Where Tiny Stalls Are Big Business
The Sandinistas have left Nicaragua's new leaders with an economy in shambles
MANAGUA, NICARAGUA — JEIMY LARIO NOGERA is literally a child of the revolution. Born on July 19, 1979, the same day the victorious Sandinistas marched into Managua, the spunky third-grader symbolizes for her family the bittersweet reality of living under Sandinista rule.
On that day, as the Larios celebrated the toppling of the Somoza dictatorship, they also received Jeimy as a gift - made more precious and poignant by the fact that her mother died giving birth.
Ten years later, the Larios - like most Nicaraguans - had grown so exhausted from war and economic disaster that they helped vote the Sandinistas out of power in February. The new conservative government of Violeta Barrios de Chamorro takes office tomorrow.
But Mrs. Chamorro and her team must perform economic miracles to help girls like Jeimy, whose life has been defined by hardship here in a stall on the edge of Managua's sprawling eastern market.
``This kind of life doesn't have a name,'' says her grandmother, a plump woman in a dirty apron who declines to give her own name for fear of Sandinista reprisals. ``When this nightmare is over, maybe we can talk openly - and maybe business will be better.''
The Eastern market, a warren of ramshackle stalls filled with everything from rouge to rugs, is the business capital of Nicaragua. That means it is the center of Nicaragua's informal economy, the hub of the black market, the biggest generator of jobs in Managua.
Rows of vendors here sell virtually the same items: Flex shampoo, Lux soap, Crest toothpaste, Nike shoes, and so on. Most of the goods - unavailable in the normal supermarkets - are imported illegally from Guatemala or Honduras.
The prices are not cheap. A bar of imported soap, for example, can cost the equivalent of several day's wages for a manual worker, while a bottle of shampoo can cost a secretary one-fourth of her monthly salary.
Business may not be booming, but for the moment it outshines the rest of what is dubiously identified as ``an economy.''
Weighed down by a United States trade embargo, the seven-year contra war, and Sandinista mismanagement, the economy shrunk by 8 percent in 1988 and another 3 percent in 1989.
Industry and construction virtually stopped. Even today, kerosene and cooking oil are often in such short supply that, on the rare occasion in which they are available, Nicaraguans walk for miles and wait for half a day just to fill a gallon jug.
The Sandinistas responded last year, however, by slashing government spending, offering incentives to the private sector, and cutting 34,000 public jobs. That, in turn, pushed the unemployment rate past 30 percent.
The informal economy has cushioned the blow.
Thousands of Nicaraguans have found jobs working as street vendors or go-betweens in the black market. The eastern market has attracted not just the jobless, but skilled workers and professionals as well.
The lure: Even modest wages here outstrip the depressed salaries in the government and the private sector. Such prospects for employment have also made Managua a magnet for rural peasants, who have helped double the city's population (to 950,000) in less than a decade.
On April 10, with less than two weeks left in power, the Sandinistas tried some last-gasp measures to alleviate the crisis.
They devaluated the cordoba by nearly 5 percent to 51,200 cordobas to the dollar. They forgave or extended most debts owed by the government and rural peasants. And, taking aim at the informal economy, they jacked up the minimum wage 400 percent, to about $140 a month.
Such populist measures do not please the incoming government.
The first priority for Chamorro and her economic advisers is to cut the 2,000 percent inflation rate while boosting production - and the Sandinista moves have undermined both goals.
Understanding that its stability hinges on a rapid economic recovery, the Chamorro administration is expected to unleash a flurry of economic measures soon after tomorrow's inauguration.
Proposed changes include:
A reorganization of the nationalized banking system.
A proposed reform of the tax law.
The first steps toward a privatization of land and international trade.
BUT the most radical move is the introduction of a new currency, called the ``Gold Cordoba,'' that will be pegged at the value of one dollar. Chamorro's top economic adviser, Francisco Mayorga, envisions Nicaraguans gradually shifting over to the new, stable currency by the thousands, thus automatically cutting the inflation rate.
None of the lofty plans, however, can be realized without US aid.
At the moment, Chamorro is still waiting for the proposed $500 million to emerge from a lethargic US Senate, which delayed its decision on the package until after its Easter recess.
The money is especially crucial now, since the rural farmers in this primarily agricultural nation must make their planting decisions within a matter of days. If the farmers do not take a leap of faith and plant more acreage, then the target of 10-percent annual growth may not be attainable.
But Mr. Mayorga is sure that Nicaragua is finally on the mend.
``I don't think we'll be able to make the country prosper again in a single year,'' Mayorga says. ``But we expect the recovery to be quick enough at least to put the country back on its feet.''