One black, one clear: Two vital liquids under threat

The Ortega-Murillo power project would have been impossible had it not been for Venezuela’s generous oil agreement, so what effects will the fall of oil prices have? A sustainable development path for Nicaragua largely depends on the rational use of water, the country’s most important natural resource. But the interoceanic canal project jeopardizes that use. Oil and water are at the very core of this month’s national dynamic.

Envío team

The significant drop in oil prices could have seismic effects in Venezuela, with the aftershocks rattling the project of our presidential couple here in Nicaragua. Having read the signs, they are beginning to make budget cuts and adjustments, and like all other members of the Bolivarian Alliance for the Peoples of Our America (ALBA) except Bolivia, they have decided to put their bets on China, a more distant, larger and more dominant power. In Nicaragua’s case, President Ortega and his wife Rosario Murillo are mortgaging the nation’s future with the concession granted to a Chinese company to build an interoceanic canal through the country.

Oil prices on a
downward slope

Oil prices have been dropping since midyear. By the middle of October the international price per barrel was 27% below this year’s previously low and its lowest in the last four years. It’s grim news for the oil exporting countries, which will lose an estimated US$2.8 billion a day and will have to tighten some belts. But it’s terrific news for importing countries, which will spend less on oil and hopefully pass the savings on to consumers, helping to ease the cost of living.

Venezuela, which has already been grappling for many months with a serious economic crisis—high inflation, a scarcity of basic goods, mammoth debts and low productivity—is very vulnerable to any drop in oil prices because its economy is based on its export of crude: $9.50 of every $10 entering the country comes from the sale of oil. President Nicolás Maduro has responded with voluntarist rhetoric: “Nothing and no one will roll back social rights in Venezuela; we have plans for any situation... Oil may fall, but socialism will not!”

The important social programs with which the now-deceased President Hugo Chávez guaranteed rights to Venezuela’s poorest would have been impossible without the high oil prices during his years in government. Can those programs be maintained, or will the economy suffer even more? Can Venezuela’s generous petrodollar aid to other countries, including Nicaragua, also be maintained?

“Shale fever”

The sharp drop in oil prices is the result of both a decline in world demand and a rise in supply. The demand has dropped because Europe has more economic problems than it had anticipated, world demand is recovering much more slowly than expected and fear is growing of a more prolonged stagnation of the global economy than predicted. Supply has grown, among other reasons, because the United States is moving from being an importing country to an exporting one, with US oil production jumping by about 48% in less than three years.

On July 30 of this year the Singa¬pore-flagged tanker BW Zambesi left Galveston, Texas, carrying 400,000 barrels of an ultralight, unrefined shale-extracted oil known as condensate and offloaded it in South Korea. It was the first US oil export to a country outside America in nearly four decades, an historic event that got around congressional prohibitions on the export of crude imposed after the Arab oil embargo of the 1970s. Enterprise Products Partners, a US$47.7 billion Texas company that processes, ships and stores oil and gas, argued that the processing to remove some volatile elements from the shale oil was enough to qualify it as exportable fuel. The discovery of this loophole will surely permit new ships, new exports and new shifts in today’s geopolitics.

It was possible due to “shale fever” and the “fracking” technology, which involves the hydraulic fracturing of oil-bearing shale rightly denounced by environmentalists due to the extraordinary consumption of water required. It consists of a high-pressure injection of water mixed with chemicals into subterranean shale rock to force open fissures in the subsoil and thus obtain large quantities of gas and oil in spaces previously inaccessible for the extraction of crude. The technology is being used prior to scientific investigations and could turn out to have as-yet undiscovered environmental consequences.

Its already-known environmental damage has triggered a world controversy, but in a civilization based on an unstoppable and even growing consumption of oil it has been impossible to halt the projects already underway, and in fact they have multiplied. The polemic is such that October 12 has already been designated World Day against Fracking. This year Latin American organizations warned of the irreversible impacts that the exploitation of hydrocarbons through fracking could have on their territories. On October 9, the Mexican Alliance against Fracking and Latin American organizations and experts released a position paper on the issue for the region.

With the power of petroleum

In the now consolidated model of global civilization, the lines between left, right and center are disappearing in the eagerness to pillage the natural resources. Fracking has worked well for the interests and ambitions of the United States, offering it the possibility to buttress its hegemonic role in the geopolitics of this brave new world.

The New York Times reports that in the last six years the US has increased its oil production by 70% (some 8.8 million barrels in September 2014) and cut its oil imports from the OPEC countries by about half. As of 2011 it had already gone from being the greatest importer of oil derivative products in the world to being a significant exporter.

In the next decade, once refineries in the US have been fitted out to process shale oil, which is lighter than the heavy crude imported in large quantities from Mexico, Venezuela and Canada, experts anticipate that US production could reach 12 million barrels a day. But while the environmental and geopolitical consequences are as yet unpredictable, they are obviously coming.

Nicaragua has a
very costly oil bill

While Venezuela, Mexico, Ecuador and increasingly Colombia are Latin America’s oil exporting countries, a number of others produce some oil and some also export within the region. In Central America, however, Nicaragua, El Salvador, Honduras and Costa Rica are strictly oil importing countries.

After the rise in crude prices back in 1979, Mexico and Venezuela established what was known as the San José Agreement the following year to supply revolutionary Nicaragua, the other Central American countries and certain Caribbean nations that could not pay the new bill for the fuel needed to move their economies. While the prices were set by OPEC, the relief came in the form of the payment deal. The beneficiaries would pay 30% of the oil bill 30 days after embarkation and the other 70% over ten years at a low interest rate.

As of 1981, with the mounting war, Nicaragua could no longer pay according to the agreement so Venezuela cut off its supplies and Mexico picked up the slack, supplying 100% of Nicaragua’s oil needs under even more favorable conditions than before. But the debts continued mounting and Mexico stopped providing oil to Nicaragua in 1985. For the rest of the revolutionary years, nearly all of our fuel requirements came from the USSR and other countries of the socialist community. By 1986 Nicaragua was importing some 5.5 million barrels a year.

In the nineties and well into the first decade of the new century, the country’s energy policy, backed by the World Bank and the Inter-American Development Bank, was based on granting concessions to private corporations (Amfels, Coastal, Enron) to install thermal plants that use diesel combustion. In 2003, according to data of the UN’s Economic Commission for Latin America and the Caribbean, 72% of the nation’s energy depended on oil.

In 2005, Venezuelan President Hugo Chávez launched the Petrocaribe initiative, and the following year, representing the Association of Municipalities of Nicaragua, the Sandinista mayor of Managua Dionisio Marenco opened the doors to oil collaboration with Bolivarian Venezuela. Nicaragua’s first beneficiaries of this new oil agreement, a more generous follow-up model to the San José Agreement, were 53 Nicaraguan municipal governments, most of them administered by the FSLN although some Constitutionalist Liberal Party (PLC) mayors also signed on.

The heart and nerve center
of Venezuelan cooperation

When Daniel Ortega returned to government in 2007, Petrocaribe’s advantages were extended to the entire country and Nicaragua also joined as a full member of the more ambitious ALBA project, expanding Venezuelan cooperation to other credits, investments and export lines.

Today that oil agreement is at the center of Caracas’ cooperation with Nicaragua. As before, prices are internationally set, but the excellent payment conditions provided by Petrocaribe are the heart and nerve center of the collaboration. The Nicaraguan government sells the 11 million barrels of oil and other fuels Venezuela sends per year through the state oil company Petronic, a counterpart of Venezuela’s PDVSA. Half the bill must be paid within 90 days of receipt of each shipment, while the other half is paid over 25 years at 2% annual interest and with a two-year grace period. Part of the bill can even be paid in kind, through the “fair-trade” prices Nicaragua offers for exports to fill Venezuela’s needs, such as black beans, beef and cattle on the hoof.

The agreement has put some US$500 million a year quite literally in Ortega’s hands as it is not assigned through the government’s annual budget and thus sidesteps any institutional or social scrutiny. It has been administered at his discretion, financing social subsidies, hand-out programs and other forms of political clien¬telism, as well as the capitalist accumulation of the group in power through his control of the investments by the Nicaraguan-Venezuelan joint venture consortium ALBA de Nicaragua, S.A. (Albanisa).

Since 2009, Petronic, administered by Francisco López Centeno, who also happens to be the FSLN’s party treasurer and vice president of Albanisa, has been effectively functioning as a privatized enterprise within Albanisa as the holder of 49% of its shares (the other 51% belong to PDVSA). That same year, using ALBA funds, Petronic bought out the Swiss corporation Glencore’s operations in Nicaragua, including its National Petroleum Distributor (DNP), created 11 years ago.

DNP, which now operates more than 80 gas stations around the country and is privy to untendered contracts to supply petroleum products to state institutions such as hospitals, is administered by Yadira Leets, one of President Ortega’s daughters-in-law. DNP’s status as a state company has been questioned by some independent media after discovering that people close to the presidential family have significant shares in it. Both companies have thus become functional links to the private interests of the family in power. In 2012, a journalistic investigation by La Prensa demonstrated that DNP generated US$21 million a week in the sale of fuel to the country’s gas stations.

In October, the majority of the FSLN legislative bench voted in favor of reforming Petronic’s organizational law so it can now also officially represent the State in foreign exploration and exploitation agreements for Nica¬ragua’s presumed oil deposits.

The oil debt

The fact that the Venezuelan money does not go through the budget and is largely managed on behalf of FSLN party and family interests leads some to assume that the debt with Caracas must be a private one, assumed by Albanisa. Nonetheless, Dionisio Marenco has repeated on several occasions that when he signed Nicaragua’s Petrocaribe Agreement with Chávez in 2006, it was a State-to-State agreement, meaning that any debts involved would be public. Ortega, who has consolidated his family’s power over the past seven years on the back of that mounting debt, has made no effort to clear up the confusion.

Meanwhile, a large part of the billions that have not gone into non-productive subsidies and social programs that do nothing to improve Nicaragua’s human capital have been invested in projects by Albanisa that may be helping transform the country’s energy supply system and other productive activities but several of those investment categories are exonerated from taxes. While there is no public information on the details of all those expenditures, it’s fair to surmise that they are doing little to guarantee that the debt will be payable in the future, if in fact it is public. Petronic, for example, only contributes a reported $2 million to the annual national budget despite its huge profits.

The nose dive in oil prices, which is very positive news for Nicaraguans as it will ease costs in the national economy, will unquestionably have important implications for Ortega’s model of power, which has been possible only thanks to his use of the oil agreement with Venezuela. If his relations with that country fall victim to its internal crisis, his government will be facing a crossroads. One choice will be to move the subsidies, social programs and other investments covered by Venezuelan resources to the national budget, financing them with taxes insofar as possible. But the only way to find enough taxes to cover the current costs would be to reduce the exemptions and exonerations with which the government privileges its business elite allies. Tax law expert Julio Francisco Báez never tires of pointing out that the cost of those privileges rounds out at 6% of the gross domestic product, some US$700 million, or 1.3 times the amount of Venezuela’s cooperation.

If the Ortega government prefers not to affect its corporative alliance with Nicaragua’s wealthy, it only has one other choice: negotiate a new agreement with the International Monetary Fund, accepting its conditions. In this case, the fiscal adjustment would be immediate and just as unpopular as taxing the rich, but the sector hit would be quite different: the subsidies and social programs for the poor would have to be cut even further, or possibly eliminated altogether.

In such a fragile and uncertain scenario, the government hasn’t yet chosen which way to turn, but it has begun to take some half-way measures, cutting the funds for Zero Hunger, one of its insignia programs, by half in next year’s budget, and substantially cutting funds for rural children in the program Love for the Littlest. There have also been “austerity” decisions to control some other funds that previously flowed fast and loose. On the other hand, just before the English edition of envío went to press, Ortega sent a bill to the National Assembly to use some of the Central Bank’s international reserve funds to beef up the Ministry of Health’s response to the Misquito-borne propagation of the dengue and chikungunya viruses among other urgent needs.

Business pessimism

Despite the fall in oil prices, the third annual report of FUNIDES, the think tank of big private Nicaraguan business, foresees an uncertain economic scenario. The report reiterates the continuing deceleration of Nicaragua’s economy starting late last year and forecasts stagnant growth for 2015 and 2016.

The most significant aspect of the report is the business class’ pessimism about the economy’s performance and perspectives. Every quarter since 2010, FUNIDES has systematically asked the same survey questions to a broad spectrum of business people. This time 82% answered “no” to the question about whether they are considering investing in the next six months. And for the first time since June 2010, a majority thinks the country’s economic situation has worsened.

The negative factors they mentioned to explain their pessimistic perception included the political situation, corruption, electricity rates and the cost of credit.

What weight did uncertainty over the relationship with Venezuela or the murky interoceanic canal project have? Some did mention the canal issue, but only in private. In public none of them touches it even with the proverbial barge pole.

Tariff Preference Levels:
A lost opportunity

The FUNIDES report identified the termination of the US-granted Tariff Preference Levels (TPL) for the free trade textile assembly plants in Nicaragua this December as the greatest negative impact the economy can expect in 2015. Nicaragua was the only country in the Central America Free Trade Agreement (CAFTA-DR) granted the TPLs, which have allowed it to export to the United States free of import duty a certain percentage of apparel made with cloth originating in non-CAFTA-DR countries.

FUNIDES identifies 37 companies that took advantage of this benefit and calculates that even if they decide not to close up shop they will have to cut a minimum of 7,000 direct jobs, most of which are held by women, particularly single heads of household. It also estimates that Nicaragua’s garment exports will fall between 7.5% and 9% and that “certain important clients, such as US chains, will shift their production of certain brands to Haiti and some countries in Africa and Asia, those that will continue to receive the benefit of the TPLs.”

Given the social crisis that will result from the loss of all those jobs, or nearly triple that number if Nicaragua’s daily newspaper La Prensa is to be believed, it must be remembered that Nicaragua was granted that 10-year privilege so it could reconstitute a vertically integrated textile-garment industry inside the country on a par with the other CAFTA countries. The end of Nicaragua’s cotton-growing in the early eighties, the spread of free-trade garment assembly plants—which before CAFTA could re-export to the US market only if the cloth and other inputs originated there—and the inability to get spare parts due to the US economic embargo sounded the death knell for Nicaragua’s small textile and garment industry. What has the government done to benefit from the new opportunity? Why did the cotton planting program designed to contribute to that industrial development fail? No one has offered any explanations, but lacking textile plants here, the assembly plants (maquilas) that took advantage of the TPLs continued to do so with cheap fabric from third countries.

President Ortega’s investments adviser, Álvaro Baltodano, claims that important textile companies have left Nicaragua due to the high electricity costs here. Two of those companies that did not put down roots here produce thread and cloth that would have contributed to the integration of a more developed textile industry in the country. Baltodano quipped that other countries must perform “magic” on their energy rates to offer lower costs than we have here. Is “magic” the explanation for the national energy morass? If we really have a government policy favoring investments in alternative energy sources and only half of the national electricity grid now reportedly depends on oil, why are electricity costs going up rather than down in Nicaragua? No one has explained that either.

Cocibolca is in trouble

If that dense bituminous liquid, the black gold called petroleum that has explained the government’s bonanzas over the past seven years, is now sparking uncertainties, another liquid, this one clear and far more essential to life, is generating even more uncertainty due to the risk the interoceanic canal project poses to Nicaragua’s huge reserves of it.

Ever since Daniel Ortega and his unchallengeable legislative majority imposed the canal concession on the country in June of last year, it was clear that all four routes contemplated by that concession’s beneficiary, the newly formed Chinese company HKND Group, would pass through Nicaragua’s Great Lake, Cocibolca. A year later HKND announced its chosen route: it will cross 65 miles of the lake, passing close to the Solentiname archipelago, a National Monument, at its east end and to the island of Ometepe, declared Heritage of Humanity by UNESCO, at its west.

With its 3,320 square miles, Lake Cocibolca, also known as Lake Nicaragua, is Latin America’s largest fresh water lake, and falls only 10% short of beating out Lake Superior as the world’s largest. The General Water Law (Law 620), approved in Ortega’s first year back in office, establishes that it “must be considered a natural reserve of potable water, being of the highest national interest and national security priority.”

This source of potable water that is a priority not just for Nicaragua but for Central America as a whole is at grave risk of being riven in two by the projected canal to allow passage of the mammoth cargo ships being built today, including those too big even for the widened Panama Canal. Since the lake is shallow, this will involve both massive and continual dredging and possibly also the dynamiting of 56 miles of the lake’s rocky bottom. Doing so will at the very least destroy the lake’s enormous wealth of biodiversity and make it impossible to ever recover its use for potable purposes. Furthermore, we have been given no scientific assurances that the massive dynamite blasts will not do even graver damage given that Ometepe still boasts one of the live volcanos on Nicaragua’s volcanic chain.

“Not for all the
gold in the world”

With one of the most repeated concerns about the interoceanic canal over the past year and a half centering on the irreparable environmental damage it will cause to animal species, forests, wetlands and above all Lake Cocibolca, Daniel Ortega finally felt obliged to refer to this aspect of his project. He did so as host of the 32nd plenary meeting of the Permanent Conference of Political Parties of Latin America and the Caribbean (COPPPAL), held in Managua on October 13.

Ortega admitted having said in May 2007, when he presented his government’s new forestry policy, that “not for all the gold in the world could we risk the lake. There is not enough gold in the world to make us cave in on this, because the Great Lake is the greatest reserve of water in Central America and we’re not going to put it at risk with a megaproject like an interoceanic canal.” They were the same words he had used months earlier to unequivocally reject the canal project presented by his predecessor, President Enrique Bolaños, who was also prepared to compromise the lake. Justifying his rejection of the canal at the time, he explained to his audience of political party leaders that he reacted that way “shaken by the whole debate about the environmental issue.”

“Leonardo Boff convinced me”

He went on to say that “they began to persuade me over the years that under the current circumstances the canal was Nicaragua’s only way to have a resource that would give it the profitability to increase the fight against poverty and qualify our country’s productive activities…. They kept persuading me, persuading me, until in the end they convinced me.” Here he paused, smiling, waiting for the expected ovation. “It wasn’t easy, no. It wasn’t easy to convince me.”

At that point Ortega made a statement that surprised many: “The acid test for me was Leonardo Boff. Yes, Leonardo was here some two years ago and I said, ‘I’m going to talk to him about the canal because, as we all know, he’s a defender of Nature.’ I was prepared for Leonardo to tell me that it was an atrocity; that we shouldn’t get mixed up in that project. I explained to him that we don’t have any other solution and he told me he understood. And then he told me about projects they’ve developed in Brazil, such as the Itaipú dam, that great Brazilian work. And he told me he’d had doubts about them, but they accompanied those projects and the impact they’ve had giving life to forests and vitality to totally overexploited zones was really impressive. It was a huge relief to me to listen to those reflections by Leonardo.”

Boff confirms
what he told Ortega

We learned Boff’s response two weeks later, after envío sent him a lot of information about the canal project, especially the environmental damage it will imply. It came when Nicaraguan journalist Carlos Fernando Chamorro asked to interview him about his reaction to what Ortega said. Boff told Chamorro that “I don’t want to get into a controversy based on an absolutely informal conversation with President Ortega in the house of Miguel D´Escoto two years ago.”

Instead he sent Chamorro the answer he had already given another journalist on the same issue, published in a news bulletin by Brazil’s Jesuits. It didn’t back off even a centimeter from the use Ortega had made of Boff’s authority as a theologian and ecologist to justify such a damaging project. Boff even endorsed such an environmentally depredating country as China because “it’s confronting the United States.”

“I hope everything goes well”

Boff told the first journalist, “I have no secrets. Two years ago, in an informal conversation in the home of former Foreign Minister Miguel D´Escoto, President Ortega said the United States was pressuring all countries and businesses not to invest in Nicaragua, that Nicaragua was drowning in debts and that the definitive solution would be to build a canal that would give the Nicaraguan people minimum subsistence and development.

“I told him we must combine the two poles: the human one and that of Nature, since both are relevant. There are now technologies that can avoid irreparable damages. I advised him that he should visit the world’s largest dam, the Itaipú [Brazil-Paraguay] in Foz do Iguaçu, which implemented a successful experience of balance between man and Nature, and that I myself have been advising the Cultivating Good Water project there for the past ten years. That was all I said.

“China is one of the few countries that is resisting and confronting the United States. All the other companies were blocked. We have to see the problem as a whole, not transforming Nature into a temple in and of itself but integrating human beings with Nature. It’s possible to find that equation, above all when it has to do with pulling so many poor people out of poverty and giving them a better life. I have nothing more to say. I hope everything goes well for the Nicaraguan people, who have such a wealth of Nature.”

They gave the lie to Ortega

Nicaragua admittedly hasn’t been a country careful with its natural wealth, among other reasons because of the shortsightedness poverty imposes on so many. But that shortsightedness also characterizes the wealthy few who have monopolized power, so many of whom have irresponsibly and permanently pillaged, destroyed and fouled the country. Lake Cocibolca is a good example of such neglect and conscious lack of care.

Speaking at the COPPPAL plenary that night, Ortega turned that lack of care, for which he also bears responsibility, to his own purposes, tossing out another argument in favor of the canal: “Now the canal’s contamination of the lake is being used as a pretext. That lake is already contaminated! And it would take huge investments and very costly big processing plants to process everything that goes into Nicaragua’s Great Lake.”

The next day Maritza Tellería, a spokesperson for ENACAL, the state water and sanitation utility, explained that the drinking water her company supplies to several neighboring lake¬side towns is simply processed with chlorine. “The lake water is apt for human consumption,” she assured nervous consumers.

Three days later, on Carlos Fernando Chamorro’s weeknight TV program Esta Noche, Ortega’s words were also contradicted by former ENACAL director (2007-2010) Ruth Selma Herrera, one of the professionals who has most investigated the country’s water resources: “The President’s explanation is utterly simplistic and just a way to wiggle out of the problem. It denotes a profound ignorance, shared by the majority of our legislators, about the state of our water resources. The lake has always had certain levels of contamination but it is a very large body of water, with an exit to the ocean, a lot of biological life, large waves and a lot of internal movement that allow it to maintain a certain degree of self-purification.”

It’s the same thing all national scientists have been saying for months; the very same scientists Ortega has studiously avoided consulting.

“A Chinese horror story”

In her appearance on Esta Noche, Herrera also referred to the different projects to make Cocibolca’s water potable, which since 2009 have allowed the municipalities of Juigalpa, department of Chontales, and San Juan del Sur, department of Rivas (with a total population of over 80,000 according to the 2005 census) to receive water from the lake via indoor plumbing in their homes. Another project is now underway to provide drinking water to Cárdenas, another Rivas municipality with a population of 13,000.

She added that tens of thousands more people in the islands of Solen¬tiname, Ometepe and Zapatera are supplied by wells with water from Coci¬bolca: 400 rural wells in Chontales and 64 rural water systems in Rivas receive their water from the lake and that innumerable individuals around the lake directly use its water for irrigating crops as well as for drinking (after filtering or boiling), personal hygiene and cooking. Herrera stressed that not too far in the future, the municipalities of Chontales, part of Boaco, Río San Juan, Granada, and almost all of those in Rivas, Masaya, Carazo, and even Managua that don’t have rivers and whose ground water is increasingly exhausted will be looking to Cocibolca for drinking water.

Her conclusion was dramatic, as was her article for the August issue of envío: “The canal seems to me an absurd project with respect to Nicaraguans’ human right to survival, health and to drinking water. When people realize they’re going to end up without water to drink, they’ll also realize that the Canal is a Chinese horror story.”

International warning

A week later, international voices weighed in on the lake controversy. The Association of Tropical Biology and Conservation (ATBC), the world’s largest scientific organization dedicated to the study, protection and conservation of tropical systems, issued a resolution stating that Cocibolca is “the region’s largest fresh water reservoir, with enormous and long-term strategic value,” and warned that “the Canal would create substantial impacts to water quality and supply.... The Yale Centre for Environmental Law and Policy Environmental Performance Index (EPI) has identified Nicaragua as a country with ‘water stress,’ meaning that the volume of water available to the population is inadequate, and ranks Nicaragua 136 out of 163 countries surveyed for water scarcity. Yet the impacts of the Canal on access to clean freshwater in Nicaragua are likely to be severe. The combined impacts of the canal construction process coupled with accidental oil spills from ocean-going vessels using the passage could take decades to remediate and would hinder the use of lake water for drinking, fishing, irrigation and tourism.”

Among other points, the ATBC urged the government of Nicaragua to “Invite the Organization of American States Inter-American Commission on Human Rights and UNESCO to conduct a thorough, transparent and independent scientific review of the long-term environmental and social consequences of the canal project, as well as the legality and constitutionality of the Nicaraguan government’s concession with HKND;” and to “cease all activity related to the construction of the Canal and its sub-projects until these independent studies are completed, and significant concerns are appropriately addressed.”

More lies or just a case
of “lapsus linguae”?

In July of last year, Paul Oquist, President Ortega’s public policy secretary, toured Nicaragua and abroad touting the canal. In his Power Point presentation, Oquist insisted that the mere announcement of the canal would see Nicaragua’s economic growth hit 10.8% in 2014 and increase to 15.1% in 2015 for an average annual growth of nearly 11.7% between 2014 and 2018, making Nicaragua the world’s fastest growing economy. But the World Bank,which admittedly calls Nicaragua “a bright spot in an otherwise mixed scenario for Central America’s economies” this year, has projected a GDP growth of only 4.2% for the country this year, much more in line with its performance so far. Oquist has offered no comment on his rather excessive early optimism.

The 2015 budget presented to the National Assembly for its approval in October contained no projection whatever for the canal construction’s impact on the national economy, even though it will reportedly get underway in December. When Sandinista Renovation Movement legislator Enrique Sáenz reminded Treasury Minister Iván Acosta that Oquist’s figures appear in the findings of the Canal Concession Law, Acosta had to backpedal, suggesting that “they were due to lapsus linguae.”

Oquist also said last year that the canal would more than triple formal sector jobs, from the current 623,458 to 1.9 million, a concept he repeated, albeit somewhat more conservatively, in July of this year when he said in a BBC interview that formal employment in Nicaragua “”would double thanks to the canal and its multiplier effect.” Yet in early October, HKND representatives inadvertently let the cat out of the bag in a meeting with big growers in the Superior Council of Private Enterprise to learn about Nica-ragua’s agricultural supply and analyze whether the country will be able to guarantee the food for the 50,000 workers who will work in the canal construction. HKND calculates a daily consumption of 37.5 tons of rice, 25 tons of vegetables and 12.5 tons of various meats. Some alert observer noted that the list includes foods basic to the Chinese diet, but not Nicaragua’s staples of beans, corn tortillas and cheese. This confirmed what many already suspected and observers of other Chinese mega-construction projects have warned is always the case: the workers who will build the canal will be mainly Chinese.

Indignation and disappointment

Inside Nicaragua so far, only the scientific community and some independent media have seriously challenged the canal concession. Most of the population is still hoping against hope that Ortega and Oquist are right, that the canal will bring prosperity and jobs to this beleaguered nation. But thousands of residents of municipalities and districts on the canal route are now waking up to the fact that they will be forced off their lands.

On October 17 the government issued public recognitions to Chinese technicians from continental China’s Land Evaluation Institute who between the end of August and mid-October participated in a census of lands along the canal route. They did so under the protection of Law 840, which granted HKND the concession for the canal and other huge tourist, infrastructure and commercial sub-projects. The same law establishes HKND’s right to expropriate any “required property” anywhere in the country to implement its investments. In the event, President Ortega’s son Laureano provided the first official information about the expropriatory census, which measured properties totaling 880,000 square meters belonging to 7,000 families (some 29,000 individuals).

By November 6, the close of this issue, 12 protest marches against the canal had already been held by residents of Rivas, Río San Juan, Nueva Guinea and Ometepe with the now standard slogan on their banners: “Ortega sell-out.” The method used in the census has fueled both indignation and a sense of betrayal among the population affected. The indignation felt by those who will be evicted is because the national authorities, including armed police and army officers accompanying those taking the census and measuring people’s properties, have not talked to the population or given any explanation of what will become of them afterwards. The sense of betrayal is felt by the ranks of the mobilizations swollen with people who voted for and identified with the FSLN. It has been years since such angry slogans, speeches and comments against the current government have been heard on so many streets in so many corners of the country.

Liquid times

The times we live in have been dubbed “liquid modernity” by Polish sociologist and philosopher Zygmunt Bauman because they are uncertain, rapidly changing and voluble, constantly adapting to the new realities just as liquid adapts to the shape of its container. In these times, loves and lives are often liquid, hard to contain and hard to shape to our desires.

Nicaragua is not isolated from these unquestionably liquid times, but Daniel Ortega still appears very solid, as the latest surveys by three firms—CID-Gallup, Borge y Asociados and M&R—show. Even his lowest approval figure (CID-Gallup’s) is a very acceptable 56%. Its analysts believe the Nicaraguan population has achieved what they call “osmosis” with the Ortega government. Although the more familiar chemical definition of that term is “the process by which molecules of a solvent tend to pass through a semipermeable membrane (as of a living cell) from a less concentrated solution into a more concentrated one,” it is also defined as the gradual, often unconscious assimilation of ideas. Either way, the metaphor serves brilliantly to refer to Ortega’s solidity and the permeability of much of the population.

The disaster strategy

Unlike other nation’s populations, which typically attribute their economic problems to their government, Nicaragua’s poor are not yet holding Ortega responsible for the continuing high unemployment, quadrupled price of beans, lesser but still significant increases in the cost of other foods, rising electricity rates… The model has gotten people to assimilate the idea that all these problems come from outside and the government is doing everything it can…

To reinforce this perception, the government has launched an ongoing “disaster strategy” ever since the series of strong earthquakes in April. It works by constantly reporting bad news then with a reassuring voice telling people to remain calm and trust in their government and God until they end up feeling helpless but in good hands. The government spokeswoman publicly reports on the mosquito-borne dengue and chikungunya virus epidemics on a daily basis with precise numbers for both deaths and those treated; has provided daily information about seismic aftershocks since the April series of earthquakes and even more diligently after the 7.4 magnitude earthquake of October 14—this in a country that constantly has unfelt seismic movements; and periodically issues red or yellow alerts….

This strategy is not unlike the process ironically but erroneously referred to as “Chinese water torture,” in which water is slowly dripped onto a person’s forehead to drive them mad. In this case it is applied only enough to make people forget the really major pending topics they might otherwise react to. It reinforces the idea that while there are serious problems, they are not the result of the government’s inefficiency, the corruption or the profound inequalities Ortega’s power project has exacerbated. To the contrary, by osmosis people are absorbing the sensation that “the comandante and his com-pañera are taking care of us.”

The responses are still liquid

Will the economic downturn and the cuts in social programs due to Venezuela’s petrocrisis shake people out of that perception? Will Ortega’s solidity begin to melt? How will the expropriation of people’s lands and the announced evictions to execute continental China’s project in Nicaragua affect our President’s popularity? Will the osmosis continue or will the population outside the membrane firm up and the government inside begin to deconcentrate? They are solid questions but the answers are still liquid.

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