Nicaragua CLASS STRUCTURE
Momotombo volcano between Managua and Leon
Courtesy Nicaraguan Tourism Institute
Describing the Nicaraguan class structure that existed
in the
early 1990s is a problematic task. Current data on the
distributions of occupation and income are not available.
In the
wake of a decade of Sandinista rule, certain aspects of
the class
structure are still in flux. Nonetheless, the general
profile of
the class structure can be described with data from the
recent
past (see
table 3, Appendix A).
An outline of the Nicaraguan class structure, based on
labor
force and rural property data from 1980 and reflecting the
1979
seizures of properties held by the Somoza family and other
early
expropriations under the Sandinistas, revealed a highly
stratified society. Less than one-fifth of the population
could
be described as middle class or higher. Another study from
the
same period showed that 60 percent of income went to the
top 20
percent of households. The data also indicated that
although a
high proportion of Nicaraguans were self-employed,
relatively few
held stable, salaried employment. Self-employed workers
constituted almost half of the labor force in 1980, and
salaried
workers made up less than 30 percent.
Land is the traditional basis of wealth in Nicaragua,
and in
the twentieth century the greatest fortunes have come from
land
devoted to export production, including coffee, cotton,
beef, and
sugar. Almost all of the upper class and nearly a quarter
of the
middle class are substantial landowners. The rapid
expansion of
agro-export production in the decades after World War II
encouraged growth of the urban economy. Planters
diversified
their investments. Together with an expanding class of
urban
entrepreneurs, they found opportunities in banking,
industry,
commerce, construction, and other nonagricultural sectors.
Economic growth created jobs for salaried managers and
technicians. The impact of this period is reflected in the
varied
occupations held by the middle class.
The rural lower class is characterized by its
relationship to
the agro-export sector. Rural workers are dependent on
agricultural wage labor, especially in coffee and cotton.
Only a
minority hold permanent jobs. Most are migrants who follow
crops
during the harvest period and find whatever work they can
during
the off-season. The "lower" peasants are typically
smallholders
without sufficient land to sustain a family; they also
join the
harvest labor force. The "upper" peasants have enough
resources
to be economically independent. They produce a substantial
surplus, beyond what they can consume directly, for
national and
even international markets. Studies have shown that
peasant
farmers supply much of the country's domestic grains,
beef, and
coffee.
Many, if not most, of the workers in the urban lower
class
are dependent on the informal sector of the economy. The
informal
sector consists of small-scale enterprises that employ
primitive
technologies and operate outside the legal regime of labor
protections and taxation to which large modern firms are
subject.
Workers in the informal sector are self-employed,
unsalaried
family workers or employees of small-enterprises, and they
are
generally poor. In the past, many economists believed that
the
informal sector in Latin America was a remnant of past
underdevelopment that would disappear with economic
modernization. But in Nicaragua, as elsewhere in the
region, the
informal sector expanded at the same time that modern
factories
were being built and new technologies were transforming
export
agriculture.
Nicaragua's informal sector workers include tinsmiths,
mattress makers, seamstresses, bakers, shoemakers, and
carpenters; people who take in laundry and ironing or
prepare
food for sale in the streets; and thousands of peddlers,
owners
of tiny businesses (often operating out of their own
homes), and
market stall operators. Some work alone, but others labor
in the
small talleres (workshops; sing., taller)
that are
responsible for a large share of the country's industrial
production. Because informal sector earnings are generally
very
low, few families can subsist on one income. A man who
works in a
taller might have a wife at home making tortillas
or a
child on the street peddling cigarettes.
The Sandinistas attempted to transform the Nicaraguan
class
structure, most notably by expropriating wealth from the
privileged classes. Upon assuming power in 1979, the
Sandinista
government expropriated the banks and seized the property
of the
Somoza family and its closest associates. These early
measures
targeted the interests of the country's most powerful
capitalists: the Somoza group and two competing financial
groups,
each organized around a separate bank. In subsequent
years, the
government gradually took over other large urban and rural
enterprises, until the private sector was reduced to about
half
of the gross national product
(GNP--see Glossary).
In the countryside, where the Sandinista revolution
probably
has had its most enduring effects, the Agrarian Reform Law
transferred nearly a third of the total land under
cultivation.
Land expropriations began in 1979 with Somoza's
properties,
constituting about a fifth of all farmland, and continued
under
agrarian reform laws passed in 1981 and 1986. Most of the
affected land belonged to the richest 5 percent of
landowners,
who, at the end of the Somoza period, controlled more than
half
of the land under cultivation. By 1988 the reform had
benefited
60 percent of Nicaraguan peasant families: 43 percent
received
land, typically as members of government cooperatives, and
another 17 percent received the land (often located on the
agricultural frontier) on which they had been squatters.
The restructuring of land tenure between 1978 and 1988
resulted in a sharp decline in the share of land held by
the
largest landowners. Expropriated farms generally became
state
farms or peasant cooperatives. By 1988 the land reform had
passed
through its most active phase. During the brief lame-duck
period
following the Sandinistas' electoral defeat in 1990,
however,
Sandinista authorities granted several thousand new
agrarian
reform titles, often to land transferred from the state
farm
sector. Some properties, which later became objects of
controversy, went to influential Sandinistas, but the net
effect
of these actions was to further reduce the concentration
of land
in the hands of the few.
The government of President Violeta Barrios de Chamorro
(president, 1990- ) assumed power committed to
privatizing the
state sector in both urban and rural areas. But the new
government also agreed to reserve a 25 percent share of
state
sector enterprises for their workers and to uphold the
rights of
the peasant beneficiaries of the agrarian reform. The
government
faced militant demands for land from ex-fighters on both
sides of
the civil war. Of roughly 300,000 hectares of state
cotton,
coffee, and cattle lands privatized by late 1991, former
combatants received 38 percent, and farm workers received
32
percent. Far from attempting to reverse the agrarian
reform, the
Chamorro administration was compelled to extend it.
The enduring effects of the Sandinista revolution on
the
Nicaraguan class structure may not be known for some time.
In the
early 1990s, the property situation remained unsettled. It
was
also uncertain how many of the businesspeople,
professionals, and
skilled workers who became expatriates in the 1980s would
reestablish themselves in the country. The Sandinistas did
reduce
class inequalities, most notably by eliminating the three
major
financial groups that once dominated the economy and by
redistributing land. They seem also to have altered the
perceptions and expectations of the population. The gap
between
the privileged classes and the poor majority did not
appear as
proper or as inevitable as it did in the past. However,
some key
aspects of the class structure that existed before 1979
remained
unchanged. During the 1980s, the urban informal sector
actually
grew in size, and a large part of the rural population
continued
to depend on seasonal employment. Even before the economic
collapse of the late 1980s wiped out the gains of the
early
Sandinista years, the vast majority of Nicaraguans lacked
the
resources to satisfy basic needs, according to a
government
study.
Data as of December 1993
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