Globalization Economy Nicaraguan

globalisation Economy NicaraguanGlobalization has had a great impact in the modern world, and has tied(p) come to rival the economy of several Latin Ameri crumb countries. However, has globalisation pretended the Nicaraguan stintingal panorama? In order to answer this interrogate, it is important to withstand Nicaraguas history into account, a history that has been sme bed with end slight depravity. An other(a)(a) idea that essential(prenominal) be kept in mind is the term globalization has many amounts of comments, so in order to represent the answer a straight-laced definition must be structured.Within the scope of globalization, it is trivial to identify if the key treaties worry the ALBA and the CAFTA crap had any momentous effect on the Nicaraguan economy. Through a c arful evaluation, it testament be detect that Globalization has non had an impact in the Nicaraguan Economy genius however the roots of globalization lav already be traced to the economy. whiz of the limitations found in this research paper was the gathering of distinct sources from the rustic spheres of the country, as the coarse emplacement of this essay is of much(prenominal) importance to topical anestheticize if globalization has affected Nicaragua or not.IntroductionGlobalization has started to influence the Nicaraguan scotch scheme from the beginning of the 21st century. The Nicaraguan population should await themselves if globalization would aid the economic stance they are in. Another apparent motion that must be asked is if the new trade intellects will gain or harm the private firmament of the rural Nicaraguan farmers. The last question to be answer is, Globalization from what side? as the American hemisphere seems to be structured with a strong Capita come giant on the top, The coupled States of America, and numerous amounts of underhighly-developed Socialist countries, which can be give tongue to to be roughly of S breakh America, consis ting of Brazil, Chile, Argentina, Ecuador, Venezuela, and Bolivia, Uruguay all draw socio-democratic g everyplacenments, that exercise populist tendencies.Another point that should be kept in mind is the plectrum surrounded by the ALBA and the CAFTA, as the socio-democratic confederation that Nicaragua currently has should be kept in mind. Both treaties should be considered in the global sense as on that point are currently four enlisted countries in the ALBA agreement, which are Venezuela, Cuba, Nicaragua, Bolivia and Ecuador while the CAFTA is con make fored of The join States, Guatemala, El Salvador, Nicaragua, Honduras, Dominican Re usual and Costa Rica.The main concern in regards to globalization may not even be of an economic impact, only rather on of an ideological degree. The Nicaraguan populations view on globalization is of a loss of matter pride, as if the United States would take over the countrys economy which to some extent is true. The ideological conflict, however, stands on whether to be a nationalist, a socialist or a capitalist. Nicaraguas preferences must be examined in order to determine if globalization will afford an effect in the Nicaraguan economy.Nicaragua has a farsighted history of degeneracy that can be traced back to the 1930s with the Somoza dynasty, and can then be fol piteoused along the list of Somoza family members onto the Sandinista Mandate and then into the 21st century with the newly elected big(p)ist parties. It is important to recognize Nicaraguas background in order to determine if Globalization will benefit or harm the economy. In order to genuinely define the screen of globalization that suits Nicaragua best, a definitely structured definition must be established, as globalization is wide in the send of it meaning.Definition of GlobalizationThe definition of globalization can be ramose into three main concepts. The first of the concepts can be referred to as the bighearted point of view, in which g lobalization is interpreted without inclinations towards the unknown or interior(prenominal) spots. In this notion, we call globalization when a company or multi-national perseverance invests capital in a usually underdeveloped economy such(prenominal) as Nicaragua. The other two perspectives stray apart when the question of wherefore would the companies invest in underdeveloped countries? is asked.The Imperialist perspective bases itself on the chaste principal of stimulating under developed countrys economies. In this lay out, a corporation such as Nike sets out a divisory in the under developed country in order to provide jobs for the luxurious un busy population. By providing such work, the corporation is therefrom permitted to pay low fees to its new employees. If a company does not wish to set up a factory in a new location, they can quiet enter the local anaesthetic markets through Commerce treaties.In Nicaragua there are two possible treaties, the CAFTA (Central A merica Free Trade Agreement) and the ALBA (Alternativa Bolivariana), the CAFTA being the most suit sufficient, as it permits United States owned companies to fence in local markets. pickings the Imperialist point of view, the local population is given new prime(prenominal)s in the market from which to buy from, choices that are sometimes less expensive and then more(prenominal)(prenominal) economically feasible for a greater part of the population.The Anti-imperialist perspective, other than known as the down side to globalization, regards globalization as frugal terrorism. This point of view focuses on the injustices that these corporations bring upon the under developed countries. The first injustice is the claim that these companies pay a misery of a fee to the employees thus only keeping them busy kinda of provide them, reason for why this low pay condition is usually referred to as a Sweat-Shops.The most impacting injustice would be the fact that these corporations are allowed to compete in local markets. The reason for this claim is that the foreign companies offer products of a cheaper nature, and therefore encourage the local merchants to buy foreign products instead of local ones. Once the local products are not consumed, the national domestic companies thus run out of business placing pot out of work.The only form of globalization encouraged in Nicaragua, is one through the ALBA agreement, as the conditions in this treaty are of Self-Growth concepts betwixt allied Latin American countries Venezuela, Bolivia, and Nicaragua.Nicaraguas Economic Background during the Somoza era and the Sandinistas.In the 1936, the Nicaraguan population elected Anastasio Somoza Garcia to power. At this moment, the Nicaraguan economy is on the rise. The main exports were cattle and coffee, settling Nicaragua as one of the richest countries of Central America in the first half of the twentieth century. Somoza Garcia, however set Nicaraguas faith by providing the U nited States with raw materials during serviceman contend Two for the Allied war effort. This close association with the United States set the Nicaraguas economical and political dependence to the will of the United States. During his disposal however, he did not increase the Nicaraguan Economy to a operative degree, instead hes main dedication was of a personal extent.Somoza Garcias tactics consisted of comical government funds to his own accounts, and purchasing government lands at ludicrously low prices. While the Nicaraguan economy remained at a at once unalterable, Somoza Garcias personal Bank accounts were at an all time raise. During the wartime, he come through numerous facilities to which income was due, facilities such as a cement factory, the national railroad, a cement factory, most textile plants, several electric power companies, the national airlines, and an extensive control over the banks. His personal income, later worldly concern War Two, was estimated to have been of 60 million dollars. after(prenominal) Somoza Garcias death in 1956, his young son Anastasio Somoza Debayle took control of the presidency and succeeds his father in power. A few days later, after a rigged election, Luis Somoza Debayle, Anastasio Somozas older son, took control of the Nicaraguan presidency. During Luis Somozas presidency, the Nicaraguan economy was hit with a drop in coffee tree production, as now the aspirations for their main product had been expanded onto other locations and were purchased at even demoralize prices, causing Nicaragua to drop prices as well.It wasnt the coffee drop, however, that caused many grievances to the Nicaraguan Economy, it was the 1972 Earthquake that caused $15 million in damages. Richard Nixon, however, support the Nicaraguan government with a bounty of $50 million. The Nicaraguan Treasury only reported $17 million of that donation, while the other $33 million was believed to be in Luis Somozas personal bank account s abroad. It was until 1980 that the Somoza dynasty was replaced by another secern of mandate, a left fieldist government.In 1980, the United States lifted its protective screen out over the Somoza family and allowed internal social conflicts to rise out of control. Luis Somoza was then pressured by the United States to leave Nicaragua with the threat of freezing bank accounts that were located in United States banks. The country was therefore left in the overtakes of the ultra party F.S.L.N (Frente Sandinista de Liberacion Nacional, which is translated to Sandinista Front, for National Liberation), which was commanded by Daniel Ortega. At the moment the F.S.L.N gained chairpersonial authorities, the economic situation had an incredible deficit as major loans were issued from the World Bank.The F.S.L.N, or the Sandinista party for short, did not play a significant enjoyment for the Nicaraguan Economy, as their main intentions remained to restore the social injustice. politica l and private lands were some(prenominal) confiscated and given to the Nicaraguan population as a sort of Land Reform. Not all the land was given to the people, most of it was kept by the high ranking officers such as Daniel Ortega, his brother Humberto Ortega, his right-hand man Tomas Borge and several other Sandinista generals.The countrys economic posture dropped from being one of the richest countries in Central America, to being the poorest in the American Hemisphere, preceding only Haiti on the list. It is state by the Director of the Nicaraguan Economic Institute during the 1980s, father Xabier Golostiaga, that the Sandinista government, when they took power, found a country with no financial resources, and also stated that only 3.5 million dollars were found from the 19 banks that were nationalized however, according Father Golostiaga, Nicaragua inherited a debt of $1.6 billion dollars, while more than half of that silver was never used on the Nicaraguan grounds. flush t hough the Sandinista government is still regarded as a group of bandits in Nicaragua, they did relieve a great percentage of the external debt that Nicaragua had attained during the Somoza dynasty.At the beginning of the Sandinista mandate, influences shifted from the United States the Soviet Union. Nicaragua would engage in trade with the USSR instead of the United States, as the United States had placed Nicaragua in a sort of Financial Boycott. Once the Cold War was over, and ties with the USSR started to shed, the Sandinista government seemed to lose its nail over the political panorama. In 1990, the Sandinista government accepted elections to go forth, losing to aspect Violeta Barrios de Chamarro of the U.N.O party (National Opposition Union).The Nicaraguan Economic panorama (between 1991 and 2007).In 1991, after the Nicaraguan Revolution and the decline of a communist dictatorship, finally, the first liberal government was established during the globalization era. The UNO ma ndate, cleared much of the economic detritus that the Sandinista dictatorship had left behind. During Violeta Barrioss presidency, she was denied compensation by the United States for damages during the Contras period. After this, donations from European countries were effected, as Nicaragua still remained the worlds second poorest country. It can be said that Nicaragua was institutionalized in a sort of rehabilitation for 7 years in order to get on its feet again.Seven years later, elections were carried out and the Nicaraguan , where people elected Arnoldo Aleman as electric chair from the Liberal implicit in(p) Party (PLC). At this moment the economy was up and running and was receiving donation from developed countries, receiving the most from Spain. Besides the flow of income, due to chronic corruption during his government, a 50 million dollar deficit was filed. Arnoldo Aleman had been diverting governmental funds to a private bank account in Switzerland and was arrested for corruption, and money laundry. Corruption had once again been in the hands of a single man.In 2001, Nicaragua saw yet another election, in which Arnoldos vice-president was elected president, president Enrique Bolanos. Nicaraguas economy suffered a stalemate, as president Bolanoss presidency served to clean the corruption of the political panorama and to pay off most of the debts that Nicaragua has inherited during the Sandinistas administration and the Somoza dynasty.The Economic effects of the ALBA and the CAFTA agreements.The CAFTA and the ALBA treaties share similarities within their texts however, both treaties are show uped from different perspectives. The ALBA treaty, is not just considered a treaty, according to Hugo Chavez, it is a bond between Latin American countries, and as Chavez stated Latin America will save itself alone. So far, there are only 5 members to the ALBA treaty, which members are Cuba, Nicaragua, Ecuador, Bolivia and Venezuela.The CAFTA on the other han d is seen as simply a treaty between the United States and Central America and the Dominican Republic. This approach by the United States has scared off most of the trust among the population, as it suits the symptoms of an economically manipulative doctrine. The points of the CAFTA are expressed as followsPresident Hugo Chvez in his intervention in ALADI has summarized the principalsALBA as the following topics1. To get ahead the fight against the pauperization2. To preserve the autonomy and Latin American identity3. The transference of technology, the good assistance4. The formation of human resources5. To prioritize national companies us public beings suppliers6. The agreements could not be obstacle to the diffusion of the scientific and technological draw close7. To face the abuse of the monopolies and oligopolies through effective mechanisms that assure fare competition8. The foreign investors will not be able to demand the countries by the handling of state monopolies of p ublic interest9. Treatment special and place to unequal economies to open opportunities to the weakest10. Process of wide social participation, which can be characterized like democratic11. Economic, social, cultural and civil rights should be interdependent, indi patent and can not be waived12. The commercial interests of the investors will not be able to have supremacy over the human rights or over the sovereignty of the States13. Creation of founds of structural convergence for the correction of asymmetriesThe different definitions of Globalization must be kept aside when comparing the ALBA and CAFTA, as the determination of a foreign agreement is to aid Nicaraguas economy regardless of ideological opinion. The CAFTA is regarded as the treaty that puts forth the Americanization of a country, as on the contrary, the ALBA encourages Nationalistic growth.The CAFTA agreement encourages United States corporations into investing their capital in underdeveloped countries in counterc hange for tax liberation, lower employee costs, and a guarantee in case of collective loss due to a social instability. The preamble of such documents statesThe CAFTA is designed to eliminate tariffs and trade barriers and expand regional opportunities for the workers, manufacturers, consumers, farmers, ranchers and service providers of all the countries.The CAFTA, however, interferes with the local market thus damaging the economy anyway, as the bankrupted domestic companies are fully taxed and pay proper salaries to their employees, when I the other hand the foreign corporations pay miserable fees and when in regard to domestic re-investment, the it is unclear of how much of the companys profits are to be invested.Nicaragua has approved the CAFTA however it has not been publically accepted, as in Nicaragua, the CAFTA can be understood in the context of a US strategy to divide opposition in negotiations for other larger trade agreements. Instead of aiding US companies, the object ive of the ALBA agreement is to promote cooperation and collective development of the region with an emphasis on fighting meagreness and social exclusion. The general feel of the can be appreciated in Venezuelan president Hugo Chavezs opening remark at the United NationsALBA is not an agreement of the elite. ALBA is born from down infra, from the grassroots of the population, without the people no marrow would be possible and that is one of the criticisms that we have always made of other integration efforts. The objective is not necessarily to maintain high economic statistics or attract investment, but rather to benefit our populations, so that they have health care, education, jobs, and so they can get out of poverty.Another factor to the highest degree the ALBA and the CAFTA that must be kept in mind is the alignment is the political alignment that Nicaragua maintains of a socio-democratic regime that owes alliances to Venezuela and Cuba, as the Sandinista party owed much of their existence to Cuba during the Cold War. Due to these populist tendencies, it could be said that, the ALBA is the more appropriate treaty to sign.Socio-Economic Perspective of GlobalizationIt is of public knowledge in Nicaragua that most of the populations regard Globalization as not welcome. The socio-economic perspective of Globalization can be seen from two lights the rural and the industrial perspectives. The rural perspective of globalization can be expressed as the lower classs point of view, while the industrial would affect the middle and upper classes. In short, both of these perspectives contain the entire range of the Nicaraguan society.The people that constitute the rural perspective, also known as the Nicaraguan Farmers, do not welcome globalization because of the economic impact that it will cause society. For most farmers in the outskirts of Managua and on the borders of the country, the prices set by the CAFTA are below the prices they have been used to deal wit h, meaning that there will be an economic impact for that field of society. The rural branch of society represents about 70% of the Nicaraguan population, meaning that to off-set an economic pendulum from this side will affect the countrys economy greatly.The industrial perspective of the socio-economic side to globalism might actually benefit from the no tariff agreements as machinery and foreign goods might be less expensive to ship in, and national products will be easier to export. The industrial sector of Nicaragua can be said to constitute by 30% of the population, however, even though it is a minority in regards to the rural sector, the industrial sector represents about 50% of the Gross domestic Product in Nicaragua.The choice between which treaty to chose seems to be the more difficult question as the ALBA benefits the rural sector with its standard wages, while the CAFTA would cause a significant impact in the economy. The industrial sector on the other hand would benefit from both the CAFTA and the ALBA, as the free commerce agreement of no tariffs would mean that the import export of Nicaragua will of a wider range. The issue in mind however, remains on the ideological alignment concern.The rural sector of the Nicaraguan population belongs to a new pleat of ideologies, a mix of neo-socialistic liberalism, where a sense of national pride and populism makes the number one goal to push on the Nicaraguan economy. The CAFTA is not appreciated in this perspective as it is seen as an agreement that binds Nicaragua to the will of the United States prices and tariffs, therefore permitting the Unites States to have a sort of control over the Nicaraguan Economy. Nicaragua has already matte up the United States economical grasp in the 1970s during the Sandinista government, where the United States employed a boycott on Nicaragua. The sense of resentment has not left the Nicaraguan panorama yet, which means it might take a long time for the CAFTA to be appro ved by the population. The ALBA in the other hand, is more widely accepted as it involves direct proposals by Venezuelan president Hugo Chavez.In current times, Nicaragua has approved both the CAFTA and the ALBA, the differences, however, are only visible in regards to the material gifts provided by Hugo Chavez. On the Economical perspective, both the ALBA and the CAFTA have not made and impact. Both treaties have rendered the Nicaraguan economy with the aforesaid(prenominal) Gros Domestic Product than the year before their signing.ConclusionNicaragua has been a signer of the CAFTA for over 3 years now and has also been a signatory of the ALBA treaty for over 1 year now however both these treaties have not saved Nicaragua from the enormous deficit that it faces. In conclusion, it can be said that Globalization will have an impact in the Nicaraguan Economy in the long-run however, in regards to Globalism of the Socio-democratic sphere, the Latin American countries should remain uni ted and try to roll back influences from the United States in order to be financially dependent on its own.Nicaragua needs to be financially independent, however, in its current economical state it cannot stand on its own two feet, which means it should have the temporary support of a greater power. The choices are obviously dived between the CAFTA and the ALBA, which are obviously a reflection of the United States and Venezuela. In the wider-picture, the choice between the ALBA and the CAFTA is the choice between Capitalist democracy and a socio-Populist democracy.The relationship between Nicaragua and the United States has not been as strong as the 1930s in the time of Anastasio Somoza Garcia. The constant intervention from the United States in Nicaragua has rendered a sense of mistrust. In actuality, the CAFTA seems like another brick to the wide and high wall that the United States has been building over Latin America, the first brick being the Monroe Doctrine, which guaranteed the United States right to intervene in any Central American nation if its freedom was being threatened. even off though Nicaragua is a signatory of both the ALBA and CAFTA treaties, so far the ALBA has aided the Nicaraguan economy more than the CAFTA, due to the multiple gifts given by Hugo Chavez to the Republic of Nicaragua, gifts such as Oil Plants. The bottom line, nevertheless, stays the same(p) Globalization will have an increasing effect on the Nicaraguan economy.Bibliographyhttp//www.ustr.gov/Trade_Agreements/Bilateral/CAFTA/CAFTADR_Final_Texts/Section_Index.htmlhttp//www.venezuelanalysis.com/news/2360Ministro de Estado de Venezuela para la Bancoex, Integracin y Comercio outside(prenominal)http//www.globalization101.org/What_is_Globalization.htmlhttp//www.newdream.org/consumer/globalization.phphttp//www.country-data.com/cgi-bin/query/r-9212.html