The evolution of Nicaragua’s external debt is tightly linked to the sociopolitical context of the time. Initially, during the Somoza dictatorship, guarantors of an agroexport model were tied to the Creole Bourgeois and United States interests. A second time period, perhaps the most controversial in that there were already external factors that determined, basically, the dramatic increase of debt during the decade of the Sandinista Revolution in the 1980s. After the arrival to power of President Violeta Barrios de Chamorro, a third period was initiated with the application of Structural Adjustment Programs (SAPs) and the Neoliberal agenda.

The accumulation of Nicaragua’s ecological debt is comprised of three historical phases. Obviously, we are not including in this work the plunder carried out during the colonial period because this study merits current research. Some references enunciated here on the agroexport model and the extraction of primary materials in the 19th and 20th centuries demonstrate the same process as current overexploitation of natural resources for the payment of external debt. Today this is called foreign investment.

One of the elements that we try to present with this complaint is not only a limited conceptual understanding of the problem of external debt; more importantly, we document how "development," foreign investment, and debt have been tools used by the rich countries of the North to control and exploit from other nations’ natural resources and workforce. Faced with dramatic levels of impoverishment, as well as environmental and social crisis, we are looking to focus in on the causes of this indebtedness without having to rely on the statistics, percentages, and in general the number’s game so effectively manipulated by the technocrats of the World Bank and the International Monetary Fund (IMF).

The contributions that have been made by our agriculturalists and indigenous as natural "phyto-improvers" have never been remunerated; in contrast, the large industrial pharmaceutical corporations for years have usurped earning from seeds and food they have patented and certified. To this, one can add the climatic disaster caused in large part by the burning of fossil fuels and industrial pollutants, whereby remnants of forest like the BOSAWAS Biosphere Reserve play a determining role in the free absorption of carbon dioxide that we don’t produce. Our forests contribute to the equilibrium of the planet but nevertheless it is not always enough and we experience severe impacts from disequilibrium such as Hurricane Mitch.

Although large international conferences have helped to define the relationship between development, ecological deterioration, and poverty, in addition we cannot leave out the justifiable association of the same international model of plunder and robbery. Many NGOs and authorities of Northern countries have practiced environmental preservation in conformity with their own commerce. These cosmetic actions do not take into consideration the true costs of resource extraction since the prices do not reflect environmental or social damage. This is most clearly demonstrated by the case of mining where a ton of earth is displaced for every two grams of gold extracted.

The style of life, of production and consumption, of Northern countries has gone beyond the limits of sustainability. The negative impacts of this system we have seen principally in Southern countries and as a result we are less prepared to confront human and ecological disasters.

The agroexport model was provided and financed by the State; it was extended with cotton production beginning in 1950. The biggest farms had the largest areas of monoculture. The financial system assigned a major portion of its funding to the cultivation of exports such that in 1976 5.510.3 manzanas (apples) were under export production while 54,400 were used for national consumption. In 1950, coffee was Nicaragua’s greatest export crop and cotton made up 5% of exports. In 1972, due to global trends, coffee represented 13% of exports and cotton 25%.

The coffee latifundios were formed since the end of the XIX century with a history of expropriations and the destruction of a large area of moist forest. Between 1920 and 1930 the cultivated area occupied some 2,000 manzanas, which were held by some 49 large latifundios. With the crisis of the coffee price, harvests were abandoned in the 1930s and not reactivated until the 1950s. By 1967 coffee occupied 4,700 manzanas in total as a result of substantially higher prices on the world market. Coffee was planted on the best lands while coffee transport, in large part, was done in the arms of workers or with mules that contributed to soil compaction.

When technology, in the 1950s, introduced "modern" varieties, that is to say varieties that gave high yields without lowering quality, they had a short life and greater dependency on agrochemicals. This cultivation has a clearer relation to ecological debt from the point of unequal exchange and the deforestation of the mountains to make room for plantations in contrast to the ecological debt from the contamination that was left by the other monocrops. This is because the Creole oligarchy maintained the traditional form of harvest. Our Nicaraguan reality is added to the other countries that export the same crop. The coffee crisis is based in the agroexport model imposed on us by the North.

According to the few existing statistics on external investment in Nicaragua, we find a geographical division between resource exploitation and agroexportation. The Atlantic Coast has been oriented toward the control of natural resources for export. The largest investing companies were Rosario and Neptune Mining Companies from the United States. The yellow gold taken from the mountains of Siuna and Bonanza has cost the lives of hundreds of workers and the total poisoning of two of the largest rivers, the Mico and the Bambana, as a product of the tons of mercury used. Mining also became one of the causes of deforestation and the relocation of indigenous communities in order to make space for the creation of three enclave cities, namely Bonanza, Siuna and Rosita.

Neptune Mining Co. Gold production occurred in Bonanza, one of the richest zone with this yellow metal. According to data, the accumulated value of gold extracted between 1880 and 1922 was estimated to be $12 million (USD). Neptune’s production began in 1939 after other small U.S. companies were founded. Due to the change of gold prices in the world market, they dedicated themselves to the extraction of lead and zinc. Vesubio became the second largest mine in Central America.

Rosario Mining Co. In 1909, La Luz and Los Angeles Mining Company acquired a concession for mineral exploitation in Siuna. This company was based in Pittsburgh, Pennsylvania in the United States. Later, Ventures Limited of Canada operated this mine. Nonetheless, due to the increase in the price of copper during the Vietnam War, and the discovery of the copper mine in Rosita, this company had the greatest overall earnings in Nicaragua in 1960s. In 1973, Rosario Mining Company bought the actions for $1,468,425 (USD). In 1978, sales exceeded $61,692 (USD).

Forest extractors in the region installed sawmills in the areas closest to roads and rivers. Among them were INFOCASA, with Spanish capital, and Wadley & Ivy and Wrigley from the United States who installed plants to wash rubber latex. Later the Atlantic Coast company called Química (with Japanese and U.S. capital) set up a plant to extract resin from the native pines. The majority of natural resource extraction occurred between 1900 and 1930. In large part, this meant the extraction of all precious woods and the exploitations of rubber in a large part of the rainforest. Standard Fruit Company also exploited from the Atlantic enormous volumes of wood before investing in banana plantations. After a series of production difficulties, they pulled out in 1935.

ATCHEMCO was established on the lands of the indigenous Miskitu and in the most extensive areas of pine forest in Central America, an area that also included Honduras. However, the exploitation and devastation of the pines began with Nicaraguan Long Leaf Pine Company (NIPCO) after the 1940s. This was induced by the abundance of accessible primary material, which motivated great forest destruction. Later ATCHENCO received a concession but not to extract trees, they took the stumps left by NIPCO. The zone was converted into a cemetery. Other investors included ADELA Investment Company and Luxemburg y Mitsui & Company from the United States as well as Shin-Etsu Company from Japan.

The African Palm started in 1940 with plantations, which cause indiscriminate deforestation of wide areas in order to plant 4,000 manzanas of African Palm. United Fruit Company received subsidies and opportunities to purchase land cheaply. Nearly 80% of the biodiversity of this zone was destroyed. United Brands high level of promotion encouraged the planting of this type of palm in the tropics.

The Agrarian Reform Program was implemented in the indigenous territories of the Atlantic Coast where lands were given to campesinos displaced by the cotton and coffee booms. It was accompanied by education and training on preparing the new lands with insecticides and fertilizers and the introduction of certified seeds that "produce more;" loans were granted in order to purchase this agricultural technology.

The program sent 2,651 families to an area of 41,052 manzanas. The land was not handed over legally, rather they sold the right to possess the parcel and pay for a period of 15 to 20 years. In the venture, a large number of national institutions with international funds, as well as international institutions such as AID, IDB, OAS, and the United Nations, intervened. These last institutions came to bind up the loans of national capital that they had conceded to the banks of this same country. This was the case in 1975 with the INVIERNO program who received a direct loan from the United States for a sum of 95 million córdobas.

The deed of pushing thousands of families onto unknown forestlands in the Central Zone and Atlantic Coast of the country brought with it the opening of the agricultural frontier, extraction of the last precious woods, and the consolidation of a system of agriculture dependent on technologies from the North. This was prepared in conjunction with the servile and country-betraying State, Creole bourgeoisie and foreign capital, principally from the United States, parties who were not concerned about natural and human limits. The intention was not to create the minimal conditions for Nicaraguan small farmers, rather it was to assist the international banking system to exploit us as work force and domesticate us into the capitalist export agriculture system.

The Pacific was the most industrialized area (roads, ports, highways, industries, public administration, telecommunications, etc.) and it was precisely in these soils where cotton production was concentrated. In 1963, expenditures in infrastructure had risen to six times greater than in 1950. This demonstrates that state policies made the invasion of this zone possible. Then, they financed the capitalists in order to make the cultivation profitable. In León and Chinandega, 84% of the production was concentrated with nearly 300,000 manzanas under cultivation, compared to 120,000 of coffee and 60,000 of sugarcane.

Cotton was cultivated for the world market and was subject to the rise and fall of prices and the requirements of this same market. The cotton export agents between 1972 and 1973 were 95% U.S. companies. The importance insecticide and fertilizer had in cotton production is demonstrated by the fact that they were one third of the total expenses for this cultivation-that is to say 600 cordóbas of every 1,800 that were spent. These insecticides, although they were mixed in Nicaragua, were distributed by the company HERCULES, which is a distributor for all of Central America that has its base in Delaware, USA. In terms of the importation of technology, in 1950 there were only 417 tractors in the country and by 1972 there were 2,400.

Cotton production concentrated land in few hands, destroyed part of the forests of the zone, and transformed the soils for complete monocropping, saturated with fertilizers and pesticides. In 1960, this production consumed 98% of the insecticides used in the nation. In 1972, people working for the production of this wealth obtained only 7.5% of the income from the sector while 4% of the population, the "patrones," received 60% of the income. Impoverishment with seasonal employment (4 months of the year) provoked the eradication of rural modes of living. The expulsion of small farmers into the cities instigated a food dependency that originated from when people stopped producing alimentation.

The increase in cotton production is always cited as an essential element in the economic growth of Nicaragua, but very frequently the other impacts are discussed. Workers were transported to the fields to work in conditions concealed by tons of dust, and supporting temperatures up to 60º centigrade. Since the use of agrochemicals was indiscriminate, both the insects that attacked the crops and the workers that cut them felt the impact. Fumigations killed, first, birds, and then fish, and also animals that drank from the rivers and finally the workers.

At the beginning of the 20th century, the volcanic plains of Chinandega began to be increasingly focused on agroexportation with the expansion of the large sugarcane plantations that were integrated into agroindustrial production. Monocrop cultivation transformed this zone leaving soils exposed by erosion as a result of deforestation. The rate of soil loss in the plains of the Pacific reached 44 tons/hectare, which is greater than the estimated permissible levels of 12 tons/hectare.

The first banana company to install itself in Nicaragua was the United Fruit Company (1899) in the Atlantic Region. In 1960, United Fruit Company entered the west of the country based on the invitation of the Institute of National Promotion (INFONAC). After the pull out of United Fruit in 1965, the same institution invited Standard Fruit to enter. They installed themselves in 1969 and stayed until 1982 during the Popular Sandinista Revolution.

The Chiquita banana plantations have been estimated to have cost Nicaragua $4,000 million (USD) in ecological and social harm. As many as 36 different chemical products were applied to this crop. The aerial fumigation with Nemagon landed on the fields and the workers as well as their houses and gardens. Indirect and direct contamination from herbicides, fertilizers, pesticides, etc. impacted populations in three ways, by air, soil and water. The transformation of fertile soils was caused by the loss of soil microorganisms, high levels of erosion, ecological disequilibrium, and the accumulation of pesticide residues in the tissues of aquatic species.

DBCP, or Nemagon, which was produced starting in 1940, was sold globally in all the countries where Standard Fruit had banana plantations. Once the damage to workers’ health was proven, the use of DBCP was prohibited. Nevertheless, this was not an obstacle for continued applications in our country. Standard Fruit, Dole Foods, Shell Oil, Dow Chemical Company and Occidental Chemical Corporation did not take into consideration the laboratory results, which are not becoming apparent twenty years later in cases with high dosages. The number of workers directly impacted by Nemagon is as many as 3,500, of which 800 are women.

Damage to the environment are quantified most often as contamination of water resources: the discharge of leftover formulas and water from equipment was thrown in rivers, streams, or lakes, the instillation of the plantations up to the edge of water sources, the spreading of pesticides by wind and rains then deposited into lakes and rivers, the contamination of subterranean water supplies due to filtration, as well as the direct application of pesticides in the control of larvae, snails, and aquatic vegetation.

The decade of the 1980s marked the initiation of a new period in the relation between the Sandinista government of Nicaragua and the administration of the United States. Relations between the two governments deteriorated even more after the arrival of President Ronald Reagan to the White House. The assistance that the U.S. government gave to anti-Sandinista forces was not secret and the Reagan administration was directly and indirectly involved in the attempts to overthrow the Nicaraguan government of this time. April 27, 1983, in a television appearance, President Reagan affirmed that national security of the entire continent was threatened by the actions of the Nicaraguan government. On May 4, 1983, President Reagan publicly accepted that his country was assisting anti-Sandinista forces, who he referred to as "freedom fighters."

At the beginning of the month of May of 1983 the Senate Intelligence Committee of the United States approved a resolution (#13-2) that authorized the Central Intelligence Agency (CIA) to continue its support to the Nicaraguan Resistance in open violation of the rules and norms of international agreements.

The Nicaraguan Resistance (Contras) received help from the White House through many means. In 1980, President Carter dedicated one million dollars for the organization of counterrevolutionary forces. In 1981, Reagan authorized another 19 million to amplify the coverage of operations. In two separate resolutions in 1983, the U.S. Congress approved 19 and 24 million to help the Contras. In June of 1985, Congress approved another 27 million. By spring 1986, the Contras had received a total of 130 million (USD) in assistance. In June of 1986, Congress authorized another 100 million to continue the war. By 1988, the Contras had been given more than one thousand million dollars of support from the United States (NYT 1988b).

Suddenly sabotage operations and the destruction of economic targets underwent a drastic increase in quantity and quality that was superior to the organizational capacity of the Contras. This lead to the discovery of direct involvement of special U.S. forces in said operations. The CIA created a special commando force called "Unilaterally Controlled Latino Assets," whose principal mission was to carry out sabotage and make it look like it had been done by the Contras.

September 13, 1983 an explosion destroyed a submarine oil duct and part of a petroleum terminal in Port Sandino. Following, on October 2, 1983, they carried out an attack on petroleum deposits in Port Benjamin Zeledon, located in the Atlantic Coast of Nicaragua, which provoked the destruction of a large quantity of fuel. Then again on October 10, 1983 the port of Corinto was attacked by air and by sea causing the destruction of five oil deposits and the loss of millions of gallons of fuel (Metil-Cetona y Hexano).

The destruction of the economic and human base of Nicaragua by a war imposed and financed by the government of the United States left the country on the edge of economic collapse, with astronomical foreign debt and a rate of inflation of more than three digits. Ten years of armed conflict under a scheme of "low intensity warfare" implemented by the North American administration left deep footprints on the Nicaraguan environment and society. The quantity of forests that disappeared as a product of armed confrontations, the use of artillery and bombardments, forest fires as well as the near disappearance of animal species in battle areas are not quantifiable. Nor is the loss of human lives. By the end of the 1980s the victim toll had reached 50,000: 15,000 dead combatants, 15,000 dead civilians and another 20,000 wounded in the war.

This was the reality that confronted Nicaraguan and obligated the presentation of a case against the United Stated in the International Court of Justice. The sentence was resolved in the favor of Nicaragua

With the sentence from the International Court of Justice in the Hague on June 27, 1986, in the case of Nicaragua against the United States of America, in point number four, with twelve votes in favor to three against, the court decided that "…The United States of America, in virtue of certain attacks carried out in the Nicaraguan territory in 1983 and 1984: against Port Sandino on September 13 and October 14 of 1983, against Corinto on October 10, 1983, against the Navel Base of Potosí on January 4th and 5th of 1984, against San Juan del Sur on March 7, 1984, against patrol boats in Port Sandino on March 28th and 30th of 1984, and against San Juan del Norte on April 9, 1984, in the virtue of these acts of intervention that imply the use of force as indicated in the clause above, have violated, in respect to the Republic of Nicaragua, the obligation that is imposed on them by International Customary Law of not resorting to the use of force against another State."

Later in point 6 the tribunal decided twelve votes to three that "upon placing mines in the interior waters or territory of the Republic of Nicaragua in the course of the first months of 1984, the United States of America has violated, in respect to the Republic of Nicaragua, the obligations that are imposed on them by International Customary Law of not resorting to the use of force against another States, of not intervening in their affairs and of not interrupting peaceful marine commerce."

In point 13, the decision of the court, by twelve votes against three, was that "the United States of America is obligated, in front of the Nicaraguan Republic, to repair all damage caused by the violation of the obligation imposed by International Customary Law that have been cited above…"

Another of the sequels of destruction, derived from the war imposed and financed by the government of the United States, was the use and installation of antipersonnel mines in the entire national territory. The fundamental premise is that if the Nicaraguan conflict had not escalated to the levels that it did during the 1980s, in large part due the role played by the White House, it would not have been necessary to resort to defense mechanisms of this type. According to the registries, 35,643 anti-tank and antipersonnel mines were installed in the national territory due to civil and military objectives in 1990.

From 1982 to 1989, 81,626 mines were installed in 467 camps or mine groups at a distance of approximately 400 kilometers from the state border and around 39 different targets in the interior of the country.

The populations impacted by the presence of the mines are located principally on the fringes of the northern and southern borders as well as the rural sector located near economic targets in the interior of the country and in the theaters of military operations in the northern, central and Atlantic zones. The mined areas have reduced the production possibilities in communities due to constant danger. Work and subsistence methods in the impacted areas-cattle ranching and agriculture-have been affected by the mines. On occasion people are injured or killed when grazing cattle in mined areas; not to mention the inability to use the soil and the work limitations for the same cause as well as serious problems for campesino economic self-sufficiency and food production.

The number of Nicaraguan citizens impacted by the effects of the mines during and since the end of the war is unknown. In the department of Madriz alone, which is in the north of the country, 58 amputees and 249 additional injuries have been registered as a result of mines. The population that lives in the municipalities most affected by mines represents 37 percent of the total population of the country.

In Nicaragua there exists communities that were mined 20 years ago and their lands are still unusable due to the continued existence of the mines. The worst danger is when people abandon an area because they suspect the existence of mines. This problem has been presented in several municipalities of Nueva Segovia and the worst case is in coffee zones because this is an essential base of temporary work in the rural areas. The producers in these zones (Dipilto, municipalities de Quilalí, Jalapa, San Fernando, etc.) affirm that between 3,000 and 4,000 manzanas of coffee have been practically abandoned over the past 15 years. People believe that there are mines in these areas.

As a result of Hurricane Mitch, a natural phenomenon that impacted the country in October of 1998, many places where antipersonnel mines had been planted were displaced by currents and the sliding of sediments. These mines were dragged and some exploded, others were disseminated and partially buried. In all the northern and central territory of the country, the army’s control maps were completely invalidated, which increases the risk of greater tragedies.

Nicaraguan Population 4,357,094 inhabitants
Territorial Extention 148,000 Km²
In Nicaragua in 1993:

On October 21, 1998 Managua’s meteorological station announced the arrival of a tropical depression and the following day issued the alarm that it had converted into a tropical storm. On the 28th the presence of a hurricane was communicated. Since the initial registration in 1880 of rainfall there has never been data similar to the magnitude of the rains of Mitch. The deed of receiving between 44 and 485 mm of rain in two days has never been superceded. Even during Hurricane Juana in 1988, which was the strongest hurricane recorded to this point with winds of 220 Km/h. The media repeated the worlds of the specialists, that it was a hurricane with fast escalation and the rains of the century.

The economic losses offered in conservative statistics estimate the destruction of infrastructure and the loss of agriculture to be $1,504 million (USD). There were 2,863 left dead and 938 disappeared. Hurricane Juana in 1988 caused the loss of $839 million (USD) and the tropical storm of 1992 cost $25 million (USD). The statistics always forget the other damages such as the contamination of rivers, the damage to gallery forests, the loss of species, the direct damage to biodiversity, and the transformation of the landscape.

The evidence indicates that each time the impacts are more severe and we also learn that nature charges us for the damage that occurred. The most affected areas were exactly those damaged and contaminated by monocrops such as sugarcane, cotton, and bananas. We also know that when these disasters occur in poor countries, the damage is multiplied many times more. In Nicaragua the victims of disasters are 2,590 per one million inhabitants while in the United Kingdom it is 89 and in the United States it is 51 per million.

The environmental debt continues even more in the actions and proposals of reconstruction, which until now have never taken into consideration environmental restoration. When they define reconstruction proposals they multiply this debt, in creating infrastructure projects, the introduction of machinery, imported technology with foreign advisors and with loans that create debt. It is important to signal that the levels of production and consumption by the countries of the North have saturated the capacity of carbon dioxide absorption in the atmosphere. Nevertheless, the impacts of the disequilibrium provoked is suffered more and to a greater degree by the populations of the South.

We are not selling nature-we are merely trying to use the mercantile language to our favor to demonstrate all the relations that originate in power centers. Our position insists that there are not quantities or numbers to calculate the damages that have been caused and that we exposed here in this report. Without making economic pretensions, the economic debt claim that we are directing towards the North is an important junction because the politics and payment methods of the so-called external debt deepen and generate even greater ecological and human damage.

This reclamation gives us the opportunity to suggest clear alternatives to the development that currently challenges all the standards of living of the North and the South. For us it has already been demonstrated that this implies the cancellation of the external debt. Furthermore, we should also make known that only the reduction and in some cases the detention of the extraction of natural resources will assure us the survival of present and future generations. This for the North implies an ecological adjustment with social implications in all its power relations.