[net.politics] : Sandinista economics, Reaganista foreign policy

berman@psuvax1.UUCP (Piotr Berman) (02/26/86)

> THE SANDINISTAS' WRECKAGE from the Boston Globe, 2/17/86, p 15.
>
> by Edward R. F. Sheehan
>
> SAN JOSE, Costa Rica -- "NI SE VENDE, NI SE RINDE": "Neither sell out,
> nor surrender" is the Sandinista slogan.  After a month in Honduras,
> a week with the CONTRAS, and five weeks inside Nicaragua, I can only
> conclude, NI REAGAN, NI SANDINISMO.  If Reagan is wrong, that does not
> make the Sandinistas right.  They are both wrong.
>
> Nicaragua today is tragic -- partly due to Reagan's pressure, but as much
> the Sandinistas' own fault.  They maintain the myth of a mixed economy,
> but in truth they control nearly every sector of public life.  Their
> experiment in collectivism and state capitalism has ruined the economy.
>
> In Somoza's time the Nicaraguan cordoba sold seven to the dollar.  When
> I arrived in Managua in mid-December, it sold on the black market 800
> to the dollar.  When I left in late January, it was selling for 1220 to
> the dollar.  The cordoba has become essentially worthless -- today in
> Nicaragua, paradoxically, only dollars count.  The poor -- whom the
> revolution was supposed to redeem -- suffer most of all.
>
> But to know Nicaragua one must get out of the capital city of Managua.
> I visited much of the country -- from the departments of Granada in the
> south to Jinotega in the north -- talked in Spanish with hundreds of
> Nicaraguans, from richest to poorest, and was saddened by what I heard
> and saw.
>
> Leon, for example, the nation's second city, the seat of many fabulous
> churches that evoke a rich ancient culture, is falling apart from neglect,
> mismanagement and misery.  Food and clothes are scarce or prohibitively
> costly for the poor.  The main hospital is dirty and lacks antibiotics
> and other essential medicines.  Water and electricity are often shut off.
> The streets swarm with begging children, unemployment is high, and most
> of the population lives in squalor.  The Sandinistas have built housing,
> but by most accounts it is reserved for the party faithful.
>
> Such conditions prevail everywhere throughout Nicaragua.  In the country-
> side, despite Sandinista attempts at land reform, state cooperatives and
> collective farms fare poorly because high inflation and low prices for
> bsic foodstuffs provide the peasants with few incentives.  Soviet-bloc
> tractors break down; spare parts for remaining American-built tractors
> are scarce.  [ What happened to all the grants of land made from some of
> the big estates to campesinos during the early '80s?  Were they only a
> prelude to collectivization?  If so, Nicaragua is agriculturally headed
> toward becoming a classic Communist society.--RR ]
>
> The private sector faces destitution.  In theory, both state cooperatives
> and private farms negotiate their prices with the government, but in
> practice all prices are decided by the ministries in Managua.  For coffee
> -- the nation's major cash crop -- in Ocotal and Matagalpa, for example,
> the government pays a private grower 9,000 cordobas per quintal (about
> 100 pounds), plus $5 as an incentive, a total of $15 at best, then sells
> the coffee abroad for $200 to $250 per quintal.  The state pockets the
> enormous difference.  Still, Nicaragua's export earnings since the fall
> of Somoza in 1979 have dropped by more than half.
>
> The middle class (backbone of any prosperous economy) is being wiped out,
> and increasingly the poor -- the vast majority -- are disaffected.  The
> regime -- save for the few who benefit from it -- has become deeply
> unpopular.
>
> The few who benefit are the privileged Sandinistas, particularly the
> comandantes.  They live not only well, but high on the hog, with access
> to the best houses, the most expensive whiskey, and dollars where they
> buy the latest luxuries at the SUPERMERCADO INTERNACIONAL.  They -- like
> their models in Russia and the Eastern bloc -- are the New Class.  [ Com-
> plaints about comandante corruption & high living have been coming in for
> at least 3 years now; apparently nothing's changed.--RR ]
>
> Human rights?  The Sandinistas have no death squads, but the regime is
> repressive and growing worse.  Officials of the independent Permament
> Commission for Human Rights estimate at least 5,500 political prisoners,
> detained without due process and often psychologically or even physically
> tortured.  The highest church officials told me that the number of poli-
> tical prisoners is considerably higher.
>
> Pro-Sandinista Americans in Nicaragua turn a deaf ear to all such serious
> accusations, and blame all on Reagan.  They are misguided zealots.
>
> To be fair, it must be said that Nicaraguans still generally speak with
> candor.  Political prisoners are selectively chosen to intimidate dissenters,
> but so far the tactic hasn't silenced them.  The regime has innoculated
> most Nicaraguan children against disease and raised literacy among the
> poor.  But even education is drenched with Sandinista-Marxist doctrine,
> and the gains in health are being negated by the ruined economy.
>
> The standard answer of Sandinista officials to these sorry facts is that
> Nicaragua is at war, that nearly half of the nation's resources must be
> spent on defense -- against the contras and "Reagan's aggression."  There
> is some truth in this argument, but in the end it is a pretext and does
> not convince.
>
> As a writer widely traveled among third-world socialist regimes of the
> Mideast, Africa and beyond, it seems to me that the Sandinistas have
> learned nothing from the mistakes of their peers, and are committing
> the same blind errors and abuses as the Castros and Nassers of this
> world.  They have alienated the most vital sectors of their people;
> the rich are growing poor, and the poor are abandoned in their suffering.
> Nicaragua's deepest tragedy is to be governed by incompetent colonels.
>
> *************************************************************************
>
> Edward R. F. Sheehan, novelist and a winner of the Overseas Press Club
> Award, is a former fellow of Harvard's Center for International Affairs.

The above article supports my opinion on Soviet weaknesses.
The Soviets are unable to make their allies to prosper.  They
advise wrong economic policies, the machinery they supply works
badly, and with shortage of medicines at home they do not provide
them to allies.

On the other hand, Reagan administration, with their ideological
bias, is unable to exploit the situation.  It issues macho statements
(not followed by very macho policies) and provoke macho responses.
Here is what I would do: provide Nicaragua with some economic aid,
loans from IMF and private banks, import quotas for sugar, coffee and
bananas, and quietly negotiate some tokens in exchange.  The fine point
should be that those tokens should not irritate commandantes to much
(machismo!) but in the long run the should subvert they goal of
transition to a communist state.

The tokens which could serve this purpose may be as follows:

--75% of quotas (if not 100%) must be filled by production of the
  private sector;
--the prices paid to private producers must be at least 50% of
  import prices in US;
--the machines and parts imported from US must in 50% (or so) be
  sold by private dealers;
--the El Salvadors rebels should not be helped (I know that there
  is always some cheating in this respect).

Additionally, one could propose a nonagresion treaty under condition
of complete absence of foreign military personel.

It would considerably helped if some of the allies would follow the
same guidelines.  I think that there would be no trouble with IMF,
since the economic guidelines are a part of reasonable economic
police which increases creditworthness.

In the span of several years commandantes would be considerably
moderated by the presence of private sector.  In Latin America
monies know how to talk.  I would not be surprised if some of the
top officials (or their kin) would join the ranks of the capitalists
(by the way, Ortega bought many pairs of design glasses while visiting
UN in NY, I wonder whether he made similar purchases in Moscow).

The ultimate outcome of such a charade would be yet another corrupt
and autoritharian Central American country, with leftist rethoric
of the government, not very different from say, Panama.

As the "real democracy" is concerned, Central America today is not
a fertile soil for this plant.  The hailed Costarica is nearly as
corrupt as the authoritarian Mexico, democratic institutions in
Honduras, El Salvador, Guatemala and Panama all operate under an
ominous shadow of military.  One must honestly admit that the
democracy does not work to well in Central America, and it is no
wonder that Sandinista do not profess to much faith in it.  Their
life experience says that this is a joke (I think that they err,
but this is a side issue here, USA nowhere makes a point to have
a real democracy, witness our current policy toward Liberia, Surinam,
Guyana, Guatemala, Panama etc. etc.).  However, once we admit that
what we want is not a democracy but a set of institutions which may
create a democracy at some point, like private economy, some free
press, political parties, ellections etc., then we can achieve
this limited goal in Nicaragua without any military pressure and
Contras.

On the other hand, if private sector in Nicaragua is destroyed,
it may be to late for the policy I propose.  Therefore I think
that Reaganista commit a strategic blunder.

Piotr Berman