Nicaragua : countering the false consensus

by toni solo, March 10th 2009

For many people in North America and Europe, Nicaragua's municipal elections in 2008 marked a watershed in terms of their support. Many self -styled progressives tended to believe the Nicaraguan opposition's false claims of electoral fraud. The main right wing opposition party - the Constitutional Liberal Party (PLC) - was supported by the centre-right social democrat Sandinista Renewal Movement (MRS) in a massive campaign trying to mobilize international condemnation of the governing Sandinista National Liberation Front (FSLN). In response, FSLN supporters mobilised their own manifesto campaign which attracted important and broad based international support, especially in Latin America.

Nicaragua's fractious political opposition breaks and remakes frequently, causing much confusion to casual observers of Nicaragua's political scene. In general, the United States embassy supports the extreme right-wing representing Nicaragua's traditional oligarchy whose current political leader is Eduardo Montealegre. European Union governments tend to favour MRS leaders like Dora Maria Tellez, Edmundo Jarquin and Victor Hugo Tinoco. The MRS has been very successful in mobilising support internationally. Within Nicaragua, they have never won more than around 7% support in any national election. 

Their articulate, persuasive spokespeople include internationally acclaimed novelists like Gioconda Belli and Sergio Ramirez as well as Ernesto Cardenal, Nicaragua's most famous living poet. They tend to appeal to distinguished individuals who were friends with them during the Sandinista People's Revolution of the 1980s. The MRS appeal is essentially a class appeal to the intellectual-managerial class that has great influence in the North American and European media. Another leading MRS opposition figure,  Monica Baltodano, of the MRS bloc in the National Assembly, is a maverick virulently opposed to the FSLN, who in practice works with the right wing but offers a left-wing discourse for the benefit of her foreign supporters.

In December 2008, in various of its editions, Le Monde Diplomatique published "Democracia pactada en Nicaragua", an article by Baltodano continuing her long-standing vendetta against Daniel Ortega and his colleagues in Nicaragua's governing FSLN party. Her fundamental accusation is that Ortega has betrayed the ideals of the Sandinista People's Revolution of the 1980s. That accusation is also the mainstay of an article published in both Counterpunch and ZNet by Roger Burbach of the California-based Center for the Study of the Americas "Et Tu, Daniel? The Betrayal of the Sandinista Revolution".

On every point of substance, in his account of Nicaraguan politics and economics over the last few years, Roger Burbach seems to rely completely on interpretations borrowed from Nicaraguan opposition social democrat politicians and their right wing allies. Where it is not factually inaccurate, Burbach's account is wrong or confused. While available detailed analysis may be worth following up, the broader role of anti-FSLN propaganda is perhaps of more immediate interest and concern. The articles by Burbach and Baltodano conform to a standard format whose characteristics seldom vary.

Both right-wing and progressive critics deliberately downplay or omit the FSLN government's impressive achievements in social and economic policy and, for example, its reversal of previous governments' attempts to privatize the country's State-owned water utility. By contrast, just like the US government and its European allies, they tend to exaggerate and distort concerns about accountability and democracy. In 2007, the Nicaraguan opposition focused on what they alleged was arbitrary mismanagement of development project funding derived from Nicaragua's concessionary oil agreement with Venezuela under the ALBA framework. Currently, the Nicaraguan opposition is following up its false accusations of electoral fraud in the 2008 round of municipal elections, in which the FSLN won 109 out of 153 municipalities.

ALBA

Burbach's account of alleged abuse of ALBA funds is typical of Nicaraguan opposition supporters commentary. He writes in his recent article, “...under the rubric of ALBA, Ortega signed an accord with Venezuela that provides an estimated $300 million to $500 million in funds personally administered by Ortega with no public accountability."

Whether out of ignorance or ill-intent, his statement is completely inaccurate. Last year Daniel Ortega publicly announced the ALBA funds have contributed well over US$500 million to a wide range of development projects. On January 11th 2007, the day after his inauguration, Daniel Ortega signed an agreement, together with Hugo Chavez, Evo Morales and Cuban Vice-President Juan Ramón Machado, making Nicaragua a full member of the Bolivarian Alternative for the Americas - ALBA.

At the same time, Francisco Lopez, the new head of Nicaragua's State oil company, Petronic, strengthened an already existing arrangement with Venezuela under the Petrocaribe agreement. Petronic signed a commercial agreement (convenio) with Venezuela's State oil company PDVSA. The agreement's main points were that Petronic would import oil and oil derivatives from Venezuela and pay 50% of the amount due within 30 days.

The remaining 50% would be repaid over 20 years at 2% interest. Over that period 25% of the total amount due was to be managed by PDVSA through an ALBA social fund. The remaining 25% was to be administered by a Nicaraguan institution. In practice, both parts of the outstanding 50% are administered on the basis of a commercial financial agreement between PDVSA and the Caja Rural Nacional (CARUNA) – a savings and loan cooperative, founded in the mid 1990s, that administers funds for numerous foreign organizations working in Nicaragua. Subsquently, PDVSA and Petronic set up a joint company called ALBANISA in which PDVSA is the majority shareholder but operating on the same basis as that of the first convenio between Petronic and PDVSA.

Petronic is subject to all the controls that apply to State companies in Nicaragua. It reports regularly to the Economic Affairs Committee of Nicaragua's National Assembly. It is obliged to file annual accounts with the tax office of the Finance Ministry and to keep its records up to date in the Registro Mercantil. It is also subject to audit by the independent State audit body, the Contraloría General.

CARUNA as a savings and loan cooperative is subject to the relevant legislation that applies to financial institutions in Nicaragua as well as to the law applying to cooperatives. As a financial institution it is supervised by the Superintendencia de Bancos y Otras Organizaciones Financieras and has to file tax returns and other relevant reports to the Ministry of Finance. As a cooperative it is subject to supervision by the Instituto de Fomento a las Cooperativas. As a cooperative Caruna also has to report regularly to its members and its board has to submit to periodic elections.

So it is completely untrue that Daniel Ortega personally administers hundreds of millions of dollars with no accountability. He has to work within the restrictions of Nicaragua's relevant national legislation and also within the terms of the agreements both with PDVSA and the other ALBA governments which have their own reporting and audit processes to control the use of ALBA funds.

Municipal elections

Burbach goes on, “An independent Nicaraguan group, Ethics and Transparency, organized tens of thousands of observers but was denied accreditation, forcing them to observe the election from outside polling stations. But the group estimates that irregularities took place at a third of the polling places.” No one unfamiliar with Nicaragua could possibly judge the truth of Burbach's assertion here, because so many facts and so much context get left out.

“Etica y Transparencia” is an NGO heavily dependent on funding from USAID. It has participated regularly in anti-government demonstrations. The Supreme Electoral Council decided Etica y Transparencia did not meet the criteria of independence and impartiality normally expected of election observers. Etica y Transparencia is a local group of Transparency International one of the plethora of multinational NGOs promoting the political agenda of imperialist globalization.

In its recent report on the municipal elections held on November 9th (and January 18th for seven municipalities in Nicaragua's northern Atlantic Coast) Etica y Transparencia presented evidence of what they are calling “irregularities” in 33 municipalities - that is, some events that may or may not amount to electoral fraud, depending on one's interpretation of them, in 21% of the country's 153 municipalities - not one third as Burbach states. So now, after having for months alleged massive, wholesale, indisputable nationwide fraud, even the US embassy's main vehicle for destabilizing the Nicaraguan electoral process has in effect admitted that they were wrong. Their report is a lame attempt to justify the substantial funding they received from donors like USAID and their parent Transparency International.

Like so many other commentators, including writers for the BBC and the UK's Independent, for example, Burbach omits to note that 150 international independent election observers from all over Latin America– all electoral professionals with current or recent experience of organizing elections - participated in the municipal elections of November 9th. They reported that the elections were free, fair and very well organized. So one is left with the choice of who to believe : a USAID funded outfit clearly identified with the Nicaraguan political opposition which was not directly involved in the election process, or, genuinely impartial electoral professionals from all over Latin America and the Caribbean who worked with the national authorities throughout the whole electoral process.

Who cares?

Stepping back from the controversy, one ends up asking why anyone should care. Nicaragua is a tiny country with a population much smaller than most rich countries' capital cities. There are probably two main reasons why so much energy gets invested in arguing the minutiae of Nicaragua's internal affairs. One reason, constant ever since the 19th Century, is Nicaragua's location on the Central American isthmus. The United States and its allies view control of that narrow inter-oceanic region as a vital strategic concern.

The second reason is that ever since the Sandinista People's Revolution of 1979, the Sandinista National Liberation Front has posed a categorical challenge to the United States' perceived interests and those of its European allies. FSLN leader Daniel Ortega's election as Nicaraguan President in 2006 startled foreign observers in the United States, Canada and Europe. So when Venezuela's President Hugo Chavez, Bolivia's President Evo Morales and Cuba's Vice-President Juan Ramon Machado welcomed Nicaragua into ALBA on January 11th 2007, the United States and its allies were almost certain to react badly. If El Salvador joins ALBA following a possible FMLN win in country's presidential elections on March 15th, the US will have effectively lost its former "backyard".

One superficially puzzling aspect is that, whereas the Bolivian and Venezuelan governments receive quite favourable support from North American and European progressives, Nicaragua's government does not. The reason for this conundrum is that progressive opinion in the US, Canada and Europe takes its lead from former FSLN leaders who split from the FSLN. To destabilize the FSLN government, these former revolutionary leaders now work closely with Nicaraguan right-wing and social democrat politicians. These in their turn receive substantial financial and political support from the US government and its European allies. If progressive arguments about Nicaragua's politics are contested, convoluted and fierce, it is because lines of political definition have got confused – a tactic typical of right-wing propaganda warfare.

Karla Jacobs contributed to his article