An evaluation of exchange rate policy and economic adjustment in Nicaragua, 1993--1995

Since the late 1970's, but particularly since the mid-1980s, the economy of Nicaragua has had persistent and large macroeconomic imbalances, while GDP per-capita has declined to 1950s' levels. By the second half of the 1990s, huge fiscal deficits and a reduction of foreign financing resulted in record hyperinflation. The Sandinista government's (1979–1990) harsh stabilization program in 1988–89 had only modest and short-lived success. It was doomed by their inability to lower the public sector deficit due to the war, plus diminishing financial support from abroad. Hyperinflation stopped only after their 1990 electoral defeat ended the war and massive aid began to flow in. Five years later, macroeconomic stability is still very fragile. A sluggish recovery of export agriculture plus import liberalization, have impeded a reduction of huge trade and current account deficits. Facing the prospects of diminished aid flows, the government's strategy has hinged on the achievement of a real devaluation through a crawling-peg adjustment of the nominal rate. However, at the end of 1995 the situation of the external accounts was still critical, and the modest progress achieved was attributable to cyclical terms-of-trade improvement and changes in the political outlook of agricultural producers. Using a Computable General Equilibrium Model and a Social Accounting Matrix constructed for this dissertation, the importance of structural rigidities in production and demand in explaining such outcome is shown. It is shown that under the plausible structural assumptions incorporated in the model, the role of devaluation in the adjustment process is restricted by structural rigidities. Moreover, contrary to the premise of the orthodox economic thinking behind the economic program, it is the contractionary effect of devaluation more than its expenditure-switching effects that provide the basis for is use in solving the external sector's problems. A fixed nominal exchange rate is found to lead to adverse results. The broader conclusion that emerges from the study is that a new social compact and a rapid increase in infrastructure spending plus fiscal support for the traditional agro-export activities is at the center of a successful adjustment towards external viability in Nicaragua. ^

Capabilities of Police and Military Forces in Central America -- A Comparative Analysis of Guatemala, El Salvador, Honduras an d Nicaragua

A difficult transition to a new paradigm of Democratic Security and the subsequent process of military restructuring during the nineties led El Salvador, Honduras, Guatemala and Nicaragua to re-consider their old structures and functions of their armed forces and police agencies. This study compares the institutions in the four countries mentioned above to assess their current condition and response capacity in view of the contemporary security challenges in Central America. This report reveals that the original intention of limiting armies to defend and protect borders has been threatened by the increasing participation of armies in public security. While the strength of armies has been consolidated in terms of numbers, air and naval forces have failed to become strengthened or sufficiently developed to effectively combat organized crime and drug trafficking and are barely able to conduct air and sea operations. Honduras has been the only country that has maintained a proportional distribution of its armed forces. However, security has been in the hands of a Judicial Police, supervised by the Public Ministry. The Honduran Judicial Police has been limited to exercising preventive police duties, prohibited from carrying out criminal investigations. Nicaragua, meanwhile, possesses a successful police force, socially recognized for maintaining satisfactory levels of security surpassing the Guatemalan and El Salvadoran police, which have not achieved similar results despite of having set up a civilian police force separate from the military. El Salvador meanwhile, has excelled in promoting a Police Academy and career professional education, even while not having military attachés in other countries. Regarding budgetary issues, the four countries allocate almost twice the amount of funding on their security budgets in comparison to what is allocated to their defense budgets. However, spending in both areas is low when taking into account each country's GDP as well as their high crime rates. Regional security challenges must be accompanied by a professionalization of the regional armies focused on protecting and defending borders. Therefore, strong institutional frameworks to support the fight against crime and drug trafficking are required. It will require the strengthening of customs, greater control of illicit arms trafficking, investment in education initiatives, creating employment opportunities and facilitating significant improvements in the judicial system, as well as its accessibility to the average citizen.

The academic orientation of first and second generation Nicaraguan immigrant adolescents

The rise in diversity and numbers of U.S. immigrants since 1965 has spawned a number of studies about the education of these immigrants and their children. Most of this research finds that school-age immigrants arriving in the last 20 years have the highest drop-out rates, lowest test scores, and are less likely than their native born peers to go to college. This dissertation examines the experiences of Nicaraguan immigrant youth living in Miami and the factors that make some of these adolescents feel positive about education, while others have negative attitudes about education. The method for this study combined structured and unstructured interviews, participant observation, focus groups, and data collected from a larger data set to understand the academic orientation of 25 Nicaraguan youths over a 4-year period. One of the independent variables is length of time in the United States. During the time of my initial contact with the subjects, 6 had been living in the United States for less than 3 years, 14 had been living in the United States between 6 and 12 years, and 6 had been living in the in the United States most or all of their lives (either they were born in the United States or had resided here for over 12 years). ^ Results are based on the students' particular experiences, which influence the dependent variable, academic orientation. Besides length of time, the independent variables also include ethnic self-identity, perceived discrimination, social capital in Miami, and peer influence. The study finds that those who are very recent arrivals have a “dual frame of reference,” that is, they directly compare their educational opportunities here in the United States, with their prior, often less favorable, situation in their homeland. Many of those who were born in Nicaragua, but have been residing in Miami most of their lives, have a less favorable view of education based on a higher degree of perceived discrimination. However, those who are second generation Nicaraguans deliberately take advantage of the strength inherent in their co-ethnic community unique to Miami. Recognition of this ethnic community prompts them to perceive education as worthwhile. ^

The United States Congress and Venezuela's Hugo Chávez

The Soviet Union's dissolution in December 1991 marks the end of the Cold War and the elimination of the United States' main rival for global political-economic leadership. For decades U.S. foreign policymakers had formulated policies aimed at containing the spread of Soviet communism and Moscow's interventionist policies in the Americas. They now assumed that Latin American leftist revolutionary upheavals could also be committed to history. This study explores how Congress takes an active role in U.S. foreign policymaking when dealing with revolutionary changes in Latin America. This study finds that despite Chávez's vitriolic statements and U.S. economic vulnerability due to its dependence on foreign oil sources, Congress today sees Chávez as a nuisance and not a threat to U.S. vital interests. Devoid of an extra-hemispheric, anti-American patron intent on challenging the United States for regional leadership, Chávez is seen by Congress largely as a threat to the stability of Venezuela's institutions and political-economic stability. Today both the U.S. executive and the legislative branches largely see Bolivarianism a distraction and not an existential threat. The research is based on an examination of Bolivarian Venezuela compared to revolutionary upheaval and governance in Nicaragua over the course of the twentieth century. This project is largely descriptive, qualitative in approach, but quantitative data are used when appropriate. To analyze both the U.S. executive and legislative branches' reaction to revolutionary change, Cole Blasier's theoretical propositions as developed in the Hovering Giant: U.S. Responses to Revolutionary Change in Latin America 1910-1985 are utilized. The present study highlights the fact that Blasier's propositions remain a relevant means for analyzing U.S. foreign policymaking.

ALBA: A Political Tool for Venezuela’s Foreign Policy

Despite its founding by Hugo Chávez on the heels of the failed Free Trade Area for the Americas (FTAA) negotiations which took place November 2003, the Bolivarian Alliance for the Americas (ALBA, as it is known for its Spanish acronym) has evolved into a political tool that uses “social power” to facilitate Venezuela‟s positioning as the leader of the anti-U.S. agenda in the region. Fostering political favors and goodwill through the financing of social development projects, ALBA has created a political environment whereby countries on the take and their respective leaders seem deterred from taking public opposing viewpoints to Chávez. To that end, it has provided billions in economic aid to several nations in Latin American and the Caribbean, winning their favor and support for its policies. To date, ALBA counts on eight member nations. Besides Venezuela, it includes Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, and Saint Vincent and the Grenadines. It also has several observer nations, among them, Grenada, Haiti, Paraguay, Uruguay, and a non-Latin American country, Syria. Throughout its recent history Venezuela has used its oil wealth to pursue political capital. Under the Chávez government it is doing so as part of a strategic effort countering the U.S. Following Cuba‟s demise in the region as the anti-American socialist camp leader, Chávez is attempting to step into Cuba‟s shoes, picking up where Cuba left off over a decade ago and has used the ALBA as a mechanism to help promote his foreign policy. Relying on its own resources, not those of the Soviet Union as Cuba once did, Venezuela has already shown its influence in the international arena, challenging U.S. positions at the Organization of American States (OAS), the United Nations, and even in matters having little if nothing to do with the region, such as Iran‟s nuclear proliferation. Taking advantage of Venezuela‟s oil prices bonanza, Chávez has been spreading economic aid throughout the region, funding several development projects. From stepping in to buy Bolivia‟s soy beans when the U.S. ceased doing so, to helping finance and construct an airport in Dominica, Venezuela‟s ALBA has provided assistance to many states in the region. As in the past, Venezuela has invested significantly both in time and money in the Caribbean, providing development assistance and oil at a discount to Haiti, St. Kitts and Nevis, and the Dominican Republic, although the latter two are neither member nor observer states of ALBA. The aid Chávez has been spreading around may be coming at a cost. It seems it has begun to cause cracks within the CARICOM community, where ALBA already counts on six of its 15 members, leading experts and leaders in the region to question traditional alliances to each other and the U.S. Yet, ALBA‟s ability to influence through aid is dependent on the Venezuelan economy. Its success hinges on continued Venezuelan oil sales at stable prices and the ability of Chávez to remain in power.

Lan American Coups: Have They Vanished or Taken New Shapes?

In the following pages, three well-known Latinoamericanists share their views on the current prospects for coups in Latin America. They are: Rut Diamint of the University Torcuatto de Tella in Buenos Aires, Argentina; Pablo Policzer of the University of Calgary in Canada; and Michael Shifter of the Inter-American Dialogue in Washington, DC. Each looks at the potential for coups from different perspectives but, all three come to similar conclusions. That is, that despite substantial gains in democracy, the threat of coups in Latin America remains latent. The authors agree that democracy is growing in the region. Opinion surveys such as the Americas Barometer consistently show that citizens in Latin America have gradually incorporated democracy as part of their core value system. Yet, the authors argue convincingly that Latin America faces new types of interruptions to its democratic process that should be considered coups, even if not following the traditional style of military coup that predominated in the past. Situations that have taken place in Peru, Ecuador, Nicaragua, Honduras and other countries serve to illustrate the new trends. More specifically, Professor Diamint argues that in Latin America a culture of intolerance, demonization of the opposition, and the utilization of any method to achieve power prevails. In a region with a very high threshold of violence, governments fail to set an example of establishing a culture of debate, consensus, and transparency. This culture is inclined to uncontrollable political expressions, preferring confrontational means to resolve conflict. Within this scenario, “messianic” solutions are promoted and coups cannot be discarded as an option that would never transpire. Professor Policzer looks more closely to the constitutional loopholes that allow for a transformation of limited into absolute power. He argues that coups can be constitutional or unconstitutional, and that a constitutional coup can occur when violations to democracy actually stem from the constitutions themselves. In Honduras, for example specific provisions in the Constitution itself created conditions for a constitutional crisis; similar provisions have also led to constitutional authoritarianism in Venezuela and other countries. Dr. Policzer stresses that when a head of state or the military take absolute power, even temporarily, based on provisions in their constitutions; they are in essence staging a constitutional coup. These blind spots in constitutions, he argues, may be more serious threat to democracy than that of traditional coups. Lastly, Dr. Shifter argues that some kind of coup should be expected in Latin America in coming years, not only because fundamental institutions remain weak in some countries, but because the regional political environment is less prepared to respond effectively to transgressions than it was a few years ago. The good news, however, is that only a handful of countries, show no interest in governing. The bad news is that in those few countries where situations are indeed shaky, they are also in some cases aggravated by rising food and fuel prices, and spreading criminality, which pose serious risks to the rule of law and democratic governance.

Islamist Cyber Networks in Spanish-Speaking Latin America

Despite significant concern among policy, law enforcement and intelligence communities in the United States (U.S.) over the possible spread of radical Islamist thought throughout the world as part of a global jihad movement, there has been little investigation into the growing cyber networks in Latin America that promote strong anti-Semitic and anti-U.S. messages. This paper offers an overview of that network, focusing on the structure of Shi’ite websites that promote not only religious conversion but are also supportive of Iran -- a designated State-sponsor of terrorism – its nuclear program. Hezbollah, and the “Bolivarian revolution” led by Venezuelan President Hugo Chávez and his allies in Bolivia, Ecuador and Nicaragua. There is also a smaller group of Sunni Muslim websites, mostly tied to the legacy organizations of the Muslim Brotherhood. Many of the Shi’ite websites are linked to each other consistently portray Israel as a Nazi State, and the United States as an imperialist war monger. The Palestinian issue is frequently juxtaposed with the anti-imperialist struggle that those states supporting Chávez’ Bolivarian revolution claim to wage against the United States. Some of the Islamist websites claim thousands of new convert, but such claims are difficult to verify. Most of the websites visited touted the conversion of one or two individuals as significant victories and signs of progress, implying that there are few, if any, mass conversions. While conducting this research, no websites directly claiming to be linked to Hezbollah were found, although there numerous sites hosted by that group that were active until around 2006. Several of the inactive links are supportive of Hezbollah as a political party. No websites linked to al Qaeda were found. Yet a substantial Internet network remains operational. Much of the outreach for Shi’ite Muslims, closely tied to Iran, is sponsored on numerous websites across the region, including El Salvador, Chile, Ecuador, Colombia, Mexico and Bolivia. Numerous Facebook forums for discussion are also hosted around Latin America. These links must be viewed in the context of the rapidly expanding diplomatic, intelligence, political and economic ties of Iran in recent years with the self-proclaimed Bolivarian states. Given the sparse literature available and the rich vein of un-mined information on the sites cited as well as others that one could find with additional research, the cyber network of Islamist groups remains one of the least understood or studied facets of their presence in Latin America and the Caribbean. It merits significantly more investigation.

Beyond the Pay: Current Illicit Activities of the Armed Forces in Central America

The growth of criminal gangs and organized crime groups has created unprecedented challenges in Central America. Homicide rates are among the highest in the world, countries spend on average close to 10 percent of GDP to respond to the challenges of public insecurity, and the security forces are frequently overwhelmed and at times coopted by the criminal groups they are increasingly tasked to counter. With some 90 percent of the 700 metric tons of cocaine trafficked from South America to the United States passing through Central America, the lure of aiding illegal traffickers through provision of arms, intelligence, or simply withholding or delaying the use of force is enormous. These conditions raise the question: to what extent are militaries in Central America compromised by illicit ties to criminal groups? The study focuses on three cases: Nicaragua, El Salvador, and Honduras. It finds that: Although illicit ties between the military and criminal groups have grown in the last decade, militaries in these countries are not yet “lost’ to criminal groups. Supplying criminal groups with light arms from military stocks is typical and on the rise, but still not common. In general the less exposed services, the navies and air forces, are the most reliable and effective ones in their roles in interdiction. Of the three countries in the study, the Honduran military is the most worrying because it is embedded in a context where civilian corruption is extremely common, state institutions are notoriously weak, and the political system remains polarized and lacks the popular legitimacy and political will needed to make necessary reforms. Overall, the armed forces in the three countries remain less compromised than civilian peers, particularly the police. However, in the worsening crime and insecurity context, there is a limited window of opportunity in which to introduce measures targeted toward the military, and such efforts can only succeed if opportunities for corruption in other sectors of the state, in particular in law enforcement and the justice system, are also addressed. Measures targeted toward the military should include: Enhanced material benefits and professional education opportunities that open doors for soldiers in promising legitimate careers once they leave military service. A clear system of rewards and punishments specifically designed to deter collusion with criminal groups. More effective securing of military arsenals. Skills and external oversight leveraged through combined operations, to build cooperation among those sectors of the military that have successful and clean records in countering criminal groups, and to expose weaker forces to effective best practices.

Post-revolutionary post-modernism: Central American detective fiction by the turn of the 21st century

Contemporary Central American fiction has become a vital project of revision of the tragic events and the social conditions in the recent history of the countries from which they emerge. The literary projects of Sergio Ramirez (Nicaragua), Dante Liano (Guatemala), Horacio Castellanos Moya (El Salvador), and Ramon Fonseca Mora (Panama), are representative of the latest trends in Central American narrative. These trends conform to a new literary paradigm that consists of an amalgam of styles and discourses, which combine the testimonial, the historical, and the political with the mystery and suspense of noir thrillers. Contemporary Central American noir narrative depicts the persistent war against social injustice, violence, criminal activities, as well as the new technological advances and economic challenges of the post-war neo-liberal order that still prevails throughout the region. ^ Drawing on postmodernism theory proposed by Ihab Hassan, Linda Hutcheon and Brian MacHale, I argued that the new Central American literary paradigm exemplified by Sergio Ramirez's El cielo llora por mí, Dante Liano's El hombre de Montserrat, Horacio Castellanos Moya's El arma en el hombre and La diabla en el espejo , and Ramon Fonseca Mora's El desenterrador, are highly structured novels that display the characteristic marks of postmodern cultural expression through their ambivalence, which results from the coexistence of multiple styles and conflicting ideologies and narrative trends. The novels analyzed in this dissertation make use of a noir sensitivity in which corruption, decay and disillusionment are at their core to portray the events that shaped the modern history of the countries from which they emerge. The revolutionary armed struggle, the state of terror imposed by military regimes and the fight against drug trafficking and organized crime, are among the major themes of these contemporary works of fiction, which I have categorized as perfect examples of the post-revolutionary post-modernism Central American detective fiction at the turn of the 21st century.^

Social Capital and International Migration from Latin America

We combine data from the Latin American Migration Project and the Mexican Migration Project to estimate models predicting the likelihood of taking of first and later trips to the United States from five nations: Mexico, the Dominican Republic, Costa Rica, Nicaragua, and Peru. The models test specific hypotheses about the effects of social capital on international migration and how these effects vary with respect to contextual factors. Our findings confirm the ubiquity of migrant networks and the universality of social capital effects throughout Latin America. They also reveal how the sizes of these effects are not uniform across settings. Social capital operates more powerfully on first as opposed to later trips and interacts with the cost of migration. In addition, effects are somewhat different when considering individual social capital (measuring strong ties) and community social capital (measuring weak ties). On first trips, the effect of strong ties in promoting migration increases with distance whereas the effect of weak ties decreases with distance. On later trips, the direction of effects for both individual and community social capital is negative for long distances but positive for short distances.

Managua Relief

Bob del Toro, Dianne Haley and Others with Toys for Managuan Relief. On December 23, 12:29 a.m. local time in Managua, Nicaragua, a magnitude 6.2 earthquake occurred. The earth caused widespread damage among Managua, the capital city. In Managua, 5,000 residents were killed, 20,000 were injured and over 250,000 were left homeless. In Miami, residents and relief organizations focused on helping children. Wife of General Arturo Somoza pleaded on efforts on gathering sporting goods and toys for Managua’s young people. Relief committees purchased 230 dozen balls – basketball, rubber, and volley, soccer, and others. Nearly $500 came from students in Hialeah High School. Jump ropes and jacks were donated from a sorority at Florida International University. Arrangements were made to bring 44,000 pounds of baby formula and canned meat and 13,000 pounds of medicine. Many of Miami’s corporations, associations, and residents contributed to the Managuan Relief effort. Source: The Miami News, March 19, 1973 by Lynn Feigenbaum 887-3400. april 30, 1973. Cutlines: More than 350 dozens of various balls, skate boards and games were recently purchased by the Student Governance Committee of Florida International University for the young people of Managua, Nicaragua who not only do not have enough toys but are unable to attend schools which are closed. Left to right are, Bob del Toro, Dianne Haley, Chairman of the Student Governance Committee, Hialeah Councilman Jack Weaver of the Hialeah-Managua Sister City Committee, Barbara O'Nan and Margaret Klein.

Managua Relief

On December 23, 12:29 a.m. local time in Managua, Nicaragua, a magnitude 6.2 earthquake occurred. The earth caused widespread damage among Managua, the capital city. In Managua, 5,000 residents were killed, 20,000 were injured and over 250,000 were left homeless. In Miami, residents and relief organizations focused on helping children. Wife of General Arturo Somoza pleaded on efforts on gathering sporting goods and toys for Managua’s young people. Relief committees purchased 230 dozen balls – basketball, rubber, and volley, soccer, and others. Nearly $500 came from students in Hialeah High School. Jump ropes and jacks were donated from a sorority at Florida International University. Arrangements were made to bring 44,000 pounds of baby formula and canned meat and 13,000 pounds of medicine. Many of Miami’s corporations, associations, and residents contributed to the Managuan Relief effort. Source: The Miami News, March 19, 1973 by Lynn Feigenbaum From: City of Hialeah Publicity Bureu. 401 1/2 East 1st Ave. Hialeah, Fla. 887-3400. april 30, 1973. Cutlines: Florida International University students recently raised more than $ 1,000 for more than 300 dozens toys and balls for the youngsters of Managua, Nicaragua. With the balls above are shown student Committee members and oficials of the Hialeah-Managua Sister City Committee, left to rigth: Bob del Toro, Sister City Committe president Raymond R. Schultz, Student Governance Committee chairman Dianne Haley and Hialeah City councilman Jack Weaver.

Managua Relief

On December 23, 12:29 a.m. local time in Managua, Nicaragua, a magnitude 6.2 earthquake occurred. The earth caused widespread damage among Managua, the capital city. In Managua, 5,000 residents were killed, 20,000 were injured and over 250,000 were left homeless. In Miami, residents and relief organizations focused on helping children. Wife of General Arturo Somoza pleaded on efforts on gathering sporting goods and toys for Managua’s young people. Relief committees purchased 230 dozen balls – basketball, rubber, and volley, soccer, and others. Nearly $500 came from students in Hialeah High School. Jump ropes and jacks were donated from a sorority at Florida International University. Arrangements by organizations were made to bring 44,000 pounds of baby formula and canned meat and 13,000 pounds of medicine. Many of Miami’s corporations, associations, and residents contributed to the Managuan Relief effort. Source: The Miami News, March 19, 1973 by Lynn Feigenbaum From: City of Hialeah Publicity Bureu. 401 1/2 East 1st Ave. Hialeah, Fla. 887-3400. april 30, 1973. Cutlines: Skate boards, paddle balls and flying saucers were among the big shipment of toys which was recently dispatched to Managua, Nicaragua by students of Florida International University through the Hialeah-Managua Sister Committee. Examining the toys above are, left to right: Margaret Klein, Hialeah councilman Jack Weaver and Barbara O'Nan.

Managua Relief

On December 23, 12:29 a.m. local time in Managua, Nicaragua, a magnitude 6.2 earthquake occurred. The earth caused widespread damage among Managua, the capital city. In Managua, 5,000 residents were killed, 20,000 were injured and over 250,000 were left homeless. In Miami, residents and relief organizations focused on helping children. Wife of General Arturo Somoza pleaded on efforts on gathering sporting goods and toys for Managua’s young people. Relief committees purchased 230 dozen balls – basketball, rubber, and volley, soccer, and others. Nearly $500 came from students in Hialeah High School. Jump ropes and jacks were donated from a sorority at Florida International University. Arrangements were made to bring 44,000 pounds of baby formula and canned meat and 13,000 pounds of medicine. Many of Miami’s corporations, associations, and residents contributed to the Managuan Relief effort. Source: The Miami News, March 19, 1973 by Lynn Feigenbaum