Nicaragua: First Impressions

Beatriz and I spent a week in Nicaragua early last August during school break. It was the first time we set foot in the land of our calling. For three years we've been sharing about this country and its people, and finally, after much work and anticipation, we were able to experience it for ourselves. It was quite different from where we are in Costa Rica. San José and the language school are located in the mountains of what is called the Central Valley. It is almost 3,000 ft here so I'm not sure that it is much of a "valley." It is beautiful, however, and the mountains are all around us. As we flew into Nicaragua, though, we immediately noticed a change in landscape. The mountains softened into a low plane. Clearly defined farms and fields replaced rugged hills. And the rich greens turned into browns and soft greens. The entire landscape was magically tranformed. It was very different.

We flew over Lake Nicaragua, which I mistook the Pacific Ocean (until I saw land on its west side), and then over the city of Managua. Lake Nicaragua is an incredible sight. It is long and blue. It is a fresh-water lake with, what people tell us, species of fresh-water sharks. I'm not sure we'll want to swim in the lake but it did remind me a little of Lake Erie back home. Not that there are sharks in Lake Erie. It's similar in the fact that its fresh water, one cannot see across it to the other side, and it has pretty large waves. When I explain to Latin Americans where I'm from in Cleveland, I say it is on the coast of one of the five great lakes, Lake Erie, and that it's a little bigger than Lake Nicaragua. When I mention Lake Nicaragua to them, they immediately understand where I'm coming from. Lake Nicaragua is the largest fresh-water lake of its kind in Central America.

Managua is west of Lake
Nicaragua, and it has a lake of its own. But Lake Managua is quite a contrast to Lake Nicaragua. Lake Managua is a muddy, brown-colored body of water that just sits there. It was, to be honest, remarkable ugly compared with the blue of Lake Nicaragua. We were told that Lake Managua is heavily polluted and has been for some time. What a shame. In the city, as we drove into the older part of town near the lake, we could see the lake's potential if it could only be cleaned-up. The city borders the lake's southern coast, and it is framed by mountains to the north. What potential. For now, though, the lake is foul, quite possibly a subtle reminder of years of neglect and abuse. As I think about it, it may just be a manifestation of the city itself.

TLC (CAFTA)

What is TLC? It's not "Tender Loving Care," for sure. At least not in the minds of these Costa Rican University students. (This is a picture taken just outside our apartment building). TLC is the Spanish acronym for "Tratado de Libre Comercio." In English it is CAFTA - Central American Free Trade Agreement. TLC is the equivalent to NAFTA - North American Free Trade Agreement (the trade agreement between Canada, the U.S. and Mexico) but involves the Central American countries along with the Dominican Republic.

The goal of TLC (CAFTA) is the elimination of trade barriers (Import Duty) between treaty partners. It is as controversial as NAFTA was in the United States but TLC did pass both Houses of the U.S. Congress and was approved by the President. Labor unions strongly oppose the treaty because of fears of the loss of manufacturing jobs and more outsourcing to less developed countries.

In Costa Rica, an economically liberal democracy with some socialist leanings, many in the state universities still favor a strong socialistic policy. Some even wish for a communistic government like that of Cuba (note the color and symbols on the banner the student is holding).

For these, there is good reason to fear. Currently all the utility companies in Costa Rica, i.e. telecommunications, internet, cable television, electricity and even pensions and securities are state owned. With TLC these monopolies or closed markets would eventually have to open to national and international competion. Many feel this would cause instability and uncertainty and a loss of national control.

Private business tends to support TLC because with it they see the opportunity for an open market and an opening of the Costa Rican economy to international investment. They also understand that with the lowering of import taxes the average citizen would be able to afford the less expensive products. And the government would not lose its much needed revenew because with the growth of business the national tax base would be broadened to more than compensate for the loss in import duty. It would probably even grow the natioal treasury. At least that is the theory goes.

In the U.S., supporters of TLC (CAFTA) understand the advantage U.S. exporters, especially exporters of agricultural products, would gain by the Central American countries lowering their import duties. The U.S. today has one of the lowest import taxes for overseas products coming into the country. It is well under 10 per cent. But when our exporters try to sell to Central American countries, there is an import duty of 40 per cent. With TLC, these trade barriers would be brought down and evened-out. This would help our farmers sell more products at cheaper prices abroad.

Whatever one thinks of NAFTA and TLC (CAFTA) one thing is certain, there is much heat in the discussion. In this photo I'm standing near graffiti saying "Get out Yankee, No TLC." It's a good thing I'm a Cleveland Indian and not from New York (note my hat). As an American living abroad I am sometimes cornered into defending the policies of our government.
The more I am aware of policies such as this one, the better I can explain the intent of Congress, the President, and the economically conservative view on capitalism.