II. Bourgeois Opposition

September 25, 2007

Some of the most powerful capitalists in Nicaragua are calling on Somoza to step down. Their demand, echoed by several Latin
American governments and sectors of the U.S. government, represents a threat to Somoza's power second only to that posed by the FSLN (Frente Sandinista de Liberacion Nacional).

Seldom has the bourgeois opposition been able to unite on anything, although periodically some bourgeois sectors have ineffectively tried to topple the regime. Their lack of unity
in part testifies to the earlier success of Somoza's divide and rule tactics, as well as the extent of Somoza's stranglehold on the economy. However, in the last decade the opposition bourgeoisie has been slowly developing power based on relatively independent capital concentration and is desperately attempting to challenge the political system. We now turn to assessing the viability of bourgeois alternative.


It was not after World War II that a basic infrastructure (including electrification, highways and communications, port works, financial structures) was created in Nicaragua. On the basis of this national consolidation the intensive cultivation of cotton could begin-a cash crop geared to the world market-transforming traditional agriculture. Under cotton
production land holdings were eventually centralized, thus breaking down the old Conservative-Liberal dichotomy which had
marked Nicaraguan history for over 100 years and stimulating the development of a modern bourgeoisie.(1) By expropriating land from the peasantry, the formation of a rural proletariat was also completed.

As well, by the late 1940s, the fiscal structures and practices that had enriched Somoza were coming into conflict with the need to modernize production and create new investment opportunities. Under pressure from the United States, fiscal and credit policies were liberalized, lifting political restrictions from investment. Long-term development plans were devised, and the banking system was reorganized, all with a goal to raise agrarian production.(2)

Temporarily at least, these steps appeased the opposition at little cost to Somoza himself. U.S. development agencies financed the transformations and provided the government with enough capital to extend long-term credits across the board-to
Somoza himself and to other Nicaraguan capitalists. The spectacular rise in cotton production during the early '50s, coupled with high prices on the world market, softened the

To break Somoza's stranglehold over credit resources agricultural profits were channeled into the establishment of independent banking institutions which eventually formed connections to foreign capital. In 1952 ranching, mercantile and sugar interests joined to create the Banco de America (BANAMERICA), while cotton planters of the northwest, joined
by coffee growers and Managua merchants, founded the Banco Nicaraguense (BANIC). U.S. lending agencies required that these banks be "non-political" so they formally disassociated themselves from traditional political parties.(3)


Accommodations between Somoza and independent capital hinged on sustained economic growth which in turn was dependent on world market prices for coffee and cotton. Prices for these products fell sharply after 1955 and the country's average growth rate fell from 8.3% (1950-55) to 2.3% (1955-60)(4) The economic downturn, compounded by Tacho's assassination in 1956, created new discords. Armed rebellions were attempted
but easily aborted by the Guard because they lacked any mass support. A business-led general strike in 1959 was brought under control when the government suspended the import licenses of strike supporters.


In the early 1960s, the United States again sponsored efforts to alleviate the tensions. New modernization efforts were based on the creation of the Central American Common Market which offered an expanded and protected market to investors. The viability of such a scheme was questionable given that all
the Central American economies were subject to violent price fluctuations for their primary products and the narrowness of even their combined domestic markets. But for a while at least, high economic growth rates and new investment opportunities accompanied the expansion of intra-Central American trade and the massive infusion of private and public
capital from the United States. (The Central American Common Market was later to lose much of its political and economic cohesion as a result of the war between Honduras and El Salvador in 1969).(5)

Thanks to the Common Market and ties to private U.S. capital, BANIC and BANAMERICA expanded rapidly in this period, encompassing nascent manufacturing activities, large commercial establishments, agro-industries and construction. The banks worked out a general understanding with Somoza based on informal "spheres of influence" and mutually beneficial arrangements. For example, the two principal banking groups, together with Somoza, held a virtual monopoly on the production of sugar. Cartel agreements among them kep sugar prices well above world market levels. Today, much of the raw production from Somoza's estates is processed at the refinery controlled by BANAMERICA. Similar agreements prevail with respect to paper processing and the dairy industry.(6)

To be sure, old patterns persisted. Somoza enterprises, characteristically poorly managed, continued to make use of state power and laid first claim to government contracts and credits. For their part, the bankers remained active in the political opposition, without actually challenging the system. After all, they too benefited from Somoza's repression of the
revolutionary movement and mass discontent, as well as cartel and price fixing agreements.


In 1967, the beginning of Tachito's rule, political and economic developments began to drive a wedge between the government and sectors of the bourgeoisie. Tachito's regime
was characterized by increased militarization and centralization of authority. He curtailed the political privileges of the moderate opposition, leading the mainstream Conservatives and an important faction of the Liberal Party
to desert the somocista camp. As a result, in both 1967 and 1974, Somoza had to resurrect the farcical Zancudo faction of the Conservative Party to provide a semblance of electoral opposition. Twenty-seven leaders of the opposition were eventually stripped of all political rights.(7)

On the economic front a series of droughts cut back agricultural production in 1972. Before the year was out the earthquake had devastated Managua, severely curtailing industrial production and commercial activity. An unprecedented amount of capital from government and institutional sources worldwide began to flood the country in the form of reconstruction aid, reaching a peak of US$174
million in 1974.(8) Instead of applying these funds toward easing the economic distress of the bourgeoisie, Somoza aggressively moved to expand his own operations.

First, Somoza made privileged use of international credits to enter the banking and construction fields, heretofore dominated by BANIC and BANAMERICA affiliates. Second, unprecedented levels of administrative corruption flourished.(9) Business sectors complained of a "mafia-type" atmosphere at the highest levels of government, while reconstruction faltered and long-term foreign and domestic investment levels dropped. Moreover, the effects of the world
economic crisis began to be felt. Industrial production costs sky-rocketed, demand for traditional exports plummeted, and the government was forced to resort to new taxation and short-term loans at onerous rates.

Finally, the Somoza apparatus itself was assaulted. On December 27, 1974, the FSLN interrupted a Christmas party and held high-level politicians and Somoza family members hostage. The action succeeded in liberating imprisoned militants and one million dollars in cash. But of even greater concern to
Somoza was the massive outpouring of popular support for the FSLN that followed. The bourgeois opposition heard the message as well: a political alternative to Somoza had to be created to contain the growing mass unrest.


One such alternative arose that same month. Pedro J. Chamorro, editor-publisher of La Prensa and long-time critic of the
Somozas, formed the Union for Democratic Liberation (UDEL). UDEL distinguished itself from earlier bourgeois initiatives by espousing progressive reforms, including free elections, agrarian reform and "national self-determination."(10) It was also unique in uniting a broad spectrum of political and
social forces, including the Nicaraguan Socialist Party (PSN), labor groupings, sectors of the petty bourgeoisie, ex-Somocistas and Conservatives. Nonetheless, UDEL relied
primarily on an electoral strategy aimed at convincing the U.S. that it represented a "non-revolutionary" alternative to the Somozas, worthy of State Department support.(11) Chamorro himself hoped to run in 1981 with U.S. support for his candidacy.

But within the bourgeois camp, unity was still a distant goal. The traditional opposition parties resented Chamorro's attempt to up-stage them. Bankers and industrialists distrusted UDEL's pluralist composition and left-of-center program. Angered by the government's reckless and corrupt fiscal policies, they were still not willing to make an open break with Somoza. Nor were they convinced that the United States would renounce
its support for the regime. Most importantly in their eyes, the National Guard seemed to be winning the war against the guerrillas. The established opposition groups instead favored plotting with the National Guard and high members of the apparatus. Coups d'etat, attempted in July, 1977 and August, 1978, failed miserably with most of the Guard remaining ever loyal to Somoza.


In October 1977, a third approach was initiated by a grouping that came to be known as The Twelve (Los Doce). Composed of influential businessmen, clergy and intellectuals, many with close family ties to the FSLN, these twelve individuals represented the most radicalized current within the bourgeoisie. Believing that only armed struggle would force
Somoza's resignation, they sought a tactical and programmatic alliance with one tendency of the FSLN, and called for the constitution of a popular government with FSLN participation.

Timed to coincide with the Twelve's appearance, the FSLN launched a new offensive. UDEL, strengthened by new support
from the business sector and the Catholic Church, called for a "national dialogue" to restructure political power. But the bourgeoisie's vision of a peaceful road to power was blocked by the mutual unwillingness of Somoza and the Sandinistas to negotiate a settlement.

At this roadblock, Chamorro traveled to the United States, where high government officials were reported to have guaranteed U.S.backing for his attempt to displace Somoza.(12) By January 10, 1978, Chamorro was dead--assassinated by Somoza's business and political associates or, according to
certain reports, on the orders of the dictator's son, Anastasio Somoza Portocarrero. In any case, Chamorro's death was a blow to the Washington-sponsored formula for political
change, and created confusion and disorder in the ranks of the opposition.

The assassination also triggered the largest explosion of mass protest in Nicaraguan history. Tens of thousands took to the streets, waving Sandinista banners and demanding an end to the dynasty. Reacting to this brusque change in the political climate, UDEL and the business sectors stepped in to seize leadership of the anti-Somoza struggle from the FSLN. On January 23, UDEL called for a combined lock-out and general strike. The private business sector paid partial salaries to workers during the strike, appealing to them to refrain from revolutionary activity.

Sensing its new strength, UDEL reversed its position on the "dialogue" and demanded Somoza's resignation. It called on the population to prepare for "the definitive struggle for democracy."(13) Even the compromised Conservative Party refused to participate in February's municipal elections, designed by Somoza expressly to appease the opposition.

UDEL's moves were too little, too late. A Sandinista attack on four major cities on February 2 reasserted the Front's vanguard position. The offensive, moreover, along with UDEL's inability to control the mass movement, placed the U.S. once again on the side of Somoza. Far from demanding his resignation, Washington channeled new aid to the regime and called on the opposition to work for a "peaceful solution" with the government. The opposition was pressured to accept that in the final analysis, they could neither force Somoza's resignation nor provoke a military coup.

The leaders of BANIC and BAN-AMERICA also took this line of argument. The banking groups had continued to conduct business and politics with Somoza and refused to join the general strike. Nonetheless, they feared a "fratricidal confrontation destructive of our social and economic world."(14) In an
internal analysis of the political situation, the financial bourgeoisie portrayed itself more as victims than participants in the struggle with Somoza:

The present moment and its perspectives do not offer the private sector, that is to say capital, security to develop its activity let alone program its future.

The bankers contended that both the Twelve and UDEL had failed to offer "responsible leadership and that the traditional
parties were too divided and discredited.

In an attempt to devise an acceptable alternative, the Nicaraguan Democratic Movement (MDN) came into being in March 1978. It was headed by Alfonso Robelo Callejas, a businessman with close ties to BANIC and U.S. capital. The MDN, however, was caught in the same contradiction as UDEL and the bourgeois opposition as a whole.

The revolutionary movement in Nicaragua has gone too far for the bourgeoisie to demand anything less than Somoza's resignation. Yet its weapons are limited. Somoza's stake in the economy undercuts the tactic of the economic strike. The National Guard remains exceptionally loyal to Somoza. Hence, in order to oust Somoza, the bourgeoisie is dependent on
pressure from two sources: the FSLN and the United States.


In May 1978, yet another grouping was formed to secure the interests of the bourgeoisie. The Broad Opposition Front (FAO)
represented perhaps a last-ditch attempt to put forth a broad-based political alternative, acceptable to both the United States and to one tendency of the FSLN. Under its umbrella came the MDN, UDEL, the Twelve, labor confederations and the traditional opposition parties.

Today, the FAO seems destined to failure. The United States, for one, sees it as incapable, by itself, of filling the political vacuum that Somoza would leave behind. In addition, an FAO government could not be assured of Guard support, and now its token influence over the FSLN seems to have been broken with the Twelve's departure from joint negotiations.

The Nicaraguan bourgeoisie, then, weakened in its historical development by imperialism and somocismo, must in the final
analysis submit to leadership outside its own camp. It must choose between a new somocismo, under the direct or indirect control of the National Guard, or Sandinista participation in a popular-democratic government.

At present, U.S. mediation involves reconciling the mainstream of the bourgeois opposition to a new form of somocismo, dominated by the Guard, the economic power of the Somoza family and the Liberal Party. Already the more progressive elements of the FAO, such as the Social Christians, have rejected this alternative. Instead they seem reconciled to
the need for armed struggle and ready to allow the FSLN to play a role in the post-Somoza political spectrum. Much seems to depend onthe guerrillas. In the next section, we will
examine the development of the FSLN and assess their political and military capabilities.



1. Edelberto Torres Rivas, Interpretacion del Desarrollo Social Centroamericano (San Jose, Costa Rica: Editorial Universitaria Centroamericana, 1973), pp. 177-179.

2. Inter-American Bank for Reconstruction and Development (IBRD), The Economic Development of Nicaragua (Washington, D.C.: 1952), pp. 116-117; NACLA Report, "Nicaragua," Vol. X, No. 2 (February 1976).

3. Latin America Political Report (LAPR), Vol. VII, No. 34, August 30,1974;Gaceta Sandinista (Habana: October 1977), p.26.

4. Consejo Nacional de Economia, Lineamientos de un Plan de Desarrollo Economico y Social para Nicaragua, 1965-1969 (Managua:1964), p. 2.

5. Inter-American Development Bank, Annual Report, 1975 (Washington, D.C.: 1975), pp. 300-306.

6. Jaime Wheelock Roman, Imperialismo y Dictadura: Crisis de una Formacion Social, (Mexico: Siglo XXI, 1975), pp. 172-182.

7. LAPR, Vol. VII, No. 34, August 30,.1974.

8. Inter-American Development Bank, Annual Report, (Washington, D.C.: 1975), pp. 300-306.

9. Some of the complaints are detailed in the New York Times February 17, 1974, March 23, 1977; Financial Times (London), October 1, 1975; Wall Street Journal, February 23, 1978 and September 12, 1978. See also the analysis given by the FSLN and UDEL representatives to Proceso(Mexico),February 20, 1978.

10. NACLA Report, op. cit., p. 30.

11. Ibid., pp. 29-31.

12. IBRD, op. cit., pp. 116-117.

13. FSLNBoletin Informative, No. 3, ea. 1-3, 1978.

14. Estudios Centroamericanos (San Salvador) 355, (May 1978), pp. 345-347.

15. FSLN, Communique of August 22, 1978.

Tags: Somoza dynasty, bourgeois, opposition, UDEL, US role

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