Tuesday, June 12, 2012

Talking Commerce in Nicaragua - The Reluctant Psychoanalyst Gets the Business

An economics professor in our group commented that it is impossible to separate economics from politics and culture. He has gotten comments from his students that his classes contain too much of the latter and not enough of the former, but this trip has reaffirmed his commitment to teaching in the way that he does. Of course, I would add that we need to also include individual psychology in the mix.

The economy of Nicaragua is a mess. It is the second poorest country, in GDP and income, in the Western Hemisphere. It is also a tremendously rich country: in natural resources, raw agricultural assets, beauty, and the potential industry of its people.

Culturally, the country is divided in two with a line dividing east and west that separates the Spanish individualist culture on the Pacific side from the British/Indigenous/Creole collectivist culture on the Atlantic side. We were immersed in the Western culture and talked most about it. We were given a smattering of information about the east, but it was really the west that we looked at. The east is tremendously intriguing in terms of an opportunity to develop entirely new ways to think about building an economy. Much of the land is held in communal zones, and negotiating, managing, and motivating modern capital backed structures in that economy would be fascinating - as would understanding the psychology of such a culture, but we were given only a peak at it.

The economy in the west is a mess because of earthquakes, hurricanes, and corrupt leaders in the conservative, liberal, and revolutionary parties, but mostly it is a mess because of US economic and political strategies. The Monroe Doctrine, something that I read about when reading a biography of Monroe, and one that seemed benign at the time, involves a position on the part of the United States that the Western Hemisphere is the domain of the United States, not Europe, and we should be the dominant political, military and economic partner (though this term is problematic in power imbalanced relationships) of each of the Latin American, South American and, I suppose, Canadian countries.

This policy led, in Nicaragua, to the declaration of an American, William Walker, as president of the country in 1855. The marines conquered the country, Franklin Pierce recognized Walker, and Walker reintroduced slavery into the country before being run out in 1857. In the twentieth century, the marines returned, and they supported the repressive rule of the Somoza family from 1933 to 1979, when they were overthrown by the Sandinista revolution in 1979. The Sandinistas are named after Ernesto Sandino who opposed the marines and was ambushed and executed on the front steps of the president's palace by Somoza.

In the twentieth century, the Monroe Doctrine meant that we supported a government not of democracy - not one that is responsive to the people - but a government that ruled by repression of the poor and maintaining the loyalty of the rich by giving them favors, and increasing their wealth. This may well have been the dominant style of governing in the Central and South American countries during the twentieth century and into today, I don't know, but there seems to be consensus that this was the course in Nicaragua.

Nicaragua, despite being much poorer than its neighbors, is the safest of the Latin American countries. This is likely due to many factors (and your property is likely not safe in Nicaragua - burglar bars and razor wire are all over the place - but apparently to prevent theft, not harm; this is, after all, a very poor place), but perhaps the most important factor decreasing violence is that this is the only Latin American Country where the military and, by extension, the police are not trained by the US military. The military is the revolutionary army - the army of the people. Its mission is not to suppress the people but to protect them. This is a profoundly different mission than is the case in other Latin countries, and, because violence begets violence, those other countries are rife with gangs and other murderous elements - including the police and military. Of course, as the war on drugs drives the transport of South American drugs to the land routes, all bets may be off...

In this culture, though, individual responsibility for wealth creation and maintenance is minimal. We met, during our trip, with various groups trying to offset this with various strategies. We met with a grassroots group in Esteli that is working to provide micro-loans to urban and rural customers, to extend credit to individuals that are not served by banks who need credit to buy seed or to buy a home. To the south of Managua, in a town called Masaya, we met with a man who had secured a $250 micro-loan to purchase a potter's wheel, and who now has a thriving business. In the micro-lending office, all of the 18 employees were devoted to collecting the loans, but nine of them were devoted to this full time. The approach to loan collection that they used was a problem solving one. It involved establishing and maintaining a relationship with the lendee and helping him or her (51% of loans went to women) anticipate and solve loan payment problems, sometimes by offering expertise.

The biggest challenge currently was a "no-payer" movement that was started when Daniel Ortega - the current despot - promised, in an off the cuff campaign comment, that all loans would be forgiven if he were elected. He later, thankfully, reneged on this promise, but a group of people, a group of people who expect the government to provide resources directly rather than to regulate and manage the economy have taken the position that they don't need to repay loans: not only do they renege on obligations, they have gone so far as to firebomb lending offices to drive their position home (Okay, that does sound violent).

The positive effects of microlending include the palpable - a potter obtaining a wheel - but also something more subtle and potentially culture shifting - the idea of being responsible for an obligation - and the idea that capital can generate capital that can be used to increase wealth.

We met with a very interesting fellow who is working on the problem of not just generating wealth, but keeping that wealth in the hands of those who have generated it. To do this he has created co-operatives, which he describes as companies where the company is owned by workers, workers own the company (not the same thing), and where gross profit is necessary, but net profit isn't necessarily necessary (the share holders are all employees, so they have already profited from their salaries and net profit would be a bonus - nice but not necessary), so that long term planning can be undertaken. He is also working to eliminate middle men in delivering product - he wants to deliver the product directly to the distributor - and to create control over the entire production. He has set up a cotton farm that includes a cotton gin and that will ultimately include spinning the fiber, making the cloth and cutting it, so that he will have his own River Rouge plant - Henry Ford's experiment in turning raw materials into cars in one plant - in his back yard.

The driving engine behind this man's efforts, however, is not finding situations that need a solution and coming up with one - it is asking the locals what they want done and working with them to figure out how to do it. He gave examples of marvelous technologies that westerners have provided to Nicaraguans that they have not used - solar stoves, for instance. A solar stove seems to be a no brainer in equatorial Nicaragua, until you realize that most Nicaraguan women wake up at 4 am and put on a pot to simmer beans and rice while they get the family up and the day started. Oops. The sun isn't out at 4 am, the solar stove, when it is working, produces a hot fire, not one that lets things simmer and it needs to be tended, so it changes the whole lifestyle of the owner if they are to use it, so when the Westerners come back, the stove is being used to store wood for the fireplace.

But what was most surprising was that this message - the message of asking the locals what they want to do and partnering with them, not bullying them, was offered in a very different context; at the Chamber of Commerce. The Chamber of Commerce looks not at a micro level, but at a macro level to see how Nicaragua can improve the economy. A current hot topic here is waivers - a US government position that lets the world bank and others lend to Nicaragua contingent on such things as governmental transparency and repaying US citizens whose property has been nationalized. The US - and the chamber of commerce - are not pleased with the election in Nicaragua. Neither is pleased with the Chavez/Venezuela money flowing into the country without any statement about where it is going or whether it needs to be repaid.

If the US chooses to rescind the waivers, something they will announce on Monday, they will essentially be pressuring the country to get rid of Ortega and to do it now. Ortega will certainly resist. Without capital, this woefully poor country will be even more deeply thrust into an economic morass and the people will suffer. When they have suffered enough they will overthrow the government - that seems to be the logic.

The spokesman for the Chamber of Commerce, while recognizing that there were those in Nicaragua who want the US to put this kind of pressure on them, was profoundly opposed to it. He wants to get rid of Noriega desperately, but he wants to do that on Nicaragua's terms, not the US's. He wants the US as a concerned partner, not as the entity calling the shots (again). He wants the US's help, but does not want them to be pulling the strings as a condition of providing this help.

The position of empowering the little guy - offering aid, but making him responsible - was echoed from the micro to the macro level, and is certainly something that we experience in psychoanalytic practice - the patient wants and needs to be in control of their own destiny at the same time that they need our help. From the US position, Nicaragua may well be on the edge of defaulting on a loan - by not being transparent in ways that they have promised. This is a moment to, together, figure out how to address that problem. Nicaragua, despite being governed by a despot, is not repressing free speech. New elections should be held. Is it the US's job to insure that? Or is that something that the citizens should be demanding? Can we let the internal foment resolve? Or do we need to act? These are the kinds of questions that an analyst needs to ask as a patient, struggling to become more autonomous, nose dives back into a suicidal crisis after discovering a truth they have been unaware of. Can Nicaragua figure out how to solve the problem of Ortega, or do we need to send her to the hospital?

To access a narrative description of other posts on this site, link here.   For a subject based index, link here.

Additional posts about this trip to Nicaragua can be found here:
Anticipating Travel to a Third World Country  Preparing for Nicaragua
Fear and Loathing in Nicaragua First day in Nicaragua
In The Hall of the Incest King Daniel Noriega and Day two in Nicaragua
Mass in Nicaragua Day three in Nicaragua
Dora Maria Tellez Day four in Nicaragua
Talking with Peasants about Birth Control Day Five in Nicaragua
Nicaragua on the Couch Processing the trip as a whole

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