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THE PRISM

December 1998
January 1999

Stories Columns

Hurricane Damage Reveals Economic Sabotage

by Mark Cook


The Central American catastrophe brought on by Hurricane Mitch has provoked calls from across the United States for a turn to rational policies by Washington and transnational banks and corporations: cancel the foreign debt of Honduras and Nicaragua, halt deportations of Central American nationals, and stop the insane ultra-laissez-faire economic policies that contributed so much to the disaster.

Official Washington has greeted the calls with an embarrassed silence similar to its response to the other Latin American news story, the attempt to place Chilean ex-dictator Augusto Pinochet on trial.

Cuba, France, Brazil and other states have canceled Nicaragua's and Honduras' foreign debt. As of this writing, Washington has said nothing. The head of the International Monetary Fund, following as usual orders from the US government, has declared that cancellation of foreign debt is "no magic wand." Translation: the debt stays. [For the economic roots of the ongoing disaster, see related story, page 8]

The Clinton Administration initially assured Central Americans that they were in Washington's thoughts and prayers, and offered to send $2 million for the entire region. The US authorities, shamed by media coverage of the hurricane, and by the behavior of other governments, finally came through with much more aid than originally offered, but still a pittance compared to the money they had freely spent in the 1980s on wars to destroy the region.

Lowering Expectations

The New York Times later admitted that Washington aims to lower the expectations of those Central Americans who thought that the US authorities would come through with any serious "investment" or "aid" once Washington's clients were in power. What the Times did not mention was that media censorship before the hurricane of news from Central America—about matters such as the 60% and 70% unemployment rates and widespread hunger in the region—has made Washington's task all the more simple.

Meanwhile, Cuba offered the Central American countries doctors and medical supplies, which Nicaragua's buffoonish President Arnoldo Alemán turned down. He declared that Nicaragua had plenty of doctors, and that there was no point in having Cubans come there to eat. Honduras gratefully accepted the Cuban doctors.

Within two weeks, Alemán's minister of health had to send out a plea to Cuba to send the doctors after all.

Elsewhere, the Nicaraguan government showed its genealogical ties to the Somoza dictatorship, which stole most of the emergency aid that was donated from abroad after the 1972 earthquake that devastated Managua.

Milk sent by France and Spain was stolen by officials of Alemán's government and turned up in Managua's main market two days after it arrived in the country.

In Ciudad Darío, the people had to kidnap the mayor to force him to open the warehouses to give food to the people.

The Sandinista Front organized a caravan to bring aid to the town of Posoltega, where an estimated 2,000 people were dead or missing after a mudslide from the Casitas volcano.

Felicita Zeledón, the mayor of Posoltega, who lost her husband and two of her children in the disaster, later told reporters that they had received nothing from the Alemán government, only from the Sandinistas. She said that when, in the midst of the rainstorm, she had told the government that a disaster was in the making they treated her warning as a joke.

Since the disaster, she and other elected mayors, who set up emergency committees in the first days to receive and distribute aid and to provide for emergency housing, have complained that they have been pushed aside by the Alemán government which arrived and established its own emergency committee and decreed that all aid had to pass through it.

It seemed an odd time to be attempting to build a political machine. Perhaps the explanation lies in the fact that the mayors who were pushed aside were Sandinista.

Attack on NGOs

Prior to the disaster, the Alemán government had imposed a 15% tax on foreign donations to non-governmental organizations (NGOs) in Nicaragua. The intent was transparently clear: to drive the NGOs (many of which are unenthused about the immensely corrupt Alemán government—and not under its control) out of Nicaragua.

When the extent of the Hurricane Mitch disaster became apparent, it was thought that Alemán would shelve his plan to tax the NGOs, at least until after the crisis had passed.

Instead, Alemán summoned to his office Julie Noble, an American contract worker for USAID, so that he could personally expel her from the country. Noble had reportedly sent an e-mail to friends abroad telling them not to send aid through the Alemán government because it would be stolen, but rather to send it through other organizations.

Alemán's personal interrogation and expulsion of the USAID contract worker raised questions in the Nicaraguan media as to what the President of the Republic was doing taking time out from emergency efforts to expel a foreigner, normally something that would have been handled by a lowly official at the immigration office. Alemán explained that he had wanted to ask her himself what was the basis of her statement that his government was corrupt. Aleman did not explain how his government obtained the e-mail.

National Emergency

Some US newspapers reported on political infighting that was said to be hampering relief activities. The New York Times noted that the Alemán government and the Sandinista opposition had been fighting over whether to declare a national emergency or a "natural disaster."

In reality, Alemán was refusing to declare a national emergency because it would affect bankers who are key figures in his government. A national emergency would allow the declaration of a debt moratorium or debt cancellation, something the bankers were not willing to allow. If there were no debt moratorium, it would be possible to seize mortgaged property owned by farmers who found themselves unable to pay the loan because of the disaster. Although Alemán supported an international debt cancellation for Nicaragua, internal debt was a different cup of tea.

When criticized for not declaring a national emergency, Alemán argued that the hurricane did not affect the whole country (although most crops were lost even in the least affected areas). Instead, Alemán reasoned, it was a "natural disaster," a term with no legal significance.

But was it really a natural disaster, or the largely avoidable consequence of irrational and destructive economic policies?

Imagine the situation, some remarked, if Hurricane Mitch, instead of hitting Central America, had struck a wealthy area of Florida with its six days of torrential rains.

In Florida, some cars would be washed away, or damaged beyond repair. Basements would be flooded. A few people would die in isolated accidents. But ten thousand people would not be killed. Homes would not be destroyed. People would not be stricken, weeks or even months later, with fatal diseases that arrived in the wake of the floods.

It has already been noticed that "natural disasters" nowadays strike only poor people: hurricanes destroy trailer parks in Florida but leave regular houses virtually untouched; earthquakes wreck only shoddily built homes and equally shoddy student dormitories in Los Angeles.

Even something so calamitous as the December 1972 earthquake that leveled Managua, Nicaragua left two buildings standing unharmed: the Bank of America tower and the Intercontinental Hotel.

But worse than that, the devastation caused by Hurricane Mitch was drastically worsened by the same economic policies that destroyed the economies of the fabled Southeast Asian "tigers" and that will cause Russians to freeze and starve to death this winter.

This is not a favored topic for the corporate media, which have preferred the usual Malthusian line that there are too many people in Central America and that they brought on the disaster by cutting trees for firewood or clearing hillsides for farming.

Destructive Economics

Ironically, Honduras and Nicaragua are two of the less populated countries in Central America, but the peasantry has been driven up the hillsides and into other marginal land with fragile ecology by banana companies like Chiquita (formerly United Fruit) and Dole and other transnationals, or export-oriented landowners.

In the 1950s and 1960s the National Guard of the Somoza dictatorship kicked Nicaraguan peasants off the land in western Nicaragua to hand it over to the Somoza family and friends for cotton cultivation. This was praised as "development" by the US government and semi-official media in those years.

In Honduras, many peasants were forced into non-industrial cities like Tegucigalpa where they built shacks along the hillsides for lack of any alternative.

Central Americans do not have an adequate flood control infrastructure; they cannot afford it because they are saddled with a loan and interest racket overseen by the International Monetary Fund (IMF), which for years has, at the US government's behest, insisted on cuts in social and infrastructural spending.

The World Bank itself has stated that Central American governments need to make a social investment (health, education, potable water) of $120 per person per year in order to have any development at all. When the Alemán government came to office in 1996, the investment in Nicaragua had already been cut, at the insistence of the World Bank's sister organization the IMF, to just under $60 per person per year, less than half the minimum required. It is now estimated that social investment has shrunk to $32 per person per year.

Residents of the region lack decent housing and cannot afford any because they do not receive adequate pay for their labor on banana and coffee plantations or in maquiladora textile factories.

Central Americans who work on the plantations of Dole and Chiquita Banana are forced to buy what little they can afford at company stores, where the combination of miserable wages and overpriced goods drives them deeper and deeper into debt.

In reality, however, all of Central America is working in bondage to a company store: never paid enough for its labor or its produce, forced into a debt racket where the population works harder and harder for less and less money and the debt grows larger and larger every day.

The US policy of "lowering expectations in the region" could surprise only those, within Nicaragua and without, who still believed what they did during the years of the Sandinista government: that the US authorities want to make Nicaragua a subsidized "capitalist showcase" in the style of West Berlin, Taiwan or South Korea during the Cold War, or, worse, that "free market" economics would make Nicaragua, and Eastern Europe, economic success stories, something transnational capitalist planners have shown no interest in doing for the rest of Latin America. It has by now dawned on most Central Americans—and Eastern Europeans who opted for the "free market" promise-that transnational capitalist investors do not want to improve the economic conditions of those countries, that they want to keep wages, living standards and environmental safeguards low, as they have in Mexico, to conserve the friendly business climate.

There is an alternative to the destructive economic policies of the empire: a debt moratorium and an indexation of commodity prices. These were the demands of the Non-Aligned Movement for years, although news of these demands was absent from US media coverage of Non-Aligned Summits.

An indexation of commodity prices would be like Cost-of-Living Allowances, or wage indexation that existed for many years in Brazil. If the price of a number of industrial products, such as tractors and trucks, rises by a certain amount, the price of commodities like cotton, coffee and bananas would rise by a commensurate amount. In other words, workers would be paid a high enough price for their product that they would be able to feed their families.

Dimension of the Disaster

Gradually, the full dimension of the tragedy set in for Nicaraguans, as for Hondurans and others. Health workers returned from affected areas with tales of horror.

Weeks after the disaster, many areas had still not been reached by aid workers. Epidemics of the fatal disease leptospirosis as well as cholera and dengue fever are spreading throughout the region.

Hunger and starvation are widespread. One health worker told of a woman who had walked seven miles in unbelievable conditions to beg for a bit of rice or beans for her three children, who had not eaten in four days. The health worker said that small children grabbed her by the legs and pleaded desperately for food.

Here in the Triangle, just one particular effort, Carelief, has already put together over $40,000 for emergency aid. Across the United States, the story was the same. In New York City, gypsy taxi drivers from the Dominican Republic living in northern Manhattan immediately donated money and supplies, and used their taxis to collect more, which they drove to the New York Mets' Shea Stadium at the other end of the city.

The Dominican taxi drivers had only weeks before sent everything they had to the Dominican Republic to help relatives and friends in the aftermath of Hurricane Georges.

 

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