Wednesday, April 9, 2008

Worst financial crisis since Depression, says IMF

"Closed due to housing crisis"

Governments will have to pay for more bailouts, says Fund as it slashes growth forecasts and warns of global recession

Heather Stewart

The Guardian, Thursday April 10 2008

The US mortgage crisis has spiralled into "the largest financial shock since the Great Depression" and there is a one-in-four chance that it will cause a full-blown global recession, the International Monetary Fund warned yesterday.

As finance ministers and central bankers arrived in Washington to discuss ways of tackling the crisis, the IMF warned, in its twice-yearly World Economic Outlook, that governments might be forced to step in with more public bailouts of troubled banks and cash-strapped homeowners before the crisis was over.

"The financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression, inflicting heavy damage on markets and institutions at the core of the financial system," it said.

After warning this week that the world's financial firms could end up shouldering $1trn (£500bn) of losses from the credit crunch, the IMF said it expected the US to experience a "mild recession", notching up GDP growth of 0.5% in 2008 and 0.6% in 2009. It expects house prices to fall by up to a further 10% before the downturn is over.

With the US sliding into such a recession, there is mounting pessimism about the ability of the rest of the world to escape unscathed. The IMF shaved its forecast for growth in the global economy by half a percentage point, to 3.7% for this year, and by 0.6% - to 3.8% - for 2009.

Although the Washington-based body expects most emerging economies to continue to grow strongly over the next two years, it admits that efforts to tackle the knock-on effects of the credit crunch could be hampered by fast-growing commodity prices. "Inflation has picked up around the globe, mainly reflecting sharp increases in food and energy prices," it said.

In the US, President Bush has already signed off a $150bn tax rebate package to kick-start the US economy, and the Federal Reserve last month backed an extraordinary emergency buyout of the investment bank Bear Stearns.

However, the IMF said more taxpayers' cash may still need to be spent to unblock the markets. "Given the serious risks coming from sustained financial market dislocations, the recent legislation to provide additional fiscal support for an economy under stress is fully justified, and room may need to be found for some additional support for housing and financial markets."

Simon Johnson, IMF research director, presenting the report in Washington, described such bailouts as an essential "third line of defence", after interest rate and tax cuts, for governments struggling to prevent a deep recession.

He said the main risk to the global economy over the next year was the emergence of a vicious circle, as house prices continued to fall, dealing a fresh blow to the world's banks, and creating a damaging feedback loop.

"Sentiment in financial markets has improved in recent weeks since the Federal Reserve's strong actions with regard to investment banks. But we have seen how strains in markets can quickly become reinforcing, and the possibility of a negative spiral or 'financial decelerator' remains a possibility," he warned.

The IMF's downbeat analysis creates a gloomy backdrop for policymakers arriving in Washington to discuss ways of easing the credit squeeze. Such is the concern about problems in the financial markets that a range of radical options is on the table. These include greater disclosure of losses on sub-prime assets by banks; firmer regulation of credit-rating agencies, and - more controversially - plans for taking some of the risky mortgage-backed assets at the heart of the crisis on to government balance sheets. Alistair Darling, the chancellor, is calling for a detailed plan to be agreed over the weekend.

The IMF backed more comprehensive disclosure by banks. "We fully support the move towards greater disclosure," Johnson said. "We think that marking to market [rating assets on current market values, not book values] and continuing to recognise losses is an important part of how the financial system operates."

The US Federal Reserve has cut US interest rates by a hefty 3 percentage points to 2.25% since the crisis began, in an attempt to restore confidence and turn the credit taps back on. The IMF welcomed the Fed's approach but said it would not be enough to prevent recession.

"Adverse financial conditions are likely to have a continuing negative impact on activity in the United States, notwithstanding the Federal Reserve's strong response," it said. "The United States remains plagued by profound errors in risk management."

The value of the dollar has plunged to record lows in the past year as the outlook for the US economy has darkened, but the IMF said the greenback still "remains somewhat on the strong side".

No bounce after the hard landing

Alistair Darling's forecast that Britain will bounce back from the credit crunch by next year now looks hopelessly optimistic, according to an authoritative assessment by the International Monetary Fund.

Just a month ago, in the budget, the Treasury had pencilled in 2% GDP growth this year and 2.5% in 2009 as the economy recovers, but yesterday the Washington-based IMF predicted far weaker growth of 1.6% both years.

The chancellor has said repeatedly that Britain is "better placed" to weather the storm because of its low unemployment and flexible labour market, but the IMF calculates that the housing market is overvalued by up to 30% and faces a damaging correction.

"The housing market is going to be a drag on the economy," said Charles Collyns, a senior IMF economist. "We do see house prices softening already, and we see potential that the housing correction will continue, with an impact on consumption. We also see the UK being affected by the tightening of the financial constraints related to the turmoil in the financial markets."

He added that the knock-on effects of weak growth in the US and the eurozone would also depress growth.

House prices fell 2.5% last month, Halifax said, and the IMF says the wider economy will be hit hard as overstretched banks repair balance sheets and borrowers face tighter loan conditions and higher interest rates. In January, when it last updated forecasts, the IMF was expecting expansion of 2.4% in 2009, but the longer the credit crunch continues, the more threatened the UK economy has become. Darling said yesterday that the downgrade was "not surprising" and the economy was "extremely strong".

Heather Stewart

Saturday, April 5, 2008

NICARAGUA: Houses Without Water or Water Without Houses?

The headline given to this very timely article is somewhat misleading. There is no inherent reason why Nicaraguans must choose between their water and construction jobs.

Why should a city of well over one million people have to bow down to a gang of capitalist investors and land speculators and drink their piss? They are literally defecating in the city’s main water supply, the underground aquifers to the southeast of the city.

This is only one of countless examples of savage assault on our natural environment and public health by greedy capitalist groups. We need only recall the mercury poisoning of the rivers in the mines region by Canadian and US firms -- destroying the health and food sources of Mayangna and Miskitu indigenous peoples in those areas. That too was done in the name of jobs, but it was not about jobs. It was gold – carted off the North and generating record profits for Canadian and US billionaires. The miners remained poor and died young, mostly from lung diseases.

Access to clean water is a key issue not just in rural Nicaragua, but also in a great many neighborhoods in the capital, and in other major cities of the country. The previous government was on the verge of privatizing water services in Nicaragua. One of the first actions of the Ortega government was to scuttle that planned rip-off. He appointed to woman consumer advocate who had led the national campaign against water privatization -- Ruth Selma Herrera -- to head the state water and sewage facility (ENACAL).

Not surprisingly, she is now a major target of the oligarchy's political parties, their newspaper La Prensa, and their many TV and radio outlets. They sing sweet lullabies to the environment when in the mood, but whenever it comes to a choice between profiteering and protecting the environment they know which side they are on. They are class conscious.

We need to learn a lesson from them.

We need to be not just Nicaraguan nationalists (which they are not), but class conscious internationalists who defend the interests of working people in the cities and on the land. We are the vast majority. Our interests are not opposed to Mother Earth.

Felipe Stuart

By José Adán Silva

MANAGUA, Apr 1 (IPS) - Authorities in Nicaragua are facing the dilemma of generating thousands of jobs through the development of the construction and real estate industry in the capital or putting a priority on future water supplies for the city’s 1.2 million people.

The debate broke out in February, when five city governments in Managua and surrounding suburbs agreed to adopt a ban on the construction of housing units to the south of the city, a rural, forested area where the underground water reserves that supply the capital are located.

Managua Mayor Dionisio Marenco, the main sponsor of the ban, told IPS that for 17 years, development companies have been clearing the forests in that area and building housing projects with little government oversight.

"In the name of free enterprise and progress, they have hurt the city’s water resources and the country," said the mayor. "In that area, they have destroyed forests without any controls, levelled the land, made sources of water disappear and polluted the water reserves that are going to supply the city for the next 30 years."

The mayor complained that the companies have not respected building regulations, have dumped construction industry debris and sewage, which leak into the underground water reserves, and have ignored safety measures in sewage treatment plants.

The declaration of a development ban had the support of the town councils in El Crucero, La Concepción, Managua, Nindirí and Ticuantepe, and of the president’s office, the Ministry of the Environment and Natural Resources (MARENA) and the state-run water and sewage company (ENACAL).

ENACAL president Ruth Selma Herrera reported that 355 urban developments are under construction in the area encompassed by the building ban, which have reportedly not presented the water treatment infrastructure feasibility studies that must be approved before construction begins.

She also said the companies use the water without paying for the connections or the service, even though the country’s legislation establishes that water supplies belong to the state and are subject to oversight by the relevant government agencies.

"They do business without paying, without making rational use of the water, while polluting it and refusing to bring their construction projects to a halt," Herrera told IPS.

Because of the deforestation, chaotic urban growth around the capital, and lack of investment in the city’s sewage and water systems over the last 17 years, "there are areas in Managua where we can't pump water and we have to ration it up to 12 hours a day, while the companies pollute and exhaust the water supplies day after day," said Herrera.

The decision by the environmental and municipal authorities drew an angry reaction from the Chamber of the Construction Industry and the real estate industry.

Alfonso Silva, president of the Chamber of Real Estate Developers, said the industry, which invests around 200 million dollars a year, generates employment for 25,000 heads of households and reduces the pressing housing shortage in the country.

"Nicaragua has an over 30 percent unemployment rate and a deficit of more than 500,000 housing units. In these conditions of extreme poverty, we cannot be hindering development and hurting the economy," Silva told IPS.

Nicaragua is one of the poorest countries in Latin America. According to a January 2007 United Nations report, 47 percent of the population was living in poverty and 15 percent in extreme poverty.

"We are aware that the country must protect its natural resources, but it must do so without affecting investment and development. If a company fails to live up to the rules of the game, it should be punished, but we should not all be punished," argued Silva.

Lawmaker Agustín Jarquín Anaya, an ally of the leftist governing Sandinista Front, told IPS that the ban on housing construction in the area in question is "healthy and commendable," but said alternatives for the private investment projects affected by the measure should be explored.

"We should not be so drastic. Alternative solutions that seek to preserve water sources and that do not affect the country’s economic growth should be sought," he added.Cirilo Otero, president of the Centre for Research on Environmental Policy, said the problem is complex because of the high levels of poverty in the country.

"On one hand Nicaragua has assumed the environmental commitments included in the Millennium Development Goals (MDGs), but on the other, it has to respond to the people’s need for jobs," he said.

Adopted by the U.N. General Assembly in 2000, the eight MDGs, which set a 2015 target date, are to halve extreme poverty and hunger from 1990 levels, achieve universal primary education, promote gender equality and maternal health, reduce child mortality, combat HIV/AIDS, malaria and other diseases, ensure environmental sustainability, and develop a global partnership for development.

To meet the MDGs, Nicaragua will have to provide clean water and sanitation to 2.5 million people by 2015.

But little progress has been made towards that MDG. A report by the United Nations Development Programme (UNDP), presented in Managua last year, stated that 70 percent of Nicaraguans lack access to clean water.

Víctor Campos, an expert in water resources at the Humboldt Centre, a local environmental organisation, said Nicaragua’s water supply problems are not caused by actual shortages.

"If there’s anything that Nicaragua has it is water: 15 percent of the territory is liquid. The entire country is an enormous aquifer; what is needed is the know-how, investment and research to exploit our water sources," said Campos. (END/2008)

Thursday, April 3, 2008

Nicaragua: A Sharp Left Turn

This article first appeared in MRZine, the digital zine of the US publication Monthly Review, edited by Yoshie Furuhashi.

by Felipe Stuart Cournoyer

MRZine must be commended for its recent publication of Mike Friedman's interview with Nicaragua's Comandante Mónica Baltodano. It is especially welcome because there has been a dearth of information and analysis about Nicaragua in the English-language world ever since the 1990 electoral defeat of the revolution. That in some ways is puzzling because the actions of the 21st-century Ortega government came as a surprise to friends and foes alike.

On the day of his inauguration in January 2007, Ortega signaled a sharp left turn on the part of the FSLN and his new government. With two allied presidents at his side -- Hugo Chávez of Venezuela and Evo Morales of Boliva -- Oretga announced to a mass Sandinista rally that Nicaragua would join the ALBA alliance. The speeches of all three presidents, as well as that of Cuba's vice-president José Ramón Machado,were a vehement concert denouncing US imperialism, its wars against third-world countries, and a renewed appeal for Indo-Latin American unity. Within days Nicaragua welcomed Iran's President Mahmoud Ahmadinejad, and the government signed a host of economic and trade agreements with one of Washington's arch enemies, its next target on the Pentagon's war list. Since that time, Nicaragua has deepened its ties and collaboration with Cuba, Venezuela, and Bolivia not only through ALBA, but also in bilateral agreements. And it has pursued a strong and consistent anti-imperialist course in international relations. That was most recently evidenced by Ortega's role at the Santo Domingo Summit of the Rio Group and the subsequent meeting of the OAS in Washington. Those meetings reflect a turning point in Latin America as a majority of Latin American nations rejected the Bush doctrine justifying aggression against other countries in the name of a war on terrorism.

The FSLN's left turn caught the Nicaraguan oligarchy and opposition parties, the US embassy, and the newspaper La Prensa, whose editorial board acts as the oligarchy's politburo, completely by surprise. Some observers believe that the anti-imperialist course of the government is mere rhetoric designed to cover up its real goal of consolidating deeper relations with Washington! Others limit themselves to the notion that it is all about oil, in this case Venezuelan oil, and little more.

Neither Washington nor the Nicaraguan right have bought into that kind of self-deception. Far from being mere rhetoric, the anti-imperialist course of the government is deep-going and far-reaching. [1]

On the domestic front, the FSLN government immediately set out on a course to reverse the most devastating impacts of 17 years of neoliberal assaults on workers, farmers, and poor people. These include restoration of free education and free health services (including Operación Milagro which has restored sight to thousands of Nicaraguans), an ongoing literacy campaign, social programs to combat hunger and child malnutrition, and special programs to stimulate small business and to re-activate small-scale farming. Plans to privatize the nation's water system were scuttled. Venezuelan aid has been crucial in renewing the country's collapsing electrical system and making some progress in rebuilding roads, bridges, and port facilities. Venezuelan investments in a large oil refinery and Iranian investments in hydro electric and port construction will have a major long-term impact on the economy.

The FSLN government inherited a nearly dysfunctional country and state. Nearly 80% of the population subsist on $2 or less a day (40% on $1 or less). During the previous ten years, over 700,000 Nicaraguans had emigrated in search of work, most to the U.S. The country's infrastructure had been pillaged and gutted, especially the electrical system, the health system, the education system, and such basic infrastructure as rural roads and ports.

During the first year of the government, the country was hit by several disasters and blows over which Nicaragua had no control or power to evade. Two natural disasters struck the country in September 2006 -- Hurricane Felix and the enormous floods that followed in Pacific Nicaragua. The steep rise in world oil prices has hit the national economy, especially reflected in rising electricity and transport costs. The US recession and the decline in the value of the US dollar has also struck harsh blows, given that the US is Nicaragua's major market and also the main source of family remittances (now a key generator of our country's hard currency). Another factor fueling national inflation is the steep rise of the prices of basic grains and food in the global market. While this has helped to encourage Nicaraguan agro-exports, it has also hit hard against consumers, especially poor people in the cities. The overall impact of these blows has produced galloping inflation that threatens to undercut any advances on the economic front.

The government has had to take these realities into account in developing its economic strategies. Alongside its move to join ALBA and to promote south-south economic collaboration along an anti-imperialist axis, the Ortega administration has chosen to participate in the Central American "free trade" agreement with the United States (CAFTA-DR), to maintain agreements with the World Bank and the IMF, and to promote better trading relations with Europe and Asian countries. It has also chosen to postpone a showdown with the banking and financial sector on two important internal questions -- the payment of the internal debt, a large part of which was illegally acquired in bank-failure rip-offs, and the question of reforming the regressive tax system.

The FSLN presidency is a minority government. It cannot carry out far-reaching economic changes without the consent of a pro-imperialist majority of ALN and PLC [2] deputies in the national assembly. Sociologist Orlando Nuñez, perhaps the main theoretician and ideological defender of the FSLN government, and head of the Zero Hunger campaign, explains the economic strategy of the government this way:

"For a party with a socialist mission like the Sandinista Front, our situation is very complex and contradictory. The party holds the presidency and has the most political sympathizers in Nicaragua. However, it is still a minority in other state powers, and faces an opposition that is trying to unite and jointly oppose it. This party, now in power, has to administer a country where capitalist economy dominates and must govern a society whose hegemonic values are liberal and neo-liberal. Its strategy implies defending revolutionary measures of the government and acting as a party opposed to the capitalist system now in force." [3]

President Daniel Ortega has said on several recent occasions that Nicaragua would have gone under had it not been for Venezuelan cooperation and ALBA initiatives. His strategy of combining that approach with traditional measures to attract foreign investment is highly vulnerable. But thus far it has managed to lessen the impact of the grave international economic realities facing the country. Nicaragua's export earnings rose 18% last year. This turnaround has led economist Francisco Mayorga to predict in his latest book (Nicaragua 2010: el futuro de la economía) that export earnings will continue to rise and will soon overtake family remittances as the main motor force of the economy. Hence, despite ongoing grave economic problems and poverty, the government continues to hold significant support in the population and is gaining ground in the countryside. According to a recent poll commissioned by La Prensa, Ortega has a 47% favorable rating. None of the opposition political leaders come anywhere near that level of support. However, if the government fails to bring down the bitter levels of inflation, its support could soon begin to erode, especially in the cities, traditional Sandinista strongholds.

In order to offset the problem of its minority status in the National Assembly, the government has implemented a strategy of mobilizing the urban and rural poor in popular councils -- the Citizens' Power Councils (CPC). This has enraged liberal and right-wing opinion, wedded as it is to bourgeois institutions and the phony trappings of "representative democracy." La Prensa whines and protests that the CPCs are a copy of the Bolivarian popular power movement developing in Venezuela. To some extent, that is true. They offer the hope (and also, to some, the threat) of shifting the main locus of "civil society" from the NGO- and university-based professional classes to the rural and urban poor. The claims that the CPCs are dominated by the FSLN knock hollow for the simple reason that the center and right-wing parties boycott them. This has been the experience in my Managua barrio where I am an active CPC participant and FSLN militant. Over five hundred thousand people are participating in the CPCs in city barrios and rural areas. All FSLN candidates in the 2008 elections are committed to working with the CPCs in determining and implementing municipal policies. Likewise, national ministries and agencies are under government instruction to work with CPCs in resolving problems and formulating policies.

The building and growth of the CPCs has also enabled the Ortega wing of the FSLN to get around the problem of the divisions that exist within the FSLN. Contrary to the myth that the FSLN is a monolithic machine controlled by Ortega, it is a mass movement and home to many diverse currents and conflicting interest groups, including an organized group of capitalist investors. The party's main roots are in the unions, the social movements, and among the urban and rural poor. On the Caribbean Coast its image has been enhanced by a strategic alliance with the main indigenous movement YATAMA. But it is structurally weak and often immobilized by internal tensions, especially at leadership levels. Historian Aldo Díaz Lacayo, a key confidant of Daniel Ortega and FSLN ideologue, argues that the CPCs can form the basis of a new and possibly more coherent revolutionary movement than the current FSLN. [4]

Díaz says that the FSLN's predicament is not new. "It is a consequence," he argues, "of the brutal demobilization of 1990; a product of the 'save your own skin' syndrome that attacked the whole world left after the fall of real socialism; of the 1994 modernicist rupture that offered itself as a supposed surpassing of that syndrome, convinced that the historic Frente Sandinista would never again return to power; of the withdrawal of the counterpart [5] for electoral reasons; and then two intervening electoral defeats that reduced to a minimum any expectation of getting back into government."

Díaz added that the "fundamental" problem in today's FSLN "is that the thesis of a social democratic socialism is being promoted within the [FSLN] through the commercial activism of well known leaders -- and also with the undesirable, but natural support of the local right, and their counterparts in all latitudes -- while President Daniel Ortega Saavedra has decided to orient his government to revolutionary socialist positions along the same lines as the Sandinista revolution and what is occurring in South America."

The opposition of Nicaragua's main oligarchic and pro-imperialist parties (the PLC and the ALN) to the government's anti-imperialist course is as comprehensible as it is blatant. Likewise the hostility of the center social democratic Sandinista Renovation Movement (MRS party) is not difficult to understand. The great puzzle, at least for this rank-and-file militant, is to understand the course of the Movement for Sandinista Recovery (MpRS [6]) led by Comandante Henry Ruiz (Modesto) and Comandante Mónica Baltodano, a current member of the National Assembly elected on the MRS-Alliance slate in November 2006.

The MpRS, instead of hailing the anti-imperialist course of the government, and blocking with it to fend off attacks from the right-wing majority in the National Assembly, did the opposite. It clung to the strategy of trying to consolidate an anti-government bloc and joined what came to be called the Bloc against the Dictatorship. MRS-Alliance National Assembly deputy Victor Hugo Tinoco, acting as its spokesperson on international affairs, has consistently criticized the government for endangering Nicaragua's national security because its alliance with Venezuela and Cuba will invite US retaliation. The most recent expression of this approach was the ridicule poured on the diplomatic break in relations with Colombia. MRS leader Edmundo Jarquín accused Ortega of turning Nicaragua into Hugo Chávez's "caboose." This was an extremely sad moment because it witnessed an important section of Sandinista opinion in Nicaragua lining up with the national right against a common front formed by Venezuela, Ecuador, and Nicaragua that struck a major blow against US imperialism and Colombia at the Rio Group summit in Santo Domingo.

Edmundo Jarquín got to know the caboose expression well months earlier when the MRS and the MRS-Alliance earned this tag because of their alliance with the ALN in the National Assembly, their participation in the Block against the Dictatorship, and their sustained effort to form an electoral alliance with the ALN for the 2008 elections. Unfortunately, Mónica Baltodano and the MpRS went along with this approach, although they have recently distanced themselves from efforts to form an electoral bloc with the ALN. All that blew up in the MRS's face when Eduardo Montealegre lost the leadership of the ALN and then chose to eat crow and run on the PLC slate for mayor. The MRS says it can dance with Montealegre, but not the PLC, so it is now running on its own (in the guise of the MRS-Alliance) in the municipal elections. However, hope springs eternal. In late March, MRS president and Managua mayoralty candidate Enrqiue Saenz renewed their call for rebuilding the Bloc against the Dictatorship. Montealegre has since broadcast his support for this proposal far and wide.

In my opinion the MpRS leadership made a fundamental error in not recognizing the left turn of the government and the opening provided by the launching of the CPCs. Instead of blocking with the center MRS and the right-wing parties, it should have allied with the FSLN. It should have helped to build the CPCs and should have thrown its support to the growing grassroots movements in solidarity with Cuba and Venezuela. Such an approach would have won it a hearing among the Sandinista masses for many valid criticisms and proposals regarding government policy. And it would have helped to enhance the voices of left-wing Sandinistas within the FSLN, especially on such vital issues as women's right to choice (abortion rights) and defense of the laic character of the state.

This course is blocked because of a completely erroneous view of the nature of the Ortega government. The MpRS leadership believes that Ortega has set out to build a Somoza-style dictatorship in Nicaragua. Because of that, all other questions are subordinated to forming alliances to destabilize and ultimately defeat the government.

In a January national rally in Managua of over 1,000 supporters, the MpRS issued a Proclamation (Proclama del Rescate [7]) outlining its aims and principles. "El Rescate proclaims and reiterates that it will struggle to block the re-election efforts of Ortega. We have to block the installation of a family dictatorship. . . . El Rescate reiterates its intention to carry on the struggle . . . to avoid the advance and rooting of the institutional dictatorship."

The problem with all this is that there is no dictatorship. It is a fiction used to justify an alliance with the right-wing parties, and now to maintain an ongoing association with the social democratic MRS party.

Linked to this problem is the MpRS's drift away from the anti-imperialist foundations of Sandinismo. There is no mention of anti-imperialism in the document. This is puzzling given the powerful anti-imperialist core of Sandino's example, Carlos Fonseca's writings, and the imperialist assault on the Nicaraguan revolution in the 1980s. It is even more worrisome given the vital importance today of Latin American unity and defense of the Bolivarian revolution to the outcome of our own struggle for national liberation.

On that, however, the Proclama is silent. Aside from a mention of the need for Central American unity, the document does not escape the bounds of a purely nationalist framework of reforms based on "ethical values." It stems from a post-modernist discourse shared with the MRS, so poignantly criticized by the Belgian third-world scholar and advocate, Francois Houtart, in his famous July 2007 letter to Managua's El Nuevo Diario explaining why he believed the MRS was not a left party [8].

The MpRS-proposed economic policies are not substantially different from those of the FSLN. They limit their economic horizons to reforms and policies that they argue would provide a more just distribution of the national income.

The erroneous course taken by the MpRS is not irreversible. Many more critical challenges are in the offing that will pose the same basic choice to these compañeras and compañeros -- to defend the government against right-wing and imperialist attack, to defend the Bolivarian revolution and the ALBA alliance, or to keep going down the road of cohabitation with the Nicaraguan right wing.

My hope is that developments outside Nicaragua, as well as developments in our own country, will soon clarify these problems and bring about deep-going changes not just in the approach of Sandinistas who now find themselves outside the FSLN, but also within the governing party itself. To put it another way, that the advance of anti-imperialist and Indo-Latin American unity on a continental scale finds a strong and healthy reflection in the land of Sandino.


1 My views on the nature and direction of the Ortega government can be found in articles written over the last year. See, for example, "Nicaragua Confronts Natural disasters: Time to Strengthen Solidarity," Axis of Logic, 3 November 2007 [ ]; "Nicaragua's Sandinista Government Allies with Anti-Imperialist Forces," Socialist Voice, 18 September 2007 [ ]; and "Defying Attacks from the Right, FSLN Government Stays on Course," Socialist Voice, 3 October 2007, [ ].

2 ALN -- Nicaraguan Liberal Alliance, led until recently by US embassy "first choice" Eduardo Montealegre; PLC -- Constitutional Liberal Party, led by Arnoldo Alemán. It held the presidency for two of the three terms since the 1990 Sandinista defeat.

3 Orlando Nuñez, "El asalto al estado nacional," Radio La Primerísima, 23 July 2007.
[ ].

4 Aldo Díaz Lacayo, "Without a Party the Revolution Is Difficult." See my translation of this important analysis at

5 A reference to a social democratic split from the FSLN that subsequently formed the Sandinista Renovation Movement (MRS), an electoral party.

6 Movimiento para el Rescate del Sandinismo. This has also been translated as "Movement to Rescue Sandinismo." I sense that "recovery" is closer to the real meaning in the sense used in "cultural recovery." MpRS activists call themselves "el Rescate" to distinguish themselves from the MRS "renovadores" (renovators).

Proclama del Rescate [ ]. The document appears as an annex to the welcoming speech given by Comandante Mónica Baltodano to the Rescate rally. Her speech, like the Proclamation it introduces, avoids any mention or discussion of the anti-imperialist character of the struggle for Nicaraguan national emancipation. The Proclamacan also be found at [ ].

8 See Fracnois Houtart, "MRS, ¿derecha posmoderna?" El Nuevo Diario, 24 July 2007.
[ ].

Felipe Stuart Cournoyer has been an active Marxist since the late 1950s. He is a Canadian-born Nicaraguan citizen and FSLN member. He played a leading role in the Canadian movement of solidarity with the Cuban revolution in the 1960s and also with the Nicaraguan Sandinista revolution in the 1970-80s.