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statistics and administrative expenses


As I'm sure you know, it's possible to prove anything and its opposite with accounting, statistics and surveys. Neverthess, sometimes it's at least a starting point.

Suppose that there are 200 million of revenues from aduana, 200 million from property transfer taxes, 200 million from VATA value-added tax, and 200 million from all other taxes combined (I'm making those numbers up, real numbers would be welcome). Although not classified as foreign aid, how much of these numbers actually comes from the sources I mentioned: NGOs spending money, Nicaraguans working overseas and sending the money back, foreigners living in Nicaragua spending money, buying land, etc. let's say 80 percent. Then we're left with 20 percent that is the revenue collected from purely local production.

What actually happens when a Nicaraguan government project takes place? Suppose the official funding is 60 percent Japan, 40 percent Nicaraguan gov't. As I said, most of that gov't money comes indirectly from the external sources. There is still a small fraction that comes from internal sources. But about a third of the money spent on any project in Nicaragua is siphoned off in misuse by the mafia governing parties to its ranked members. (For instance, in a typical road-construction, you might have a special salary for a person to be overseeing it who is essentially just the political boss and doesn't go but one time per week, yet gets paid a very, very healthy full-time wage.) So whatever internal revenues exist don't even cover the mafia share. The actual projects are paid for with external monies,.

As you mentioned: corruption. Between that and the daily difficulties of conducting ordinary business in Nicaragua (from natural disaster to sabotage and low education), it's a terrible place to invest in business. That's why it relies on external money.


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