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FALL
2007: A LITTLE MORE
POLITICAL RHETORIC
13 October 2007
Dear
Friends,
As
I raced to finish this before having to consider any more
political surprises, I happened upon an excellent article in the
October 11th Economist
which contains some concise historical highlights together with
some keen political observations and from which I borrow the
lead line quote, “If there is a
lesson to be learned from Che Guevara, it is that
revolutionaries are well advised to die young lest they make
fools of themselves.”
I
take my direction from many sources but this last week I’ve
watched what may well be my favorite owner, friend and counselor
begin to get a bit shaky. “Image,”
he tells me pointedly, “Its all about how the US perceives
Nicaragua now.” And my friend is quite correct of course
if we are looking primarily at a sales market.
But when we take a deep breath and look for the economic
stability that strikes the most significant chord with our
investors and with me, now a diehard Nicaraguan convert, we are
doing better than OK.
I’m
confronted with the fact that when our owners contact me with
concerns about the political situation it is frequently a
challenge to know how to respond. If I say that, although we are
watching closely what transpires, so far the climate has not
fundamentally changed, I risk being seen as a Pollyanna. This
challenge becomes greater, of course, when the president
indulges his monomania.
These
past weeks have left me, more than once, wondering who is
monitoring his meds. That a politician should say one thing on
the stump and something else in a private meeting is
commonplace. Sort of like Hillary Clinton’s southern accent in
Alabama being so much thicker than when she is in New York.
It’s just that in Ortega’s case it seems more like Dr.
Jekyll and Mr. Hyde.
And
then there is that monomania. In light of his psychotic
antipathy for the US, I was gratified that he also vilified
Europe in his latest outing. Still, he conflates the US and
capitalism into his particular bête noire and given half a
chance he starts foaming at the mouth.
He
is not coherent on his best days but when the subject is the US
he loses it. To hear that speech is to realize just how utterly
he lives in the past, fulminating about Reagan and Bush,
rambling backwards and forwards in history, lost in his fevered
obsession.
The
story is that his ministers had prepared a brief for the UN
speech around an appeal for international assistance for the
victims of hurricane Felix and an appeal for help rebuilding the
devastated northeast of the country. They were racing to make
calculations of what was needed. I cannot prove that it was
Bush’s speech earlier that day that caused him to go off---
but coincidence? I think not.
For
whatever reason, the work of his handlers went up the spout. He
had his first opportunity on that podium in eighteen years and,
instead of that all too justified appeal and all the other
constructive things he could have done with his 20-plus minutes,
he chose that moment to lose his mind.
One
reason that, at least down here, the focus has been on the
degree to which he screwed up, rather than the specific content
is that he makes that speech at every opportunity and has been
for over 25 years. He has, it is true, added another stock
speech. The new one is on the theme of peace and reconciliation,
his stump speech in the last campaign.
For
whatever it’s worth, my take on that is that we are watching a
creepier than usual struggle between head and heart. His rant is
largely gibberish but I think he believes it. He is not an
intelligent, and certainly not an educated, man. What he
believes is what he has assembled from a relative handful of
sources and as such men do, he takes them as gospel. Worse, he
thinks he has stumbled across an original idea, a unique
insight.
The
degree to which he is incapable of evolving beyond where he left
off the last time is pretty amazing. On the other hand,
apparently he has been counseling Chavez against confiscating
everything – advice un-followed in the event. But we are not
seeing the kind of shift Peru has seen in her once wild-eyed
Garcia – disastrous first presidency, sweet reason in this
one.
Also,
Ortega has a history of vilifying those with whom he is about to
make a deal. He called Union Fenosa every kind of epithet and
then gave them a better deal than the one they had. He rants and
rails about the IMF and then signs a new agreement with the
Fund, shortly after feverishly denouncing global capitalists in
his UN speech. He has vilified the PLC and Alemán in mumbled
vituperative and yet he and they have colluded in a malignant
bi-partisanship that has held strong for the last five years.
He
attacks Cafta at every opportunity and yet it only became law
with the votes of the Frente. It may be a classic example of
holding one’s nose while voting, but they voted for it.
What’s more, his consul to San José actively campaigned
against the vote to ratify Cafta in Costa Rica’s recent
referendum but as soon as it passed, he called Oscar Arias to
congratulate him and to say how he hoped this would speed
integration of the Central American countries.
Then
there are the Cenis, the bonds that have been such a bone of
contention. Basically, back at the end of Alemán’s mandate,
both parties crashed banks in w
hich
they were principals, right after they had looted them. In order
to preserve confidence in what was left of the banking system,
the government sold bonds to pay for the cost of guaranteeing
deposits.
As
Eduardo Montealegre has become a more potent force in
opposition, the pactistas, Alemán and Ortega, have twisted
themselves in knots trying to link Montealegre to the sale of
the bonds and use it to place him in legal jeopardy. It is a
farce but a pretty compelling demonstration that they are
genuinely threatened. They can read polls, too.
Some
of the more rabid members of the Frente took it in mind to posit
that if the bonds were used for illicit gain then the government
doesn’t have to honor them. This began with the dark and
brooding Attorney General they got from Central Casting. The mob
loved that idea, drool was everywhere.
At
which point the Sandinista head of the Central Bank quietly but
firmly said that, yes, the government would honor the bonds as
scheduled. Bank President Antenor Rosales carries considerably
more weight than Attorney General Estrada. In the interim, of
course, the bonds suffered and that is the part that makes
the papers.
Meanwhile
the government continues to-ing and fro-ing. In part because few
of the people serving have any qualifications for their jobs –
this is not entirely unique to the current government, although
this new bunch really are pretty hopeless.
I’ve
already spoken of the incessant and apparently deeply
internalized divisions in the man’s own mind, and this is not
helping create coherence, moreover there is also the split
within Frente ranks. There are three currents among the
Sandinistas, one led by Rosario Murillo, one by Bayardo Arce and
one led by Lenin Cerna, more about whom in due course.
Many
of the real fire-breathers are allied with the first lady and
Rosario is one determined first lady. It
was about this group that the current, Sandinista, mayor was
speaking – after some of them demanded that he be purged form
the party – when he laconically observed that ‘some [Sandinistas]
are more Sandinista.’
Managua’s
mayor is not the only local Sandinista official to have balked.
Rosario’s pet project to create citizen’s counsels to run
everything was voted down but it had already stirred up a
hornets’ nest. Not surprisingly, Sandinista city counselors,
mayors, government ministers, and members of the Asemblea took a
very dim view of the prospect of a bunch of rag-tag party
workers bossing them around. Rosario is trying to push forward
anyway but thus far she is running into heavy weather.
Bayardo
Arce is the voice of pragmatism. He is in charge of party
finances and I do not mean the official treasury, he’s the guy
that runs Sandinista, Inc. He is estranged from Rosario, as is
Lenin Cerna and most of the old guard, now calling themselves
Generation 80 – only two of the original junta still support
Ortega. She’s wild-eyed and they have an eye on their balance
sheets.
Lenin
Cerna is a street-fighter, he was head of internal security in
the old days and now, well, his role is not really a public one.
It was he around which some of the biggest recent noise
revolved. He sent Gerardo Miranda, the more or less thug
ex-mayor of San Juan del Sur and current deputy, to meet with
the owners of Arenas Bay. It was Miranda who was recorded making
extortion demands. Those owners took a copy of the tape, along
with the father-in-law of one of the investors and ALN deputy,
Alejandro Bolaños, to the cops.
The
Latins have an expression, to touch one’s testicles, as in
‘he touched my testicles.’ This is to indicate that someone
has gone too far, has done the unthinkable. Alejandro Bolaños
touched Lenin Cerna’s testicles. This became a huge scandal
and all hell broke loose. Marena shut down the development, Bolaños
and the others face 600 denunciations. No doubt cooler heads
would have preferred that the whole thing go away but Cerna’s
ego was involved and the party be damned.
Since
then, Marena has quietly backed off. The people involved,
however, continue to face all kinds of harassment, Bolaños was
illegally thrown out of the Asemblea and the guy that made the
original charges is himself being charged. We’ll see what
happens eventually but the ferocity of the reaction was very
specific, not indicative of some general assault against
investors.
The
situation in Corinto was about Ortega being bound and determined
that the Esso facility would handle Venezuelan oil and Esso
resisting. Esso had only just been shoved out of Venezuela. In
both cases thuggery was involved and I am not sanguine about
that. On the other hand it would not be reasonable to think that
these were more broadly indicative, the evidence does not
support that conclusion.
The
problem with land may continue for while.. And, of course, the
entire issue has been politicized beyond credence. The thing is,
apart from the specific excesses of the revolution and its
aftermath; most of these land problems are identical to those in
countries all over the developing world.
And
I am not willing myself to hope. I am basing hope on the fact
that there is a strong, perhaps overwhelming, desire within many
in the Frente for economic stability. The Ortega-Murillos are
not the only ones who have acquired a lot of middle-class
comfort. Many of these have invested heavily in property
development and are planning more investments. Their future
prosperity depends on investor confidence, just as our
investments do.
This
is not some optimistic assumption, I mean it literally, they
will be hurt as badly as every one of us if things go south.
And, as I say, none stand to lose more than the Ortega-Murillos.
They have a lot of children and they like their hard-won,
nouveau riche status.
I
have every confidence that this accounts for much of Ortega’s
duality. It also accounts for his and others’ efforts to find
an alternative to global capitalism and global capitalism’s
poster boy, the US.
He
and Chavez and Kirchner and Correa and the unfortunate Evo
Morales, all want a way around the existing financial
institutions. Kirchner has managed without the IMF solely
because Chavez is buying hundreds of millions of dollars worth
of Argentine bonds. And, aside from ego, Chavez is doing this
because he wants to stick it to Uncle Sam.
Even
Chavez understands that this can only be a stop-gap, what they
need is Mercorsur to preclude any hemispheric trading regime
that includes the US, and Alba to knock the stuffing out of DR-Cafta.
They suffered a disappointment recently when Chavez’s proposal
to found a new international development bank to counter the IMF
fell flat. Nevertheless hope springs eternal.
All
this is interesting because it signifies a tacit recognition
that they cannot do without the global financial structures
unless they can replace them. As
any of their attempts thus far have not come to anything, Ortega
is left muttering about how they want to trade with everybody…
we are the world...
I
am convinced that this constant, nagging frustration accounts in
no small part for his periodic explosions of frothy idiocy. But
the underlying fact is that if he could tell the US and her
investors to go to hell, I have no doubt that he would, in a
heartbeat. The reason he gets all tied-up in knots is that he
knows that he cannot.
There
will be hiccups and the young Turks, those ‘more Sandinista’
hot-heads from time to time will take him at his word and there
will have to be some scrambling to sort it out. This has already
happened and no doubt will again.
I understand that these hiccups are not helpful, believe
me I understand, but they are not actually indicative of looming
catastrophe.
That
could change but at this point I do not see it. These guys have
a long history of putting personal gain over ideological purity.
I
know that real estate agents are quoted as saying business is
off by 20 to 50 percent but they would be more credible if they
could decide which. And, between you and me, some of them are
part of the problem. They are inexperienced, many of them, at
presenting real estate. They cannot be bothered to learn
anything about the properties or sustain credible presentations;
they just want to lick up the cream. I know of an informal study
where owners of a project had their marketing guy call and
inquire about available properties and half the time the agents
couldn’t be bothered even to mention all the major projects.
On
the other hand, the economy is growing at nearly 4%, between 3.7
and 3.9, they say. The new ConeDenim Mills facility will be
enormous and they are already underway with it. Exports are up
over 30% this year, tourism is up 50% since 2000, and the World
Bank just announced they were releasing $240 Million in new
credits, as a vote of confidence in the government’s fiscal
management. I know, even I was surprised.
Another
telling measure is that big development projects are underway,
or planned, including the giant Guacalito project by Grupo
Pellas. Plus, not incidentally, still others in which the
investors are Sandinistas.
Along
with the failure of the law to create his, or rather
Rosario’s, citizen committees, the hugely problematic law of
the waters failed and other set-backs to their agenda are coming
up. Absent real popular support, Ortega’s power depends mainly
on control of the electoral commission and the courts. His
continued control of both depends on the continuing cooperation
of Alemán. This could become problematic; is becoming
problematic.
It
would be erroneous to suppose that Alemán is only going along
with Ortega because of the hold Ortega has over Alemán’s
legal situation. No doubt Alemán would have balked at some of
what the Sandinistas have gotten up to, had he not been thus in
Ortega’s grip, but they formed their initial pact when no such
leverage yet existed. They cooperate because they are expedient
men.
Nevertheless,
as the headline for a new poll said, ‘Alemán in Free Fall.’
He has lost ground even since the last poll and that is largely
because hitherto he had enjoyed the support of a core group of
die-hard Arnoldistas and lately even these are deserting him. At
long last.
At
the PLC’s annual jamboree, Alemán, functioning as chairman,
rode roughshod over several prominent party members. When one of
his closest – and most slimy – adherents was introduced, the
crowd booed. Arnoldo’s hand-picked crowd booed. Then it
happened again with another crony. Despite his adamant
objections, the crowd more than once voted against his will,
until he cut them off.
Simultaneously,
Alemán humiliated the head of his party in the Asemblea and
then also went after the man in the party most popular with the
folks, the men and women in the towns and villages. Both men sat
there and took these dressing-downs and, it has become apparent,
became very angry. There is open revolt in several provincially
important towns, including some in the party’s heartland.
These
rebels are forming ad hoc alliances with the other, now larger,
liberal faction, the ALN. One
such powerful alliance combines in the form of the Gran Unidad
de Fuerzas Democráticas where the (ALN) La Alianza Liberal
Nicaragüense, the (Apre) Alianza por la República, the (PLI)
the (PC) Partido Liberal Independiente, Partido Conservador, and
certain key members of the (PLC) Partido Liberal
Constitucionalista (there is that blackmail element which binds
the minds of the PLC’s congress), came together against
Ortega’s proposed constitutional reforms.
I choose to see this as a re-awakening of the concept of
less party ego and some of the same grim determination to
prevail that helped bring Doña Violeta to power over Ortega in
1999.
At
the national level Alemán is frantically working to hold onto
his power, fighting off every attempt at an alignment. In a new
poll, 60% of the country wanted a coalition of the liberal
opposition, versus just 28% who did not; and over 75% wanted
Alemán to have nothing to do with it. What’s more, 70% of
those polled think he should be serving his sentence in prison.
One
may quibble with polls all day long but when they track so
closely to events on the ground, it tends to lend credence. By
way of contrast, ALN leader Eduardo Montealegre enjoys favorable
public opinion from fully 64.3%. Ortega’s support, meanwhile,
has fallen to 33%, or 5% fewer than voted for him. Now that I
think of it, he and Bush are both at 33%.
There
is wide and growing support, 76.5%, to strip the corrupt and
incompetent electoral commission of its control of granting
cedulas, the all important ID for everything from cashing a
check to voting.
Hundreds
of thousands of people are without ID because they might vote
the wrong way, and the commission steadfastly refuses to give
cedulas to Nicas living overseas. Guess how those folks would be
likely to vote. Support for these people -- many of whom send
money to family here, in no small measure keeping the country
afloat -- is now up to 87% in favor of their ‘cedulization’.
Anything
is possible in the land where lead floats and corks sink but it
is difficult to imagine how things are going to work out the way
Alemán and Ortega intend.
In
these last few days the long awaited decision from the
International Court on the matter of Nicaragua’s maritime
border with Honduras finally was handed down. Honduras’ new
president Manuel Zelaya has been stretching his populist wings
and he and Ortega were holding a love-in when it was announced.
The
Court carefully split the difference but that constitutes a
substantial improvement on the status quo ante, a deal cooked up
between a past Honduran government and the Colombians. Honduras
got to keep a couple of small cays but the border was moved well
north. One member of the government pointed out that that part
of the Caribbean is thought to have about 88 billion barrels of
oil under the seabed.
A
couple of nights ago the president went to INCAE, the business
school, to meet with the most prominent Nicaraguan members of
the business class. They were very clear that the government
must improve the investment climate and they offered cogent
suggestions on how he might do that. Not least they want to
maintain an ongoing dialogue from here on. Ortega, for his part,
talked of how the government was working to get past rationing
of electricity. The cuts should diminish in November and end in
the coming year, with the installation of new plants from
Venezuela and Taiwan.
He
also announced that, along with the $220 million on tap from the
US, the new accord with the IMF and the just granted World Bank
credits worth $240 million for 2007-2012, Europe has just
approved $303 million for the next five years. Thankfully,
we know that all of these come with strings and conditions that
the government must continue to meet.
So,
when we step back and take in the whole broad panorama of
events, everything considered, things just don’t look that
bad. Please believe me when I say that I take seriously every
hiccup along the way but, being here, I also get a much wider
context.
It
is possible that I am whistling in the dark but then there are a
lot of us whistling the same tune. All
of us are paying the closest attention to all this but, so far,
things are probably better than most of us feared they would be,
those first few days after the election, before we regained the
power of speech.
As
these are simply my opinions please don’t shoot any of the
wonderful folks around Piedras y Olas here if you disagree.
Oh and one last thing--- after you read this do me a
favor please and burn your computer.
With
spirit, hope and in line with our continuing vision,
Chris |
