Politics in Nicaragua: The Scene

Today I start a series on the political environment of present-day Nicaragua.  I begin with the description of an everyday scene that is emblematic of its current political culture.

People had begun to gather at the park since the early hours of the morning.  Mostly women—mothers who, like rocks, had withstood life’s erosions to the point of achieving an ageless quality—dressed in plaid straight skirts and depleted plain-colored v-neck shirts: campesino women.  They assumed their regular pragmatic, cross-armed stance, as they stood waiting in front of and glaring at the town’s alcaldia.

At the entrance of the alcaldia stood two four-foot high jumbo speakers, that now begun playing music at a deafening decibel level.  It was a playlist of around six or seven songs, that would loop round and round for hours and hours until, mercifully, it would be turned off and discontinued at the end of the day.  The songs included an old revolutionary song, the new Sandinista campaign song, and the famous 1990 campaign song celebrating Daniel Ortega as a razorblade-wielding cockfighting gallo. (Eeeeese es Daniel, Daaaniel Orteeega, Es el gallo enavajado que ya tiene preparado el pueblo trabajador.) Groups of volunteers, wearing the newest edition Sandinista party t-shirts (no doubt collected at the last national rally), sat on the steps of the building or on the bed of the pick-ups parked along the street.

The alcalde (mayor) soon arrived from Managua to deliver a loud, rambling, defensive speech to the cheerfully enthusiastic volunteers and the stone-faced waiting women.  The alcalde reminded the crowd of why they were there, which party had made it possible, and how much the government cares about the poor and struggling.  It could easily have been a cheesy, feel-good speech had it not been for the alcalde’s habit of screaming into the microphone, his aggressive gesticulations, and his overall threatening tone.  Once finished, he got back into his Toyota HiLux and drove off.

Finally, the anticipated materials arrived: sheets of zinc used for roofing.  Volunteers helped unload the cargo from the pick-up trucks, while others started taking the names of the women in line and scanning to see if they appeared on the official list.  Groups of bystanders walked by, some whispering to each other: “Look at how they reduce those poor people to public humiliation,” and “They only give the zinc out to people of their own party.”  Throughout the day, the zinc was distributed to the neediest in the community.  “A lot of those people sell them off after they get them,” one bystander says.  But for many, it is a Godsend.  They can now remove their old, crumbling, leaky tile home roofs, and ensure protection against the elements particularly during the intense thunderstorms of the rainy season.

This scene, of poverty-stricken women being given a helping hand while Sandinista propaganda is shoved down their throats, represents Nicaragua’s current political environment.  It is the hallmark of the current populist regime of Daniel Ortega.

In the next post, I will examine the arguments given in support of the Sandinista government.

My Favorite Posts

In honor of reaching my fiftieth post, I've decided to compile a list of some of my favorite writings so far.  Enjoy:

1. my post-modern summer job - When pretending to work becomes work.

2. Game Theory and Tardiness - Something to read while you are waiting on someone.

3. Nicaragua: Names - Why are Nicaraguan names so strange?

4. Valparaiso - Life in a city of squatters.

5. Mexico City - Life in a city of mystics.

6. Bureaucratic Linguistics - When acronyms take over.

7. International School - When pluralism descends into ethnic conflict.

8. Homage to a Friend/Life in Suburbia - The Goodwill bins, mall parking lots, and buddy cop films.

9. Tower of Babel - God reacts to a new skyscraper in Qatar.

10. Radiohead - You are now entering the strange world of indie music.

Nicaragua: The German Century

Founding members of the Deutsche Club in Nicaragua  1901

When one thinks about foreign powers that have changed the course of Latin American history, the two countries that immediately come to mind are Spain and the United States.  Others that make the list might be Great Britain with its influence in the Caribbean and along much of the region's Atlantic coast during the 19th and 20th century, or France with it's former Caribbean colonies and that one quixotic adventure into Mexico.  A country that doesn't come up very often is Germany; but the German footprint--the result of a wave of immigration in the 19th century--can be seen from the Oktoberfest celebrations in Nuevo Hamburgo, Mexico to the German museums in Valdivia, Chile.  Germany's impact in Nicaragua has been particularly consequential.

Nicaraguan history has been marked by three great power shifts.  The first was independence, which was thrust upon Nicaragua in 1821--no battles were fought, no dilemmas faced.  A few flags and people were swapped.  The power vacuum left behind by the Spanish, however, unleashed a feud between the country's two major cities--Granada and Leon--for control of the newborn state.  The dispute culminated in a civil war, where the Leon faction (the liberals) requested the help of a group of American mercenaries, led by the southerner William Walker.  Walker, after helping to beat the Granada faction (the conservatives), turned his guns on his allies the liberals, and proclaimed himself president.  So, it wasn't until the 1850s that Nicaragua actually had to fight and die for its independence; and it was not against the Spanish, but against a group of slave-state proponents from the United States.*

The second major power shift was the rise of Jose Santos Zelaya, the dictator responsible for the actual establishment of a Nicaraguan political state.  Gaining power through a coup in 1893, Zelaya began building railroads, establishing steam lines, and strengthening public education.  He enacted a number of seminal constitutional rights, introducing habeas corpus, compulsory education, the separation of powers, and property guarantees.  He also took control of the entirety of the Nicaraguan territory by expulsing the British from the Atlantic side of the country, and creating a new department, named (naturally) Zelaya.

The final shift was Anastasio Somoza, who transformed the country into his personal estate.  He is the founder of a very particular political culture: the modern clientalist corrupt authoritarian dictatorship.  A political culture that sees politics as a winner-take-all game, and the presidency as the pinnacle of power, fame, and wealth.  A political culture which became so entrenched that even a popular revolution could not shake it.

Germans, I'll argue, played a critical role in both the appearance of Zelaya onto the national political scene and in cementing Somoza's legacy. All in all, a small group of German immigrants were responsible for much of what happened politically in Nicaragua in the twentieth century.

Telenovelas

What's wrong with her?

Oh, that's Elena.  She's in a coma.

What happened?

She was in a car accident.  She was in the car with Bruno and they were running from the police.

Why were they running from the police?

Because Bruno had just kidnapped her.

Why did Bruno kidnap her?

Because he is in love with her, and because he wanted a ransom payment from the money she inherited from her engagement to his twin brother Alejandro.

Is that Alejandro?

Yes.

Where is he?

Well, Alejandro was on his way to visit his beloved Elena, because she was about to give birth.  But Bruno poisoned the pilot of Alejandro's private jet and the pilot died mid-flight, and now Alejandro is stranded on a desert island.

Who is he talking to?

That's the spirit of his departed mother.  She is the reason Alejandro is rich.  You see, Bruno and Alejandro were separated at birth; Bruno went off with his father, a very wealthy business man, and Alejandro went to live with his mother in a dirt poor neighborhood in the city Medellin.  The two brothers didn't know of each other's existence until one day they crossed paths.  It was around the time of their father's death, and the will, shockingly, handed down all the father's riches to his wife.  So, Alejandro and his mother suddenly became incredibly rich, and Alejandro was left to run his dead father's businesses.  None of this made Bruno, the heir apparent, very happy.  Not only that, but Bruno's girlfriend, Elena ends up falling in love with Alejandro.

The Algorithm

"Does Standard & Poor take into account the impact of its ratings when assessing a country's credit worthiness?"

"No"
 - Myriam Fernandez de Heredia, S&P's director of sovereign ratings for Europe and Africa, on Los Desayunos de TVE (January 20th, 2012)

The new algorithm would change everything.  The Standard & Poor sovereign credit rating system used a hybrid-form of analysis that combined computerized quantitative modeling with expert qualitative insight.  Everyone understood, however, that the credit ratings themselves, once announced, changed people's behavior and, as a result, altered the equation.  It was a bright young man, a recent MIT graduate, that formulated an algorithm that incorporated the rating's projected impact into the final sovereign credit score.

For example, let us imagine that the credit rating for the sovereign bonds of the Republic of Krakhovia suffer a downgrade due to the country's high debt burden and low growth rate.  The country's S&P rating goes from A to BBB+.  The announcement spooks potential Krakhovian bond buyers; Krakhovia has trouble selling its bonds and must raise the bonds' interest rate; the rise in the interest rate exacerbates the country's already troubling debt levels.  So, the projected debt levels, once the impact of the BBB+ rating is taken into account, are higher than earlier models would have anticipated.  The new algorithm suggests Krakhovia's bond rating be downgraded to BBB.  A BBB rating, however, causes even greater concern than the original downgrade, sending bond interest rates even higher.  The new algorithm suggests Krakhovia's bond rating be downgraded to BB+.  BB+ bonds are borderline junk bonds, alarming bondholders who are increasingly trying to unload the assets.   The algorithm suggest a B- rating.  At B-, the bondholders are sent into a panic, causing a massive sell off and the crashing of the country's currency.  The algorithm suggest a CCC rating.  At CCC, the IMF enters the picture.

The algorithm, once tested, proved unusable because any downgrade (no matter how small) sent the rating spiraling to CCC (the lowest possible rating), and any upgrade resulted in an AAA rating (the highest possible).

The markets were never informed of the algorithm.

Book Review: How to Make a Nicaraguan Quilt

Rigoberto Lopez Perez

On September 21, 1956, Anastasio Somoza Garcia visited the city of Leon to accept his party’s nomination to (once again) stand for reelection in the upcoming Presidential contest. The act was merely a formality; Somoza had already been ruling the country for twenty years and through land expropriations and the personal control of several national industries had become one of the richest men in Nicaragua. Dictators, however, like all leaders, require the appearance of legitimacy, even if it’s through rigged procedure. So, Somoza Garcia made the trip north.

Days earlier, Rigoberto Lopez Perez, a young aspiring poet, landed in Nicaragua, after an ambiguous stint in El Salvador. He immediately headed for his hometown of Leon, carrying a cardboard box filled with his belongings, which included a .38 caliber Smith & Wesson. On the evening of the 21st, he sneaked into a town party thrown in honor of the visiting President. It is said, that when he took out the .38 caliber Smith & Wesson and unloaded it into Anastasio Somoza Garcia, the dictator looked straight at him and remarked (like a father reprimanding his child), “You fool! What have you done?”

Margarita, está  linda la mar by Sergio Ramirez tells the story of this extraordinary event, which led to the death of the first Somoza and the consecration of Lopez Perez as a martyr (you can find his bust next to the cathedral in Leon). As Ramirez retraces the assassin and his victim’s steps up to that fateful party, he flashes back a half-century to tell the story of Ruben Dario, by that point an international literary sensation, and his triumphant return to his hometown of Leon after decades of roaming around the metropolises of the world.

The two narrations mirror each other: as Lopez Perez arrives on a boat to the port-city of Corinto, Dario is also arriving on a boat to Corinto; as Leon throws a parade in honor of Somoza, the city is also throwing a parade in honor of Dario; as Somoza lays dying, Dario lays dying. Even some of the characters are present in both narratives. Dario writes what would become one of his most famous poems, “A Margarita Debayle,” on the side of a little girl’s fan; that little girl grows up to marry Lopez Perez’s victim, Anastasio Somoza Garcia.

Game Theory and Tardiness

Imagine the following situation: two good friends decide to have dinner at a certain restaurant and agree to meet each other at the restaurant at five-thirty in the evening.  Whether or not they honor their established meet-up time can be seen as a game theory dilemma.

In the situation there are four alternatives: (1) they could both show up on time; (2) friend A could show up on time and friend B could show up late; (3) friend B could show up on time and friend A could show up late; (4) they could both show up late.

Now, because time is infinite, alternatives 2, 3, and 4 are vague--they fail to specify the exact moment in which one or both of the friends arrive (example: in alternative 4, both friends could show up late but at the same time, or they could both show up late but with one friend showing up before the other).  So, to clarify things a little bit, lets just state the four alternatives as:

(1) they could both show up on time, at 5:30pm
(2) friend A could show up earlier than friend B
(3) friend B could show up earlier than friend A
(4) they could both show up late but at the same time

Alternatives 1 and 4 are optimal.  In alternatives 2 and 3, one person has to sit around waiting for the other to arrive.

What is interesting is that in punctual societies, like the United States (or stereotypically Germany and Japan), there exists a socially ingrained consensus to choose alternative 1.  In countries where such a socially ingrained consensus does not exist (stereotypically non-punctual societies: the developing world), each individual shoots for alternative 4, but ends up with alternatives 2 or 3.