Good morning all. It is another beautiful day her in Managua. I am sitting on the porch with my second cup of tea. I had a couple of eggs and a bagel. The no see ums are somewhat at bay - between the breeze and my DEET!
Why You Do Not Want A Palm Tree in your yard
A coconut just fell off a tree here with a huge thud. That would be interesting if you were walking around under there. A palm branch fell the other morning - it wouldn't hurt as much, but it's a huge thing as well. The oranges that fall would not do as much damage! The maintenance guy was trying to knock some down yesterday with a long pole. He missed this one.
Election Results
With only partial results, Ortega seems to have won handily - 63% and the nearest contender 29%. That was on only 15% of the vote, so the opposition is not giving in just yet. As I read the paper, there were some allegations of irregularities, but nothing major: someone could not get approved to vote, the polls closed early, and some of the secured boxes took a different route through the stadium. The observers were not all happy with the access provided, etc.
But the streets seem to be calm. Another peaceful Latin election - we just had one in Argentina and Guatemala. I hope it's a trend. It's like the one between Bush and Gore. After the fact, it would appear that Gore actually won that - but we did not bring down the country over it. Maybe we should have, given the ultimate outcome. Naw - my insides want peaceful continuity above all else. Once we lose that, it's damned hard to get it back. It's like lying - one lie and your credibility is dead.
This started as a reflection on a falling coconut - but ended up being an economic treatise. Sorry about that. If you are just in the travelogue mode, stop reading right about here!!
Development and the Economy and Rotary
There is a long "editorial" in the paper on development, and the education required to support development. The economy here is primarily agriculture, textile manufacturing and tourism. So what do we develop? I have been trying to think down the road a bit, to help Rotary get a better vision of the future for the two communities where they have undertaken this "initiative". It's hard to stay engaged when all you are doing is talking and building a trusting relationship. I need to see a picture of where this MIGHT end up - and I assume they do as well. What MIGHT these communities undertake to improve their lives?
The shape of the economy in general is an important part of that.
Economics Facts - Infrastructure
One of the Rotarians is putting together an economic picture for us. I would recommend that we invite a local economist to talk with the next delegation. My informal observation is that the infrastructure appears to be fairly well in place. Venezuela has been pouring in a lot of money for electricity - hydro and geothermal are good opportunities. Roads definitely need some help in the more rural areas. Water seems generally available. Education is decent, and improving. Property rights, the courts and contract enforcement are very problematic and corrupt - which will negatively affect any substantial foreign investment. The whole legal and financial infrastructure needs a lot of improvement, but that is a bit beyond our scope.
Most exports are to the US - 65%. Since CAFTA trade TO the US has grown by 70%. The overall trade balance is negative - $3.2 B exports, $4.7 B imports. That is not terrible - it just means that the currency will continue to devalue relative to the dollar. The US would have the same problem with China, if China were not propping up their currency by buying a trillion dollars worth of US bonds! $823 M comes each year from foreign remittances - workers in the US and elsewhere.
Textiles
Textiles are half of the exports to the US. But textiles are not as competitive since Ortega raised the minimum wage. Textile manufacturing is a "race to the bottom". It keeps moving after the cheapest labor. We won't solve that problem until the poorest place in Africa has a t-shirt factory and they demand higher wages! But, then, the US textile industry is busily automating clothing manufacturing to the point that they can compete with places like Nicaragua even now! See "The End of Work", by Rifkin. There is a local t-shirt coop here that is struggling right now - with a serious debt burden because of a failed acquisition of equipment from a US supplier. Given the long term future of textiles, I don't know that the coop will survive. Clearly, in the more rural areas, this is not an area of interest - unless it means growing cotton. I have no idea what that requires.
Transportation
As I have noted elsewhere, some of the roads are horrendous. The buses are problematic as well. They are generally crowded, no place for luggage, etc. I just learned the other day that there are no trains. The gentleman we were talking with said that one of the governments sold all of the equipment at one point. I wonder what happened to the right of way. That might be a tremendous boon - but the current government seems bent on building roads - which is fine. Probably not one of our initiatives.
Tourism
Tourism is a good idea - and there will be more as this part of the world becomes settled and accessible. There are beautiful spots that are accessible today- could be more in the future. I have friends visiting Granada as I write this. And $115 a day for an all inclusive resort on the beach is pretty attractive. But it is clear that a rural area is not likely the best place for a tourism initiative. (I keep finding myself saying WE are doing things - it's my North American view of life - but I am working on it.)
Agriculture
Agriculture has considerable potential, and it fits well with the rural communities - AND the role of AKF as a Farm School. It is 18% of the economy and 30% of the workforce. There is a substantial export of agriculture, mostly coffee, bananas, sugar and cotton. The farming is nearly 100% manual, labor intensive. There seems to be tremendous opportunity - I see lots of fields that are basically untouched as yet. And virtually all of the people in the "new" Rotary communities are agrarian.
There are substantial efforts here to promote organic farming, and more sustainable ways to increase production. There is a definite geographic advantage in those crops which cannot be produced in northern climates - coffee and fruit. So there, based on my simplistic, amateurish analysis of the situation, these farming families should be about increasing their production of exportable commodities - assuming they can get them to a market somewhere. It's clearly up to them, but this is one idea I would run past them. Nota Bene - this is not a push for machinery, not a coop, just better farming techniques. The training for that is readily available here.
I have yet to see a tractor on a farm - but I did see a Bobcat running around in a supply yard. Do you have any idea how much that little device revolutionized poultry and dairy farming? And it was invented in Minnesota!! http://www.rothsay.org/famouspeople.html. It has been compared to the cotton gin and the McCormick reaper for its impact on farming. I would love to run one down that road we traveled on the other day and fill in all the holes! What does one of those things cost? Wayne, my farmer friend - are you there?
Similar Efforts
To confirm this a bit, there was an Millennium Challenge Corporation 5 year grant of $175 M in 2006 which "sought to reduce poverty and spur economic growth by funding projects in the regions of Leon and Chinandega aimed at reducing transportation costs and improving access to markets for rural communities; increasing wages and profits from farming and related enterprises in the region; and attracting investment by strengthening property rights." This ended in 2009 because of allegations of widespread fraud in municipal elections. I don't know that there was any actual fraudulent use of the funds, but rather open government was one of the stipulations of the grant. At least one other group thinks this is a good tactic. See the reference cited below, and http://www.mcc.gov/pages/countries/overview/nicaragua.
For a much more detailed understanding of this project, how it worked and what it actually did, see: http://www.mcc.gov/pages/press/release/mcc-successfully-completes-projects-to-reduce-poverty-and-promote-economic-. There is another link there - and I have copies of the PDF files if anyone is interested and can't get them.
Most of the facts in here came from here: http://www.state.gov/r/pa/ei/bgn/1850.htm. It's as good as any I have found and it is fairly current.
Conclusion
Well, amazing - a US Government initiative in Nicaragua that has a modicum of real success. And all that from a coconut falling!
I would almost pay someone for the opportunity to sit and read and write in a warm climate in November. Thank you, Rotary!
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