Year 501 Copyright © 1993 by Noam Chomsky. Published by South End Press.
Chapter 7: World Orders Old and New: Latin America Segment 17/17
Previous segment | Next chapter | Contents | Overview | Archive | ZNet


Since the US-backed UNO government won the February 1990 election, rural poverty has "drastically increased" because of the acceleration of neoliberal policies, which has "wreaked havoc on Nicaragua's small and medium-sized farmers," CAR reports. In much of the countryside, people are "becoming more desperate each day, with more than 70 percent of the children in these areas suffering malnutrition and between 65 percent to 89 percent of the population unemployed." In the Atlantic Coast region, "not only are farmers suffering, but fishermen are losing 80 percent of their livelihood to foreign companies which the UNO government has authorized to fish in the Atlantic Coast waters." Serious diseases that were eradicated under the Sandinistas are now common in the region, where 90 percent of residents are unable to satisfy basic needs. A representative of the National Union of Farmers and Cattle Ranchers (UNAG) says that the stringent credit requirements for peasant farmers "are killing us": "Large nontraditional farms get all the funding they need, but a subsistence farmer growing beans or corn to feed his family is allowed to go bankrupt and starve." Thirty-two-thousand families are surviving on "roots and empty tortillas with salt," UNAG reports. Opening of the economy, reeling under the impact of the US embargo and the terrorist war, has "forced Nicaragua's homegrown industries to compete with giant multinational companies," John Otis observes. As the country is flooded with foreign products, small industries have declined from 3800 when Chamorro took office to 2500 two years later; Nicaragua even imports its own national beer from Wisconsin, under a Nicaraguan label. Importers, middlemen, luxury goods shops, and the local wealthy are doing fine, along with the foreigners for whom the policies are designed. The rest can wait for "trickle down," including the 50 percent or more unemployed.46

Per capita income has fallen to the level of 1945; real wages amount to 13 percent of their 1980 value, still falling. Infant mortality and low birth weight are increasing, reversing earlier progress. The reduction of the health care budget by 40 percent in March 1991 has seriously affected the already insufficient supply of medicines. Hospitals for the general public barely function, though the rich can have what they need as the country returns to the "Central American mode." "The right to health care no longer exists in post-war Nicaragua," apart from those rich enough to pay, the Evangelical Church (CEPAD) reports. A survey of prostitutes found that 80 percent had taken up the trade in the last year, many of them teenagers.

In May 1992, the US Congress suspended over $100 million of already approved aid, objecting to alleged government assistance to Sandinista organizations and failure to return property to former owners. "Extraofficially, it was learned that the government will give priority to United States citizens, to prominent Nicaraguan business people and to leaders of the former contras," the Mexican press reported, notably the North American Rosario Mining Co., which claims the gold mining installations in the northeast. The central issue is "whether the more than 100,000 peasant families who received land or title to land which they were already working under the Sandinista Administration will be able to keep their lands," as had been promised in the UNO program, Lisa Haugaard of the Central American Historical Institute observes.

Another issue is the independence of the security forces. In accord with longstanding policy, Washington insists that they be under US control -- that Sandinista officials be dismissed, to use the code words preferred by government-media propaganda. Other industrial countries, not having the traditional interest in running "our little region over here," dismiss these demands as absurd, considering the Sandinista FSLN to be a "solidly structured [party] with a significant political weight," the only large popular-based party in the country (Detlev Nolte, head of Germany's Institute of Ibero-American Studies). They object to the US policy of "again polarizing the situation," another German Latin American specialist adds. When the congressional hold on aid was dropped, the Bush Administration held it back anyway, in line with its deep commitment to bar even a minimal show of independence.47

As we gaze on what we have accomplished and envision the glorious future that awaits, we can take pride in "having served as an inspiration for the triumph of democracy in our time," as the New Republic exulted after the elections had been won by "the right side" in Nicaragua, a "level playing field" having been established by Washington's stern warning that any other outcome would be followed by continued economic strangulation and terror. We can, in short, join the editors in their praise for Washington's terror and violence, giving "Reagan & Co. good marks" for the gratifying mounds of mutilated corpses and hordes of starving children in Central America, recognizing, as they advised, that we must send military aid to "Latin-style fascists... regardless of how many are murdered" because "there are higher American priorities than Salvadoran human rights."48

Recall that in accord with official convention, the economic catastrophe of the past years in Latin America is the result of statism, populism, Marxism, and other evils, now to be cured by the newly discovered virtues of monetarism and the free market. This picture is "a complete fabrication," James Petras and Steve Vieux point out. The highly-touted new discoveries are just those that have led to catastrophe in the past -- with no little aid from US-sponsored terror and economic warfare. Furthermore, neoliberal dogma has ruled for years in these US-run "testing areas." Social expenditures dropped sharply from 1980, leading to public health disaster and educational collapse, except for the rich; growth stagnated or declined. There was one area of progress: privatization, providing great advantages to wealthy sectors at home and abroad, and diminishing public revenues still further when "efficiently run, surplus-producing operations" were sold off, as in Chile. "The brutal austerity programs of the 1980s were obviously the work of doctrinaire neoliberals," they point out, and the "dismal results" are directly traceable to their ideological fervor. The huge debt accumulated through the partnership of domestic military-economic elites and foreign banks awash with petrodollars is to be paid by the poor. "Wage earners sacrificed the most in making available the surplus needed to make payments on the external debt," the UN World Economic Survey 1990 observed.

"More than any geographic area in the world," correspondent Marc Cooper writes, "Latin America over the past decade took seriously the promise of the Reagan revolution" -- not quite by choice. The decade was marked by privatization, deregulation, "free trade," destruction of unions and popular organizations, opening of resources (including national parks and reserves) to foreign investors, and all the rest of the package. The effects have been disastrous, predictably.49

The celebration in the doctrinal institutions is also entirely predictable. Blame for past catastrophes has to be shifted to the shoulders of others. Any role that the US masters have played is, by definition, marginal at most, to be attributed to Cold War imperatives. And as the old doctrines produce new "economic miracles," there is every reason for the ideologues of privilege to applaud, as they always have, and as they will continue to do as long as power offers them that task.


Go to the next chapter.

46 CAR, Oct. 18, 1991; May 8, 1992; Otis, SFC, Aug. 1, 1992.

47 Links (National Central America Health Rights Network), Summer 1992; CEPAD Report, Jan.-Feb. 1992; Excelsior, June 11, 1992 (CAN); Haugaard, CAHI, Georgetown University; IPS, Aug. 9, 1992 (CAN ).

48 For more on the matter, see TTT, ch. 3.9; DD, ch. 10.

49 Petras and Vieux, "Myths and Realities." Cooper, New Statesman & Society (London), Aug. 7, 1992. On US-IMF programs in the Caribbean, see Deere, In the Shadows; McAfee, Storm Signals. For an ongoing record on Central America, see PEHR, TNCW, TT, COT, NI, DD, and sources cited.