Wednesday, May 16, 2007

Where the streets have no names and the poor have no chance

It's been a while. Work has been busy (my company was just bought by our largest competitor), and although I've been able to contribute various posts to KivaFriends, I haven't been as active as I'd want to.

Reading through Kendall's reports on the state of his MFI in Nicaragua, I was reminiscing about old times.

I lived from January 1994 to August 1995 in Managua, Nicaragua. I came there as a student, did a graduation project designing and installing a remote wireless fumerola measurement station, that measured the temperature of smoke coming out of Nicaragua's most famous volcano, the Momotombo. After that, I worked for about a year at Siemens' Nicaraguan field office, as a project engineer for most of the "Planta Externa": everything from fiber optics transmission lines to wired local loop. Anyways, you can read that in my LinkedIn profile if you are really interested.

Nicaragua was an interesting country. Doña Violeta de Chamorro was in power, and Arnoldo Alemán was still the very popular mayor of Managua. Poverty was extremely widespread. And the population was very much polarized: you were either a Sandi, or against them. There was no golden path through the middle. Subsequent years have both show a slight increase of GDP (which is now slightly above Honduras), and unfortunately also an increase of corruption by officials. In all reality-- it was more of the same: Somoza's control over the complete economy by force, subsequently replaced by the Sandinista's "piñata" (redistribution of nationalized property to the personal possession of the top Sandinistas); Doña Violeta's government was accused of corruption (but may have been the least corrupt of them all), and once Arnoldo Alemán became president, he turned corruption allegedly into wholesale robbery.

The per-capita GDP in Nicaragua has stayed stably low from the years the Sandinista's left office, in the $3,000 to $3,500 range or $250-$300 per month. That this number doesn't mean too much (except that it's shamefully low), becomes evident if one considers that the gap between rich and poor is the 5th worse in the world. That means that tons of people live on much less, while the lucky few are rich beyond imagination. On average, you'll get to an income of $250 a month. As an aside-- click on that picture on the left. It was made with with GapMinder, a really fantastic tool that brings poverty into perspective.

Interestingly, although the Sandinistas messed up in many things, Nicaragua did get quite a good educational system. If we disregard some of the extreme poverty issues (like-- kids that need to go out on the street to beg for money won't get time to study, because this will take away necessary family income), primary and secondary is free while tertiary education is very affordable, even for local standards. Although rural access to health care is limited due to low popular density, free or cheap clinics are available in most urban areas. Arnoldo Alemán did shore up the road infrastructure, and cellphone coverage was good even when I was there in the mid-nineties.

This shows that even if many of the conditions are there to make things happen, it's really good governance that is a prerequisite to enable economic growth from the ground up. If that is missing and all is stacked for the rich and against the poor, not much will help. Even microfinance of poor micro-entrepreneurs won't be able to break the glass ceiling in the crawlspace of economic misery.

Finally, an anecdote. Kendall Mau talked in yet another one of his great blog entries about the lack of verifiable addresses in Central America. This is especially true in Managua. I remember that the travel agency I used in Managua was at "Donde fue el Hospital 'El Retiro", 2 cuadras al lago, 1 cuadra al arriba, portón verde". (That's from the spot where the "Retiro" hospital used to be, 2 blocks towards the lake, 1 block "up" (east), green gate). This was in the mid-90s, and it still appears to be the case. What made it even more interesting was that the Hospital 'El Retiro' was completely destroyed in the 1972 earthquake, and as a reference had been completely disappeared for many, many years.

If you had to do much through the mail, your best bet was a PO Box at Managua's central Telcor post office, which was an old, stately building in the old downtown, which somehow miraculously survived the famous quake.

During the Sandinista era, the rock group U2 performed a concert in Managua. It was their inspiration for the song "Where the streets have no names".

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