Disaster aid likely to benefit Nicaragua's wealthy

National Catholic Reporter, March 26, 1999 by GARY MacEOIN

The following is the third of an occasional series on the ongoing problems and the emerging hopes of Central America by Gary MacEoin, a longtime observer of the region.

This city was destroyed by an earthquake in 1972. Only two major buildings survived in the center of the city, the Intercontinental Hotel and the Bank of America. Only the shell of the cathedral remained.

Dictator Anastasio Somoza's followers, self-exiled after the Sandinistas came to power in 1979, returned when Violeta Barrios de Chamorro became president in 1990, following the electoral defeat of the rebel party. The new Managua they proceeded to construct reflects their priorities.

Nicaragua now faces another chance at a different kind of rebuilding, thanks to the latest natural disaster, Hurricane Mitch. The central question is whether new concern throughout the world and the accompanying new development money will be spent in a way that will alleviate poverty or increase the distance between rich and poor.

Sorting out the implications of decisions about rebuilding in the coming months requires sorting through the dramatic turns of Nicaragua's recent tumultuous past.

Modern stores and upscale boutiques today line newly constructed avenues in downtown Managua. The Ruben Dario rotunda is dominated by 45-foot-high advertisements for Coca Cola, Esso, Ron Flor de Cana and Cerveza Victoria. McDonald's triumphs in the rotunda named for Gueguense, the indigenous chief who fought the Spaniards. Domino's Pizza, whose founder Thomas S. Monaghan gave $3.5 million to build the gaudy new cathedral, is similarly heralded.

Soon additional monuments will adorn new plazas. Cardinal Miquel Obando Bravo has announced that a statue of Pope John Paul, costing $150,000, will grace the Plaza de la Fe Juan Pablo II. The plaza, bigger than any other in Central America (27,000 square meters), will cost $4 million.

Paying the price

Later, a statue of Christ the King will mark the plaza named after him. Its cost has not been specified, but presumably it will not be less than that of the pope.

Inevitably, someone had to pay for the luxury. International financial agencies were cooperative, but at a price, and that price was "structural adjustment": harsh cutbacks on health, education and other public services. The official statistics of the Labor Ministry and the Central Bank tell part of the story, an increase in unemployment and subemployment from 44.3 percent in 1990 to 53.5 percent in 1995.

A recent study by a prestigious international body tells an even more dismal story. Between 1993 and 1998, the proportion of the population in the major cities that does not earn enough to buy half the basic basket of food rose from 40.8 percent to 63.5 percent. Some sources report a substantial drop in the literacy level, which in 1980 was 66 percent of the population. No figures were available showing exact literacy rates today.

However, hordes of children swarming around the traffic lights are palpable evidence of the new Managua. They dash recklessly among the cars, cleaning windshields, selling Chiclets, trinkets, flowers, simply begging a coin. At night, 13-, 14-, 15-year-old girls, scantily clad and with painted faces, work the streets. Sex tourism has reached Managua.

Hardly surprising in these circumstances, domestic violence has become rampant. Since Mitch it is worse. On the International Day Against Violence, Nov. 2.5, the Nicaragua Network of Women Against Violence deplored the "shocking" increase of violence and sexual abuse against women and children of both sexes since the hurricane.

Hurricane Mitch not only destroyed thousands of homes and radically changed geography and ecology, with new streams, canyons, hills and roads, but it also stirred international calls for a change of the conditions that caused the hurricane to concentrate its devastation on those already most disadvantaged. Four months later, one can visualize the outlines of the response.

The government of President Arnoldo Aleman Lacayo hopes to get vast new loans from the international financial agencies and spend the money in ways that will benefit the already wealthy while doing very little for those who suffered most. It has committed itself to strict observance of the IMF's "structural adjustment" terms on which such loans are conditioned. The result is destruction of local enterprises, lowering of wages and of food production, cuts in public spending on health, education and other social services, with a resultant increase of polarization of society.

Capital will flow to short-term deposits with high returns, at the expense of productive investments. Environmental controls will be further relaxed. And the deforestation, which in the past decade created conditions that intensified the devastation of Mitch, will continue apace.

Fear that whatever money comes will be diverted to the politicians is widely voiced in the press. It points to President Aleman's recent acquisition of thousands of acres of land in areas that will benefit from projected tourist projects.