Sandinistas’ Stores: Dealing for Dollars

You might call it the K-Mart of Nicaragua. There are cornflakes and mayonnaise in the food department, shampoo and deodorant in sundries and elsewhere auto parts, beds, bicycles and appliances.

The revolutionary government’s Almacenes Internacionales, commonly called the “dollar store,” is about to open a chain of seven import-stocked food and department stores in outlying provinces.

The expansion is the idea of the Sandinista government’s most successful entrepreneur, Tourism Minister Herty Lewites, who is known for his schemes to earn hard currency for the financially strapped government. Like the main store in Managua, the regional emporiums will sell for dollars goods otherwise not available in Nicaragua.

“What we are doing is making it easier for people who have dollars to spend them,” Lewites said the other day.

Many Projects

He talked animatedly about his latest plans in an interview at his office.

Other Lewites projects under way, with the help of European loans, include the 1,300-seat Olof Palme Convention Center, in downtown Managua, and a resort and casino at Montelimar, which was the beachfront home of the late Anastasio Somoza, the dictator deposed by the Sandinistas. Lewites said several state-run restaurants will soon offer a variety of imported foods and drinks for patrons who pay with dollars.

The restaurants and hotels are for tourists, but Lewites’ dollar stores also cater to Nicaraguans with greenbacks.

Lewites said that at least 30,000 Nicaraguans regularly receive dollars--in salaries paid by international companies, in government incentive payments to farmers and cattle ranchers, in U.S. pensions and in checks sent home by tens of thousands of Nicaraguan families who live in the United States.

‘Reactionaries’ Help

“This is the only country I know where the reactionaries maintain the revolution,” Sandinista Commander Omar Cabezas said. “They send dollars to everyone, beginning with my wife. Her father sends her money.”

Much of the dollar store merchandise is made by American companies and is bought, apparently, through Panamanian middlemen who circumvent the U.S. trade embargo imposed by President Reagan in May of 1985. Lewites declined to discuss his suppliers.

Almacenes Internacionales also runs duty-free stores at Managua’s international airport and in the capital city’s hotels, but its biggest operation is the sprawling dollar store in the Serrano residential neighborhood. It does a brisk business among diplomats, tourists and Nicaraguans.

Some Nicaraguans have criticized the dollar store. They say it is helping to create two economies and two classes of people--an elite with dollars and a majority with cordobas . And some Sandinistas criticize the store for being too “bourgeois,” an unnecessary indulgence amid wartime scarcity.

‘Room to Consume’

Cabezas, who works in economic planning for the Sandinista Party in Managua, defends the stores.

“You have to give the bourgeoisie room to consume,” Cabezas said. “This store is a necessity. As long as we do not have the capacity to offer these goods to everyone, at least we can capture some dollars so that later on we can offer the goods to more people. But if you take this store away, no one will have anything.”

The dollar store is a consumer oasis in a land of shortages caused in large part by the guerrilla war and the U.S. trade embargo. Also, the government restricts the sale of dollars by the central bank and limits imports, and consequently there are serious shortages of products such as spare parts for automobiles. Other goods are also in short supply, goods that are not so urgent but are sorely missed.

The shortages, inflation of 600% a year and general economic uncertainty have created a huge black market, not only in consumer goods but in dollars as well. The dollar, which is exchanged legally at the rate of 2,300 cordobas to 1, brings up to 4,000 cordobas on the black market. The rate rises by the month.

Black Market Goods

The government tries to control the price and distribution of many locally produced foods and goods, but shortages have created a black market for these, too. Rice, a staple of the Nicaraguan diet, costs 40 cordobas a pound at government distribution centers but is limited to two pounds per person per month.

Union workers and state employees may buy additional rice at special stores at a price of about 400 cordobas a pound. On the black market, rice sells for up to 800 cordobas a pound.

The government has started a campaign, in the press and at public meetings, against the thousands of “speculators” who find it more profitable to engage in illegal commerce than to take a job at wages.

Lewites said he is aware that the dollar store has fed goods into the black market, but he says he is taking steps to deal with this.

Card Permits Purchases

At present, any Nicaraguan who can demonstrate a legal income in dollars may apply for a card to shop at the dollar store. The card is shown at the entrance to the store, and the card number is noted on the receipt for any big-ticket item such as a television set.

Lewites said that soon the card number will be recorded for all purchases, including food and sundries, to make sure that people are not buying large quantities for resale.

New cards will be issued, with photographs to prevent swapping, but Lewites said the card holder will still be able to take his entire family to the store. More than 15,000 cards have been issued so far. Tourists and diplomats get into the store on the strength of their passports.

The dollar store is well stocked with liquor, perfume, toys, cosmetics, school supplies. Television sets, video cassette recorders and tape recorders are popular items.

The store has virtually no competition in Nicaragua, but Lewites says he is competing with cut-rate department stores in Miami and Panama. He keeps prices down on expensive items and marks up prices on food and sundries by as much as 30%.

“What are you going to buy more often, toothpaste or television?” Lewites said with a grin.

The new stores are to be in Corinto, Leon and Matagalpa, all to the north of here; in Granada and Jinotepe in the southern Pacific region, and in San Juan del Sur and Sapoa near the border with Costa Rica.