NEWS
AND FEATURES ON THE SOLIDARITY 2000 CAMPAIGN IN COPENHAGEN
Nicaragua
Economic Growth Amid Poverty and Corruption
By Scarlet Cuadra
MANAGUA, June 2000 (IPS) - The six percent economic growth in Nicaragua last year, which stands in stark contrast to its rank as the poorest country in Central America, has become the government's trump card in its negotiations with international credit organisations.
Other economic and social indicators are less promising: unemployment is at 50 percent, more than 30 percent of the population is illiterate, maternal mortality is at least 139 per 100,000 live births, and one-third of children suffer some form of chronic malnutrition.
According to the United Nations Children's Fund (UNICEF), 44 percent of Nicaraguans subsist on less than one dollar a day. This is the nation's status five years after the World Summit on Social Development in Copenhagen, where 160 countries drafted an Plan of Action for overcoming poverty, unemployment and social marginalisation, the results of which are to be assessed next month in Geneva.
But in spite of widespread poverty, the Nicaraguan economy last year saw six percent growth, which the government is using to boost its image before international finance organisations as it seeks to benefit from the multilateral aid earmarked for the world's highly indebted poor countries (HIPC).
''When there is full employment and the minimum wage covers the cost of basic household expenses, then we can celebrate this growth,'' maintains Luis Barboza, a union leader in the construction sector.
''Economic growth has only occurred at the macroeconomic level. The structural adjustment measures applied since 1990 have translated into unemployment for more than 100,000 workers, wage freezes and cuts in free health and education services,'' Barboza said.
But the government insists that this economic success will facilitate Nicaragua's admission into the multilateral aid programme for the HIPC. ''Economic growth is an inescapable requirement for taking part (in the initiative),'' said Noel Ramˇrez, president of the Central Bank of Nicaragua.
''It is our only way out of underdevelopment.'' Another requirement the government must meet in the short term is the privatisation of energy, water and telephone services, a process that already has the support of the political opposition in parliament and of the High Council of Private Enterprise (COSEP). But authorities know that the backing of the major business leaders is not a blank check.
''We are going to support the government, but we will demand other things. It still must meet many of the conditions of governability and transparency as they were agreed upon in Stockholm'' last year by the donor countries and the Central American nations that were devastated by 1998's Hurricane Mitch, said COSEP president Roberto Terán.
The constitutional and electoral reforms negotiated by the governing Constitutionalist Liberal Party (PLC) and the opposition Sandinista National Liberation Front (FSLN), however, are perceived as a process that endangers Nicaragua's governability and its democratisation process.
The nation is still recovering from the civil war of the 1980s, which claimed at least 100,000 lives and cost seven billion dollars in material losses. The bi-party pact led to the restructuring of the Comptroller's Office of the Republic, and the naming of their supporters to its directorate, just as occurred in the Electoral Court and the Supreme Court of Justice.
''There is a loss of credibility for these institutions due to the profile of party politics that dominated the selection of their current leaders,'' explained Ana Quiroz, of the Civil Organisation for Emergencies and Reconstruction, created as a result of the needs arising after the Hurricane Mitch tragedy.
But criticisms from non-governmental organisations (NGOs) have not been well received by the government. Their demands for greater efficiency in assisting the communities affected by Mitch have sparked the government's ire on more than one occasion, even prompting threats to withdraw the legal status of some NGOs.
The national NGOs are not alone in keeping their eyes on the Nicaraguan government. Many donor countries are interested in seeing how their money is being used and the measures the government is taking to promote democratisation here.
Despite some difficult obstacles, Finn Juhl Pedersen, head of the Danish Association for International Co-operation in Central America, believes the nation has a chance to successfully follow the path of democratisation and government transparency.
''Creating democratic space for debate and participation is a process that requires an active, organised and belligerent civil society, and, in my opinion, Nicaragua has just that,'' he said.