An Investigation into the Economic Turmoil of the Nicaraguan Revolution: To what extent did the U. S. led trade embargos of the 1980’s and the U. S. funded contra rebel groups affect the failed Nicaraguan economy of the mid to late 1980’s? Word Count: 1, 618 Table of Contents Section APage 3 Plan of the Investigation Section BPage 4-5 Summary of Evidence Section CPage 6-7 Evaluation of Sources Section DPage 8 Analysis Section EPage 9 Conclusion Section FPage 10 Bibliography Section A Plan of the Investigation To what extent did the U. S. led trade embargos of the 1980’s and the U.
S. funded contra rebel groups have on the failed Nicaraguan economy of the late 1980’s? This investigation aims to objectively determine the influence that the U. S. had on the complete devastation of the Nicaraguan economy. To achieve this end, a detailed analysis will be made of the financially U. S. supported rebel groups, the contras, that opposed Nicaragua’s Sandinista National Liberation Front (FSLN) following the 1979 overthrow of the Anastasio Debavle dictatorship. Their nature of opposition will be exposed and analyzed as a cause for the economic destruction in Nicaragua.
Further, this analysis will be paired with the 1980’s U. S. led trade embargos on Nicaragua, which will give a detailed analysis as to why the Nicaraguan economy failed in the mid to late 1980’s. Section B Summary of Evidence When considering the U. S. ’s actions in Nicaragua it is essential to note that this revolution took place in the midst of Cold War fear between the U. S. and Soviet Russia. In 1979 the Sandinista National Liberation Front overthrew dictator Anastasio Somoza, ending the 43 year Somoza dictatorship, and establishing a revolutionary government in Nicaragua.
Ronald Reagan, with a strongly anti-Communist administration, took office in 1981 and was ultimately convinced that the Sandinistas were supporting Communist revolutionary movements and were “closely allied with the USSR. ” The nature of the Sandinista government distressed the Reagan administration who saw Nicaragua as a “Soviet proxy state. ” In response to this fear, the U. S. almost immediately began to suspend aid to Nicaragua, impose economic boycotts, and began supplying money, arms and training for the armed opposition contras, or, rebel fighters, made up of Nicaraguans dissatisfied with the new Sandinista government.
These actions were taken in the hopes of disassembling the new government. The confluence of these actions showed quick implications as the Nicaraguan economy was “faced with a catastrophic situation. ” The new economic policies brought about by the Reagan administration were designed to economically strangle the Sandinista government. The U. S. put pressure on international aid agencies and banks not to lend to Nicaragua leading to blocked loans from the World Bank and Inter-American Development Bank to Nicaragua.
Beginning in 1983 with a 90% reduction of Nicaragua’s sugar quote, the Reagan administration imposed restrictions on trade with Nicaragua. By 1985 the U. S. imposed a full trade embargo on Nicaragua which cost the country an estimated $50 million a year. This had a domino effect upon the country as urban wages had drastically fallen to only 5 or 10% of 1980 levels. To further push the economic woes; in 1985 the U. S. ’s funding for the contra rebel group reached a staggering $77. 6 million. They targeted any platforms n which the Sandinistas had planned to carry out poverty alleviation goals including agrarian, health and education reform facilities. The contra forces also attacked state infrastructure, such as bridges, power lines, health care centers schools and other infrastructure deemed essential to the government. One quarter of health clinics were destroyed, but the real burden of the contra attacks fell upon the agricultural sector. Attempts to burden productivity, resulted in concentrated attacks on agricultural projects put forward by the Sandinista movement.
Between the years 1982 and 1984, when the contras weren’t even at their height, over 70 state farms were destroyed or severely damaged. During the 1985 and 1986 coffee harvests, for example, over 50 farms were attacked along with trucks transporting farm workers. Conservation programs, created by the Sandinistas to deal with environmental programs, were destroyed along with thousands of civilian homes, pushing many Nicaraguans into refugee camps which became almost impossible to fund. The impacts of the U. S. and international embargos paired with the contra forces led to hugely devastating economic problems.
By 1986, taking into account the physical and fiscal devastations, approximately $862 million was done in damage and by the end of the revolution more than $1 billion. In its worst year, 1988, Nicaragua held an inflation rate ranging from 2,000 percent to 36,000 percent, giving it the world’s highest inflation rate during that year. Section C Evaluation of Sources Modern Latin American Revolutions, by Eric Selbin was written to inform and educate scholars on recent revolutions in Latin America with particular attention to the revolutionary process in Nicaragua.
The origin of the source is very reputable. Eric Selbin is a highly regarded professor at Southwestern University, specializing in comparative and international politics and political sociology, with a focus on Latin America. This text was published by Westview Press, an academically respected publisher of core college textbooks. The purpose of this text is to provide a comprehensive body of information focused on linking organizational leadership and institutionalization process on one hand and visionary leadership and the consolidation process on the other.
Additionally, the author provides extended coverage of the future of revolution in Latin America. The source was selectively valuable for the investigator’s research. Because it includes many other Latin American countries, not all information was able to be used, however, this text provides a great broad overview into Nicaragua, then provides a focus into the Nicaraguan Revolution of 1979 including an economic lens and an overall analysis. This approach was highly beneficial for developing a wide understanding of the conflict.
The text also provided an abundance of outside sources and influences regarding the topics within. Limitations of the text are that there is a substantial imbalance between the supply of factual information and the amount of analysis. There is a large amount of analysis; however there is a lack in contextual information. Confronting the American Dream, by Michel Gobat was edited and published by the think-tank that is Duke University Press and written by a highly regarded professor of modern Latin America, specifically United States-Latin American relations at the University of Iowa. Based on research in Nicaraguan and U.
S. archives, the purpose of this source is to explore the effects of Americanization in Nicaragua with a primary concern in the contestation of power, the construction and deconstruction of cultural and political borders and the complex intertwinement of global and local outlooks. This source was of little value to the investigator regarding the focus question due to the fact that the text only cover up to 1979 with detail and has very brief encounters with anything later. However, this source provided an extremely detailed account, from multiple perspectives, of Nicaragua leading up to the 1979 revolution. Section D
Analysis The actions taken by the U. S. during the Nicaraguan Revolution were economically devastating to Nicaragua. The Reagan administration had nearly drained any structure set in place by the Sandinista’s economic reform, effectively displaying the power in economic imperialism. Looking at the attacks of the contra revolution, and their focus on the agricultural sector of the Sandinista economy an analysis is made that these attacks were aimed directly at the Nicaraguan citizens themselves and in doing so sending a message that involvement in the new government was dangerous and internationally opposed.
Simultaneously, the morale and confidence in the government was undermined, which gave more power to the anti-Sandinista movement. From the perspective of political realism, looking at the overall effect that the U. S. had on the Nicaraguan revolution and the economic power demonstrated, several assumptions can be drawn about the U. S. during this time period. First, the U. S. was largely apart of structural realism in that in the U. S. ’s economic power was characterized by its existence as a hierarchal power.
The Reagan administration was able to pressure international systems, such as the World Bank, into halting any loans going into Nicaragua, which was the beginning of the economic turmoil for the state. And perhaps more significant was the power that the U. S. alone had on the country’s economy. The financial trade embargoes set in place by the U. S. was able to effectively shut down the Nicaraguan economy, and ultimately the Sandinista government. Section E Conclusion The U. S. led trade embargos of the 1980’s and the U.
S. funded contra rebel groups did not only influence the failure of the Nicaraguan economy, they directly facilitated it. The economic embargos nudged the country into an economic crisis by reducing agricultural profit to near zero. Then, the economy was pushed headfirst into turmoil by the institutionalizing and funding of the anti-Sandinista contras that almost singlehandedly destroyed the agricultural projects of the reform, and substantially injured the infrastructure of the already weakened Nicaragua.
Together, the two were to a large extent part of the failure of the Nicaraguan economy in the mid to late 1980’s. Bibliography * Selbim, Eric. Modern Latin American Revolutions. Second ed. Oxford: Westview, 1999. Print. * Gobat, Michel. Confronting the American Dream. London: Duke UP, 2005. Print. American Encounters. * Hodges, Donald C. Intellectual Foundation of the Nicaraguan Revolution. Austin: University of Texas, 1988. Print. * Prevost, Gary. “The “Contra” War in Nicaragua. ” Conflict Quarterly, 21 Mar. 1994. Web. <http://www. lib. unb. ca/Texts/JCS/CQ/vol007_3summer1987/prevost. pdf>.
