NSC on facebookNSC on twitterNSC RSS news feed

Socialism from below: the popular economy*

News from Nicaragua | Tuesday, 30 May 2017 |

Orlando Nunez, Presidential Adviser on Social Policy

Orlando Nunez, Presidential Adviser on Social Policy

Liz Light talks to Presidential Advisor on Social Affairs Orlando Núñez Soto about the importance of the popular economy*, a sector that generates 50% of the country’s wealth but receives little recognition.

“Nicaragua's wealth is created by three economic blocks – foreign capital, national capital, and the popular economy, a sector which produces most of the country's food and creates 70% of the country’s employment.”

“Nicaragua’s popular economy is the strongest in Latin America: it owns a higher percentage of the land has most access to credit and is the most organised. Although the country is still impoverished this new type of economy is creating a slow, silent revolution by gradually taking economic control. For example, nearly 100% of sesame seed is produced, processed and exported by small producers, who because they are involved in the whole value chain are much better off.”

“Co-operatives are an important sector of the popular economy. During the 80s it proved very difficult for them to consolidate because they were military targets in the US-backed contra war. During the years of neo-liberal governments, they almost disappeared because of lack of access to credit. But since the FSLN returned to power in 2007, co-ops are again being developed and there are now more than 5,000, particularly in agriculture, fishing, craft and transport.”

“Co-ops are provided with training in administration, co-operativism, economics, organic production, water harvesting etc...

With robots and computerisation big capital needs fewer workers, so the only way forward is for the poor to take charge of the economy. It is a transformation that implies a long, hard struggle; the results will not be seen in 10 or 20 years as advances in this type of economy take between 50 to 100 years to be seen.”

“Production by small and medium producers guarantees Nicaragua’s food security, so government policies support them with credit and co-operative organisation and by improving services such as access to electricity, water and roads. Programmes such as Zero Hunger provide capital, not food handouts, enabling farmers to produce food and compete in the market. Without farmers and fishermen we would have to import food and poverty would increase.”

“The principle problem small producers face is market prices. There are always problems with credit and those related to poverty, but fundamentally the principle problem is price. Inflation hits them hard as the cordoba devalues but the prices stay the same. Other problems include access to capital to invest in adding value to their products, and competition from large foreign companies.”

“It's important that people, not big capital, own the land, the businesses, the credit market and transport. It’s good news that the small producers are beginning to appropriate the economy. This is a different approach from the socialist culture where the state owns the economy, which we've seen didn't work from either an economic or a political viewpoint. This is what we call ‘socialism from below,’ the associative route to socialism, co-operativism.”

*The popular economy consists of all workers who are not bosses or salary earners, but who earn a living from their own work. This includes small and medium farmers, informal sector and self-employed workers, co-operatives, and associations.