The Price of Development in Nicaragua

Max Serjeant





“Look at this” Padre Espinosa said, pointing to the sky. “That’s an military plane, going to attack the rebels”.

“There are rebels here?” I asked. I knew of the regions troubled history but I had thought that was all in the past.

“Yes, they are a few hours up road, near Siuna… Now, what did you want to talk about?”

I was there to talk to him about the situation in Rancho Grande. Set amongst beautiful mountains in northern Nicaragua, the village and surrounding settlements make up a municipality with a population of around 35,000 people. The land is extraordinarily productive and produces fine coffee, cacao, grains and livestock. Rancho Grande is remote – three hours by bus from the nearest city – around half of which is on unpaved road. People here stare curiously at me as I walk around the village and some shout “Chele” (foreigner) at me as I walk past. Sometimes the atmosphere can feel slightly hostile, although everyone I speak to individually is welcoming and friendly. It is unsurprising that they are suspicious of outsiders though, because Rancho Grande is also a place that has for the last few years been under threat from outsiders.

In august 2012, a Canadian mining company, B2 Gold, has been in the exploratory phase of its gold mining operations in the municipality. Last year the government of Nicaragua signed an agreement allowing them to open a full scale mine there at which work started on the 15th January. This should be a good thing – bringing jobs and development to the area – but most of the population are not convinced, including Padre Espinosa. Espinosa is the catholic priest of the municipality and since it was announced, he has been helping to build up a movement in protest to the mine. They are known as the Guardians of Yaoska, and have organized several large protest marches to draw attention to their cause. Together with the help of community leaders and ADDAC, a local NGO, the movement has grown and now everyone in the village is aware of the potential problems that this mine might cause. I asked him what these problems are, and why he was so opposed to the mine. He responded by outlining some of the health problems caused by the chemicals used in gold mining (including mercury and arsenic) and how they leak into the rivers – poisoning the whole area. He described a future where those who didn’t become ill would be forced to move to city slums as the chemicals rendered their land unusable. As the priest of Rancho Grande, these were his children and he felt a duty to look after them.

What he predicts is not just speculation however. B2 Gold already owns two mines in Nicaragua and both the communities in which they are located have been plagued with environmental issues and protest in the recent past. In Santo Domingo, local people blocked the entrance to the mine ,last February in protest but where rounded up by police – 12 were arrested. The mine at Limon also has a history of labour problems. As well as the cases specific to this company, countless examples of environmental and social problems caused by the activities of multinational companies – in the mining industry and in others such as oil – can be found throughout Latin America and Africa.

Rancho Grande differs from the other villages where B2 Gold operates, in that through the efforts of the Guardians of Yaoska a movement has grown up before the company has started work. Murals can be seen painted on houses and a banner hangs across the highway that passes the village. In the other communities the company took advantage of low levels of education to win over the population, promising jobs and development. In Rancho Grande they did not expect to find an organised group warning the population against them and as a result have resorted to underhand tactics to smooth over resistance. Occasionally you see someone wearing a t-shirt bearing the company logo – gifts given out to win over local people. Espinosa describes what he calls the “idiosyncrasy” of the campesino, whereby local people can be convinced that the mine will bring them money to buy more land, however the end result will be that they will be forced to leave the land. He alleges that other more significant types of bribe have also been used to win over evangelical pastors (and subsequently their flocks) and that they offered him to fund the construction of a new catholic chapel. One story I heard again and again relates to when the company created a petition in order to show the existence of local support for the mine. When it attracted few signatures they started tricking people by having doctors oblige people to unwittingly sign when they went for treatment. Mysterious groups have turned up and thrown stones at protest marches and anti-mine paintings have been sprayed over. The Nicaraguan state has also done its part in making it difficult for the protesters. One active participant in the movement told me that on one march they intended to go to the department capital but on the day, no buses came along the usually busy route past their village. When they managed to round up enough trucks to take them, they were stopped by riot police and a stand off ensued for several hours. Eventually they were forced to turn back. The mayor – a member of the governing Sandanista party – is the target of much local fury as she ran on a platform opposing the mine and then promptly changed her stance as soon as elected. She now organizes pro-mine marches which all council employees are obligated to attend. This puts them in the difficult position of either loosing their jobs or taking a public stand which they may not personally agree with – on an issue which puts themselves in opposition to an angry population.

It is hard to provide an exact figure of how many people in Rancho Grande support and oppose the mine, however it is clear that a large majority are against it. While the movement has so far remained peaceful, as work commences it is difficult to know what will happen next. Jaime tells me how some in the village might end up joining those guerillas in the mountains up the road and that if it wasn’t for his family and Christian faith he might be one of them. Tensions are rising and its understandable with the stakes being so high. Rancho Grande sits between the imposing (and protected) Penas Blancas massif and the vast Bosawas natural reserve. Environmental damage here could effect both. Meanwhile a village faces the possibility of chemical induced illness and displacement.




What is happening in Rancho Grande is largely unknown outside of Nicaragua, however another foreign company is starting a much more well known project in the country – one that could cause similar problems but on a much larger scale.

On the 22nd December work started on the building of the Nicaraguan Canal. This mega-project will provide a new shipping route across Central America linking the Atlantic and Pacific oceans. While the Panama Canal already allows this, it has been unable to keep up with the growth in width and depth of oil tankers. The scale of the project is mind-boggling – alongside the canal which will cut across 278 kilometres, two deep water ports, an airport and whole cities are planned at a total cost of $50 billion. While a significant portion of the route cuts across Lake Nicaragua, the size of modern oil tankers means that a channel will have to be dug out along the lake-bed as it is not deep enough for these ships to pass. Some people are suggesting that the project is not actually possible and will not be completed, partially because there has been little evidence that there is sufficient funding. The government however and the Hong-Kong based company, HKND, who have the contract to build it show no signs of wavering. It has been suggested, due to the lack of information surrounding the project as well as HKND, that the Chinese government could be bankrolling the canal. This would give it geo-political significance as it would be a significant symbol of China’s rising status in the world and its growing ability to rival the USA on the world stage.

Like in Rancho Grande, the criticisms of the canal highlights both environmental and social problems that it will create. Doctor Maria Acosta works with an NGO that focuses on Nicaragua’s marginalised indigenous and black communities. She explained that many of these communities are in the path of the canal and soon will simply not exist. In total 270 communities will be destroyed by the project, affecting an estimated 100,000 people. The government has publicly announced that compensation will be paid to displaced people however Acosta points out recent changes in legislation that will make it significantly harder for many to receive this. Unlike western countries, many people in Nicaragua do not have deeds to their land. Often the ancestors of current occupants settled their lands before deeds were in common use and have lived there ever since. It is not uncommon that even recently bought land does not come with documentation. The people in this situation will receive nothing and under Nicaragua’s new law 840, only a weeks notice is required before property is siezed. Perhaps the most worrying part of this law however is that clause 8.3 signs away any legal obligations for HKND to anyone – including the government. It effectively gives the company the right to do whatever it wants and removes the government’s right to challenge it.

The environmental risks of the project are also massive. The canal passes though several protected areas including the Indio-Maiz reserve – after the Amazon, the largest rainforest in the Americas. It will also cut through Lake Nicaragua, the largest lake in Central America and the water source for the whole of region. Around 960 thousand square meters of earth will be dug up for the project and no information has been released to explain where all this will actually go. While an environmental survey was done in preparation for the canal, the government commisioned HKND itself for this, casting its findings into doubt. In reality, nobody really knows for sure what will happen to the lake and the coastlines at either end of the canal once they are all linked up.

As in Rancho Grande, there is popular opposition to the canal. On december 10th, thousands of people protested, blocking roads and marching. On the island of Ometepe, disapproval is also not hard to find. Consisting of two volcanoes connected by a narrow isthmus, the island is a popular destination for backpackers. The ships will pass its southern shore and the locals are worried about its effect on their home. Within minutes of getting of the boat, graffiti proclaiming ‘no to the canal’ and ‘Ortega is selling our country’ is noticeable. A local guide, who takes tourists up one of the volcanoes, makes sure to alert me to the existence and location of a petition against the canal. “The government does not care about the people here” he tells me, “they just want to sell of the country as quickly as possible”.



The canal and the mine in Rancho Grande have much in common. Both will have severe environmental consequences as well as life changing social ones for local people. Both have inspired resistance amongst those populations and both reveal important information about the policies of the Nicaraguan government.

Nicaragua’s recent history is a turbulent one, and many people know of the country due to the Sandanista rebellion and the subsequent Contra war. The Sandanistas executed a popular rebellion against the dictatorship of the Somoza dynasty and established themselves a socialist political party. Not wishing to see another Cuba, the CIA covertly funded right-wing rebels with money gained from selling arms to Iran – both actions being prohibited by the US congress and Iran being subject to a international arms embargo. After successfully defeating the Contras, Daniel Ortega established himself as the unchallenged leader of the Sandanistas and spent eleven years in power before being voted out in 1990. He remained leader of the party however, and in 2006 was voted back into office. He has been president ever since.

Today, all around the country, huge colourful billboards show Ortega waving a Nicaraguan flag and staring pensively into the distance. “Christian, Socialist, Solidarity” and “With everyone, for the good of everyone” are two of the slogans they display. It seems that the reality does not meet the rhetoric however. The Sandanistas won popular support for their revolution, in part, because the Somoza family controlled so much of the nation’s economy and used repressive tactics to curtail labour rights. The Sandanistas on the other hand, promised nationalisations and improved working conditions for the Nicaraguan people. Under Ortega however, the country has seen its resources privatised and sold off to multinationals – as the canal and the example of B2 Gold illustrate. This has meant that inhabitants of local communities have not seen the promised changes to their conditions – instead finding themselves facing environmental issues and a government happy to forcefully smooth over any local resistance.

This situation has created a lot of disillusionment with politics. During my time in Nicaragua, I often heard people complain that they have switched one dictator for another – due to the omnipresence of Ortega and his apparent determination to hold on to power . Ortega argues that he wants to bring development to his country, but the cost of that development is being paid by its people and if the dissenting voices are to be believed, Nicaragua could be on the brink of upheaval. I asked one woman in Rancho Grande how much of a threat the rebel groups posed. She responded that it depends on the results of the next election in 2016. Perhaps some of the people displaced by the country’s development will end up in the mountains alongside them.


Tags: Nicaragua, Ortega, Canal, Mining, Ometepe, Rancho Grande, FSLN, Economics, Protest, B2 Gold, HKND, Environment, Pollution, Latin America


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