tortilla con sal, July 2nd 2015
http://www.telesurtv.net/english/bloggers/Western-Elites-Attack-ALBA-and...

Nicaragua's Revista Correo just published an article by Orlando Nuñez Soto, the leading Sandinista economic and social strategist, called “Who produces Nicaragua's wealth?” Athough he is writing about Nicaragua, Orlando's analysis applies across the impoverished majority world and, increasingly, to the growing impoverished populations of North America and Europe under attack from their respective oligarchic elites.

For decades, Western economic and political elites have used the international financial system they designed and control to perpetuate their colonial era exploitation, ransacking countries throughout the majority world. Now with their global power in decline, challenged especially by Russia and China, they are deepening their attack on their own peoples.

The latest example is the determination of the IMF and the European Union institutions to plunder Greece for all it is worth and more. That international reality explains why ALBA's transformative role in the economies of Latin American and Caribbean countries like Nicaragua is, in the current global context, deeply revolutionary.

Nicaragua's economy

Orlando Nuñez analyzes Nicaragua's economy into three main sectors, the private business sector owned by national and foreign companies, the governmental public sector and what he calls the popular or people's economy. He focuses on the respective contribution of these three sectors to Nicaragua's economy and its wealth.

In terms of labor, the popular economy generates a little over 83% of Nicaragua's employment, the private business sector something over 15% and the government public sector around 1.5%. In that context, Orlando Nuñez looks at where Nicaragua gets the foreign exchange it needs to develop the country's productive capital. He answers that question by looking at different ways of calculating Gross Domestic Product.

Calculated in terms of value added via production, the private business sector contributes 48% of GDP, the popular economy 42% and the public sector around 10%. But that picture changes radically when Nicaragua's GDP is viewed in terms of gross disposable income. Looked at that way, the popular economy contributes 65%, the private business sector around 23% and the public sector around 12%.

The explanation for that dramatic reversal is the huge contribution of family remittances from abroad that go directly and entirely into the popular economy. Self-evidently, the population in that sector of the national economy is very much greater than the number of people comprising the private business sector.

Orlando Nuñez points out that the popular sector's massive contribution to Nicaragua's balance of payments makes it the most important generator of wealth in Nicaragua. Even so, the popular sector has been marginalized until now because Nicaragua's elite-dominated private business sector has always controlled access to capital, including the very wealth contributed by Nicaragua's impoverished majority.

Nicaragua and ALBA

That control was overthrown by the Sandinista Popular Revolution of 1979. In order to restore political control to the Nicaragua's elite, loyal to its policy imperatives, the US government waged a vicious terror war and imposed an economic blockade against Nicaragua throughout the 1980s, destroying the country's productive economy.

The presidential election in 1990 was similar in a fundamental way to the choice now facing people in Greece during the referendum scheduled July 5th this year. In Nicaragua's case, on February 25th 1990, people chose against the Sandinista revolution and accepted the economic and political terms imposed by the United States government and its local allies.

Over the following 16 years, US government backed right wing administrations in Nicaragua implemented the same kind of neoliberal economic policies that have lately devastated the economy of Greece. By 2006, Nicaragua had become a grim emblematic example of what contemporary economists now call “austerity”, what used to be called “structural adjustment”.

In 2006, Nicaragua's infrastructure was in crisis. Electricity distribution, telephone communications and a host of other previously publicly-owned businesses were privatized. Investment in road, port, water and energy infrastructure was stagnant and ridden with corruption.

The electricity generating system suffered power cuts of up to twelve hours a day. Deepening poverty and lack of economic opportunity provoked increasingly massive migration and encouraged organized crime, especially narcotics. Public health and education were on the verge of privatization.

From the perspective offfered by Orlando Nuñez, it was the popular sector's wealth contribution that sustained Nicaragua's investment-starved economy through that period. The private business sector showed it was incapable of generating the necessary wealth to promote the country's true productive capacity.

Despite that reality, the international economic financial regime, led by the US government, continued to crush the life out of Nicaragua's public sector and squeeze wealth from the economy's popular sector. By 2006, Nicaragua's economy was turning into yet another financialized victim of the Western economies' ill-fated boom in credit and inflated asset prices.

In January 2007, when Daniel Ortega became President of the new Sandinista government, the first thing he did was integrate Nicaragua into what is now the Bolivarian Allianceof the Americas (ALBA) while at the same time guaranteeing free public health and education. Those two decisions heralded what became a steady transformation of Nicaragua's economy, regenerating investment in the popular economy and the public sector.

Despite the 2008 global recession and subsequent stagnation of the rich country economies, like its neighbours', Nicaragua's GDP has almost doubled since 2006, in Nicaragua's case from a little over US$6 billion in 2006 to almost 12 billion now. But the undeniable transformational redistributive composition of that growth has been made possible by ALBA funding for areas previously starved of investment.

Those areas are mainly food production, small and medium sized businesses and infrastructure of all kinds. Funding from ALBA has run at over US$450 millon a year since 2007 in a country whose government's budget for 2015 is just over US$2 billion.

In terms of the sectoral balances analyzed by Orlando Nuñez, ALBA's funding has been revolutionary for Nicaragua in a regional economy shackled and intimidated by the Western financial system. ALBA funding to Nicaragua has been structured so as to make it possible for Nicaragua to finance what is in effect a substitute for a public sector deficit the government could not otherwise fund.

That strategic economic move has enabled President Ortega's government to remedy the relative lack of investment from Nicaragua's private business sector. Doing so, Nicaragua's Sandinista government has profoundly democratized the country's economy, enabling the popular economy to access financial resources previously monopolized by private business, dominated by Nicaragua's oligarchic elites.

ALBA and Greece

In Latin America and the Caribbean, fear of that kind of democratization is very obviously what underlies the economic rationale behind the fifty year old US government blockade of Cuba. It explains the current all-out assault on Venezuela's Bolivarian revolution, the attack on Ecuador's redistributive fiscal reform and the international financial assault on Argentina's restructured debt.

The continuity is total between this contemporary economic and political assault on the region's progressive governments and the West's long history of colonial and neocolonial depredation. The ALBA countries defend themselves by promoting regional integration based on solidarity and cooperation, settting aside, so far as they can, differences in political ideology with other regional governments.

Another element provoking Western elites' fear and detestation is that the ALBA countries can finance their infrastructure and social investment needs from the sovereign wealth of their own nations and allies like China or Russia. Western corporate elites have been able to crank up their relentless financial torture of Greece because its government had no alternative but to finance deficit spending in the international financial markets via bonds issued in a currency, the Euro, not controlled by the Greek authorities.

Against the austerity program imposed by the European Union and the IMF, the Syriza government in Greece has tried to defend a political and economic vision similar to the strategic vision of the ALBA countries. But that defence has been squelched by European political and corporate elites determined to obliterate any policy suggestion promoting economic democracy that threatens their power and privilege.

Syriza argues for economic democratization and major investment in infrastructure so as to remedy the sectoral imbalances starving the Greek economy of investment capable of regenerating the true productive capacity of its people. Those imbalances resulted from the European Union's insistence on rescuing its member countries' major banks from the failure of their massive, reckless predatory loans prior to the crash of 2008.

Instead of acknowledging the odious, predatory origins of the debt burden incurred by Greece, the US dominated IMF and the European Union insist on deepening the country's unsustainable economic sectoral imbalances through even more intense austerity. Many commentators have noted the contrast between the Western institutions' sadistic treatment of Greece and their cynical cosseting of the fascist government in Ukraine.

Any socialist-inspired economic vision based on human solidarity and economic democratization self-evidently threatens the West's global privilege derived from centuries of merciless imperialist genocide and enslavement. The attacks on Greece and on the ALBA countries in Latin America are all part of the Western corporate elites' unending, seamless, spectacularly destructive war on the global majority.

Only the creation of powerful alternative financial and economic structures with global reach will protect the majority world from predatory Western elites desperate to maintain control of the international economy. ALBA has shown in Nicaragua and elsewhere, in a very practical way, how those alternative structures can be put together. And that is why, in the Western corporate media, you will probably never read anything but anti-ALBA propaganda.