Inflation Soars : Food Scarce for Shoppers in Managua

The woman who sells cheese at Roberto Huembes’ Market waved away the flies and nodded in rhythm with a customer’s litany about scarce foods and rising prices.

“There’s nothing here--no meat, no chicken, no bananas, no oil,” the customer said, her voice rising with each item. “A pound of rice is 400 cordobas, a pound of beans is 250 cordobas, if you can find the beans.”

Another customer, in an olive drab T-shirt, Sandinista militia issue, turned her head in disgust at this unrevolutionary tirade.

“Lady,” she said, “there’s room for you in Miami.”

Such complaints and angry encounters are commonplace these days in Managua’s markets, where discontent is rising in proportion to worsening food shortages and inflation of 330% and more. Poor and middle-class shoppers alike protest at having to cope with empty stalls and two-hour bread lines.

Chaotic Black Market

Food shortages, the most visible sign of Nicaragua’s general economic crisis, have created a chaotic black market for meat, chicken and cooking oil. Managing to buy scarce foods often depends as much on whom you know as how much money you have.

Selling in the black market has become more profitable than working at a job because pay levels are set by the government. Many skilled workers and professionals supplement their eroding salaries by selling, and some have abandoned their jobs altogether.

The revolutionary Sandinista government blames most of its economic problems on the U.S.-backed rebel war and the U.S. economic boycott. But opposition businessmen say the blame rests primarily with the Marxist-led government’s central economic planning.

In some cases, the causes are inseparable.

High-Protein Feed Lacking

Last month, consumers found out the reason for the scarcity of chickens: At least 200,000 chickens died because the government, lacking dollars, had not imported enough high-protein feed for them.

Under the front-page headline, “They Explain About the Chickens,” the pro-government newspaper El Nuevo Diario said the chickens developed a nervous disorder from the lack of protein, began to cannibalize one another and had to be killed.

No Cartons for Beef

Another food scandal made it onto the front pages in May when 20,000 pounds of beef for export rotted because the government did not have enough cardboard for storage cartons--again because of the dollar shortage.

The head of the state meat packing company had the meat put in plastic bags to sell domestically, but with improper refrigeration the meat spoiled in the airless bags. The director was fired.

Consumers, already annoyed by the scarcity of meat, were angered by the waste.

“The only thing there’s no shortage of here is shortages,” the saleswoman at Roberto Huembes’ said.

Food Is Expensive

What is available in the markets is expensive for the average Nicaraguan wage-earner, who brings home about 30,000 cordobas a month. A head of cabbage, a pineapple and a squash cost 500 cordobas each, a single carrot costs 200 cordobas and a one-pound fish costs 1,000 cordobas, a day’s pay.

The cordoba’s value varies. It is officially fixed at 70 to the dollar for buying approved imports, at 1,200 to the dollar on a legal parallel market and at 2,000 to the dollar on the black market.

The government’s dual rate for exchanging dollars was meant to keep down the price of basic goods, but it has contributed to the havoc in the marketplace. To cope with inflation, some families rely on a few dollars sent by relatives in the United States.

The Sandinista government guarantees Nicaraguans a minimum of rice, oil, sugar, salt and soap at government stores, where prices are relatively low. Wage-earners are allowed to buy other fixed-priced basic goods at stores set up for them--a benefit designed to persuade people to get out of selling and back into regular jobs.

But most people in the cities depend on supermarkets and marketplaces where some prices are fixed and some are not. And fixed-price foodstuffs are found most easily under the counter or from a friend on the black market.

Half-Hidden Black Market

In typical Nicaraguan fashion, the black market in food, although illegal, is only half hidden. Illegal transactions often take place in the open in the marketplace.

“It’s like dodging taxes in a capitalist country--it’s perfectly respectable,” said Trevor Evans, a British economist working here.

Occasionally, a seller will be caught without a required government license or will be detained for violating price controls. It is not unusual to hear of inspectors for the Ministry of Internal Commerce being showered with tomatoes and rotten fruit as they haul an offender away.

The government admits to some early mistakes in economic planning. For example, there used to be subsidies that made it cheaper to buy beans than to grow them.

In the last two years, the government has tried to stimulate the economy by raising wages five times, raising prices and devaluing the cordoba. There has been a crackdown on black market vendors, and incentives have been offered to attract workers to salaried jobs. But the economy continues to deteriorate.

“The economic problems cannot be resolved until the war is resolved,” Minister of Internal Commerce Ramon Cabrales said. “We can’t make miracles, nor can we resolve our problems by decree.”

Difficult to Control

Cabrales said that Nicaraguans traditionally have relied on commerce to survive unemployment or high prices. He said it is a particularly difficult problem for the government to control.

“There are 100,000 types of commerce here, from the guy selling bags of water with a straw, to the merchant with several employes, to the secretary who brings four bottles of perfume to sell at work,” he said.

“It’s hard to know what is cause and what is effect. We have factories without enough raw materials and . . . men who try to resolve the problem of inflation in commerce. . . . An engineer can earn abut 90,000 cordobas and maybe be assigned a vehicle full-time, but you can earn that in one day in a mercantile operation,” Cabrales said.

The Sandinistas say that the war forces them to spend half their national budget on the military. They also estimate losses of about $874 million from the U.S. trade embargo.

Indirect Losses

There are also substantial indirect losses. The contras, as the U.S.-backed rebels are called, have directed their attacks at economic targets such as power stations, coffee crops and agricultural cooperatives. Tens of thousands of men have been taken out of productive labor and sent to the army. And the war is fought in agricultural areas, causing people who would be raising beans, corn and cattle to flee.

The military gets highest priority for all goods in Nicaragua, and this adds to the shortages faced by civilians.

Meanwhile, prices for sugar and cotton, two of Nicaragua’s principal crops, continue to fall on international markets. Nicaragua’s export earnings, about $400 million a year in the early 1980s, are expected to be about $250 million this year. The cost of imports is expected to be about $650 million.

Cabrales said that he has one-fourth the money to spend on food imports that he did three years ago. “In 1983 I had $118 million to spend on food imports. This year I have $30.3 million,” he said

He said food shortages are common from June to August because the previous year’s harvest is nearly exhausted.

Coffee Crop Down

Like most Central American countries, Nicaragua has been helped by falling oil prices and rising coffee prices, but Nicaragua’s coffee crop was down last year and is expected to be affected by contras activity at the next harvest, beginning in December.

“The economy is squeezed in two ways,” said economist Evans, who is sympathetic to the Sandinista government. “The economy is cut because it is a target of the war, and, secondly, the government is forced to use more and more of its resources on defense expenditures.”

Opposition businessmen say that lack of production is due to a lack of confidence on the part of the business sector and to producers who oppose government control of the economy.

“Every day, they plant less and attend less to their crops,” said Gilberto Cuadra, a leader of the anti-Sandinista Superior Council of Private Enterprise. “Every day, there is less pesticide and other basics the growers need.”

Farmers Not Producing

Cuadra said that even the small farmers who received land under the Sandinistas’ agrarian reform program are not producing as they should.

“They don’t feel confident that the prices they will be paid for corn and beans will correspond to their efforts,” he said. “The farmers do not want to have excess production. If the contras come, they have to sell to them. And later, if the army comes, they are accused of cooperating with the contras.”

He said that production has been further hampered by recent dry spells, followed by hard rains that hit banana crops in particular.

According to the Sandinistas, half the economy is in the hands of small- and large-scale producers, including farmers who have received a total of 4.94 million acres under agrarian reform.

Uncertainty Persists

According to Cuadra, less than half the economy is in private hands. He said that the confiscation of land and businesses has increased the climate of uncertainty and that businessmen do not want to invest for fear that later they will lose their property.

“The point is we are not proprietors of anything here because the government sells raw materials and they do not sell us the quantity we need,” he said. “We are not the owners of our production. . . . Salaries are fixed by the government, and so there is no relationship between the owner and the worker.

“We don’t believe in the government, and they don’t believe in us, because they think we sabotage. But, in fact, they’re the ones sabotaging.”

Not all producers feel the same way. Jose Manuel Diaz, a pineapple farmer in the province of Masaya who received land under the agrarian reform, said he is pleased with the government’s farm policy. On his way to a Sandinista cooperative meeting, to negotiate the price he will get for his crop, Diaz said he can live well from his farm.

Economic Hardship

Sandinista supporters say the wartime economy should be endured with patriotism, but other people say the economic hardship has soured them on the Sandinistas, although their anger has not yet been translated into organized protest.

“I used to pooh-pooh the economy as an issue, but not any more,” a Western diplomat said. “The advantage for the Sandinistas is that these people aren’t Poles. They’re more passive.”

Some say it is fear rather than passivity that keeps Nicaraguans from protesting. They say they are afraid to be labeled as contras.

“Protest?” the saleswoman at the market said. She drew her finger across her throat and laughed, and added: “People are afraid to demonstrate. They’d take away my stall.”

Political observers say that lack of protest is due partly to the fact that the Sandinistas are the only ones ever to have done any mass organizing in this country, that they have a monopoly on mass groups. Historically, Nicaraguans complain but do not rebel.

Consumer Complaints

The Sandinistas have created safety valves to release pressure. Consumers can complain--and they do, vociferously--on a radio talk show called Contact 620. And in town meetings they complain directly to President Daniel Ortega, Cabinet members and other leaders of the directorate of the Sandinista National Liberation Front.

To appease members of the middle class, who have access to dollars, the government has built a well-stocked “dollar store” that makes up for some of the shortages and intercepts foreign exchange that would otherwise go into the black market.

But the store is popular with some government officials, too, and this leaves the government open to charges that it is allowing a gap between the haves and have-nots.

The majority of people, who have no dollars, make do in the marketplace and trading on the black market.

“Everybody does it because it’s the only way to survive,” said a seamstress who sells fabric on the black market. “It’s the only way to solve the problems at home.”