The state of the nation

The cautions about Aleman and the loss of his privileges

Everything seemed to indicate that the process of taking away the political privileges of the former President of Nicaragua, Arnoldo Alemán, would reach the end of the year without a definitive resolution. For quite a long period of time, the former president (who is now an ex-senator also) would be far from the hands of justice because of a series of “obstacles” (the “timely” escape of the congressman whose vote was necessary to annul Aleman’s political privileges) and because of the pressures of his followers, who did everything they could to protect him.

However, the loss of his political privileges was approved with 47 votes on December 12th. Right away, Aleman was arrested, and he is expected to respond for the illegal acts in which he was involved.

The never-ending legislative approval of the loss of his privileges took place because, for the first time in many years, the different parliamentary fractions –Sandinistas, Conservatives, and some Liberals (the political heirs of Somoza and Aleman)- were able to agree about a national affair.

It was difficult to come to an agreement that became a key element to attack corruption, just like President Bolaños promised. Aleman’s followers threatened the process. They even spoke about a “blood bath” if the former President was accused. The fraction of the Constitutional Liberal Party (PLC, in Spanish), headed by Aleman, wanted to edit once again the discredited “governance pacts” with the opposition in order to take some oxygen and gain some time.

The pressure of the citizenry played an important role. They went out to the streets demanding a trial for Aleman and the intervention of the United State’s government. These were two key factors that supported the Bolaños regime throughout the legal prosecution of the former president.


It could be said that Aleman was so sure of his power, that he believed that he was able to deal with all of the factors that were against him. That might be why he did not choose to go away as his family and some of his close collaborators did, who were also connected with a fraud that involved millions of dollars. Aleman felt that he was the strong man of Nicaragua, since he did not take the precautions that his family did.

We are watching the downfall of a character who held a considerable amount of power, even when he was not in a public position. He counted with enough political and economic power to have a continuous public influence.

You can still breathe euphoria and satisfaction in the streets of Nicaragua because of what happened. Without a doubt, this is a victory in the fight against corruption. However, we do not want to get carried away with predictions. These are quite a few reasons to stop and think.

Aleman is, because of the importance of the position he occupied and the scandal he created, just one of the leading figures of the corruption at the Nicaraguan State. It is only fair that he goes to trial; however, that will not be enough to dismantle the structure that supports the corruption at the Nicaraguan State.

We would have to turn the pieces of this puzzle around and think about one thing: it is necessary to know more about corruption, specially about those acts in which Aleman’s collaborators are implicated. We are not assuming that those accusations are true, but it is necessary to suspect and find a coherent answer.

Many of those who are the accusers were close to the power sources while Aleman “collected” his capital, as he took the state’s funds. It is only logical to suspect that these characters, who occupied high positions at the administration of Aleman, were definitively aware about what the former president was doing. It seems odd how those officials revealed the accusations against Aleman during the elections or when they took their new position at the administration of Bolaños. Why did not they do that when they worked with Aleman? Even if they were not involved in that case, they did contribute to it with their silence.

Those who also helped, from their positions, with the “governance pacts”, to grant a certain stability to Aleman’s regime, should also be questioned. This part of the opposition, at the same time, has not responded about the illegal acts that many of their members were involved in when they were part of the administration. Now they try to hide those dark pacts using a radical political discourse now that Aleman has lost all of the credibility he had left.

The recent history does not allow us to get too enthusiastic about this matter. The elites that have administrated Central America –probably with the exception of Costa Rica- have become the depredators of the public spaces, and they have not responded to the people for their acts; they have never paid for their abuse at a tribunal. This has easily happened and keeps happening to this day, when the incipient democratic institutions have arranged a trial against those responsible for the violation of the human rights (as it has recently happened with the Guatemalan military officials) and the illegal acts. The end of an absolute impunity is a positive signal, but is cannot be forgotten that the democratic institutions do not count with enough power to make the necessary corrective measures effective.

All of this happens because the elites –financial, political, and military ones- have not only a considerable degree of influence on the public decisions, but they also hold a considerable amount of the “real power”. This means that, despite that our elites are no longer military republican oligarchies, these sectors keep having a considerable degree of influence on the most important national decisions.

The “real” power of these elites has not completely disappeared. However, that is not an obstacle to acknowledge the end of the military era of our societies and the democratic achievements in the public life. These accomplishments have to stay close to the social and the political duties, otherwise they will become plain democratic excrescencies in an authoritarian body.

The most evident example has taken place in El Salvador: the acquittal of a number of high rank officials –some of them have leading positions inside the official party- who committed a fraud with the funds of the Banco de Fomento Agropecuario (The Agricultural Encouragement Bank; BFA, in Spanish). We can also mention the forgiveness that, one by one, those involved in the INSEPRO-FINSEPRO fraud obtained. They were protected by the lineage of their last names and also by the political and the economic power that those last names bring along. And these are only the cases that have been made public. There are more crimes that have not been legally resolved.

A few years ago, the arrest of those involved in the INSEPRO-FINSEPRO fraud was considered a victory. And it was only logical to think so, because no one had ever seen a member of the national elite behind bars. However, the juridical system, vulnerable to the pressure that this elite makes, threw away an opportunity to hit corruption by releasing those involved in the fraud.

It is important to consider that those affected with the INSEPRO-FINSEPRO fraud were not precisely poor people who, given their social and their economic status, would lose a judicial battle against someone “with a last name”. They were middle and high class individuals, and they fell for the trap of the false investment company. They reacted quickly and systematically when they realized about the fraud. However, this was not enough to keep the swindlers in jail. It seems odd that those affected by the fraud did not react to the legal decisions.

We have considered all of the former ideas because it is probable that something similar happens with the Aleman case. This is precisely the danger of a democratic legality when it does not react with the facts. A president or a corrupt millionaire can have a trial, but if such trial grants him his freedom –regardless of the evidences against him-, democracy becomes a joke. Besides from those who are acquitted, the only ones who are beneficiated with this sort of events are those who legitimate their authoritarian actions using the democratic façade that the trials and the elections can bring. In the long term, these procedures are not effective enough to attack the structural injustice.

Is it that we have to be content with the good will of the judges of Aleman to discard the idea of a mockery? The citizenry can only hold on to its own efforts. The citizenry cannot rely on the good will of the judicial system, the politicians, or the foreign powers. The Nicaraguan society has to keep using its organization power so that this triumph does not become a passing euphoria. This triumph should become a first step to defend a true democracy, free of corrupt politicians.

The economic reform and the modernization of the state in Central America

Before anything else, it is necessary to say that the Central American states suffered profound changes throughout the eighties and the nineties. The private business sector went through important transformations regarding its economic and its political position. The activities of the state and the private business companies have been connected with the challenges of globalization and the commercial agreements –a few conflicts cannot be ignored, such as the economic setback and the high levels of the public expense that shook Central America along the eighties.

What we understand as an “economic reform” is connected with the economic measures that have been taken in the state to adequate the productive apparatus to the ever-changing global context, and to face the setback and the downfall of the traditional productive axis, that is, the agriculture and the industry. In other words, the economic reform refers to the answer of the Central American states to the challenges of the globalization, and the ones presented by the crisis of the agricultural exportation scheme and the agricultural industry.

It is definitively important to pay attention to the “internal” factors that caused the pressure of the business companies, the bureaucratic inertia and the political engagements were an obstacle for the reform that would lead to the modernization of the state. Out of these three aspects, the most relevant one was the promotion of the right-wing businessmen towards the state’s high spheres. This business-like “assault” at the state was crucial for its reform and its modernization to wear-out in its reduction, the privatization of its assets and the loss of its economic leading role. At the same time, the business sectors inside it were favored by the economic decisions that came from the state. This is a vicious circle. Those who administrate the state’s apparatus do not only directly represent the powerful interests of the business elite, but they also use the power that they have to tear apart the state’s apparatus and strengthen the groups with economic power.

Since the eighties the relations between the business elite ad the state were re-articulated in Central America. Because of that rearrangement, the businessmen made their entrance in the political environment and they began to occupy strategic positions in the right-wing parties. The businessmen did not only get involved with the activities of the most important right-wing parties, but they also replaced the military officials as the main actors of the state’s administration.

If during the thirties, in Guatemala, Honduras, Nicaragua, and El Salvador, the businessmen “decided” to retire from politics, during the eighties they decided to come back. The presence of the business sector inside the Central American states has strengthened the economically powerful groups. From that position, they have designed and they have implemented the economic policies that respond to their interests. In some countries, the connection between the businessmen’s interests and the state’s actions has been tighter than it has been in other cases, but altogether the commercial orientation of the Central American states has turned into its most characteristic feature.

Not all of the business groups have the same influence in the actions of the state. The sectors connected with the financial resources are those who occupy the best positions, not only in the economic field, but also in the political one. This strong presence of the financial sector contrasts with the downfall of the influence and the power of the farmers and the businessmen of the industrial sector.

The strength of the Central American financial sector has its foundations in the strategic alliances with the international financial groups that take and important portion of the profits generated by the privatized assets of the state. The other portion of those assets goes to the hands of the businessmen who control the leading banks and the financial institutions of the region. The modernization of the state
–which is necessary due to the obsolescence of the traditional structures of the state- technically turned into a drastic reduction of its economic responsibilities. The reforms that were encouraged –and those presently encouraged- to reach the so called modernization of the state have had two basic axis:

1. The layoffs inside the bureaucracy of the state.
2. The privatization of the public companies or institutions.

In summary, the reforms of the state in Central America are turning the financial sector into the winner, while the privatized public institutions have been, and are, acquired by the most powerful financial groups. In other words, the reform of the state has been understood as the privatization of the less profitable public companies. The reduction of the state has been understood as a dismantling process, with massive layoffs, and the reluctance to design and implement public policies. In Central America, the state has slowly turned –despite the growing social demands- into a mechanism that works with the logic of a business company, with a higher level of resistance there where the logic of the society was not undermined by the political repression or the war. Think about Costa Rica as a relatively different case from the rest of Central America.

Therefore, the physiognomy of the present Central American societies is clearly defined by the privatization of the institutions formerly directed by the United States. Those who defend the privatization, say that it necessary to modernize the state’s apparatus, to optimize its performance and boost the economy. This last objective is very important, most of all in a world affected by the globalization of the economy; however, it is not clear how an unrestricted privatization can automatically lead to that.