Last week, the U.S. State Department made a decision that will effectively deny Nicaragua $12 million in aid this year. Now, Nicaragua and other Latin American countries are considering expelling US AID. What is going on here?
 |
| U.S. Ambassador in Nicaragua, Phyllis Powers |
Each year, in order to receive bilateral aid from the
U.S. and for the U.S. to give the green light for World Bank, IMF and Interamerican Development Bank
loans – which make up a large portion of the Nicaraguan budget – Nicaragua
must be granted two waivers by the U.S. State Department. These waivers, which
indicate that a country has complied with certain conditions, are mandated by U.S.
law for aid to continue. One waiver, the one that the U.S. denied Nicaragua
last week, indicates that the country has sufficient transparency and
governability. The second waiver has to
do with land disputes involving U.S. citizens or companies in Nicaragua: the
country must prove to U.S. satisfaction that it is making progress resolving
property cases involving U.S. citizens or it will be denied the property waiver
and another chunk of bilateral aid.
According to
the State Department, the U.S. has denied the first waiver this year due to insufficient transparency of public finances. In particular, Nicaragua receives money from
the Bolivarian Alliance of the Peoples of Our Americas
(ALBA – member countries include Nicaragua, Venezuela, Cuba, Ecuador and
Bolivia) which is not built-in to the government budget because it is
administered by bi-national and private agencies. These funds are, however, included in Nicaragua’s balance of payment statement, which has satisfied IMF and World Bank oversight. Though there is discord even within Nicaragua
about the accounting of ALBA funds, but this has been the case since 2007, and
the waiver has always been granted. What has changed this year?
 |
| Ros-Lehtinen |
For one, there is growing
pressure being exerted in the U.S. by extreme anti-Cuban factions –
including the Chairman of the House Foreign Affairs Committee, Congresswoman Ileana
Ros-Lehtinen (R-FL), and Obama’s recently appointed Latin American policy adviser
Ricardo Zúñiga.
Ros-Lehtinen, Zúñiga and others like them are threatened by ALBA’s strong alliance with Cuba – since ALBA is
financed mainly by Venezuela, it’s no surprise that they would target ALBA
funds in Nicaragua, which continues to have strong ties with Cuba.
Additionally, the U.S. was
displeased with last year’s Presidential elections
when the opposition was unable to beat Ortega, and with the country heading
into municipal elections this year, it’s possible that the State Department is
hoping to give the opposition a push in November by denying the
waiver.
But the waiver
issue is not really about how transparent or how democratic Nicaragua – or any
other country – is or is not. Because international aid is not about
helping poor countries improve their situations. As Nicaraguan economist Carlos Pacheco likes
to remind our delegations: It’s about
politics. Conditional aid – from the
U.S. or any other country – is the carrot that precedes the stick of military
might.
Here’s an example: In the past four years, a
handful of European countries have withdrawn aid, citing Nicaragua’s eroding
“democracy” and “institutionality” as the reason. Some speculate that Europe’s own deteriorating
economy is really to blame, but more probably it has to do with who will control the African continent. Historically, Europe has controlled Africa,
first through colonialism, and now through the neo-colonial carrot of conditional
aid. Lately, however, China is pouring
money into Africa, and Europe fears that
the Chinese will gain control of the giant continent in its own
backyard. In order to better concentrate
on keeping a hold on Africa, they are withdrawing from Latin America, Nicaragua
included.
From my
perspective, if the U.S. wants to influence politics in another country – as all
countries do – fine, but don’t call it
aid. Sending aid that is earmarked
for healthcare (Nicaragua will lose healthcare funding with the waiver denial) only when a country meets certain
political conditions is wrong. Not
only is it wrong, but it also ineffective.
Will the waiver denial push Nicaragua to make better decisions about
budget transparency and improve U.S. – Nicaragua relations? Quite the opposite.
 |
| Nicaraguan President Daniel Ortega |
Nicaraguans of
all stripes – even fervent critics of Daniel Ortega and his administration –
are absolutely up in arms over what they see as U.S. interference in Nicaragua’s internal affairs. For hundreds of years, Nicaragua has been at
the mercy of the whims of politicians in the U.S., and they are tired of
it. This weekend, President Ortega
responded to the waiver denial by saying, “From this moment on, they can forget
about Nicaragua making institutional political decisions while being subjected
to blackmail and pressure. We’ll make
decisions when the people decide.” His
typically anti-imperialist response has drawn criticism from moderate sectors
in the country, but it also struck a chord in the region: all ALBA countries are currently considering expelling US AID. “What lessons of morality and social
treatment are the Yankees coming here to teach us?” He asked, “At the end of
the day, they see the Nicaraguan people
as enemies, because for them if the Nicaraguan people are a dignified people
that defend their sovereignty, their self-determination, their independence,
then they are enemies.” -- Becca