Publications on Debt and Trade
For over twenty years, the Quest for Peace has worked with our partner the Institute of John XXIII, the social action agency of the Jesuit-sponsored University of Central America in Managua. This partnership, which began as an emergency aid program during the U.S. sponsored contra war, has grown into a powerful development program addressing rural poverty. The Quest for Peace also works to address policies that negatively impact our development efforts and contribute to the impoverishment of the Americas.
There is a broad consensus that the current neo-liberal economic model, which has been promoted by the financial institutions and the Bush administration, has not reduced poverty nor contributed to development. On the contrary, evidence indicates that poverty and inequalities have increased.
In response, the Quest for Peace sponsors academic studies by Nicaraguan economists on critical policy issues that impact development efforts in Nicaragua. These studies provide timely resources that inform the public debate on these issues and serve as educational tools for a broad spectrum of actors; policy makers, universities, the media, local communities, social movements, NGO's and development agencies.
Each study is first presented in a large public forum in Nicaragua with time for debate, questions and media coverage. Studies have been produced in a popular education format for use at the community level and reproduced in tabloid form in the newspapers to facilitate broad based access and distribution. The authors of the studies then present their analysis, the demands of civil society and alternative frameworks to the financial institutions in Washington, D.C.
Together with organizations in Nicaragua and social movements throughout the hemisphere, the Quest for Peace believes that Another World is Possible. We contribute to the realization of this world of our dreams through our development and policy work. We are pleased to share with you these important resources on neo-liberal policies and their impact on the poor.
Please note that you may also find more publications on issues of trade in the Alliance for Responsible Trade website.
List of Studies
"Nicaragua: Economics and Social Welfare" by Nestor Avendano, January 2007
"Nicaragua Economia y Bienestar" by Nestor Avendano, Enero 2007
"Investment in Children and the achievement of the ‘Millennium Development Goals'" by Adolfo José Acevedo Vogl, August 2006
In 2005, 50.6% of the total population of Nicaragua was under 19 years of age. Thus one would assume that investment in children would be a high priority for any Nicaraguan Government. Priority areas for investment would include education and health care. After years of extreme structural adjustment polices mandated by the financial institutions, Nicaragua entered into HIPC with the promise of additional funds for social expenditure and poverty reduction. This study documents how the diversion of HIPC and other crucial budget resources to finance the massive internal debt rather than to invest in human capital, specifically the health and education of Nicaragua's children, means that the Millennium Goals will not be achieved.
"NICARAGUA - EL ALIVIO HIPC Y LA POBREZA HUMANA" by Nestor Avendaño, Noviembre 2005 (PDF, 210Kb)
"NICARAGUA - HIPC RELIEF AND HUMAN POVERTY" by Nestor Avendaño, November 2005 (PDF, 220Kb)
This study quantifies the resources freed up from payment of external debt under HIPC that were diverted from poverty reduction programs to payment of internal debt. Much of the internal debt is illicit, and owed to private Nicaraguan bankers. The study also examines the impact of this diversion of funds on human poverty and social indicators in Nicaragua and on achievement of the Millennium Development Goals for 2015. In addition it provides an analysis of (at that time) new IMF conditionality for 2006.
"Alivio de la HIPC, ¿ádonde estás?" by Adolfo Acevedo, Diciembre 2004 (PDF, 560 Kb)
"HIPC Relief: Where Are You?" by Adolfo Acevedo, December 2004 (PDF, 610 Kb)
This study argues that without debt reduction and total elimination, in many cases poor countries cannot develop and are not viable. However, it demonstrates the negative impact of the conditionality required for entering into the HIPC initiative and the false promises of HIPC as a form of debt relief. The study lays out preliminary proposals for how HIPC Relief could be linked to poverty reduction as stipulated and for resolving the internal debt without diverting HIPC funds. The study also states that HIPC relief in itself, even if reoriented towards poverty reduction, cannot provide sufficient resources for meeting the enormous challenges facing Nicaragua and explores the capacity and limitations of the current taxation system as a means of providing needed resources.
"Seguridad social ¿para quién? Costos y obstáculos de la Seguridad Social en Nicaragua" by Nestor Avendaño, Julio 2004 (PDF, 1.5 Mb)
"Social Security, for whom? Costs and obstacles of the Social Security in Nicaragua" by Nestor Avendaño, July 2004 (PDF, 160 Kb)
Since 1991, the Nicaraguan economy policy has been determined by the IMF, which has implemented severe economic adjustments and accelerated structural reforms. Among the required structural reforms in 2004, was the privatization of the Nicaraguan Social Security System. This study provides a history and analysis of the Social Security System in Nicaragua. The study demonstrates that the privatization of the system would entail an enormous cost - approximately $750 million dollars - that would be paid for out of the national budget. The publication of this study resulted in the suspension of this conditionality in 2004, as the fiscal ramifications of the plan were made transparent and widespread opposition ensued. However, in 2007, the IMF is reasserting its demand for the Social Security System to be privatized.
"El proceso de la privatización del agua en Nicaragua" by Néstor Avendaño, Enero 2004 (PDF, 3.3 Mb)
"Nicaragua: the process of water privatization" by Néstor Avendaño, January 2004 (PDF, 3.6 Mb)
Water, like air, is a common good essential to life - which must be shared, conserved and cultivated for future generations. The management of water resources is a difficult and complex issue, and holds implications for social equity, public health, and the very survival of the poor. In Nicaragua and elsewhere in the world, the International Monetary Fund and other actors are requiring water privatization as a condition for further lending. This is of particular concern, given mounting evidence that the privatization of other sectors of the Nicaraguan economy has been characterized by lack of transparency, corruption, creation of private monopolies, and failure to achieve the macro-economic stability cited as the intent of these policies. Moreover, as the case of Bolivia shows, water privatization holds the potential to be a source of violent social conflict. This study analyzes the process of water privatization which has been attempted in Nicaragua and advises against privatization.
"Nicaragua: Alivo HIPC vs Pobreza" by Nestor Avendaño, 2003 (PDF, 2.5 Mb)
“Nicaragua: Debt Relief/HIPC vs Poverty" by Nestor Avendaño, 2003 (PDF, 2.5 Mb)
This study delineates the proportions of Nicaragua's foreign debt as well as sources of debt relief. The study also traces the accumulation of internal debt and some illicit sources of this debt. In 2003, the IMF agreement with Nicaragua placed priority on payment of domestic debt over reduction of human poverty, placing enormous pressure of the administration of public finances and abandoning poverty reduction programs. Avendaño estimates that in 2004, ninety cents of every Cordoba of tax income the Central Government collects will go to pay public debt.
The study also provides evidence that the HIPC relief will be diverted to pay internal debt rather that being allocated exclusively to poverty reduction as stipulated by the G-7 in Cologne, Germany."Impactos Potenciales del Tratado de Libre Comercio Centroamérica – Estados Unidos En el Sector Agrícola y la Pobreza Rural de Nicaragua" by Adolfo Acevedo (PDF, 1.7 Mb)
"Potential Impact of the Central America Free Trade Agreement on the Agricultural Sector and Rural Poverty in Nicaragua" by Adolfo Acevedo (PDF, 2.3 Mb)
"El Tratado de Libre Comercio entre Estados Unidos y Centroamérica: Impactos Económicos y Sociales" by Raúl Moreno (PDF, 1.3 Mb)
"The Free Trade Agreement Between the United States and Central America: economic and social impact" by Raul Moreno (PDF, 396 Kb)
"Impacts of the North American Free Trade Agreement in Mexico: Lessons for the Free Trade Area of the Americas negotiations" by Alberto Arroyo Picard (PDF, 4.8 Mb)