US Aid: What is it Good For? Absolutely Nothing! (Apologies to Edwin Starr)


A couple of weeks ago, as part of its coverage of the US House-passed NICA Act, Informe Pastran published a couple of short items about US aid to Nicaragua. The NICA Act wouldn’t, if passed by the Senate and signed by the President, cut off US aid to Nicaragua. It would require the US to vote against any multilateral lender loans to that country. There’s a good reason the ill-willed sponsors of the NICA Act, like Florida Republican Ileana Ros-Lehtinen didn’t target US aid. First, it is a piddling amount compared to other countries, and two, much of it is focused on funding the anti-Sandinista opposition.

According to Informe Pastran, a Central Bank report on foreign aid this year broke down the US aid as follows: Of a total of US$18 million disbursed, US$1.4 million went to the  “Organizational Development of Nicaraguan Civil Society”; US$1.3 million to the Democratic Development program; US$300,000 in support of a group of non-Sandinista media [specifically for election coverage] through the Chamorro Foundation; US$100,000 for Economic and Social Development; US$700,000 for the Education for Success program; US$1.3 million for the Community Action program for reading and security; US$400,000 for PREVENSIDA (AIDS prevention); US$500,000 for the Institutional Strengthening and Development program; US$300,000 in development grants; US$200,000 for the sustainable development program of education; US$100,000 to strengthen the health system; US$100,000 to strengthen logistics system; and US$400,000 for the Voices for All project.

Of the US$11 million in US aid disbursed, but not detailed in the Informe Pastran report, figure that most of it went to military and drug war purposes. 2012 was the most recent year I could find for aid from US government sources and that year $5,431,000 was given in military aid and US$440,000 for narcotics control. (The military aid is all for Drug War cooperation.) As Informe Pastran also points out, much of US aid is aimed at supporting entrepreneurs to buy US products and sell to US corporations. So that probably accounts for the rest of US aid. What stands out in the breakdown of the first US$7 million above is that even the most generous reading of it that only US$3.7 million of it is for programs that might be considered Nicaraguan priorities such as health and education. The rest is all for strengthening the anti-Sandinista opposition. None of the money was given for roads or hospitals, Informe Pastran pointed out. It’s also worth noting that the US$18 million total, with inflation, is probably not much more than the US$13 million that the US allocated for its failed effort to elect Eduardo Montealegre president in 2006. [Link to AfGJ’s election report.]
So what we see is that US aid, paltry as it is, is mostly focused on eventual “regime change,” the militarized drug war that has cost so many lives, and profits for US companies. Remember as well, that the US cut off Nicaragua from Millennium Challenge grants after the Sandinistas won overwhelmingly in the 2008 municipal elections. Hillary Clinton, as Secretary of State, headed the committee that made that decision. Nicaragua, nevertheless, despite being the second or third poorest country in Latin America and the Caribbean, achieved the UN Millennium Goals of reducing poverty by 2015 thanks to its commitment to do so and support from Venezuela in the form of oil aid, and Cuba in the form of literacy and health care professionals.

Currently, according to the Nicaraguan Central Bank, the countries which far exceed the US in aid for infrastructure and poverty reduction are:  Spain, Austria, Taiwan, Japan, and the European Union. Venezuela and Cuba’s aid as part of ALBA (Bolivarian Alliance of the Peoples of Our Americas) are mostly non-cash and not in US dollars, so they don’t count in the Central Bank’s tally. Russia’s aid has primarily been in the form of wheat donations and strengthening the military’s ability to respond to natural disasters with, for instance, a fully equipped field hospital.It is not particularly new, nor is it surprising to most people reading this, that US aid is used more often as a weapon to achieve the goals of imperialist hegemony in Latin America than for poverty reduction and sustainable development. Even at the height of post-Somoza, post-Sandinista aid during the neoliberal governments of Chamorro, Aleman, and Bolaños (1990-2006), US aid was wielded as a weapon to force those governments to reverse Sandinista land reform and seizure of properties from Somoza’s henchmen and from people who mortgaged their properties after the Revolution and then took themselves and their money to Miami, abandoning their property and never making any payments on their mortgage!

I once calculated that the entire total of US aid during the neoliberal years just about matched the cost to Nicaragua in property returns and bonds issued for confiscated properties. In other words, all US aid accomplished was to match what it cost Nicaragua not have that aid cut off. So even then, US aid was irrelevant to the improvement of life for the people of Nicaragua. But the US had to be pacified lest it cut off international loans through its virtual veto power in the IMF and World Bank. That same threat is the threat today posed by the NICA Act.

I don’t think it is a serious threat. I can’t imagine a scenario where it could come to the floor of the Senate during the lame duck session after next week’s election. Or that it would pass if it did, much less be signed by President Obama. But, I would sure hate to be wrong about that, so Nicaragua solidarity activists should watch the news carefully and contact your Senators if it does seem to be moving forward. In January, a new Congress will be sworn in, and the NICA Act would have to start the process all over again. We will be ready to mobilize if that should happen.

And just so we don’t forget. The World Court ruled in 1986 that the US owed Nicaragua reparations for mining the Port of Corinto and the Contra War. Nicaragua calculated the loss of life and economic losses at $US17 billion Thirty years have passed and inflation alone, not to mention interest, would make that number far greater today. The revolutionary government was not able to submit its bill to the World Court before the electoral loss of 1990 and the US forced the Chamorro government to drop the case, but in 2007 the Ortega government voided that decision. At any rate, even useful US aid should be seen as mere installment payments on its debt to Nicaragua; a moral and legal debt that cannot be abrogated.


  • US Ambassador Laura Dogu announced that US criticisms of Nicaragua’s Nov. 6 elections would not affect cooperation between the two countries. “The cooperation we have is with the citizens, and it is going to continue. The connection between our countries is going to continue to be very strong,” Dogu said. She repeated criticisms that the elections weren’t open to everyone. The report of international election experts who accompanied the election broadly praised the quality of the election and in particular the participation of women. (El Nuevo Diario, Nov. 9; Informe Mision de Expertos Electorales, Nov. 8)
  • Media reported on Nov. 8 that a march by Miskito party YATAMA supporters, who didn’t believe the election count in the North Caribbean Autonomous Region capital of Bilwi, resulted in violent clashes between the marchers, Sandinista supporters, and police with multiple injuries and destruction of government offices as well as looting of nearby businesses. YATAMA blamed “gangs” for the property damage although affected businesses blamed YATAMA supporters. Each side accused the other of starting the violence. Riot police maintained a tense calm the following day. (El Nuevo Diario, Nov. 8, 9)
  • The University Electoral Observatory presented a report on the Nicaraguan November 6 election stating it was carried out in a free, fair and transparent manner. The report also noted that the poll watchers of all political parties safeguarded the 14,581 Polling Stations throughout the country and no violent incidents were reported. More than 5,000 students and teachers, 4,300 human rights defenders, 100 international electoral experts, 30,000 electoral policemen, and 88,600 poll watchers from seven political parties took part in the Nicaragua election. (Nicaragua News, Nov. 11)
  • OAS Secretary General Luis Almagro said progress is being made in the constructive dialogue with Nicaragua and reiterated that in response to an invitation from the government, he will visit Managua on December 1 this year. The Secretary General added that the victory of President Daniel Ortega in the Nov. 6 election coincided with the results of several polls that projected he would win by an ample margin. “We continue to work with the Nicaragua government to find joint solutions to strengthen democracy,” Almagro said. (Nicaragua News, Nov. 10)
  • The Ministry of Education Director General of Infrastructure Henry Jaime announced that more than US$ 25 million has been invested this year in the improvement and construction of educational facilities throughout the country. “When we invest in school infrastructure, the performance of student also improves. The government is prioritizing investment in schools on the Nicaragua Caribbean Coast and the northern part of the country”, he said.   (Nicaragua News, Nov. 9)
  • A report issued last week by Fitch Ratings states that the electoral victory of President Daniel Ortega ensures macroeconomic continuity and financial stability in Nicaragua. “Since 2006, President Ortega’s administration has contributed to the improvement of public debt management in Nicaragua with sustained economic growth and moderate inflation rates. His government has instituted a Tripartite Alliance Model between government, employers and labor that contribute to ensure stability, business confidence and is attracting new investments to the country”, the Fitch Ratings report said. Also last week by Moody’s rating agency assigned a B + score to the Nicaragua sovereign debt with a stable outlook. The report noted that Nicaragua has one of the fastest growing economies in Latin America, with moderate public debt and responsible macroeconomic management. “The government has maintained a close working relationship with the International Monetary Fund and has instituted a successful Tripartite Alliance Model between government, employers and labor,” the Moody’s report stated. (Nicaragua News, Nov. 8, 9)