Nicaragua

...The Chamorro government managed to cut the debt by more than a third...

...That's rule number one of the neoliberal playbookget right with your creditors or forget about attracting foreign investment...

...Moreover, Korean timber firms were welcomed by the Chamorro government, which granted one a 150,000-acre logging concession that overlaps the ancestral lands of the Sumo Indians in the rain forest of northeast Nicaragua...

...The prin40 • DISSENT Politics Abroad cipal backers of the consortium formed to build the dry canal are China and private interests from Hong Kong and Japan...

...The IMF and the World Bank said last year they would forgive these countries about 25 percent of their debt, but not until they control inflation, shrink budgets, and privatize...

...Unless, of course, Nicaraguans can learn to make these things as well as grotesquely efficient Asian sweatshops do...

...Marines...

...But it seemed a bitter pill for Ortega, who said to a left-wing European newspaper, "We are in no condition to free ourselves from the vise of a global economy controlled by the developed world...

...During the cold war, no other power would have dared to build a canal in what the United States considered its strategic backyard, anyway...

...Later, in the shadow of the mission-style church that presides over Masaya's small central square, I met a woman who was a member of the Sandinista party and bitter over its defeat...

...In Managua I ran into Rolando Araya, a top official of the ruling social democratic National Liberation party in Costa Rica...

...At the same time, I was struck by the irony of the antiimperialist Sandinistas supporting such a project...

...Digging was halted when the Liberals fought their way back into power...

...Called "Weaving away in Maquilaville" (an industry jingle...

...Walker and his mercenaries overthrew the Conservatives but kept power for themselves, with Walker deGlaring himself president and revoking Vanderbilt's charter...

...She had studied history and economics at the University of Central America in Managua before quitting to join the Sandinista underground in the late 1970s...

...But in today's geo-commercial free-forall there are new players who prize it...

...Alemin's aide would have been pleased by an article I came across some weeks later in a publication called Latin Trade...

...It is doubtful the even more conservative Aleman government will let labor or Indian rights stand in the way of new Korean investment...

...In MonimbO and in Masaya's street markets the talk was mostly about day-to-day survival...

...Now, Washington hardly gives Nicaragua a second thought...

...Nicaragua has been a late entrant in servicing global bottom feeders in search of cheap, unorganized labor...

...But the reckless Zelaya, aspiring to an imperialism of his own and looking to spawn Liberal revolts throughout Central America at U.S...

...Meanwhile, ordinary Nicaraguans somehow carry on, generally oblivious to the idea that the only niche their country may have in today's global economy is as a rail bridge for giant containers of Barbie dolls, Nikes, and Wonder Bras that need to get to the mall faster and cheaper...

...Under IMF tutelage, much of it went to servicing the foreign debt that had piled up during the Somoza and Sandinista years, topping out at $10 billion in 1990...

...Yet in 1996 Nicaragua still found itself on the IMF list of twenty countries, mostly in Africa, considered to have unsustainable debt burdens...

...Even in an industry that is exploitative by nature, Korean plant managers are notorious for firing union organizers, physical abuse of workers, mandatory pregnancy tests, and violations of child-labor laws...

...Last year the United Nations Development Program determined that Nicaragua is one of nineteen countries whose per capita income—about $450—is below the 1960 level...

...The United States joined the fray when Cornelius Vanderbilt bought from the Nicaraguan government a charter to use the Morgan route to avoid the dangerous overland trek to California, and Washington itself began envisioning a canal...

...But while the election seemed to offer a grim choice between two frightful visions of the past, a closer examination of the candidates' platforms suggested that Nicaragua's future was largely ordained before the votes had been cast...

...The foreign aid funds left after debt servicing are now increasingly used to import basic grains and foodstuffs, which are then sold at prices Nicaraguans can barely afford...

...These people remind one that although Nicaragua is no longer at war, and even as a handful of new Miami-style mini-malls have materialized to sell imported goods at Miami prices, most Nicaraguans are worse off than when the earthquake inaugurated a period of social upheaval whose memories still haunt Nicaraguan politics...

...She now taught grade school and was active in a teachers union...

...Teachers now earn $57 a month, less than domestic help...

...Like many Sandinista activists I met, she believed Daniel Ortega had moved too far to the center in his attempt to get elected...

...I commented that the global economy doesn't give small third world countries much room to maneuver...

...But it is alleged that even Sandino, generally considered one of Nicaragua's few authentic nationalists, was not averse to playing the canal card for his own purposes...

...Alemin has promised to create a hundred thousand jobs...

...Spanishlanguage television station insisted Aleman specify where the jobs would come from, he replied that, well, there are the maquiladoras...

...Thus far, Sandinista leaders have made little noise about the denial of labor rights in Nicaragua's free zone, to the frustration of some Sandinista unionists...

...Ortega countered that Aleman would be the second coming of Anastasio Somoza, the dictator overthrown by the Sandinistas in 1979...

...As we sat on the steps of the church, she pressed her hands against her eyes, then slowly pulled them down across her cheeks...

...We're for it, you know...

...Many people I spoke with either knew or had heard of someone who had gone across to Costa Rica...

...Since 1948," he said, "we have had a social security system that made our democracy viable...

...When the United States recognized Walker, Vanderbilt joined the British to help fund a united Central American army that tossed Walker out...

...The Sandinistas even brought in a former IMF official to draw up theirs, which emphasized the principal role of the private sector...

...Last fall Nicaragua, with a population of 4.5 million, had available about $150 million in international reserves, a few million more than Disney CEO Michael Eisner's personal "pay package" for 1996...

...Today, like dozens of other concrete hulks that still litter the area, it remains occupied by squatters, refugees from civil strife and then structural adjustment, dazed beyond worry that the grimy, fractured walls might give way...

...It is now under assault by global forces...

...He may be right...

...Washington then switched its support to the Conservatives and secured canal rights in return...

...Their presence is putting an enormous strain on Costa Rica's economy and social services at a time when the IMF is demanding of Costa Rica ever sharper budget cuts...

...From atop this low-rise warren I could see the plaza by the shore of fetid Lake Managua where presidential rivals Arnoldo Aleman and Daniel Ortega had addressed their followers in separate rallies the day before, in the final moments of a polarized, fear-mongering campaign...

...South Korean companies are true sprinters in the race to the bottom, and they are chafing at increasing SPRING • 1997 • 41 Politics Abroad criticism about labor rights and worker abuses in maquiladoras in other Central American countries...

...The United States never exercised its rights under the treaty and it was abrogated in 1970...

...The peso collapse in 1994 caused Mexican wages to plunge...

...A shoemaker wearing ancient eyeglasses held together with sweat-stained adhesive tape pushed aside the leather belt he was crafting and said, "You can't sell anything to people who have no money...

...Costa Rica endured a number of direct challenges by the Somoza family, who hated being next door to Latin America's most democratic country...

...The IMF praised the Chamorro government for taming runaway inflation, which it did by slashing health and education spending and denying credits to small business, farmers, and cooperatives...

...China is concerned, too, that Taiwan's strong influence in Panama could become a problem when the United States turns over the canal three years from now...

...expense, turned and sought backing for a canal from the British and Japan...

...market, and it may be that destitute Nicaragua, as astonishing as it may seem, still does not offer enough "comparative advantage" to compete...

...Which is why the Sandinistas' economic program differed little from Aleman's—reactivate the economy by luring foreign investment and increasing exports...

...In 1978 MonimbO, a neglected Indian enclave on the edge of town, spontaneously rose up against Somoza, its people taking on National Guard tanks and helicopters with homemade bombs and hunting rifles...

...I found government officials reluctant to discuss the legal minimum wage because, Nicaraguan labor activists told me, it's not much more than the $27 a month child workers earn in Cambodian sweatshops...

...pressure to allow the contras the run of the country as a southern base against the Sandinistas...

...SPRING • 1997 • 39 Politics Abroad Hanging over all this is the specter of an interoceanic canal, the Nicaraguan grail prized by great powers in the nineteenth century, an idea spawned anew in a Wal-Mart-driven world...

...Then came U.S...

...Washington switched right back to the Conservatives in hopes of unseating Zelaya...

...Alemân, a populist, table-pounding machine politician who'd been jailed under the Sandinistas, cried that Ortega would bring back the conflict, press censorship, and property confiscations of the Sandinista era...

...After Spain let go of its colonies in the early 1800s, France drew up plans to construct a canal following Morgan's route, but was stymied when the British occupied Nicaragua's Atlantic Coast...

...Masaya, known for its independent-thinking artisans and tradespeople, balked at Sandinista economic controls in the 1980s and voted overwhelmingly for Chamorro in 1990...

...After the turn of the century, Washington finally sent the Marines into Nicaragua to put the Conservatives back in power and secure from them a treaty granting the United States exclusive canal rights so that no other power could build a competitor to the canal in Panama...

...The ideological suffocation of neoliberalism is a very ominous thing...

...I asked one of Aleman's aides about this and he said he was confident the Koreans had not lost interest in Nicaragua...

...In the 1600s the British pirate Henry Morgan pointed the way, sailing from the Caribbean up the San Juan River, which defines Nicaragua's southern border, and across giant Lake Nicaragua to sack the city of Granada, only miles from the Pacific Coast...

...That the Sandinistas and the Alemanistas both embraced the canal as some kind of economic rainmaker made me think of how Democratic and Republican party leaders had fallen in together behind the North American Free Trade Agreement (NAFTA), and the extent to which the globalized economy has made national politics beside the point...

...He said that at least four hundred thousand of Nicaragua's poorest are now in Costa Rica, whose population is less than four million...

...How the Sandinistas would have funded such programs was another question...

...Where did it go...

...In 1855 the Liberals, after losing a war to the Conservatives, recruited American adventurer William Walker, who was backed by a group of American investors who wanted Vanderbilt's transit concession...

...This so-called Bryan-Chamorro treaty became a rallying cry for maverick Liberal General Augusto Cesar Sandino (and later the Sandinistas) in his fight to expel the U.S...

...This was no surprise, coming from Aleman's party—his inner circle is fond of spouting Friedrich Hayek and Milton Friedman...

...She snickered and said, "Well, there's always the canal...

...After the election I traveled south from Managua to Masaya, a small city with a history of signaling where Nicaragua is headed next...

...Nicaragua is a small country with a big history, and much of that history centers on greatpower jousting for canal rights on Nicaraguan territory...

...According to sources cited by Sandino chronicler Neill Macaulay, Sandino in 1928 agreed to give canal rights to Mexico and Japan in exchange for arms and recognition of his government when the United States had been driven out, but Mexico reneged...

...Increasingly, Asian countries are relying on a new class of superships, carrying up to five thousand rail-car-size containers, which are too wide for the Panama Canal, and see in Nicaragua an alternative to expensive land-shipping across the United States...

...Washington hoped the project would move forward after the United States helped Liberal dictator Jose Santos Zelaya thwart renewed British penetration on the Atlantic Coast...

...She said she wasn't sure what the party stood for anymore...

...For although it was never heard on the stump, both the Sandinistas and Aleman's Liberal Alliance party said they would abide by the commitments imposed on the outgoing government of Violeta Chamorro by the International Monetary Fund (IMF) and the World Bank...

...Araya told me he believes what is happening now may be an even greater threat...

...42 • DISSENT...

...Yes, the foreign-owned assembly plants that thrive on tax breaks in low-tariff "free zones" provided by strapped third world governments...

...At artisan workshops, there were abandoned stalls—something I had not seen even during the war...

...In following the rules, the Chamorro government left more than half of Nicaraguans jobless and up to another quarter underemployed...

...What happens to Nicaragua now that foreign aid is drying up...

...But Aleman won the election and is now president of the second poorest country in the Western hemisphere, after Haiti...

...The Guard prevailed but MonimbO became an inspiration, sparking the national revolt that brought the Sandinistas to power a year later...

...But the Central American maquiladora industry must now contend with the renewed rush of foreign firms into Mexico...

...When a reporter from a U.S...

...When that did not happen, an impatient Teddy Roosevelt funded an uprising in northern Colombia, which led to the creation of Panama, and the canal was built there...

...it said some firms operating in El Salvador were beginning to see Nicaragua as "a lower-cost option...

...In 1996 a majority of Masayans again voted against the Sandinistas, but I found few who were celebrating Aleman's victory...

...The Chamorro government established an export-processing zone near the airport, but there are just twelve plants there, employing about eleven thousand workers, a fraction of the nearly quarter-million maquiladora workers toiling in other Central American countries that got into the game much earlier...

...Today, the proposal is for a "dry canal," involving the foreign-financed construction of deep-water harbors on the Pacific and Atlantic coasts connected by a rail line...

...add to that Mexico's NAFTA tariff breaks and its proximity to the main U.S...

...Competing Nicaraguan elites, locked in internecine battle since independence, realized they could use canal rights as a bargaining chip to gain foreign support...

...Agricultural production plummeted...

...It was not a campaign issue because all the parties in the national legislature had agreed months before to move forward with a feasibility study...

...During Violeta Chamorro's six-year term $4 billion in foreign aid poured into Nicaragua, more than half from the United States...

...Originally a roost of the wealthy during the Somoza regime, it was mangled by the 1972 earthquake that leveled much of Nicaragua's capital...

...Being Nicaragua's southern neighbor has not been easy...

...Still, they vowed that social programs would accompany growth policies and borrowed liberally from the language of European social democracy, as befits their new status as full members of the Socialist International...