Old Dominion University ODU Digital Commons Graduate Program in International Studies Theses & Graduate Program in International Studies Dissertations Spring 2006 Nicaragua's Survival: Choices in a Neoliberal World Stanley G. Hash Jr. Old Dominion University Follow this and additional works at: https://digitalcommons.odu.edu/gpis_etds Part of the Economic Theory Commons, International Relations Commons, Latin American History Commons, and the Latin American Studies Commons Recommended Citation Hash, Stanley G.. "Nicaragua's Survival: Choices in a Neoliberal World" (2006). Doctor of Philosophy (PhD), dissertation, International Studies, Old Dominion University, DOI: 10.25777/m977-a571 https://digitalcommons.odu.edu/gpis_etds/39 This Dissertation is brought to you for free and open access by the Graduate Program in International Studies at ODU Digital Commons. It has been accepted for inclusion in Graduate Program in International Studies Theses & Dissertations by an authorized administrator of ODU Digital Commons. For more information, please contact [email protected]. NICARAGUA’S SURVIVAL CHOICES IN A NEOLIBERAL WORLD by Stanley G Hash, Jr B.A. August 1976, University of Maryland M A P. A June 1979, University o f Oklahoma A Dissertation Submitted to the Faculty of Old Dominion University in Partial Fulfillment of the Requirement for the Degree of DOCTOR OF PHILOSOPHY INTERNATIONAL STUDIES OLD DOMINION UNIVERSITY May 2006 Approved by: Franck_Adams (Director) Lucien Lombardo (Member) Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ABSTRACT NICARAGUA’S SURVIVAL: CHOICES IN A NEOLIBERAL WORLD Stanley G Hash, Jr Old Dominion University, 2006 Director: Dr Francis Adams In January 1990 the Nicaraguan electorate chose to abandon the failing Sandinista Revolution in favor of the economic neoliberal rubric. However, since 1990 Nicaragua’s economy has been stagnant. Today it is one of the four poorest states in Latin America having been one of the wealthiest before 1975 The purpose of this work is to explain Nicaragua’s poor performance since 1990 The hypothesis is that domestic independent variables are central to recovery and are the underlying causes o f Nicaragua’s failure to fully recover. The abuses of the Somozas’ ancien regime before the 1979 revolution are well documented; less well documented is the continuation of those practices However, abuses such as pervasive corruption alone do not explain the failure. This work treats four major domestic independent variables as the collective determinant: the Roman Catholic Church, organized labor, the role of the business community and its instruments, and civil society with the residual effect from the FSLN period. Each variable has its own impact on outcomes in Nicaragua, and the failure has defied the predictions of neoliberal proponents and the international effort to implement neoliberalism This work validates that domestic independent variables have a greater effect than external independent variables as determinants for recovery. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Methods of research include an examination of available data and literature, and a review of events that have affected internal variables. Field research in Nicaragua was conducted to further investigate the dynamics of the domestic independent variables Follow-up to field study was accomplished through further research and electronic contact with primary sources The contribution to scholarship is the treatment of the internal variables as primary determinants for recovery. Highly indebted poor countries” (HIPC) states are a first-order project of powerful states that recognize that a renewed strategy must be developed. This work provides insight and direction toward that end. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. IV ACKNOWLEDGMENTS To my mother, wife and two sons who encouraged me during the period in which my wife and I saw our sons through college and graduate school To Francis Adams, Ph.D., professor, Graduate Program in International Studies, Old Dominion University and Committee Chair of this dissertation who has the patience of a saint and the focus of a surgeon; Regina Karp, Ph.D., Director, Center for Global Studies, Old Dominion University whose sagacious advice and encouragement were valuable in the most difficult stages; Lucien Lombardo, Ph.D., Professor, Old Dominion University Department of Sociology, who lent a great deal of time, and provided a perspective outside of the political science arena that was important to address; Robert Holden, Ph.D., Professor, Old Dominion University, Assistant Director, Graduate Program in International Studies, whose interpretations of the rural labor movement in Nicaragua and literature suggestions for this study proved to be very valuable; and Janet Meyer, College reader, whose patience and attention to detail were critical to the completion of this work. To Antonio Lacayo Oyanguren, Former Minister of the Presidency in the Violeta Chamorro administration; Gabriel Pasos Lacayo, Engineer, President of the Federation of Central American Chambers and Associations of Industry and President of the Nicaraguan Chamber of Industry, Jose Felix Solis C., Chief of Economic Studies, Banco Central de Nicaragua, Silvia Fonseca, Monsenor, Bicario de Education, Nicaraguan Bishop’s appointee for education matters, private and public; Managua, Adolfo Acevedo, economist and former advisor to the Chamorro administration; Efrain Laureano, Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. economist and associate of Carlos Vilas, former economic advisor to the FSLN; Nicolas Perdomo, J r, Owner and president of Tabacalera Perdomo, Esteli, Nicaragua, Carlos Benevente Gomez, Director, Institutional Advancement and Chief Economist, Augusto C. Sandino Foundation; Aynn Setright, Academic Director for the School for International Training Nicaragua Study Abroad Program, Guillermo Leiva, retired Nicaragua Sandinista Popular Army (EPS) major (political officer), political observer and writer active in the FSLN; who arranged many otherwise impossible interviews, Pedro Joaquin Rios Castellon, Deputy, Nicaraguan National Assembly; Peter A Gorin, author and historian of Soviet and Russian politics and Smithsonian Institute Guggenheim fellow, Nestor Avendano, Economist, NAC Consultores - Economic y Finanzas, consultant to Quaker Peace and Social Witness, London and Professor at UCA and FIDEG (engineering); and Matthew Falkiner, Proprietor of Simplemente Madera and Exchange - Transforming Trees in Nicaragua in Managua Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. vi TABLE OF CONTENTS Chapter Page I INTRODUCTION 1 II LITERATURE AND THEORY.........................................................................46 Political, Economy and Social Literature ................................................ 49 Anti-globalization Literature ....................................................................103 Integrative Literature .................................................................................109 Explaining Nicaraguan Revolution ......................................................... 119 Hypothesis and Discussion ....................................................................... 124 III POLITICAL AND ECONOMIC HISTORY TO 1990 128 Formative Period .........................................................................................130 Subjugation and Dependency ...................................................................141 Sandinista Liberation Front Origins ........................................................ 167 President Reagan and the Contra War ................................................... 184 Dependency Theory and Unintended Consequences ...........................196 Religion and Nicaragua’s Development .................................................199 The Role of the Moravian Church ..........................................................200 The Role of Pentecostal and other Protestant Churches .....................207 Somoza Debayle’s Postscript .................................................................. 215 Observations on Nicaragua’s Conditioning ...........................................218 IV NICARAGUA AND NEOLIBERALISM 1990-2006 ................................. 222 The Thermidor Period: Dona Violeta Chamorro ..................................225 Amoldo Aleman and His Thermidor Role ............................................ 231 Bolanos - Progress or Stagnation9 .......................................................... 237 V DOMESTIC VARIABLES AND NEOLIBERALISM 243 External Variables Held as Constant ......................................................246 Determinants Driven by History ............................................................. 249 Critical Domestic Independent Variables .............................................. 267 Summary......................................................................................................290 VI OBSERVATIONS AND CONCLUSIONS 294 Nicaragua’s National Political Psyche ................................................... 295 Constancy of the Neoliberal Agenda ......................................................297 The Washington Consensus Revisited ..................................................