Neo-liberal economics continue to impact health and education

Nicaragua Network Hotline, 15 July 2002

The U.S.-dominated international financial institutions, operating under the ideologically rigid rules of neo-liberal economics, have imposed user fees on Nicaraguas health and education systems as a condition for development loans. These user fees are designed to facilitate cost recovery and have been part of the structural adjustment agreements that Nicaragua has negotiated in the past. The country is presently in the midst of negotiating another such agreement with the IMF, negotiations that should be completed in August. Structural adjustment agreements usually require that a country cut government expenditures, privatize government-owned utilities, eliminate tariff barriers and carry out other measures, including making the countrys labor laws more business-friendly. Nicaraguas newest structural adjustment agreement should not include user-fees for basic health and education because the U.S. Congress has voted to require the US directors at the international financial institutions to oppose all loans to poor countries that mandate these fees. Meanwhile, Nicaraguas poor struggle to pay the fees the government has imposed on health and education following earlier agreements with the IMF.

Last week, Education Minister, Silvio de Franco, announced that those autonomous schools (meaning those schools where children have to pay) which were suffering the greatest economic difficulties would receive extra help, some beginning this month and some in August. Observers expressed a certain skepticism at the news since the government had already announced overall budget reductions in the order of 10-15% and the minister was somewhat vague as to exactly which schools would benefit and by how much.

The deceptively-named Participation in Education program covers more than 60% of Nicaragua's schools. Under this IMF-promoted scheme, which was introduced under the Chamorro administration and which is privatization by any other name, the parents and teachers of each autonomous school are responsible for much of the running costs of building and even for finding voluntary contributions towards teachers' salaries.

As an example, Gerardo Meinhard, teachers' union leader at the Miguel de Cervantes School, said that twenty-four teachers from the afternoon sessions were entirely supported from parents' contributions, although their basic salaries are supposed to be paid by the government. Unfortunately, this means that this month they may well not get any money, since the parents are having a really hard time and their contributions are way down. Meinhard observed that the whole school budget was consumed simply in teachers' (extremely modest) salaries - usually ranging between US$50 and 100 per month. There are a thousand other things a school needs, he pointed out, From chalk to textbooks and from water to electric light. How are we supposed to keep these schools going? According to the Minister, Miguel de Cervantes is exactly the kind of school we will be assisting with extra funds. However, until children carrying chairs to school and teachers working two or even three shifts begin to see significant improvements, the questions will loom larger than any vague ministerial promises.

The findings of an intensive study into the state of Nicaragua's health care system, especially with relation to the impoverished majority of its people, were announced last week by the Office of the Ombudsman for the Defense of Human Rights. As anticipated, the news was not good. More than one third of Nicaraguans using the public hospitals and clinics had no fixed source of income at the time the study was made, during the last months of 2001. A second third revealed that their monthly income was less than $70, not even sufficient to supply half the basic food and other household requirements for an average family for a month. Only 3% said that their income was greater than $140, but that, even so, they had the greatest difficulty paying medical bills.

Where once health care was free, under structural adjustment even the most modest consultation now bears a price tag, while specialist doctors charge as much as most people earn in one month. Everything costs, even down to a simple vaccination certificate (US$2), while families of those who are hospitalized for operations are expected to bring everything for the operation, from gauze to gloves, besides paying as much as one year's income.

Although this work [of investigation] was conducted when the Ministry of Health was passing through a severe crisis due to lack of medicines, said Victor Urroz, author of the study, things don't seem to have gotten any better since then, but rather worse. For example, despite the two-thirds of a million US dollars that the Health Ministry has invested in new medicinal supplies under the new government, it is still carrying an historic debt of close to $2 million, and medicines remain scarce and expensive.

He noted further that the health budget had fallen as a percentage of the total national budget from 17.53% in 2000 to 13.24% in 2001, and that it was suffering further cuts in 2002 as the national budget faced severe contraction itself.

70% of respondents said they had to wait about one and a half hours before they reached the consulting room, and that the doctor could usually only spare them about fifteen minutes. Urroz drew attention to the fact that Nicaragua's Constitution speaks of the population's inalienable rights to education, social security and health. The government is obligated to supply these services, without exclusion or favor, he explained. It must guarantee free access to health service for the most vulnerable sectors of society, prioritizing especially programs for mothers and children.