Archive | Nicaragua

Why Nicaragua Was Smart to Reject Uber

NOVANEWS
  • Taxi drivers protest against Uber in Mexico City.
    Taxi drivers protest against Uber in Mexico City. | Photo: Reuters
The clear business strategy of Uber’s investors is to work ruthlessly to gain a monopoly position both within individual countries and internationally.

Back in July 2016, New York radio journalist Don Debar, reporting on the Democratic Party Convention in Philadelphia, found that people arriving for the convention in taxis were stopped at the security cordon over a mile from the convention center. From there, they had to get out and walk in the exhausting Philadelphia summer sun in order to attend Hillary Clinton’s preordained triumph.

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But passengers arriving with the Uber app taxi service were driven right up to the convention center into the company’s air-conditioned reception area. Debar’s anecdote about the Democratic elite’s cozy cronyism towards Uber is a microcosm of why Trump in the end easily defeated an out-of-touch Democratic leadership committed to Clinton’s corrupt, war-mongering candidacy.

In January, Nicaragua’s Sandinista government under President Daniel Ortega announced it would not give Uber permission to operate in the country. In Central America, Uber operates in Guatemala, Costa Rica and Panama. Its regional representatives say it has over 20,000 drivers serving more than 700,000 customers.

Uber projects the image of an innovative business, offering greater efficiency, convenience, economy and security for its customers and benefiting its drivers and the local economies where it operates. But Uber’s business model is aggressive, secretive and predatory, glossing over its questionable sustainability and distorting comparisons with competitors it seeks to displace. As a private company, Uber is not obliged to publish its accounts nor to have them audited by accepted accounting standards applicable to public companies. Transport analyst Hubert Horan reckoned that through 2015 Uber’s investors were effectively subsidizing passenger fares by as much as 49 percent, thus making it easy for Uber to underbid its competitors.

That is especially relevant in the case of Nicaragua where the taxi sector of the transport industry is dominated by low-income drivers grouped in cooperatives, and by very small family businesses, especially in the capital of Managua. Nicaragua’s government policy supports providers of public transport across the country, from Managua’s urban bus and taxi services to the river buses of the Rio San Juan, or from Nicaragua’s very efficient inter-city transport network to the boats that serve communities along the country’s Caribbean coast.

The support takes various forms, for example compensating bus cooperatives for the cap on bus fares in Managua, preferential prices to taxi and bus cooperatives for lubricants, tires and spare parts or credit support for the purchase of new vehicles. This support for Nicaragua’s transport industry keeps fares within the reach of ordinary Nicaraguan families, most of whom are on very low incomes.

By contrast, the clear business strategy of Uber’s investors is to work ruthlessly to gain a monopoly position both within individual countries and internationally. That strategy has involved years of pricing fares at below cost in order to hijack market share and promote an image of Uber as some kind of unstoppable natural force, encouraging more investors and creating an enormous wannabe Ponzi-like contraption vainly trying to generate enough business to be able to take off. A more likely outcome is that the business will eventually fall apart into one or more smaller viable components, for example selling data extracted from customers’ patterns of using the company’s service.

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Uber’s public relations falsely suggest it introduces healthy competition into a transport market vitiated by special interests jealously protecting poor service and anti-competitive practices. But the basis of Uber’s business model has nothing to do with innovation or fair competition and everything to do with classic predatory capitalism, maximizing profits by externalizing costs as much as possible and minimizing costs it cannot externalize.

For example, prior to 2016, Uber’s commission on each journey was 20 percent. Then, Uber hiked its cut to 25 percent of each fare. In contrast to conventional car hire and taxi businesses, Uber’s model avoids taxation, regulation and costs like auto insurance, vehicle purchase, maintenance, and depreciation or security. All that burden is absorbed by the drivers before they even begin to make any money.

Similarly, Uber’s multinational business tax profile offers minimal contribution to the upkeep of roads and highways. Uber may pay the authorities of a given country for permission to operate there, but the amount will certainly be much less than the revenue lost from transport operators displaced by Uber.

Nor is it true, as its promoters argue, that Uber makes more efficient use of its drivers’ vehicles. A typical Uber driver wastes 40 percent of their time driving between fares. So it is false to argue that Uber contributes to the local economy or is environmentally more sustainable than other taxi businesses. Uber contributes nothing to public health systems to cover costs from accidents involving their drivers or to mitigate environmental pollution their drivers’ vehicles create.

Uber’s app is easy for anyone technically competent to develop and was hardly innovative even when it appeared. For decades, local car-sharing and solidarity-taxi initiatives have pooled resources to reduce costs and make more efficient use of transport resources by reducing operating, administrative and insurance costs and parking problems. They too use communications technology via smartphones and the internet. The only thing uniquely extraordinary about Uber is how its promoters have managed to network elites so effectively as to attract over US$60 billion in investment for a business model that, as Hubert Horan demonstrated, will never match the rise of internet-based companies like Amazon or Facebook.

The idea that Uber might start operating in Nicaragua was floated by the private business umbrella organization COSEP based on the suggestion that Uber would help modernize, diversify and make Nicaragua’s existing taxi services more efficient. COSEP’s support for Uber is logical given the corporate business interests dominating its membership. Nor was it surprising that Uber’s public relations campaign bamboozled consumer organizations and media outlets with shallow “innovation” gobbledygook.

Announcing the government’s policy decision, leaders of Nicaragua’s cooperative movement attributed it to the need to avoid conflict with the cooperatives and family businesses that operate Nicaragua’s taxi services. Nicaragua’s transport services may be defective in some respects, but they deliver a proven, robust service to millions of Nicaraguans every day.

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More importantly, they do so as a grassroots associative network defending the still precarious standard of living of many thousands of Nicaraguan families in a mutually beneficial relationship with local and national government. As more people in Nicaragua adapt to new technologies, they will themselves develop new ways of mediating exchanges in goods and services without paying a cut to foreign multinationals like Uber. For the moment, Nicaragua has been able to defend an important component of its grassroots cooperative, community and family-driven economy against Uber.

As Sandinista strategist Orlando Nuñez Soto argued in his introduction to the Foro Sao Paulo’s just published “A Consensus for Our America,” the region’s progressive governments and social and political movements have created a new economy based on strategies by which people at the grassroots across Latin America and the Caribbean survived the long years of neoliberal catastrophe. That new economy, much of it still precarious, contributes over 50 percent of the region’s GDP.

As it becomes more sophisticated, the new economies are progressively expanding into regional and global markets despite increasing corporate efforts to exclude them so as to preserve the chokehold of capitalist businesses leeching surplus from the region’s economies. Since 2010, that new economy has made it possible for Nicaragua to grow faster than its Central American neighbors. Excluding Uber shows Nicaragua’s Sandinista government is serious about defending that new economy and promoting genuine economic democracy.

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Farmers, Indigenous Peoples and NGOs Take to Streets in Ten Cities Demanding an End to World Bank’s Morally Bankrupt Development

NOVANEWS

Image result for World Bank' CARTOON

Washington, D.C. — On October 10, 2014, NGOs, farmers’ groups, and indigenous organizations from across the world are coming together as part of the Our Land Our Business campaign to denounce the World Bank’s Doing Business rankings. The campaign, endorsed by over 235 organizations, will be staging  “creative resistance” events at the Bank’s annual meetings in Washington D.C. and nine other cities around the world. The D.C. event is drawing support from a wide range of activist communities, including Occupy groups who will join representatives of impacted communities from Kenya, Mali, and Ethiopia.

“Under the banner #WorldVsBank, this movement is calling for the end of the Doing Business rankings and the new Benchmarking the Business of Agriculture project. They are tools of a pro-corporate, anti-poor, environmentally unsustainable model of development. If the World Bank keeps promoting economic activity that destroys biodiversity and the livelihoods of smallholder farmers, pastoralists, and indigenous communities, they should not have a mandate to exist,” said Alnoor Ladha of /The Rules.

The World Bank’s lending to developing countries reached $35 billion in 2012. The Doing Business rankings play a critical role in determining what form of economic development takes place around the world. According to the World Bank’s own literature, they are “an incomparable catalyst for business reforms initiatives.” In practice, this has meant liberalizing developing country economies so that large-scale land investment and western corporations can move in unimpeded. The casualties are the smallholder famers and providers who currently feed 80% of the developing world but who are all too often rendered invisible or actively dispossessed.

“Working for the World Bank’s Social Fund in Gambella, I protested the widespread coercion and forced relocation of people. Today I live in political exile in Kenya. I am protesting the World Bank on October 10 because I know firsthand how their policies negatively impact communities,” said Okok Ojulu who will share his experiences at actions planned in D.C.

To coincide with the #WorldVsBank mobilization, the Oakland Institute, one of the world’s leading think tanks on land issues, is releasing a new study tackling the Bank’s approach to land, agriculture, and development, Unfolding Truth: Dismantling the World Bank’s Myths on Agriculture and Development. In addition, the Institute will also release six new country fact sheets that expose the reforms promoted by the World Bank in Kenya, Uganda, DRC, Laos, Cambodia, and Uruguay. In each country, the Bank’s policies have served as a catalyst for massive land grabs, dispossession, and forced eviction of countless small-scale farmers.

“If you look behind many of the recent land grabs, you will find World Bank policies that enable investors to come in with projects that promise benefits to communities but don’t follow through. We can keep going after each corporation and investment group but it would be more effective if the World Bank stopped using their immense political and financial power to pave the way for what has become the systematic exploitation of land and people,” said Anuradha Mittal of the Oakland Institute.

Our Land Our Business is also launching the world’s first transnational “missed call” campaign–uniting a call-to-action across multiple countries. The idea is to make a call to a local phone number; the mobile number is then registered as an expression of support, then supporters receive free text messages to get further involved (e.g. showing up at a creative resistance). In parts of the world where first-generation mobile phones are ubiquitous but computers and the Internet are costly and inaccessible, this is a new powerful tool for mass engagement in political action.

On October 10, a street mobilization featuring speakers and artists will take place at 4pm in Rawlins Park, Washington D.C. This is followed by further action on October 11 when activists and concerned citizens from around the world will again gather outside the World Bank at 11am to protest the Bank’s attempt to dismantle critical protections for people and the planet that are currently enshrined in its operational policies. These changes come at a time when the Bank is making plans to scale up its lending to the private sector and return to the sort of risky mega-projects that characterized its now-discredited structural adjustment programs in the 1980s.

The October 10 – 11 actions send a message to the Bank that the world won’t stand for its exploitive practices.

For more on the two-day event, please visit www.ourlandourbusiness.org.

Download Unfolding Truth: Dismantling the World Bank’s Myths on Agriculture and Development and the country fact sheets.  

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The Peasant Farmer Who Stood Up to the President of Nicaragua

Francisca Ramírez, the head of the peasant movement that is leading the fight against the construction of an inter-oceanic canal in Nicaragua, which has made her a victim of harassment by the administration of Daniel Ortega. (Credit: Luis Martínez / IPS)

Francisca Ramírez, the head of the peasant movement that is leading the fight against the construction of an inter-oceanic canal in Nicaragua, which has made her a victim of harassment by the administration of Daniel Ortega. (Credit: Luis Martínez / IPS)

The unequal battle that small farmer Francisca Ramírez is waging against the Nicaraguan government of Daniel Ortega has become so well-known that people are calling for her security and her rights from the political heart of Europe.

Who is she and why did the European Parliament order Nicaragua on Feb. 16 to protect her life and rights, as well as those of thousands of peasant farmers in the centre-south of this impoverished Central American country?

Ramírez is a 40-year-old indigenous farmer who has lived all her life in the agricultural municipality of Nueva Guinea, in the Autonomous Region of Caribe Sur, 280 km from the capital.

She told IPS in an interview that her family has always lived in that rural area, which was the scene of bloody fighting during the 1980s civil war.

When she was eight, her father abandoned them and her mother had to work as a day labourer, while Ramírez took care of her five younger siblings.

Having survived the US-financed war against the government of the Sandinista Front for National Liberation (1979-1990), Ramírez learned agricultural work, got married at 18, had five children, and with the effort of the whole family, they acquired some land and improved their living conditions.

Ortega, who governed the country in that period, after overthrowing the dictatorship of Anastasio Somoza, returned to power in 2007. In January, he started a third consecutive term of office, after winning widely questioned elections where the opposition was excluded, supported by a civil-military alliance which controls all the branches of the state.

Ramírez was happy with her life until 2013. “They told us over the radio that they were going to build a canal and I thought that it was a very important thing because they said that we were no longer going to be poor,” she said.

Then, gradually, the news started to change her perception of the project to build the Great Nicaraguan Canal linking the Atlantic and the Pacific, granted in concession to the Chinese group HKND in 2013, and she started to ask questions that nobody answered.

One day, bad luck knocked on her door: delegations of public officials who her community had never seen before, accompanied by members of the police and the military, escorted delegations of people from China who made measurements and calculations about the properties of the farmers.

“The route of the canal runs through your property and all of you will be resettled,” they told her.

Law 840, passed in 2013 to give life to the over 50-billion-dollar mega-project, which she was barely able to understand with her three years of formal schooling, was very clear: they would be paid for their lands a price which the state considered “appropriate”.

So the resistance began. “At first everybody was happy, we thought that at last progress was coming, but when overbearing soldiers and police officers started to show up, guarding the Chinese, the whole community refused to let them in their homes and we started to protest,” she said.

Since then, she said the official response has not varied: repression, harassment and threats to farmers who refuse to give up their land.

Ramírez said that she became an activist in the National Council in Defence of Our Land, Lake and Sovereignty, a civil society initiative to organise the peasant movement to defend their lands and rights.

She started marching behind the rural leaders who led the first demonstrations against the canal.

One of the many demonstrations by small farmers who came to Managua from the southern Caribbean coastal region to protest the construction of an inter-oceanic canal that would displace thousands of rural families and cause severe environmental damage. (Credit: Carlos Herrera / IPS)

One of the many demonstrations by small farmers who came to Managua from the southern Caribbean coastal region to protest the construction of an inter-oceanic canal that would displace thousands of rural families and cause severe environmental damage. (Credit: Carlos Herrera / IPS)

Later on, the leaders were arrested, threatened, intimidated and repressed by the police and military, and Ramírez unexpectedly found herself leading the demonstrations in 2014.

Her leadership caught the attention of the national and international media, human rights organisations and civil society.

Soon, the peasant marches against the canal became a symbol of resistance and more people joined, turning the movement into the most important social force to confront Ortega since he took office again 10 years ago.

The peasant movement against the canal “is the strongest social organisation that exists today in Nicaragua. Within any movement, an authentic and genuine leadership emerges, and that is what Mrs. Ramírez represents,” sociologist Oscar René Vargas told IPS.

The president “is aware that the movement is the most important social force that his government is facing,” he said.

The admiration that Ramírez arouses, with her ability to organize and lead more than 90 demonstrations in the country, has irritated the authorities.

More than 200 peasant farmers have been arrested, about 100 have been beaten or wounded by gunfire, and the government has basically imposed a military state of siege in the area, where it refuses to finance social projects, according to the movement.

Police checkpoints along the entire route to Nueva Guinea and military barricades in the area give the impression of a war zone.

Ramírez has not escaped the violence and harassment: her house has been raided without a court order, her children and family persecuted and threatened by intelligence agents and police officers, her belongings and goods that she sells, such as food, confiscated and damaged, and she has been accused of terrorist activities.

One of the latest episodes occurred in December 2016, during a visit to Nicaragua by Organisation of American States (OAS) Secretary-General Luis Almagro, to discuss with Ortega the allegations of attacks on democracy.

To keep Ramírez and other leaders of the movement from meeting with Almagro, police convoys besieged the community and repressed members of the movement, she said.

They partially destroyed the main bridge out of the area, and suspected members of the movement’s Council were held at military checkpoints.

They even confiscated Ramírez’s work vehicles, used them to transport troops and later damaged them, according to Gonzalo Carrión, from the Nicaraguan Human Rights Centre.

“Ortega’s government has visciously mistreated Francisca Ramírez and the farmers who follow her. Her rights have been violated, from the right to protest to the right to freedom of movement, and we fear that they will violate her most sacred right: to life,” Carrión told IPS.

Walking along footpaths in the dark and crossing a deep river, where she almost drowned, Ramírez got around the military cordon and travelled, disguised and hidden in a truck, to Managua, where she was able to meet with Almagro on Dec. 1, 2016 and tell him of the abuses to which her community had been subjected for refusing to give up their lands.

On Feb. 16, the European Parliament issued a resolution condemning the lack of protection for human rights activists in Nicaragua, putting a special emphasis on the case of Ramírez, and lamenting the deterioration of the rule of law and democracy in this country.

The members of the European Parliament urged “the national and local police forces to refrain from harassing and using acts of reprisal against Francisca Ramirez for carrying out her legitimate work as a human rights defender.”

“Francisca Ramirez is a victim of abuses by the police in the country aiming at risking human rights defenders’ security and livelihood,” the European Parliament denounced.

“Ramírez, coordinator for the Defense of the Land, the Lake and Sovereignty, was in Managua to file a formal complaint over acts of repression, violations of the right to free circulation, and aggression experienced by several communities from Nueva Guinea on their way to the capital city for a peaceful protest against the construction of an inter-oceanic canal, projects which will displace local farmers activities and indigenous people from the premises of the construction,” the resolution states.

While the government remained silent about the resolution, social activist Mónica López believes that it represented a victory for the rural movement.

“Without a doubt, the resolution is a social and political victory for the peasant movement against the canal, a condemnation of Nicaragua, and a global warning about what is happening against indigenous peasant movements in Nicaragua,” López told IPS.

The government asserts that the canal project is moving ahead, although a year has passed with no visible progress, and it maintains that it will eradicate the poverty that affects more than 40 percent of the 6.2 million people in this Central American country.

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