Do Not Leave Nicaragua Alone
NICARAGUANS have taken a crucial step toward rebuilding their society. After five weeks of bargaining, the government, the unions, and some of the producers signed an accord Oct. 27 to end the economic warfare and begin to resuscitate the economy. President Violeta Chamorro's inauguration in April ushered in a period of posturing and muscle-flexing as both Sandinistas and UNO began to adjust to their new positions in the opposition and government. But after months of debilitating strikes and a deteriorating economy, neither side had prevailed, and each side began to realize it could not make Nicaragua work alone.
Now, Nicaraguans are experimenting with concertacion, a method of consensus-building through negotiations. Concertacion entails discussions between the government and key interest groups to reach a consensus on addressing a national problem.
The Chamorro government proposed in August a national dialogue to address the economic crisis, recognizing that the cooperation of workers and investors was essential to economic recovery. But while the government hoped to limit the discussion to the technical aspects of its economic program, the potential participants held different visions of what the agenda and outcome of concertacion should be. The Sandinistas and affiliated unions insisted on protecting the gains of their revolution, especially the agrarian reform and nationalization of key industries; UNO leaders meanwhile insisted that the government privatize much of the public sector and return unjustly confiscated property, as called for in the UNO platform.
Despite these competing visions, the key economic groups began in late September to negotiate the economic program with the government. That program seeks to stop inflation, reactivate the crucial agricultural sector and its exports, and make structural reforms through privatization of state enterprises.
The key to the government's plan to stabilize the economy is to cut the fiscal deficit and introduce a new currency - the gold cordoba - tied to the dollar. Yet the tools at hand are limited. Cutting government expenditures by further reducing the size of the military (already reduced by 10,000 regular troops and 50,000 militia) or eliminating public sector jobs will add to the current 40 percent unemployment rate. Aggressively privatizing state enterprises will alienate the well-organized unions. It will also be hard to freeze wages in a high-inflation economy or reduce even further state social expenditures in a society already facing a crisis of hunger and health.
In signing the accord, the signators acknowledged that compromise is essential to reaching their goals. The accord calls for an end to strikes and gives broad guidelines for privatizing the public sector, reactivating the economy, and setting minimum wages in accordance with food prices. The agreement lacks specifics and unanimity: It was not signed by the private business organization COSEP, because it failed to address the issue of confiscated property to COSEP'S satisfaction. But it does give the government maneuvering room, and it reflects a national will to begin working together to revive the economy.
Nicaragua cannot do it alone, however. International cooperation will be required to eliminate the arrears on its foreign debt. Fifty million dollars of the $300 million aid program provided by the US in May is directed toward eliminating the arrears accumulated on loans from the World Bank and the Inter-American Development Bank. Another $250 million is needed to cancel the remaining arrears and make Nicaragua eligible for future credits.
In September, President Chamorro went to the United Nations General Assembly to ask for international assistance. Arguing that the economic recovery in Nicaragua is necessary to support its democracy and consolidate peace in the region, she pleaded, ``Do not leave us alone.'' Nicaraguans have taken the first step. Now it is time for the world community - the International Monetary Fund, World Bank, and foreign governments - to respond with the aid and loans needed to rebuild Nicaragua.