Action Alert: IMF Pressures Continue in Nicaragua!
March 21, 2007
Write the IMF and Daniel Ortega!
In this action alert, you will find:
1) Summary of IMF pressures on Nicaragua
2) Sample letters to President Daniel Ortega and IMF head Rodrigo de Rato
3) Statement on IMF and Nicaragua from Jubilee South
Just a few weeks ago, Nicaraguan Vice-President Jaime Morales announced
that Nicaragua and the International Monetary Fund were in accord that any
agreement that Nicaragua would sign with the IMF would have the flexibility
and social sensitivity that comes with making the fight against poverty
the highest priority. Morales said that that had been made clear in a meeting
he had with IMF Managing Director Rodrigo de Rato in Costa Rica.
Now it appears that the IMF is pressuring Nicaragua to continue with programs that are part of the failed “Washington Consensus” economic model, programs that have only increased poverty and inequality in Nicaragua. The new Sandinista government, which took office in January, has abolished school fees and announced programs to favor small peasant agriculture along with other programs to reduce the high levels of poverty in the country.
A statement released by Jubilee South (see complete communiqué below) lists the unacceptable demands of the IMF as follows:
• Sufficient budget surplus to pay off foreign and domestic debt
(much of which is considered illegitimate);
• No raise in salaries for government employees. (Teachers, health
workers, and police officers are the most poorly paid in Central America);
• Repeal articles in the Nicaraguan constitution which mandate that
a certain part of the national budget go to municipalities and universities
and to certain state entities;
• Increase the retirement age and the number of years of service before
retirement and severely reduce the percentage of wages on which Social Security
payments are based; and
• Index energy rates to international oil prices. (This would mean
guaranteed profit for energy companies and hardship for the poor.)
***Write to Nicaraguan President Daniel Ortega telling
him you support the government of Nicaragua categorically rejecting these
IMF requirements which are not in the interests of the Nicaraguan people
and urging him to call the citizens of Nicaragua together to support good,
transparent positions that will favor the poor and the sustainable and sovereign
development of their nation.
See sample letter below!
***Write Mr. Rodrigo de Rato, Managing Director of the IMF, demanding that the IMF base any agreement with Nicaragua on unconditional respect for Nicaragua’s laws. Tell him that the IMF must respect the principle of non-intervention in Nicaragua’s internal affairs by ending demands that the country change its constitution. The government should not be required to make payments on illegitimate foreign and domestic debt. Budgets for education, health, food security, housing, etc. must be increased so that Nicaragua can reach the levels of the United Nations Millennium Development Goals.
See sample letter below!
Sample Letters:
March 2007
His Excellency Daniel Ortega
President of Nicaragua
Daniel@presidencia.gob.ni
Managua, Nicaragua
Dear President Ortega:
I have learned that the International Monetary Fund is pressuring Nicaragua to continue with programs that are part of the failed “Washington Consensus” economic model, programs that have only increased poverty and inequality in Nicaragua. I understand that your government, upon taking office in January, abolished school fees and announced programs to favor small peasant agriculture along with other programs to reduce the high levels of poverty in your country.
I support you and the government of Nicaragua in categorically rejecting IMF pressures for measures (including changes to Nicaragua’s Constitution and laws) which are not in the interests of the Nicaraguan people. I urge you to call the citizens of Nicaragua together to support good, transparent positions that will favor the poor and the sustainable and sovereign development of your nation.
I am writing Mr. Rodrigo de Rato, Managing Director of the IMF, urging him to support policies that respect Nicaragua’s sovereignty and help the country achieve the United Nations Millennium Development Goals.
Sincerely,
Your name and address
**************
March 2007
Mr. Rodrigo de Rato
Managing Director
International Monetary Fund
700 19th Street, NW
Washington, DC 20431
ngoliaison@imf.org
Dear Mr. de Rato:
I have learned that the International Monetary Fund is pressuring Nicaragua to continue with programs that are part of the failed “Washington Consensus” economic model, programs that have only increased poverty and inequality in Nicaragua. I urge you to end this pressure on Nicaragua and to base any agreement on unconditional respect for Nicaragua’s constitution and laws.
The IMF must respect the principle of non-intervention in Nicaragua’s internal affairs by ending demands that the country change its constitution. Budgets for education, health, food security, housing, etc. must be increased so that Nicaragua can reach the levels of the United Nations Millennium Development Goals. The government should not be required to make payments on foreign and domestic debt, much of which is illegitimate. Salaries for public servants need to be raised over time to the level of other Central American countries. State regulation of public services must be preserved and the Social Security program must continue to benefit the aged and infirm at acceptable levels.
I and many others in the international community will be following the negotiations between the Nicaraguan government and the IMF and expect to see your institution act in support of Nicaragua’s efforts to make the fight against poverty its highest priority.
Sincerely,
Your name and address
Background:
Statement from Jubilee South. March 13, 2007
Jubilee South joins its voice to the protest of Nicaraguan and international organizations with regard to the International Monetary Fund’s proposal for “reforms” in negotiations with the government of Nicaragua.
The essential point of the IMF proposal is that the government should have sufficient budget surplus to pay off debts – foreign as well as domestic – both considered to be illegitimate. [Jubilee South considers foreign debt to have been paid many times over in high interest payments. The domestic debt is bonds owed to people whose property was confiscated, many of whom have been paid now three times for it, and bail-outs of banks that failed due to fraud.] In addition, the IMF wants to require the new government of Nicaragua to continue along the lines of previous neo-liberal governments in consolidating an economic model that reproduces and increases poverty and social inequality.
The IMF proposal – to be negotiated with the government in March – insists that there be no “break with fiscal responsibility", which implies:
• Not allowing a rise in total real salaries, which ties the government’s
hands when it comes to fulfilling the wage demands of teachers, physicians
and other health workers, police officers and other government employees.
• Placing emphasis on the repeal of constitutional provisions whereby
certain budget portions are allocated to municipalities and universities
(thus affecting university and municipal autonomy) and to certain state
entities;
• Imposing the so-called "parametric reforms" on the National
Social Security Institute (INSS), which would mean an increase in the retirement
age, in the number of years of service before retirement and a severe reduction
in the percentage of wages to be paid to pensioners;
• Indexing energy rates according to rises in international oil prices,
which would mean a huge increase in profit margins for energy generating
companies, directly taken out of the wallets of citizens.
While condemning IMF positions as being in violation of human rights, including the right to self- determination, Jubilee South calls upon the government of Nicaragua to categorically reject this proposal which is alien to the interests of the Nicaraguan people and to call citizens together around good, transparent positions coherent with the sustainable and sovereign development of the nation.
Furthermore, Jubilee South expresses its solidarity with civil society organizations demanding an audit as well as a moratorium on domestic and foreign debt payment, believing both debts to be immoral and illegitimate. The servicing of these debts nearly equals the government’s budget allocation for health and education. Both demanding payment and the payment of these debts constitute criminal looting; penal and administrative responsibilities for the contracting of such onerous debts should be established and reparation for the crimes committed should be assured.
JUBILEE SOUTH
Regional Latin America and Caribbean Coordination
13 March 2007
JUBILEE SOUTH/Americas
Regional Secretariat
Piedras 730, (1070) Buenos Aires
TeleFax 5411-43071867
jubileosur@wamani.apc.org
http://www.jubileesouth.org
[This action alert comes to you from the Nicaragua Network. For more information, visit www.nicanet.org or write nicanet@afgj.org or call 202-544-9355.]