Nicaragua's threat is real, but it isn't exactly communist

Ambrose Evans-Pritchard
Evans-Pritchard is a British free-lance writer who reports from Central America.
1071 words
17 June 1984
The San Diego Union-Tribune
© 1984 San Diego Union Tribune Publishing Company. Provided by ProQuest Information and Learning. All Rights Reserved.

President Reagan has made another persuasive speech about communist subversion in Central America and has even managed to extract more pocket money from the recalcitrant Congress. Although it has become fashionable to deride the domino theory, the President is probably right to try to prevent Cuban-backed revolution spreading from Nicaragua up to El Salvador and Guatemala.

On the other hand, Mr. Reagan takes issue with Nicaragua's drift towards communism and here he is confounding two different problems. Nicaragua is dangerous because of its foreign policy: because it is military regime and a surrogate of the Soviet Union. It is not dangerous because it is communist. Indeed, it is questionable whether it can even be described as communist at all.

General Sandino, the 1920s resistance fighter and father of the Sandinistas, was not a Marxist. This is very inconvenient for some of his latter day disciples, notably Tomas Borge, the hard-line interior minister in the present government of Nicaragua, but it has made the idea of private gain and profit acceptable in revolutionary circles and has stopped the Sandinistas from swinging too far to the left in their management of the economy.

Sandino was a great fan of cooperatives, not those ill-famed Soviet Kholkhoz that have so retarded Russian agriculture, but partnerships of peasants who come together of their own free will to enjoy the obvious advantages of collective farming. Most of these cooperatives are loose groups in which farmers work their own plots but get together to sell their produce or share an expensive piece of machinery, and they belong to the private sector.

The development of cooperatives has been the main thrust of the Sandinista agrarian reform. There is no real shortage of land in Nicaragua, unlike El Salvador, and they have been able to find enough acreage for the new cooperatives from idle or abandoned land, rather than by indiscriminate expropriation of the holdings of the rich. The cooperatives, therefore, are not a substitute for the old estates and plantations of pre-revolutionary Nicaragua. They are part of an alternative and parallel system of cultivation.

Whereas in Cuba 70 percent of the land is in state hands, the figure for Nicaragua is only 21 percent and is actually expected to drop slightly this year as nationalized farms are turned over to the cooperatives. Free enterprise still accounts for 63 percent of overall economic output and, by international standards, that puts Nicaragua squarely in the capitalist camp.

The Nicaraguan revolution is clearly not a repeat of Cuba. That does not mean, however, that the private sector is flourishing. In the first days after the civil war there was hope that the old propertied classes would join the Sandinistas in an historic alliance to rebuild the country. The revolutionary government was cautious not to undermine the economy with rash changes. Although the domains of the Somoza family were seized, most landowners were told their estates were not in danger as long as they were "patriotic" and continued to till the land.

The honeymoon didn't last long. The private sector was suspicious of the Sandinistas, and without trust there is no investment. In fact, there was heavy disinvestment. Ranchers rustled their cattle over to Honduras, where they could sell the herds for dollars. Others got friends in the United States to over- invoice for imports of spare parts and machinery and slipped the difference into foreign bank accounts. When they had smuggled a tidy sum out of the country they bought a one-way ticket to Miami and never returned.

The moderates among the Sandinistas were devastated. They had offered cheap credit and guaranteed export prices to producers. They had even given the private sector representation on the Council of State and in return they saw their economy being plundered through massive decapitalization. The hard-liners, who had always been opposed to a concordat with capitalism, had their mistrust of the rich fully vindicated.

Since then things have gone from bad to worse. The government began confiscating the property of asset strippers. Then it got repressive. Leaders of COSEP, the private enterprise organization, were imprisoned without trial and their president was gunned down by security forces.

Industrialists and farmers began losing their property on grounds of political affiliation. Benjamin Lanzas, president of the chamber of construction and a member of the opposition, was told he would not be able to visit his farm for a while because it was being used for military exercises. Two months later he was informed that, having abandoned his land, he had forfeited his property rights and the farm had been confiscated.

Whatever hope there was of a partnership between the private sector and the state has given way to a bitter political contest. It is not so much that the Sandinistas want to throttle free enterprise, but rather that they will not keep politics out of business and will not define the boundaries of the public and private sectors. A mixed economy can work only where there are firm guarantees; leftist guerrillas, with their dogma and reckless immaturity, can hardly offer that assurance.

But despite the uncertainty, free enterprise is not yet dead in Nicaragua. Many firms are soldiering on quietly and the Economist Intelligence Unit has estimated a 2 percent growth rate for 1983, which is better than most of Latin America achieved last year.

The Sandinistas have had a crash course in economics since they came to power. They are now trying to attract foreign investment, including wicked and imperialist Yanqui investment. Not every country allows 100 percent foreign ownership of companies and full repatriation of profits. And with the corporation tax at 40 percent and top income tax at 50 percent, Nicaragua compares favorably with most of Western Europe.

The emotional basis of the Sandinista movement is hostility towards the United States, and it has therefore aligned itself with America's foes. As a result, Nicaragua is a threat to U.S. strategic interests.

But to call the country communist does not discriminate between the many political systems that exist throughout the world. Nicaragua resembles the Arab socialism of Algeria more than the Slavic communism of Russia.

Evans-Pritchard is a British free-lance writer who reports from Central America.

Union-Tribune Publishing Company

last updated june 2013