Rising Fuel Costs Provoke Transportation Strike in Nicaragua

Written by Mneesha Gellman and Josh Dankoff

Monday, 12 May 2008 11:52

Editor's note: This strike ended Saturday, May 19. The government agreed to subsidize gas by $1.30.

Within minutes of rescuing us from the blazing sun of downtown, Jose Briceño Perez, a driver in a Nicaraguan taxi cooperative in the capital of Managua, made it clear that he was less than content with current government policies concerning fuel prices. "The money we pay for gas, it just goes to corruption."

Jose Briceño Perez does not appreciate the government's approach.

May 5th marked the beginning of an intended thirty day strike, with public transport workers and truckers in Nicaragua protesting rising fuel costs and the lack of government impetus to do anything about it. (1) With road blockades in several places in Managua and almost no public intercity transport allowed whatsoever, Nicaragua is at an effective standstill. Containers full of goods sit stalled on the sides of highways, and even sports teams have cancelled weekend matches. When baseball is put on hold in Nicaragua, you know it is serious.

The focus of the strike centers on three unions' demands for government subsidization at the fuel pump. The Federation of Taxi Drivers, National Transportation Coordinator and the Interurban Transportation Directorate demand that gas prices, currently at about US$4.70 per gallon, be reduced by more than US$2.00 per gallon and frozen. However, the government remains firm that such a policy would bankrupt them, and the Ministry of Transport and Infrastructure has offered to reduce the price of gasoline by only US$0.30 cents a gallon. (2)

In Managua, some urban buses continue to run - those that already receive heavy fuel subsidies from the government. However, travel in the city is both risky and tense, and taxis refuse to drive in neighborhoods where there are known blockades. This week informal reports told of several strike-breaking taxis which were stopped by strikers at blockades. Strikers dragged passengers out and then stoned the vehicle. On Wednesday, more than 100 people were arrested in the city of León over the strike, and at least 15 police officers have been injured in interactions with the strikers. (3) Reports trickle in of violent scuffles in most major cities throughout the country.

A normally frantic Managuan intercity bus terminal sits empty.

While many hope an agreement will be reached between the government and the transport workers prior to the planned month-long strike, several Nicaraguans we spoke to say that the situation has to get worse before it gets better. A 1999 transportation strike left two people dead and 48 wounded before a resolution was reached. (4)

Latin America's New Left and the Petroleum Challenge

In the hour-long ride it took for us to circumvent the blockades and arrive home, Briceño Perez explained that underlying the strike were corrupt politicians were sucking up the profits from the petroleum trade. Much of Nicaragua's petroleum comes from Venezuela, which has been a consistent ally of President Daniel Ortega's leftist government, yet gas in Nicaragua is currently the most expensive in Central America.

Daniel Ortega's Frente Sandinista de Liberación Nacional (FSLN) came to power through elections in January 2007 after 17 years of right-wing, neo-liberal governments. People's expectations were high, though Ortega's popularity is not uniform. His allies are those who have consistently maintained allegiance to the FSLN, though now well into middle age they work for a more moderate and secure kind of change. Opponents see this as selling out and feel disillusioned with the unfulfilled promises from the revolution. The way Ortega's government handles this transport strike could have major implications for his legitimacy in the eyes of many constituents and could shape his political future.

Nicaraguan does not produce any oil itself and relies heavily on Venezuelan oil imports. On the Pacific coast, there is one oil refinery that refines 20,000 barrels per day of Venezuelan crude oil and construction continues on a larger US$4 billion plant financed by Venezuela. (5) Nicaraguans are especially upset at the largely held perception that the oil refined in Nicaragua gets exported to Honduras where it is sold at a lower price. To add to the already complicated situation, Esso (an Exxon subsidiary), the operator of the working refinery has refused to handle Venezuelan crude in response to that country's nationalization program. (6)

While buses are not leaving the city, minvans and pickup trucks fill the gap.

Meanwhile, Exxon Mobil posted recent quarterly profits of over US$10.9 billion and it is no secret that these incredible sums are coming from all-time high oil prices, topping $120 per barrel this week. (7) However, high oil prices have been passed on to consumers throughout the world, causing hardship and resentment towards governments who are the most visible targets, though by no means the only culpable parties in the gas wars. Progressive governments must maintain social infrastructure that allows the 'canasta basica,' or 'basic basket' of products people require to meet their needs, to remain affordable. The Nicaraguan transport strike can be seen, on the one hand, as a response to a government unable to protect the canasta basica, but more broadly it is a response to the international capitalist system that enables corporations to profit at the expense of the public.

Local response blames the Government

Taxi Cooperative Logo.

The bitterness that Briceño Perez feels for the current government is complex. He shows us a scar on his hand, a bullet received while fighting for the Sandinistas during Nicaragua's civil war. He says, "The Sandinista revolution was transparent and nationalist, according to Sandino's values." But now, he says of Ortega, "We do not have a real leader. If a real leader came today, he would put the corrupt politicians in jail. Ortega says to people to get in line or get killed. His use of power now is a corruption of the revolutionary values of times past that we fought for. Ortega brings destruction to this country - the government is strangling the country. The people don't have work or food, unemployed people are eating only one time a day. It is time to say, 'enough already.'"

We ask him how he feels about the strike, because clearly he is driving a taxi - against orders of the transport union. Vehemently, he declares, "I am participating in the strike, despite driving. I know it is needed to bring a change." While the spiritual solidarity Jose may feel with strikers is evident, his car is owned by the taxi cooperative, and if he stopped picking up fares he wouldn't be able to pay the company fees.

A driver takes down an exterior 'taxi' light to avoid strikers' attention.

The implications of the transportation strike are rippling through the country and economy. Most of the food sold in Managua, where one out of five Nicaraguans live, is brought daily from outlying agricultural communities. After only four days of the strike, we found supermarket shelves bare of basics such as butter, cheese, and milk. Besides individual sellers unable to take the public bus to sell at city markets, highways are lined with stopped buses, as well as semis, the fate of their cargo unknown. A month long pause in transport means food scarcity in the capital is a risk, not to mention lost income for all those involved in national and international production, trade, and tourism.

For many, navigating the daily routine has become increasing complex in the streets of Managua. A domestic worker we spoke with said she thought she could get home tonight, but her job tomorrow required traveling through several neighborhoods rumored to be blockaded. She will have to weigh the risk of traveling against the need for work.

Mneesha Gellman and Josh Dankoff are currently traveling in Central America. They are stuck in Managua until the strike is resolved.

NOTES:

(1) The Daily News, 10 May 2008. "Nicaragua taxis, buses try
putting brakes on gas prices." Accessed 10 May 2008.

(2) La Prensa, 8 May 2008. "MTI firmará acuerdos con transportistas que no se sumaron al paro." Accessed 9 May, 2008:

(3) La Prensa, 10 May 2008. "Paro golpea estómagos." Accessed 10 May 2008.

(4) Carribean Update, 1 June 1999. "Transport Strike Settled." Accessed 10 May 2008.

(5) Energy Information Administration Country Briefs: Central America. Accessed 10 May 2008.

(6) Green Left Weekly, 22 February 2008. "Nicaragua and ExxonMobil clash over oil." Accessed 10 May 2008.

(7) International Herald Tribune, 1 May 2008. "Exxon Mobil reports 17% rise in quarterly profit." Accessed 10 May 2008.