening up space for centrist candidates, such as Ramirez. An Assembly seeking more Constitutional powers for itself, however justifiable the changes, is not going to be seen by all as statesmanlike. Lack of consensus led to crisis.

The reforms were ratified by the Assembly, first in October, 1994 and again in February, 1995, by the required constitutional margin of 60% of total deputies. But President Chamorro refused to promulgate them, alleging procedural irregularities. Assembly President Guzmán then had the reforms published. For months, the President recognized the 1987 constitution as still valid while the Assembly recognized the reformed version.

The Nicaraguan Supreme Court was quickly drawn into the battle. On April 6, the Assembly elected six new justices to fill three vacancies and in accord with a constitutional amendment expanding the number of magistrates from nine to twelve. However, the existing justices refused to accept their new colleagues. In May, the rump court issued a ruling striking down the Assembly’s promulgation of the reforms. The legislature refused to recognize this ruling, on the grounds that the court was not legally constituted to act.

The decisive element in resolving the crisis was a shift in position adopted, privately and in public, by segments of the international community that had supported the Chamorro government for five years through thick and thin. These include important bilateral donors (in particular the U.S. and the Nordic countries), and at least one key multilateral institution in which U.S. influence is paramount, who strongly signalled the need for institutional agreement and reform, and in general the need for stricter controls over the use of foreign assistance. Facing the need to go to Paris June 19 to secure fresh funding commitments from donors for the remainder of its term, the Chamorro government decided it could not afford to leave Managua without an agreement in hand.

The current juxtaposition of fragile institutional consensus and mass political apathy suggests that Nicaragua’s democratic transition will be not only a long-drawn-out affair, but one with many pitfalls. For democratic construction to continue the newly elected government must not tear down what has just been achieved. Once elected, the new government will have to overcome public indifference.

CONTROL OF THE MILITARY

For many years critics of the Sandinistas complained that the military was not that of the nation, but of the Sandinista political party. They pointed to the military’s name — the Popular Sandinista Army (Ejército Popular Sandinista) and the Sandinista’s refusal to rename it the Nicaraguan Army. Fervent backers of the contra army, the National Resistance (RN) hoped that it would replace the "Sandinista party’s army," or that the new government would clean out the Sandinista officer corps. When the newly elected President announced that she would be her own Minister of Defense, but that Humberto Ortega would remain head of the military, rightist members or UNO complained loudly and two of her cabinet nominees refused to serve.

As government promises to the former combatants of the RN failed to materialize (details in sections that follow), protests by former contras for land and benefits began to include calls for the firing of General Ortega and, soon thereafter, for the firing of Minister of the Presidency Antonio Lacayo as well. That similar calls for Ortega’s ouster, as well as that of René Vivas, were coming from high level sectors of UNO, and from Senator Helms and other Republicans in Congress, led to Sandinista beliefs of an orchestrated campaign backed by a military arm to stamp out the Sandinistas — the continuation of the war goals of the Reagan administration. To the Sandinistas this "revanchist" movement gave little recognition to the Constitutional basis of the elections or the transition accords which, in their view, called upon the government to respect the military as a professional, government institution.

The UNO Assembly bench was hardly cohesive; the Sandinista bench, until 1995, was. The U.S. faced the choice of abandoning the candidate it had supported in the election, while the rest of UNO had no national figures and the RN was in the process of demobilizing.

The RN demobilization agreement called for large scale reduction of the military. The EPS released from service more than half its 96,600 troops by July, 1990, weeks after Chamorro’s inauguration. In November, the first of three rounds of dismissals of EPS officers began and by the end of the third round over 10,000 had been dismissed in acts which left lasting political scars between many of those dismissed and their superiors, despite severance packages of widely varying sizes for most of them. (These had an average of less than $3500 and 6 hectares of land.) With an eye to professionalizing the army, among the first officers to go were those with the most combat experience, but who had fewer skills necessary in a much smaller peacetime army.

Unlike the army of El Salvador during its peace process, Ortega and the EPS were kept busy dealing with multiple armed actions that continued due to the lack of compliance of the government toward the demobilized, combined with the severe economic distress in the country and the reduced capacity of the army and police to deal with armed insurgents.

In January, 1992 General Ortega confounded his critics and infuriated many of his supporters when he bestowed upon the U.S. military attache, Col. Dennis Quinn, Nicaragua’s highest military order, named after his martyred brother Camilo. A firestorm of criticism erupted from Sandinista supporters outside Nicaragua, from veterans, including some who handed their medals back in protest, and even from members of the FSLN National Directorate. The army was marching toward a status of independence from the FSLN.

Later, in July 1993, the EPS attacked an armed incursion by former EPS combatants into the northern city of Estelí, quickly defeating it and leaving behind a still debated number of dead among the insurgents (estimates range from 12 to 54). By 1993, the government had confronted many dozens of armed actions by former contras and EPS, most calling for economic benefits and, in most cases, though not all, the confrontation was ended by negotiations. One analysis of why the army took a hard line in the Estelí encounter was that General Ortega, at a time when a new military law would be coming up for review, wanted to demonstrate to the U.S. and UNO critics that the military was independent and supported the government. Once again, criticism rained down from Sandinistas, including members of the National Directorate.

General Ortega’s efforts to assuage his harshest critics on the right did not help much. Calls for Ortega’s resignation continued, and some rightist critics argued for the abolition of the army. More moderate critics noted the lack of legislation to control the military which would set the terms of office of its commanders, regularize promotions, or set forth the lines of authority between the President and the head of the military. Ortega reached an understanding with the Chamorro administration that a miliary code should be drafted and submitted to the legislature to regularize procedures and professionalize the miliary.

In the midst of this process, President Chamorro shocked General Ortega (as well as his brother Daniel) when she announced in an Army Day speech in September of 1993 that she would remove General Ortega sometime in 1994, among other changes. This pronouncement seemed to violate the understanding that his departure would be determined by the terms of the as yet unfinished military code and also violated a 1991 decree by President Chamorro which put the power to dismiss the Commander in the hands of the Military Council. The crisis was, in all likelihood, engendered by the persistent efforts of Senator Helms to reverse Sandinismo. In this instance he wanted to condition aid to Nicaragua on demonstration that the military was under the control of the Chamorro administration.

The Code was finally passed after months of debate in September 1994. It gave the President the authority to elect or reject the head of the military from candidates proposed by the Military Council. The term of office was for five years. The President could dismiss only for specified reasons, among them being violation of the non partisan status of the military. It set the terms for Ortega’s retirement with pension benefits, also established by the Code. The new head of the military, Joaquín Cuadra, came into office in February 1995. Therefore the President to be elected in October or November of 1996 will not have the opportunity to pick a head of the military until almost four years into a five year term, further separating the military from civilian politics, and perhaps also insulating it from civilian control. The name of the army was changed through the Constitutional reform process to the Nicaraguan National Army.

A significant block of UNO deputies voted against the law, and its permanence may depend on the outcome of next year’s elections. The law would very likely result in at least the next three military heads (that is to the year 2010) being commanders who cut their teeth on Sandinista politics and who have risen through the ranks of the EPS. The military still controls businesses and has a pension system which it will fund and operate as an independent entity. Though the Code sets up procedures for civilians to play a role in auditing these activities, as of this past August, little had been done to effectively implement this level of civilian control. Business interests, through COSEP, complained that it is improper for the military to be running businesses in competition with the private sector.

However, despite UNO votes against the Code, the Presidential contender for the right, Arnold Alemán, an arch critic of the Sandinistas, has been noticeably silent on the Code. According to informed sources, as part of his road paving campaign while Mayor of Managua, Alemán made sure that roads around Commander Joaquin Cuadra’s home were well paved. It may be that the military issue will not come to the fore in next year’s campaign.

THE PROPERTY TANGLE

No issue has been of greater significance for national reconciliation in post-Sandinista Nicaragua than property — and no issue has been thornier. The Sandinista revolution gave birth to a massive, if disorderly, transformation of property and productive relationships that benefited tens of thousands of Nicaraguan families while penalizing a few thousand others. When the Sandinistas lost in 1990, the expropriated propertied elites were determined to get their holdings back. Beneficiaries of the Sandinista agrarian reform, whether regarding themselves as Sandinistas or not, have, in most cases, been equally or more determined to hold onto their land. Complicating the picture, the new government promised land to former combatants on both sides, a promise it did not keep to the satisfaction of many.

The political battle has played itself out within a shifting correlation of domestic and international political forces. It has been accompanied by economic policies and conditions which have undermined the beneficiaries of the agrarian reform, forcing many to sell their land, often at quite low prices. The gamut of actors involved runs the full range of Nicaragua’s social and political groups: Sandinista workers (ATC, CST), farmers (UNAG) and communal (MCN) organizations, demobilized EPS and RN soldiers, propertied elites in Nicaragua and Miami (including COSEP, a association of expropriated former owners, a separate Bondholders Association), and all political parties. The U.S. government and Congress, international organizations (World Bank, IDB, UNDP) and, marginally, other governments (Germany, Spain) have also participated.

The battle over property has deeply affected Nicaragua’s stability. No one set of positions has prevailed; compromise, often borne of violent conflict, has been essential to resolve interim crises. The tenor of a comprehensive solution would affect the prospects for development, social equity and, in turn, hopes for a lasting peace and the consolidation of democratic institutions. We examine below the extent to which the Sandinista agrarian reform has been undone, whether significant progress has been made toward stabilizing land titles, the corruption issue, and compensation problems.

Within weeks of the overthrow of Somoza in July 1979, the government confiscated the holdings of the Somoza family and alleged accomplices. The next few years saw the Sandinistas go on to confiscate or expropriate land, businesses and houses under decrees justifying the taking of property by reason of absence from the country, lack of use and decapitalization, counterrevolutionary activity, or, in a few cases, simple public utility.

Violeta Chamorro’s election campaign did not promise to return all agrarian reform properties to their former owners. Her platform pledged to respect the holdings of poor beneficiaries and to restore the holdings of confiscados only when it was possible to do so without injuring the former. Other confiscados were promised an unspecified indemnization. The Chamorro camp could not hope to win an electoral majority on a platform of open counterreform.

But the confiscados supported the Chamorro campaign in hopes of securing total or partial restitution. It is not clear if they provided much financial support, especially in view of copious U.S. campaign aid. On the other hand, numerous confiscados were members of the new government; campaign promises to the poor often don’t mean much; and the conservative Chamorro camp could be expected to privatize state properties on a large scale, all of which looked promising to the confiscados.

When the Sandinistas awoke on February 26, 1990 and took stock of their defeat, they quickly realized that the lack of clear legal title loomed as a massive danger to their property reforms. To deal with this problem, the lame-duck National Assembly passed a series of last-minute laws.

Law 85 granted full property rights to individuals and organizations occupying state-owned housing units. Law 86 did the same for state-allocated building lots. Law 88 in theory transformed the Sandinistas’ truncated agrarian reform titles into property titles, and authorized subsequent division of cooperatives into individual, family owned parcels (something the Sandinista government had previously opposed). But there was no time individually to title and register the properties covered by these laws.

Vigorous actions by the Chamorro government to return properties to former owners, land invasions by former owners, and the sometimes violent reactions of affected Sandinista groups comprised the first stage of the property battle. This overlapped with equally violent urban conflict over economic stabilization policies, and the over benefits to war veterans. After several rounds of conflict, the Chamorro government and the Sandinistas established a political modus vivendi that later gave shape to the outlines of policy.

The government’s opening foray, in May 1990, gave hope to the confiscados. President Chamorro issued Decree 11-90 establishing a Confiscations Review Commission (CNR) to pass judgment on Sandinistas’ property takeovers and order restitution of holdings found unjustly seized. Without specifying clear criteria for what constituted an "unjust" confiscation, the Commission soon began to hand out legal notices (popularly called papelitos) that housing and farmland should be returned to its "rightful" owners. The government, in its opening weeks, seemed bent on eroding if not nullifying its campaign promise to protect the holdings of poor agrarian reform beneficiaries.

Attempts by former owners to enforce the papelitos quickly led to confrontation and incidents of violence. In most cases the status quo prevailed, however, in other cases peasants, fearing the game was up after the elections, gave up.

The next month, conflict over privatization erupted. The government announced it was leasing state-owned cotton lands to their former owners, who could also recover them outright through the CNR process. In reprisal, Sandinista farm workers, organized in the Farm Workers Association (ATC), seized the farmland. When the government attempted to return 16 state factories and urban businesses in September, workers took over many.

These conflicts made it apparent that the Chamorro government was courting serious danger. Lacking firm backing from the Sandinista police and military to enforce CNR decrees, with land invasions beginning and labor protests in full swing, the government had no choice but to call Sandinista worker and farm groups along with COSEP and pro-government unions to a dialogue designed to avert chaos. While neither of these goals was immediately achieved, "Concertation Phase I" reiterated the campaign pledges to respect poor people’s rights under Sandinista laws and to compensate former owners. The majority of participants (without COSEP) also agreed that a percentage of privatized state enterprises should go to their work forces. The Chamorro administration had decided to dampen conflict by ceding a slice of the pie to a variety of organized social groups and to retreat from an untenable position that would open the door to massive returns to previous property holders. Would the agreement hold?

Sandinistas continued to fear that Somocistas would come back and take away their houses and farms. Land invasions continued. Former property holders, and Nicaragua’s business elite in general, complained that Chamorro had given in to Sandinista violence ("blackmail"). They were further angered when in May 1991 the Supreme Court struck down the operative provisions of Decree 11-90 (saying the CNR had usurped judicial power in deciding ownership conflicts). So old owners shifted the property struggle to the National Assembly.

In April 1991, Assembly president Alfredo César began to hammer together a coalition of UNO deputies to propose a sweeping legislative "solution". In theory, "César’s law" was true to the UNO platform—it would uncover Sandinista abuses, allow former owners to get some holdings back and be compensated for others, while legitimate beneficiaries of the 1980s reforms would ostensibly be protected.

Lacayo allied with the Sandinistas and agreed to reconvene the concertación parley to execute an end run around the legislature. Participants (without COSEP) agreed that workers would be given a 25% share in privatized companies and that abuses of the transition laws (the piñata) would be reviewed on a case-by-case basis by the government. They stipulated that beneficiaries of Law 85 occupying homes larger than 100 square meters would have to pay a 100% tax on the assessed value in order to sell or bequeath them, but they would not simply lose them. On August 19, 1991 President Chamorro signed executive degrees turning the concertación agreements into law.

Chamorro and the FSLN agreed to divide state agricultural corporations among demobilized soldiers from both sides, as well as among the agricultural workers, and a minority of former owners. In addition, the Office of Territorial Ordering (OOT) started operating in October, 1991 to review the legality of acquisitions under Law 85.

But by the end of 1991 conflict continued unabated. No formula for compensating former owners was yet in place. Land invasions continued at a high level, and Managua’s poor neighborhoods continued to be plagued by old-time real estate barons (lotificadores) threatening evictions.

Far from inducing the César forces to give in, loss in the Assembly led them to seek the aid of powerful foreign allies. In May 1992, U.S. Senator Jesse Helms requested the Bush administration to suspend $104 million in assistance to Nicaragua until the Chamorro administration took a number of steps, the principal of which had to do with compensating "U.S. citizens" whose properties had been seized by the Sandinistas. That most were Nicaraguan exiles naturalized as U.S. citizens only after their holdings had been taken was for Helms legally irrelevant.

The new decisions filled in the outlines of an overall political solution to Nicaragua’s property conflict. With the balance of political forces still favoring the Chamorro-Sandinista camp, these steps heralded the likelihood that most poor beneficiaries of the Sandinista reforms would be ratified in their possessions, had they not already been forced to sell them by the severe economic conditions. The bulk of former owners would receive compensation rather than get their holdings back. And legal steps would eventually be taken to recover properties illicitly appropriated by outgoing Sandinista officials.

The September decisions were a turning point. Conflict over property peaked in November 1992 with the murder of confiscados’ leader Arges Sequeira by a commando made up of the former members of the Sandinista state security force. It diminished thereafter as the confiscados association lost steam and, in early 1993, when Alfredo César lost his post as Assembly president. Land invasions became less frequent. Property bonds for compensation began to be issued and accepted in February, 1993.

However, major questions remained. Political players on all sides were by now well aware of Lacayo’s penchant for defusing crises by making promises that could not or would not be fully kept, and tempting his opponents to pursue their individual claims. How many abuses would the OOT ferret out? How would the economically-strapped Chamorro administration compensate former owners? How long would it take for the government to grant titles to humble home owners and agricultural cooperatives?

There was sufficient play in the institutions charged with adjudicating property conflicts for interested actors to exert influence, whether licit or illicit, to achieve their objectives, tipping the balance of the property outcome in one direction or another. Conflict over property did not cease but rather shifted to new arenas.

At the root of the property issue in Nicaragua, then, are the contradictory promises contracted by the UNO government with a range of highly mobilized political and social forces. The impossibility of complying with all forced it to vacillate. For many groups, at the outset of the new government, getting or holding onto property was high on the agenda: confiscated former owners, agrarian reform beneficiaries, ex contra and former government soldiers. The government made promises to them all at the outset, and then added workers on state properties to the list. As violent actions by one group or another escalated, it made more land promises to induce groups to stop shooting.

In attempting to meet its land and compensation promises, the Nicaraguan government has received little foreign assistance. Four years into the crisis, a $25 million World Bank loan was to finance the modernization of the land registry, and part of the titling program. Of the $2.7 billion in foreign funds through 1993, none have been made available for compensating former owners or purchasing properties for distribution, despite the widespread analysis that property related violence and unclear title braked investment. Nonetheless, a great deal of property has changed hands, with sales backed by unclear or no title.

Nicaragua has undergone two radical transformations in rural land tenure in the past 15 years. Some 5.9 million of Nicaragua’s 13.1 million hectares are adequate for agriculture. Of these, the Institute of Agrarian Reform (INRA) estimated 1.97 million hectares (34%) changed hands in the agrarian reform in the 1980s. By 1988, 508,000 hectares had been assigned to individuals and 792,000 to cooperatives, representing together some 60,000 families, while 673,000 hectares were held by the state-owned enterprises. Despite some property restorations since the 1990 election, large landholders control only 22% of the land area rather than the 52% they held in 1978.

Government land policy became reduced to ad hoc crisis management. The invasion trend has been clearly downward as negotiations proceeded, reconciliation between former enemies advanced, land grants were provided, occupiers tired, access to arms was reduced and as the government gained confidence in its ability to operate firmly against usurpers.

Land invasions by ex-RN were successful. Almost a third of the area titled since 1990 had been occupied by invasion, and in the war zones of Matagalpa and Jinotega the figure is 84%.

Ironies abound. During the war RN troops, mainly poor peasants with little or no land, did the fighting against the Sandinistas whose defeat was fervently desired by the former large property owners. In many cases, lands the RN invaded after the war, were lands claimed by confiscados or other anti-Sandinista large land owners. The UNO coalition’s opposition to the Sandinista land reform ranged from mild to apoplectic. But the government was now, in effect, permitting an "agrarian reform" by armed invasion — a "policy" considerably more arbitrary than anything the Sandinistas had effected. Finally, the compensation deals offered by the government to those whose lands had been invaded were little better, and sometimes worse, than what had been offered by the Sandinistas.

Some owners of farms occupied in 1990–91 have received cash compensation of up to $70/hectare (well below market prices in calmer areas of the country; see figures below), but latecomers in the negotiations have been offered only bond compensation. In 1994, 11 cooperatives received indemnization for 1,723 invaded hectares at $238/hectare in bonds, with a present market value of only $48/hectare, about 40% of average compensation under the Sandinistas.

Other land invaders did not do so well. Invaders in the Pacific region by non ex-combatants have been repeatedly and sometimes violently evicted by the police. This response is due as much to the perceived illegitimacy of claims from landless peasants who present no credible military threat as to the political importance of the land owners there.

Eighty percent of these lands are located in Regions V, VI and Rio San Juan, mostly along the agrarian frontier where land tends to be marginal: less fertile, farther from markets, bad roads. Considerable investment will be needed to make it economically productive. By contrast, the more fertile and communicable Pacific regions of the country (Regions II, III and IV) have provided less than 10% of all land under Chamorro’s "agrarian reform". Under the Sandinista Agrarian Reform 44% of the land came from Regions II, III and IV.

The CNR has received claims from 5288 individuals to almost 16,000 rural and urban properties, vehicles, machinery and equipment, factories, and shares of companies. Seventy percent of the claimants were Nicaraguan nationals, while 25% were U.S. citizens. Of these claims, 7,186 (from 1527 individuals) involve 1.4 million hectares on which an estimated 60,000 agrarian reform families live. The return of land would displace, on average, 39 beneficiaries per property. To avoid the political consequences of such displacement, bond compensation has been offered.

The principal state resource being used to shore up confidence in the bonds is the potential sale of a minimum 40% share of the telecommunications company TELCOR. In April 1994, a commitment to effect this sale was written into the Extended Structural Adjustment Facility (ESAF) with the IMF and the World Bank. However, bonds have sold at 20–30% of face value. This sagging quotation has impeded government efforts to get former owners to come to terms over indemnization.

Former owners complain about the slow pace of the CNR. By mid-1995, the CNR had passed resolutions for just a quarter of the area claimed, and bonds had compensated less than 20%. At this rate, the process might last until 2005, if it survives two changes of government. Also, they allege that officials must be bribed.

The titling process has been slow and complicated. Some 2000 cooperatives have unclear legal status, and lands held by some 20,000 rural families are registered in the names of their former owners. Before title can be legally transferred, the latter must sign off on the compensation terms offered by the state.

Five years of legal and political turmoil have taken their toll. Lack of clear title has made it difficult to borrow money. Market forces and an absence of credit to small farmers have deepened poverty among agrarian reform beneficiaries and former combatants, and led to forced sales. Some have lost lands due to invasions or land grabs.

Land claims of some former owners, ex-combatants and workers from state-owned farms have been accommodated through privatization — a mix of restoration to former owners and sales to veterans, workers, former owners and other customers. The Chamorro administration established The National Public Sector Corporations (CORNAP) to manage privatization of 351 urban and rural enterprises.

The ATC estimated the real value of their 130 farms to be $100 million, but CORNAP indicates that these properties might bring in about $20 million, which could be reduced to $10 million under a quick payment plan, and if bonds were used, could be purchased for as little as $2.5 million.

Only 243 of the 279 farms designated for former owners have actually been returned, because occupants have refused to leave and demand agrarian reform titles. Most of these were returned initially but retaken when owners violated worker contracts. Others were invaded by ex-RN who demand titles or relocation to other land. The government continues to pressure the ATC to return a number of farms it received, particularly those belonging to U.S. citizens, in exchange for canceling the debt on the remainder.

The ex-RN initially were to receive 56 farms through privatization. However, in up to 20 cases, requirements to pay were eliminated, so the farms will be titled to them through the agrarian reform free of cost. The same has happened for a few ex-EPS officer groups.

Privatization has given disparate groups slices of the pie, but of quite difference sizes. By privileging certain members of claiment groups the government’s privatization process succeeded in disorganizing larger social movements, thus reducing their capacity to impose demands. This repeats a theme of meeting crises by delay and divide seen elsewhere in the report. The current level of protest is considerably less than the politically destabilizing pressures of a few years ago.

By then, cries had gone up that anti-Sandinista political bias, favoritism, and bribery were influencing OOT rulings. After negotiations with the Nicaraguan Communal Movement (MCN), documentation requirements for humble petitioners were relaxed and the proportion of solvencias went up.

But previous owners have sued in court, and leaders of the Nicaraguan Communal movement have charged that judges have ignored the possession of OOT solvencias by reform beneficiaries. Court orders have led to evictions. In response, the National Assembly passed a law in 1992 prohibiting evictions for six months, and renewed this effective brake on evictions several times.

With all of the property crises confronting the Chamorro government, it has become increasingly evident that it is letting the market and credit policy settle the issue. Both the Sandinista agrarian reform lands and recent transfers to ex-combatants are threatened with reversal due to lack of credit, and for some some ex-combatants lack of farming skills. A stock of buyers feeds an active market offered at distress sale prices.

In sum, former owners received a significant, though minority, portion of their former property through privatization, negotiations, invasions, and in a few cases, court action. Among them, U.S. citizens have done relatively well. They have been awarded $300 million in indemnization bonds, and some of those bonds have been used at face value to buy back confiscated state assets.

Third, the allocation of some state property to unionized workers has lead to experiments with fully worker-managed companies and others in which workers are part owners with some say in management.

It is now five years since the change of government. The process of granting solvencias was agonizingly slow, and CNR processing of former owners claims slower. The titling process has barely begun. Aside from identifying cases of potential abuse, the government has done little to overturn the Sandinista piñata, much less examine allegations of corruption within its own ranks. At current rates the negotiations over compensation will not be completed until after the turn of the century.

Humble home and lot owners are in still in danger from court suits and a large number of agrarian cooperatives face investigation by the state. Unless government and private banks make more credit available, cooperativists, smallholders and worker corporations will lose their land to market forces.

A new property law and the sale of Telcor is being debated in the Assembly as we go to press in November. A framework of agreement has been reached in property, which includes provisions that would benefit some former Somocistas, and protections for owners of small homes, but the property debate was put on hold to take up the related Telcor issue.

WAR VETERANS AND THE UPROOTED

Nicaragua’s war was the first to end of three Central American civil wars framed in cold war terms, and the only one immediately preceded by a radical electoral change in government. Recognition that the root of the region’s wars was not the East-West conflict but the marginality of a large part of its populations underlay what became known as the "CIREFCA process."

To understand why those processes remain incomplete after five years, we will trace Nicaragua’s complex experience, starting with the agreements to end its war.

In early 1990, neither the newly elected government nor the Nicaraguan Resistance (RN) had peace negotiation experience. The RN was further hampered by not being a political organization with an ideological framework and a set of strategic goals. It was a loose agglomeration, organized by the U.S., of former National Guardsmen and young and angry peasants. The RN had also just undergone a serious upheaval, in which Somoza’s former National Guard Colonel Enrique Bermúdez was replaced as top leader by younger men who better represented the rural base. The RN’s negotiating team, however, was as heterogeneous as the RN itself, and less experienced than Bermúdez.

The government-elect, with the participation of Cardinal Obando y Bravo, took over the halting peace talks with the RN that had been initiated by the Sandinista government in 1988. Just 35 days after its inauguration, the government signed a final agreement with an irregular force whose base euphorically believed it had won the war and brought President Chamorro to power.

As a first step of compliance, President Chamorro abolished the draft thus releasing tens of thousands of two-year conscripts into a shrinking job market. Within another two months, the bulk of the RN demobilization also ended. They and their repatriated families, who had received U.S. support, had little or no means of livelihood. Refugees also began streaming back.

All told, over 600,000 people, some 15% of the population, had been directly affected by the war and needed extensive help. Other victims included some 40,000 people with war disabilities and dependents of the dead and disappeared, refugees and the internally displaced.

The UNHCR provided transport to their places of origin, a brief medical check-up, about $50, clothes, minimal household implements, a 6-month supply of food, roofing materials, and simple building and agricultural tools. Some 15,000–20,000 others returned on their own and received no help.

RN Combatants and families (22,413 plus 18,479 family members): Their profile was similar: 83% were peasants, only 25% owned any form of property, 60% were under 25 years old, 90% were illiterate or semi-literate, and 2,000 were injured or disabled. As adolescent troops, many had had little farming experience. Over 50% of their returning relatives were minors.

CIAV-OAS facilitated their disarmament and demobilization. ONUCA was assigned to collect and destroy their weapons. CIAV provided an emergency assistance package similar to the UNHCR’s and later repatriated their families. It was also assigned to protect their rights and physical security.

Discharged Armed Forces Personnel (72,000 army and 5,100 Ministry of Government): The army conscripts were immediately discharged with no benefits. Over 20,000 NCOs were also quickly discharged with minimum severance benefits. By 1993, another 10,500 army officers and 5,100 officers of the Ministry of Government of all but the highest ranks, had been discharged in three stages.

Compared to RN troops, the two-year conscripts tended to be more urban and with a slightly higher education level. Officers were mainly from urban areas and had sacrificed jobs or schooling to fight for the revolution, many starting with the insurrection that overthrew Somoza. They had a higher education level than most RN commanders. The negotiated discharge packages improved in each stage, ultimately involving several years of (low wage) severance pay depending on rank and length of service, and land and material benefits, in significant amounts to those in higher ranks.

CIAV’s one-sided mandate, to help only ex-RN, triggered accusations of excess bias and even of assisting the RN members who soon began to rearm. The exclusive assistance CIAV and the UNHCR provided to the demobilized combatants and returning refugees created tension between recipients and other poor peasants in their communities who were receiving no help.

Ex-RN officials who received government positions came under fire from their base for "selling out" to the government—i.e., riding around in fancy trucks while ex-foot soldiers languished in plastic tents in the muddy demobilization sites.

In southern Region V, with 38% of demobilized RN, property conflicts, lack of funding, uncertainty about where to settle, lack of jobs and post-war pyscho-social problems led to frustration, dependence on CIAV, and selling the provided roofing and seeds to cover immediate expenses, including liquor. By late 1990 many penniless RN members began drifting north to their original communities.

On the armed forces side, favoritism toward high-ranking discharged officers left many in the lower ranks extremely bitter. They lacked civilian skills, so their job prospects in a shrinking economy were limited. Many invested their severance pay in small businesses that rapidly failed due to the deepening recession and their own lack of know-how. Discharged firemen, bodyguards, and some state security agents received nothing.

The situation called for a comprehensive government strategy to reactivate the economy in the war-torn zones, create conditions for ex-combatants to rebuild an economic and social life, reduce hatred, and, provide psycho-social help to put the war trauma behind them. That would have required a domestic consensus and coordinated international assistance for a "mini-Marshall Plan."

For purposes of presentation, the activities and actors involved in the various facets of the post-demobilization drama are best tracked separately, but readers should bear in mind the overlaps in time and the general context of chaos and abject poverty that have prevailed.

CIREFCA’S 1989 Conference provided the main conceptual framework for dealing with the war uprooted, a three year plan based on integrated help. (Since no wars had yet ended, demobilized combatants were not contemplated.) Women merited priority help, and support should be not just to families but to communities.

(U.S.$ millions)

PRODERE Italy 23.00

Self-Sustain Uprooted, EEC 4.08
Region I

Self-Sustain Uprooted, RAAN EU 5.06

Self-Sustain Uprooted, EU 4.80
Jinotega

Self-Sustain Uprooted, EU 4.80
Cuá-Bocay

Self-Sustain Uprooted, Waslala EU 3.00

Self-Sustain Uprooted,
La Dahlia, Rancho Grande EU 3.60

Self-Sustain Uprooted,
Rio Coco Basin EU 4.30

Self-Sustain Uprooted,
marginal zones of Estelí, EU 3.60
cities of Matagalpa, Jinotega

Integral Development of
RAAS (PRORAAS) Holland 1.29

Socioeconomic Rehabilitation
of Uprooted WFP 11.43

Infrastructure and Credit UNCDF 9.66
Projects

UNHCR Quick U.S., EU, 12.91
Impact Projects Nordic countries
(QIPs)

Integral Spanish government 2.08
Development, & NGOs
Rio San Juan

Basic Integral Services UNICEF 7.00

Various Smaller France, Japan, .93
Projects Switzerland,
UNHCR,
OIM/FNUAP

Assist Rehabilitation of UNHCR 3.65
Returnees

PRODERE and EUROPEAN UNION: The Development Program for the Displaced, Refugees and Repatriated (PRODERE), financed by Italy as part of its $115 million Central America effort, was the flagship program. Targeting its efforts to municipalities in war zones, PRODERE also assisted veterans from both sides and brought them into local organizations partly to foster reconciliation. A full 45% of the population in PRODERE’s seven municipalities were demobilized, repatriated refugees or displaced.

Several programs, particularly by the European Union (EU), use a similar model. They attempt to build social and economic infrastructure, start small, self-sustaining productive activities, seed revolving credit funds and contribute to reconciliation with the refreshing perspective that the target populations are viewed as participants, not just beneficiaries. All programs recognize the importance of creating or strengthening local organization and providing training and education. Most individual components are small, manageable and low-cost.

Initially, CIAV’s main work entailed verifying charges of human rights violations, mediating conflicts, and freeing hostages. Since CIAV’s mandate was extended for only six months at a time it could not plan strategically.

In mid 1993, it received a 2 year extension and a mandate to deal with all sectors of the uprooted. By then it calculated that only a third of some 100,000 uprooted families had received attention and were relatively stabilized. The remainder still lacked decent housing, could not sustain themselves, and did not participate in community development. CIAV was eager to apply the philosophy it had evolved over the previous three years, based largely on its "CHAP" model of housing-sustenance production communities,

The CHAP prototype was a 1991 Basque-financed project in Somoto of 40 housing units for ex-army officers and an adjacent EEC-housing project for ex-RN members. Everyone put in something: CIAV the floor plan, materials and a building coordinator; the recipients their collective labor; and the UN World Food Program, provisions for the laborers during the construction period. To assure that all houses would be built with equal care, they were assigned by raffle after they were completed. The German government financed family gardens and rabbit raising for the two neighborhoods.

A measure of the reconciliation achieved is reflected in the work of the unlikely building coordinator CIAV hired—a former National Guardsman and RN member who had been jailed by the Sandinista government for five years. Once the ex Sandinista army houses were built, the former officers voted to oust one of their own group, who had been lazy, and give his house to the hard working coordinator.

Later CHAPs were mixed projects. Local veterans’ organizations from each side chose the beneficiaries for their houses on the basis of need, including war disabled and widows. Everyone worked together: former enemies, men and women, able-bodied and those with disabilities. Since the houses were picked by drawing, they also lived side by side afterward.

NGOs: National and international nongovernmental organizations (NGOs) have been able to fill few of the gaps left by government inattention. International NGOs faced budget cuts and most were reluctant to provide a social cushion that would merely mitigate the effects on the poor of the governments economic policies. National NGOs, most of which were Sandinista-identified, and the demobilized RN members and returning refugees viewed each other at first with mutual distrust.

Also, both the government and the UNDP seem to have a bias against Nicaragua’s NGOs. They have had virtually no role in any CIREFCA program. At the outset newer, and some older, NGOs had limited experience. But both CEPAD and the FACS, for example, have worked with uprooted sectors for years, and participated with the government and UNDP to assure the consensual proposals CIREFCA required, yet were given no effective role in either designing or implementing the projects.

Even with the CIREFCA programs’ emphasis on integrated community development within a framework of aid to ex-combatants and the war uprooted the sums of money were small compared to the universe of need in war zones and the rest of the country, or to the overall level of international resources. Combined with the host of other conflicts in which the government was embroiled its inattention to these programs meant that violence was not long in coming.

By October 1990, armed RN takeovers of Sandinista cooperatives, state farms, roads and towns in the north—in the latter case, mainly police departments and FSLN installations—were becoming common, as were vengeance killings. Rightist politicians and parties with strong international ties have been repeatedly accused of inciting RN members to anti-FSLN violence, and even financing it. But they charged that Sandinista police were committing human rights abuses and other provocations. Revenge toward old enemies by both sides vied with economic and political demands as motives for the violence through mid-1991, after which the settling of old scores slowly tapered off while the demands on the government snowballed.

By August, joint recompa-recontra (or revueltos) armed actions began, both groups seeking land and benefits. Seven months later a highly coordinated and spectacular operation of 1000 revueltos took the small city Ocotal for several days with support from the citizenry. Through September 1992, rearmed veterans from both sides planned and carried out joint takeovers of cities and highways to exert more pressure on the government for compliance with its promises for land and for broader demands, such as free public education, road repair and housing for the rural poor. Their actions were mainly civic disruption, but always with the threat of armed activities.

In August 1991, the government announced it would pay for weapons turned in. Estimates of hidden weapons ranged from 30,000 to 150,000. Two months later the army and police stopped vehicles all over the country in a weapons search. The following month, Special Disarmament Brigades (BEDs) were set up in conflictive regions to disarm both civilians and rearmed groups. BED personnel were specially chosen army and police officers, demobilized RN members, and even newly-disarmed recontras and recompas. It was a first example of reconciliation in action, together with the few cases of a mixed police force in some rural towns. Both produced surprisingly positive results.

Nevertheless, in 1992 there were 863 actions against internal order, including armed actions, land and building takeovers, demonstrations and kidnappings with a total of 143 dead and 134 wounded, according to army and police figures.

While the activities of both revueltos and recompas had largely declined by September 1992, many of the recontra bands had coalesced into a large, loosely coordinated body known as the Northern Front "3-80", with a leader named "Chacal". Its demands were political (removal of both General Ortega and Antonio Lacayo, for example), but its actions were largely banditry, rustling and killing Sandinista peasants.

With more violence, by May 1993 the government realized that the weapons purchase program had turned rearming into an attractive business. In 14 northern municipalities, it suspended some constitutional guarantees for common crime suspects, and declared the remaining armed groups "common criminals", giving them until June 1 to move into security zones for final disarmament with no further negotiations. Those who did not heed the ultimatum would face a major military offensive.

By the deadline, the government announced that only half of the estimated 1,200 irregulars—mostly recompas—were in the zones. The government backtracked, lifting the state of emergency and offering amnesty and special social and economic assistance to all who disarmed, virtually independent of any crime they may have committed. An amnesty bill was finally passed with a bare legislative quorum in August. While the Assembly languished in debate, the country was convulsed by the aforementioned (p. 15) Estelí takeover by recompas and bloody army counteroffensive, and the August double kidnapping of government and Sandinista officials initiated by Chacal with retaliation by former Sandinista troops who took hostage 33 UNO leaders. By September, over 1000 "rearmados" began to demobilize again.

What remained of the armed groups had largely lost both their political and social character by 1994. After a negotiated agreement with "Chacal," in February 1994, involving significant material benefits for 450 men and his social base (the last two EU projects in the CIREFCA list are also to pacify his area of operation), the government declared, once again, that remaining groups would be treated as common criminals.

Two aspects stand out in this panorama. As leaders on both sides now admit, the groups sought short-term immediate compensation such as money, food, clothing and houses, despite political demands regarding General Ortega and Lacayo. Even the demand for land was unaccompanied by a demand for changes in the prejudicial credit structure or economic policy in general. Second, benefits were unevenly distributed. Between a third and a half received neither farm land, lot, housing nor job because of limited benefits, and, among the demobilizing groups and their leaders, there was a general lack of egalitarian sharing.

With Chacal’s settlement, the official line was that only a few scattered armed groups remained. The line was repeated after the costly army mobilization to protect the coffee harvest at the end of 1994. But by mid 1995, as the 1996 electoral season beckoned, estimates ranged from 500 to 1,000 fighters.

The prospect of continuing violence may have been what finally led the Chamorro administration to begin talking more seriously about pacification and reconciliation, although some observers suggest it was a fresh argument to flagging donors. In its presentation to the international donors’ Consultative Group in June 1995, the government stressed that "peace making in Nicaragua, primarily oriented towards social and productive reinsertion, is a fundamental component of the Government’s strategy for the remainder of the current presidential period..."

The new pacification plan of MAS makes no attempt to change the countryside’s impoverished economic profile. Many of those who fought for a piece of land are now aware that land is useless without credit, technical assistance, distribution mechanisms and a viable market. As noted above, many veterans are selling their land at rock bottom prices because for them (as opposed to richer buyers) the land without these resources is not viable. Once they spend the small sale price they will have few options: Nicaragua’s already saturated informal market; illegal migration to the United States; crime.

CONCLUSION

As a direct result of civil war fought within the context of the cold war, Nicaragua’s peace process has been beset since 1990 by a sometimes violent array of conflicts over land, over economic policy and division of resources, over institutional power, and over quotas of power within and between a political class with many small parties and factions. For common citizens it has been a bewildering and dispiriting political scene they have viewed from an unsteady economic terrain which has deteriorated an already poor standard of living. Despite differences among international agencies over policy, and the intricate maneuvering of the executive branch, the dominant economic policy — stabilization and structural adjustment — has remained firmly anchored. But even though it has sought to create a firm economic foundation and growth it is evident that it has so far failed to do so.

Despite this turmoil, progress toward consensus has been made. Nicaragua has one newly named army, not two, that is now subject to a detailed military code negotiated by the military, executive, and legislature and supported by a broad majority in the legislature. Humberto Ortega has retired under the terms of the new code, ending a national and international contest.

The institutional crisis within the Assembly has been largely resolved, and a new set of agreed upon Constitutional reforms should establish a better, more stable balance between the executive and legislature, and allow a more independent Supreme Court. Electoral changes in the Constitution shorten terms, prevent extended control of the executive by one family, provide for a Presidential runoff, and reshape legislative geographic representation in a fashion that may make Assembly deputies more accountable to a local constituency. All of these changes could lead to increased legitimacy.

Progress toward resolving property conflict has pleased few interested claimants, but it has reduced the extent and depth of conflict and provided a measure of certainty with realistic hopes for additional legal certainty. And if there is any one property issue upon which all agree it is that the high levels of uncertainty have made economic and residential life awful. A new property law before the end of 1995 may increase certainty, though it is sure to be contentious.

Though the cost has been great, insupportable levels of high inflation have been brought under control since 1991. There are at least faint signs in the last year or so of renewed economic growth.

Political violence has diminished greatly. There is less post war score settling, and armed groups making political demands have almost disappeared. Remaining armed groups seem more bent on crime.

Nicaragua remains very much at risk. Practically none of the new agreements rest on a firm foundation or have been tested by time. In a year an election will reshuffle the quotas of power, and it remains to be seen if the new power brokers will honor the commitments that have been reached. As detailed above, there are many thousands of property disputes that have not reached final resolution.

What should be done? The political agreements that have been reached must hold. The newly reformed Constitution is not ideal; it was a compromise. But it should be a Constitution and not a negotiated escape from a crisis and a deal for the next election. Nicaragua simply could not sustain another five years of institutional crises, nor could international donors. Presidential candidates should commit to the new arrangements despite the loss of executive power they represent.

The property law should not prolong disputes with extended court battles. It is clear that a consensus exists in the Assembly to sell a portion of Telcor and to use a portion of the proceeds to support bonds used to compensate former property owners. At issue are the portions. The sale should leave the country with substantial control over this valuable asset and some of the proceeds should be used to help reactivate the economy.

The government must follow through on its commitments made at the Consultative Group, to CIREFCA, and at the December 1994 meeting of Central American presidents at the White House, to pursue policies of sustainable development with particular priority for those most affected by war. At the moment, it is not clear if there is a strong commitment in the current administration, or among electoral candidates, to such policies, or how they would square with the Chamorro administration’s sustained commitments to the rules of structural adjustment and stabilization laid down by the IMF and World Bank.

Nicaragua is going to continue to need very substantial aid from the international community. Some of that aid should go toward reinforcing the political agreements that have been, and are being made. Developing alternative dispute resolution mechanisms, such as the Carter Center has proposed, to quickly resolve property disputes should be a high priority, as should be increasing the technical capacity of land registries. Policies and pressures which favor U.S. citizens over other claimants can only lead to further conflict and bitterness within Nicaragua. Aid should go to strengthening an independent judiciary, and providing support to the investigative capacity of the impoverished police force.

A good portion of that aid will have to continue to meet balance of payments deficits, though that could be reduced if steps were taken to curb at least some kinds of imports through tariffs, and if more debt was forgiven. The international financial institutions, however, should not use economic formulas in mechanical fashion without fully realizing the on-the-ground conditions of poverty and disruption in the wake of two wars. Nicaragua has now been put through the wringer of such policies for five years with only a substantial gain over inflation to show for it.

A mentality that seeks first and only to provide bits of aid to keep a lid on grassroots eruptions will not lead to sustainable development. Rather aid should target credit to medium and small producers, and so should the policies of national banks. It should focus on entire communities most affected by the war. It should target those in most poverty so they might join the ranks of small producers. Such policies may activate production among small and medium land holders and then lead to increased consumer demand among the majority and thus stimulate the economy. International aid should target health and education; economic growth will not be sustained by an epidemic ridden, ill educated population.

Nicaragua will not be able to drive a hard bargain with international financial institutions; it has little leverage. A more flexible attitude on their part as well as considerably more funds targeted for poverty alleviation will be necessary. Nicaragua can do more on its own as well. Changing the mix of credit policies, for example, would help. Reduced levels of conflicts on many fronts would not only be salutatory for a conflict weary population, but provide an important condition for fostering new economic productive activity. But, if achieved, greater consensus alone will not be a sufficient condition for restarting the economy or reducing poverty and inequality, and without strides toward those goals more conflict, not less, would be likely.

ENDNOTES

1 Lance Taylor, et. al. "The Transition from Economic Chaos Toward Sustainable Growth," Stockholm, Swedish International Development Authority (SIDA), 1989.

2 UNO politicians blamed the FSLN for the economic problems. The Sandinistas admitted mistakes, but blamed the U.S. financed war. For an assessment see, Jaime Behar and Mats Lundahl, Now’s the Time: An Evaluation of Swedish Development Cooperation with Nicaragua, Stockholm, Ministry of Foreign Affairs, 1994.

3 See Laura Enríquez, et. al., Nicaragua: Reconciliation Awaiting Recovery: Politics, the Economy and U.S. Aid under the Chamorro Government, Washington Office on Latin America, 1991; Richard Stahler-Scholk, "El ajuste neoliberal y sus opciones: La respuesta del movimiento sincial nicaraguense", Revista Mexicana de Sociología, Vol. 56, July 1994; Lisa Hauguaard, "In and Out of Power: Dilemmas for Grassroots Organizing in Nicaragua", Socialism and Democracy, Vol. 7, Fall 1991.

4 Eduardo Baumeister, "Farmers’ Organizations and Agrarian Transformation in Nicaragua", in Minor Sinclair, ed., The New Politics of Survival: Grassroots Movements in Central America, New York, Monthly Review/EPICA, 1995, p. 259.

5 The Sandinista government received considerable aid, though much more in-kind aid than liquid funds. The sources and composition of funds have changed dramatically, with the demise of the Soviet bloc and ending of the U.S. blockade of Nicaragua. See Behar and Lundahl, op. cit.

6 Venezuela and Sweden each put in $120 million, Spain $106 million, and Germany $88 million. Some German aid may have originated in the former German Democratic Republic. The government counts in its 1990–93 table $279 million from the USSR (none of it in liquid funds) no doubt carried over from the former government. See Ministerio de Cooperación Externa, Memoria de la Cooperación Externa 1990–1994, Managua, November 1994.

7 Behar and Lundahl, op. cit. p. 79, and U.S. Embassy, "Macroeconomic Developments in 1992–1993," ECLAC (UN Economic Commission for Latin America and the Caribbean), "Nicaragua: An Economy in Transition," Mexico, May 31, 1994.

8 Banco Mundial, The Who, What and Where of Poverty in Nicaragua, Managua, November 24, 1993.

9 Ample public opinion research underwritten by the UNDP confirms the low opinion in which Nicaraguans hold virtually all political institutions. See Instituto de Estudios Nicaraguenses (IEN), "La gobernabilidad y el acuerdo nacional en Nicaragua (resumen ejecutivo)," arch 14, 1995 and "La cultura política en Nicaragua: análisis desde la opinión pública nacional," April 10, 1995.

10 Richard Stahler-Sholk, "Breaking the Mold: Economic Orthodoxy and the Politics of Resistance in Nicaragua," Latin American Studies Association Congress, September 1995, p. 7.

11 Ibid., p. 10 (quoting a joint UNO-FSLN statement) and Rose J. Spalding, "Economic Elites: The Chamorro Years", Latin American Studies Association Congress, Washington, D.C., September 1995, pp. 19–22 (indicating business elite reservations about the neoliberal model).

12 For these events, see La Prensa and El Nuevo Diario, August 7, 1995, El Nuevo Diario, August 18, 1995, La Tribuna, September 7, 1995. La Prensa and La Tribuna, September 8, 1995.

13 See "Ataque a Dios," El Semanario, August 18, 1995, Barricada and El Nuevo Diario, September 12, 1995, La Tribuna, September 18, 1995.

14 For a more detailed discussion of transition, see David R. Dye, "Notes on the Nicaraguan Transition," introduction to Nicaragua’s Search For Consensus: A Conference Report by Cynthia Arnson, Joseph Tulchin and Bernice Romero, Woodrow Wilson Center Working Paper No. 213, August, 1995, from which parts of the present section are condensed.

15 Different perspectives on Nicaragua’s neoliberal economic restructuring can be found in José Luís Medal Mendieta, "Nicaragua: políticas de estabilización y ajuste", Managua, December, 1993; and Adolfo Acevedo Vogl, "Nicaragua y el FMI: El pozo sin fondo del ajuste", CRIES, Managua, 1993.

16 Before Mrs. Chamorro’s inauguration, the outgoing and incoming governments negotiated a "Transition Protocol" respecting the institutional autonomy of the armed forces. See text in Emílio Alvarez Montalván, Las fuerzas armadas en Nicaragua: Sinopsis historica 1821–1994, pp.117–121.

17 See Comisión Tripartita, "Memoria de Trabajo, 1992–1993", December, 1993, and Human Rights Watch/Americas, "Separating Facts From Fiction: The Work of the Tripartite Commission in Nicaragua," October, 1994.

18 For a blow by blow account, consult Oscár René Vargas, Adonde va Nicaragua?, Managua, Ediciones Nicarao, 1991, pp.210–228.

19 See the present report’s subsection on privatization in the section on property and Trevor Evans (coord.), La transformación neoliberal del sector público, Managua, Latino Editores, 1995, pp. 241–57, and CORNAP, Avance del proceso de privatización al 31 de diciembre de 1994, Managua, March, 1995.

20 See the present report’s section on the Military and a the cogent study, Roberto Cajina, Reconversión militar en Nicaragua: 1990–1994, Managua, CRIES, forthcoming.

21 These conclusions are culled from polls undertaken at regular intervals since 1990 by the Costa Rican polling firm CID-Gallup.

22 The following analysis has been developed in numerous interviews since mid-1993. Those most influential are Tomás Delaney, Vice-minister of the Presidency for Legal Affairs; Luis Humberto Guzmán and Reinaldo Antonio Tefel, president and vice- president of the National Assembly, deputies Cairo Manuel López (UDC), José León Talavera (MRS) and Hernaldo Zúniga (independent conservative); Emilio Alvarez Montalván, political commentator for La Prensa and La Tribuna; Carlos Fernando Chamorro, former editor of Barricada; former Ambassador to the U.S. Carlos Tunnermann; historian Roberto Cajina, and Franceso Vincenti, director of the UNDP in Nicaragua.

23 See Asamblea Nacional, Constitución Política, con las reformas vigentes de 1995, August, 1995. The reforms reduced the terms for president and deputies from six years to five, renamed the EPS as the "Army of Nicaragua," provided for direct and mid-term elections of mayors, and required Assembly candidates to reside in the areas they represent. Most will be elected by department rather than by the much larger regions used in the past.

24 The schism in the FSLN can be traced to late 1993; relations reached the point of no return at the May 1994, FSLN Congress, when a majority of pro-Ortega delegates removed Sergio Ramirez from the party leadership. The division widened in September, 1994 when Ramirez introduced the constitutional reforms in defiance of the FSLN’s wishes. Ramirez, and others such as Dora Maria Tellez and Luis Carrión resigned from the FSLN in early 1995. The Sandinista Renewal Movement became a party in May, 1995. In the end, the FSLN came around to accepting the proposed constitutional reforms.

25 Meanwhile, the aforementioned church bombings began. In early May, Sandinista groups initiated a protest over the property issue which degenerated into a violent incident May 17, but culminated in a peaceful takeover of the National Assembly June 15. See "Nicaragua llora nuevamente," in El Semanario, May 25, 1995.

26 See text of the "Ley Marco" in Barricada, July 5, 1995.

27 Late August polls by Victor Borge y Asociados and CID-Gallup demonstrate a continuing wide lead by Arnoldo Alemán of the PLC over nearest rival Daniel Ortega, in the Borge poll by a margin of 41-20. While the Chamorro government’s new "Proyecto Nacional" and the Sandinista Renewal Movement garner 4–5% of the potential vote each, no other party exceeds one percent. See La Prensa, September 10, 1995; La Tribuna, September 11 and 12, 1995.

28 IEN, op. cit.

29 See Orlando Nuñez, et. al., La Guerra en Nicaragua, Managua, CIPRES, 1991, pp. 454–470 for one account of the transition.

30 The analysis is based on: Luis Humberto Guzmán, Políticos en Uniforme: Un Balance del Poder del EPS, Managua, Instituto Nicaraguense de Estudios Socio-Políticos, 1992; interview with Guzmán, December 1992; Humberto Ortega Saavedra, Nicaragua: Revolución y Democracia, Organización Editorial Mexicana (1993); UNDP, Debate Acerca del Ejército Popular Sandinista de Nicaragua, Managua, July 1994; UNDP, Primer Conversatoria: "La Violencia en Nicaragua", Managua, June 30, 1994; Ministerio de la Presidencia and Programa de las Naciones Unidas Para el Desarrollo (UNDP), Foro Ncaional "Estado, Sociedad, Fuerzas Armadas y Derechos Humanos," Managua, January 13 and 14, 1994; UNDP, El Ejército de Nicaragua, January 1994; Código de Organización, Jurisdicción y Previsión Social Military, published in La Gaceta, September 2, 1994; and interviews with Francisco Caldera and Vilma Reyes, respectively Commander and Sub-Commander of the National Police January 1995 and with Commander Caldera, June 1995; with military expert and historian Roberto Cajina, June and August 1995, with UNDP official Alberto Machado, June and August 1995, with a former EPS captain, June 1995. See also Daniel L. Premo, "The Nicaraguan Armed Forces in Transition, 1990–1995", Latin American Studies Association Congress, September, 1995.

31 El Ejército de Nicaragua, op. cit., pp. 2–3.

32 H. Ortega, op. cit, pp. 160–164.

33 David J. Stanfield, "An Analysis of the Current Situation Regarding Land Tenure in Nicaragua," Terra Institute and Wisconsin Land Tenure Center, November 1994, p.5.

34 Much of the material in this and the following subsection is condensed from David R. Dye and Jared Kotler, "U.S. Policy and Property Rights in Nicaragua: Undermining the Search for Consensus," Nicaragua Issue Brief #2, Washington Office on Latin America (WOLA) December, 1992.

35 For detailed numbers see subsection on Implementation below.

36 The Chamorro government’s current estimate is 171,890, but will grow as some 30,000 cases are added. See Ministerio de Finanzas, "El problema de la propiedad en Nicaragua: avances y desafíos," July 8, 1995.

37 Former president Daniel Ortega was accused of paying $2,000 for a home valued by its former owners at $500,000. The Sandinista defenses against these charges can be found in Jaime Wheelock Román, La verdad sobre la piñata, IPADE, Managua, 1991.

38 See, "El rompecabezas de la propiedad," in envio, no.133, December 1992, p.16, and "Los nuevos terratenientes," El Semanario, September 29, 1994.

39 These included manipulation of the limits defining properties as "small" or "large", the limitation of land titling only to cooperatives that were legally registered, and restoration of full powers to the National Review Commission, in explicit violation of the May 1991 Supreme Court ruling.

40 The CNR this time was limited to a strictly administrative role; it could not transfer properties without court approval.

41 Statistics on agrarian reform are from INRA, "Consideraciones generales sobre la evolución reciente de la tenencia de la tierra en Nicaragua" (mimeograph, May 1995), and on privatization from CORNAP’s general report on 1994, op. cit. Privatization figures are adjusted to include the land distributions to ex-combatants and others since the change of government and to reflect results of the 1992 cooperative census.

All land numbers here and elsewhere are approximate. Official statistics on land are weak, though better than other sources. For example, in the 1980s, government statistics estimated rather than measured areas and frequently double or triple-counted cooperatives. Deena Abu-Lughod’s purging of duplicate entries for one department — Matagalpa — resulted in a 15% reduction of cooperative hectares. Of state lands privatized, 400,000 hectares are not fully accounted for because they are not reflected in CORNAP statistics. Anecdotal evidence suggests many deals have been made outside of CORNAP.

42 Of these, 750 were recorded by the National Police while an additional 300 or so were never classified as "public disturbances" yet merited the attention of the Agrarian Reform institute, the press or local governments.

43 The land area occupied is estimated in Javier Matus, "Entrega y Demanda de Tierras II," (Teosintle, Nos. 11–12, Diciembre 1992). Interview with Tablada, December 1994.

44 INRA, "Marco Estratégico de la Reforma Agraria" (mimeograph), 1992.

45 The gender-specific reference is intentional. Almost all agrarian reform beneficiaries are male. Wives have recently been included in titles, in an attempt by INRA to keep husbands from selling the land.

46 Matus, op. cit., p. 6.

47 Colonos are over represented because many had a document from the Sandinista land reform which eased titling. Some are ex-RN pretending to be colonos believing this will protect them from potential reprisals.

48 Data from the Office on Quantification and Indemnization was generously provided by Horacio Garcia, August 1995.

49 Government figures from Ministerio de Finanzas, July 8, 1995, op. cit., and Leopoldo López Vice Minister of Property,interview, August 24, 1995. The Finance Ministry figures on bonds accepted for rural land total 350,000 hectares, almost 80,000 more than the Office of Quantification and Indemnizaion estimate.

50 INIESEP, Survey of 473 members of UPANIC, April 1994.

51 For an analysis of the bonds, see Ricardo Guevara, "El sistema de bonos en Nicaragua," November 1994, (Swedish International Development Authority). In June 1994, a combination of bondholders and US pressures led to Law 180, which reduced the bonds maturity from 20 to 15 years, raised interest from 3% to 4–5%, and mandated that bonds could be used to pay certain tax and credit obligations. See text of law in La Prensa, July 29, 1994.

52 Interviews with López, cited above, and Ariel Bucardo, President of the National Cooperatives Federation, June 12, 1995.

53 By March 1995, the 280,000 hectares had dropped by 35,000 apparently because some 26 farms were transferred out of the privatization process to the agrarian reform category which would mean that its occupants would not have to pay. The data are insufficient to trace each case.

54 For example, the 196 hectare farm San Rafael 1 in Boaco appears in the CORNAP report to have cost RN commander Benito Cerda ("El Puma") $12,400. It was actually purchased by another RN commander, Carlos Luna ("Bruce Lee") in 1991 for $23,800. In this case, CORNAP under reported the amount due, raising doubts about possible other under reporting and the destination of funds.

55 Interviews with José Adán Rivera, Farm Workers Association, June 8, 1995 and July 27, 1995.

56 See CORNAP report, op. cit., pp. 44–49, 81–83.

57 See Barricada, May 26, July 11 and August 23, 1995, and La Prensa, August 28, 1995.

58 Figures from Ministerio de Finanzas, and Dye and Kotler, op. cit. "Solvencias" are not titles, but a step towards obtaining title. To obtain solvencias under Law 85, petitioners had to demonstrate effective occupancy of a dwelling before February 25, 1990 and that they possessed no other domicile.

59 Numbers from Ministerio de Finanzas, op. cit. Some have appealed the ruling to the Minister of Finance. In May, OOT was transformed into the "Office for Urban Titling" or OTU. The 30,000 estimate is that of Leopoldo López, interview above.

60 Helms’ staff gathered voluminous information on U.S. property cases. See "Nicaragua Today," Republican Staff Report to the Committee on Foreign Relations, U.S. Senate, August, 1992. pp.9–32. For a critique of this report, see Dye and Kotler, op. cit. pp.5–6 and passim.

61 Data supplied by U.S. Embassy in Managua, August 17, 1995. U.S. property cases continue to be opened, in small numbers.

62 Barricada (August 10, 1995) published 45 names, which also appeared in a longer list of U.S. property claimants in "Update on the Resolution of Expropriations," Committee on Foreign Relations, U.S. Senate, March 28, 1994.

63 José Adán Rivera, interviews cited above.

64 It is not known whether the former owner of this farm, General José Rodríguez Somoza, half brother of Anastasio Somoza, has received compensation. However, the average amount issued in bonds for farms in that zone is $475/hectare.

65 Some buyers are politically connected large landowners who apparently use loans from government banks intended for other purposes. See NITLAPAN, "Decollectivization: Agrarian Reform from ‘Below’," envio, December 1994, p. 21. See also "Los nuevos terratenientes," El Semanario, September 29, 1994.

66 Richard Stahler-Sholk, 1995 op. cit., p. 8.

67 See Mario de Franco, "Nicaragua: experiencia de privatización de empresas públicas," June 1995, report prepared for the UN’s Economic Commission for Latin America (ECLA). This report also makes calculations of the real worth of the assets privatized.

68 As of mid-1995, 63,649 solvencias for Law 86 have been issued. Figures and information from Ministerio de Finanzas documents and López interview.

69 Eight bids from companies such as AT&T, Italtel, France Telecomm are being considered. See draft law entitled "Ley para la Incorporación de Particulares en la Operación y Ampliación de Servicios de Telecommunicaciones" submitted on July 17, 1995.

70 Interview with Luís Raúl Cerna, head of the Bondholders Association, August 9, 1995. Guevara, op. cit, calculates that interest accumulating over 13 years on $600 million worth of bonds will reach $370 million. The Sandinista Renewal Movement, which holds the largest bloc of votes in the Assembly, has pronounced against the bondholders’ proposal, calling the suggestion a "new piñata." Press conference, MRS, July 18, 1995.

71 Gobierno de Nicaragua, Decree 19-95, May 19, 1995. However, the Assembly has challenged the legitimacy of this decree.

72 "Si el gobierno no cumple, nosotros también desconoceremos los compromisos," Barricada, June 5, 1995.

73 Targets of this campaign have included Directorate members Daniel Ortega, Bayardo Arce, and Henry Ruíz, former Directorate member Luís Carrión, and ex-Barricada editor Carlos Fernando Chamorro. See LaPrensa, August 3, 1995; La Tribuna, August 11, 1995. In July Sergio Ramirez returned his home to the government.

74 On July 17, President Chamorro sent draft bills on urban and rural property and on TELCOR. See FSLN proposed law, October 25, 1994, and that of the National Conservative Party, January 17, 1995.

75 Another issue regards the method to title properties to reform

beneficiaries when legal title is still registered in the names of pre-1979 owners. To speed up titling to the former, various proposals call for a new expropriation in favor of the state, with indemnity paid later to former owners.

76 Carter Center, op. cit., pp. 19–42. UPANIC and UNAG have also developed a private mediation mechanism for agricultural properties. Interview, Gerardo Salinas, president of UPANIC, August 8, 1995. Also, the government has offered international arbitration of U.S. citizen property claims through the International Court for the Settlement of Investment Disputes (ICSID).

77 Alto Comisionado de las Naciones Unidas para los Refugiados, "El trabajo del ACNUR y de los pares dentro del contexto de CIREFCA" (undated photocopy).

78 Gobierno de Nicaragua, "Balance del proceso CIREFCA 1989/1994 y la temática pendiente del desarraigo," Managua, Junio 1994, document agreed to between the government and the Federation of Nongovernment Organizations with technical support from UNHCR/UNDP.

79 Defined as a "production unit designed to benefit members of the community and the country, acting as a center for services and development for the surrounding region... which should contain the following basic elements: Municipal Area: schools, warehouses, potable water and electricity, hospitals, roads; area for housing those living in the zone or development center; private land plots for subsistence farming and ranching; a Community Area and Projects Area for the benefit of all community members."

80 Carlos García, President of the recently created Foundation of Ex-Combatants of War and a member of the Nicaraguan Resistance Party, interivew, August 1995.

81 See IEN, op. cit.

82 Unless otherwise noted, the population figures for each sector are from CIAV-OAS, UNHCR, UNDP, SPP, EPS, MINGOB and INSSBI.

83 Ken Ward, "Survey of Current Situation of Central American Refugees in Costa Rica," for Project Counseling Service, November 1991; and Los PIR en Nicaragua, ACNUR Nicaragua, junio de 1993.

84 Diagnóstico de la población desplazada, repatriada, refugiada y desmovilizada y Plan de Acción (síntesis), Federación de Organismos No Gubernamentales de Nicaragua (FONG), Managua, Abril 1991.

85 CAPRI, Valoración de los Proyectos de Impacto Rápido en Nicaragua, El Salvador y Guatemala — Una Perspectiva de los ONGs, Managua, Abril de 1994.

86 The original $48 million the United States provided to CIAV was extended to over $50 million by 1992.

87 Carlos García, op. cit.

88 Extrapolated from USAID’s overall figure of $62 million for CIAV and UNHCR demobilization, repatriation and protection work plus CIREFCA between 1990 and 1993, provided in a telephone interview with AID’s Managua mission in August 1995.

89 Opening speech at a seminar on PRODERE-MAS Community Participation, Managua, Nicaragua, June 4, 1993.

90 "The FAC’s Contribution to the Reconciliation Process," Augusto C. Sandino Foundation (FACS), Managua, September 2, 1994, p.11.

91 "Nicaragua: Medium-Term Development Policy 1994–
1997," document presented by the Government of Nicaragua at the Consultative Group Meeting Paris, France, June 16, 1994.

92 Introduction to the Government of Nicaragua’s CIREFCA Plan of Action, 1992–95. The donors were the EEC, Norway and the United States.

93 Interview with former PRRN official, Jaime Matus, August 1995.

94 According to Jaime Matus, the government had restructured the original proposals by the end of 1991, but CIREFCA rejected them because they did not conform to its criteria that they be consensual proposals of the government and civil society. That led to the creation of an Ad-hoc Committee, with representatives from the government and the Federation of NGOs, with technical participation by the UNHCR and UNDP.

95 Quilalí, El Jícaro, Murra and Jalapa in Nueva Segovia; San Juan del Río Coco in Madriz; and Wiwilí and Pantasma in Jinotega.

96 "PRODERE: Visión General de los Contextos, Procesos, Avances, Impactos y Perspectivas 1990–95." Government of Nicaragua-PNUD, draft.

97 CIAV programs are not in the accompanying table.

98 "La Misión," undated mimeo by CIAV synthesizing its pre-1993 work and future plans. CIAV says it has convinced Congress to relax that restriction, which technically would prohibit using a US-financed vehicle, for example, to visit a project in the same area where human rights work is being done.

99 Telephone interview with USAID official in Managua, August 1994. This "overlap" explanation is curious, since AID funds virtually no such projects in a reconciliation-reinsertion framework.

100 Recontras derives from "contra" (short for counterrevolutionary in Spanish), used to denote the RN during the war, and recompas comes from "compa" (short for compañero, or comrade), used by Sandinistas to change the image of the army from the days of Somoza’s National Guard. Revueltos (recontras and recompas who carried out coordinated actions) and rejuntos (who carried out joint actions but under separate command) represent a typically Nicaraguan humorous double-play on the familiar phrase juntos pero no revueltos (together but not mixed), usually referring to couples who still live together for convenience but are no longer involved with each other.

101 Central American Historical Institute, weekly summary of events, February 1992.

102 In an interview for this study, Carlos García, president of the Foundation of Ex-Combatants and member of the Nicaraguan Resistance Party, said that some RN members had joined recontra groups five or six times, selling another rusty rifle from their stash each time as a way to make a living.

103 Angel Saldomando D., "Documento de análisis, Proceso de pacificación en Nicaragua 1990–1994," Proyecto Nic/95/002, Gobierno de Nicaragua, Ministerio de la Presidencia-PNUD, Marzo 1995.

104 Ibid.

105 Nicaraguan Human Rights Center (CENIDH) annual reports, based on both newspaper reports and investigated cases.

106 Memoria de Trabajo, Comisión Tripartita, op. cit.

107 Summary of the UNDP draft proposal provided by Marcelo Ochoa of UNDP in late August, 1995.

108 Interview with Marcelo Ochoa, UNDP, July 1995; "Estudio de la pobreza en Nicaragua," Proyecto NIC/93/016, MAS/PNUD/UNICEF, Managua, 30 de Junio 1994; "Balance del proceso CIREFCA 1989/1994.." op. cit. See also, "Consolidating Peace in Central America through Humanitarian Action, Human Development, Participatory Mechanisms and International Support," UNDP/UNHCR Joint Support Unit, 1 December 1993. CIREFCA has now ended, but it left behind a Declaration of Commitments by all the governments to work together with NGOs on overall strategies of sustainable development and eradication of extreme poverty in areas prioritized for consolidating peace, and a commission (called GRUCAN) with broad representation to promote the commitments. But the CIREFCA commitments seem to run counter to the current veterans focus of MAS.

109 UNDP, "Contribuciones al análisis.." op. cit.

110 See, World Bank "Republic of Nicaragua Poverty Assessment," April 14, 1995, and PNUD, "Contribuciones al análisis de la transición nicaragüense," presentado al Grupo Consultivo sobre Nicaragua, Junio 19–20 de 1995.

111 UNDP, "Contribuciones al análisis .." op.cit.

112 UNDP, "Statement for the Consultative Group Meeting, June 16–17, 1994", Managua.

113 PNUD, "Contribuciones al analysis..," op. cit.

114 See James K. Boyce, et. al., Adjustment Toward Peace: Economic Policy and Post-war Reconstruction in El Salvador, May 1995 draft (Commissioned by UNDP in El Salvador).

115 UNDP, "Contribuciones al análisis .." op.cit.

116 UNDP, "Statement for the Consultative Group Meeting, June 16–17, 1994", Managua.

117 UNDP, "Contribuciones al analysis..," op. cit.

118 See James K. Boyce, et. al., Adjustment Toward Peace: Economic Policy and Post-war Reconstruction in El Salvador, May 1995 draft (Commissioned by UNDP in El Salvador).