FT: Sandinistas on the New Labour Path

Johannes Schneider Johannes.Schneider at gmx.net
Tue Jun 19 04:36:37 MDT 2001


>From FT.com

Ortega would grant bank independence
By Andrew Bounds in Managua
Published: June 18 2001 17:44GMT | Last Updated: June 19 2001 03:22GMT

The former revolutionaries of the Sandinista National Liberation Front
(FSLN) are prepared to grant independence to Nicaragua's central bank in an
attempt to assuage market fears about their possible return to power.

The move, which would echo that of the British Labour party, whose socialist
roots were distrusted by the markets in 1997, is outlined in a FSLN
manifesto for the November elections obtained by the Financial Times. The
manifesto, yet to be approved by the movement's high command, contains many
departures from the Sandinistas' policies in power from 1979 to 1990.

After toppling dictator Anastasio Somoza, the Front, then a coalition of
Marxists, nationalists and clergy, nationalised industries, confiscated
property and established collective farms.

With Daniel Ortega, Front candidate and ex-president, leading in the polls,
the manifesto, entitled Nicaragua United - The Promised Land, proposes to
transform Latin America's poorest country by increasing production in the
public and private sectors and restricting the state's role as facilitator
and regulator.

"The FSLN recognises the role of workers and private businessmen in the task
of constructing a viable and self-sufficient nation," the manifesto reads.
"To support this objective we will give full autonomy to the Nicaraguan
central bank so its decisions have no political interference."

The ruling Constitutional Liberal party (PLC), with Sandinista support,
reformed the central bank law in October 1999 to put political appointees on
the board. Of the five directors one is the finance minister, one should
come from the principal opposition party and the rest are appointed by the
president. Noel Ramírez, the bank president, is a high-ranking PLC official.

Although the bank cannot finance the government, it has been criticised for
using more than $100m in scarce reserves to bail out troubled banks under
government pressure.

The Sandinista manifesto makes no mention of privatisation. International
lending institutions have made relief of Nicaragua's $6.3bn debt conditional
on the sell-off of the state telecommunications company and power stations.
Both have been postponed for lack of interest or low bids.

An International Monetary Fund delegation in Nicaragua this week is expected
to replace a comprehensive agreement with a temporary programme to last
until the new government is sworn in on January 10.

The Front's new-found respect for private property has a caveat: it would
also respect the rights of those "beneficiaries of the revolution" who
received property confiscated from the Somoza family and other landowners,
who are "prostrated by a exclusive and archaic system". This will infuriate
the US, whose citizens lost property in the revolution and are trying to
reclaim it. The manifesto says those treated unfairly would get their assets
back.

The manifesto also proposes decentralisation and sweeping constitutional
change, calling for a referendum on whether to switch from a presidential to
a parliamentary system.





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