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Central American University - UCA  
  Number 405 | Abril 2015



A country’s foreign policy must defend national interests

This former Nicaraguan foreign minister and ambassador to both the United States and Canada (1997-2001) shares his views on Nicaragua’s foreign relations in today’s world.

Francisco Aguirre Sacasa

Before commenting on the state of the Ortega government’s international relations it’s useful to establish the conceptual framework on which the essential foundations of any serious country’s foreign policy are based.

The three pillars of diplomacy

A well-understood and well-managed foreign policy rests on three pillars. The first is to contribute to the defense of the nation’s sovereignty and territorial integrity. This implies a collaborative relationship with the country’s armed forces. Diplomacy is the country’s velvet-glove and the armed forces its iron fist.

The second pillar is to ensure the interests of the country and its citizens wherever they may be. Serious countries not only defend the interests of their citizens who live in-country, but also try to help with any problems they may face abroad. In this regard, Nicaragua’s Foreign Ministry has an obligation to protect the interests of Nicaraguans in Costa Rica, Panama, the United States, El Salvador, Spain or anywhere else they may be.

Unfortunately, Nicaragua has a large diaspora, with one in six of its citizens living abroad, and we are obliged to assist them any way we can. This obligation isn’t just based on a fundamental pillar of diplomacy; it’s the least we can do for our compatriots in other countries who generously send us over a billion dollars in remittances annually.

The newest and most modern third pillar of diplomacy is concerned with economic issues, with how to promote the country’s growth and how to “sell” the country, in the most positive sense of the word. This, for example, involves attracting investment to Nicaragua. It was one of the main tasks that occupied my time as ambassador to the US and Canada as well as when I was foreign minister.

Diplomacy and realpolitik

Some people confuse diplomacy with protocol. This is a mistake. Diplomacy is formulating and implementing strategies to promote the country’s interests in the areas I just mentioned, based on the three pillars. This is the essence of diplomacy in any country, whether it’s the United States, Russia or Nicaragua.

A country’s diplomatic strategy must also be consistent with its possibilities, so it has to be based on what’s called realpolitik, a German word simply meaning political pragmatism. An essential element of a country’s realpolitik is to know its place in the concert of nations. More specifically, a country has to be clear about its specific importance—the heft of its economic and military power—and adapt its actions accordingly. This same principle, of knowing its place, isn’t applied only to nations; we must also apply it to people. To remind myself of this I have a ceramic plaque by my front door noting the longitude and latitude of my house and its height above sea level.

Let’s now look at how serious diplomacy’s principles should be applied in our country. Nicaragua has to position itself with respect to its foreign policy. Nicaragua can’t aspire to the same international policy as, say, China, because we don’t play in the same league; we don’t have its resources or its specific heft. Who are we? We’re the country with the smallest economy in Latin America, even smaller than that of Haiti. We’re the second poorest country in Latin America; only Haiti has a lower per-capita income than ours. Given this, our outward projection is limited, even if some of us like to think we’re the center of the universe, a way of thinking that leads to confusion, self-deception and mistakes in international relations.

ACARA is an example of
Nicaraguan diplomacy in action

But being small doesn’t mean we’re powerless. Our diplomatic service has skilled, trained men and women able to deal pragmatically with countries that are bigger and more powerful than our own. What we need is creativity, audacity, perseverance and knowledge about the domestic correlation of forces in the countries we interact with. Using diplomacy, for example, we managed to get the Nicaraguan Adjustment and Central American Relief Act (NACARA) passed in 1997, which was really an amnesty for undocumented Nicaraguans in the United States.

As ambassador in Washington, I saw that thousands of undocumented Nicaraguans in the US greatly feared being deported. Millions of other illegal Latin Americans were also feeling this same terror because in late 1996 US Congress had passed the most severe anti-immigrant legislation in US history and President Clinton had signed it. I therefore proposed launching a campaign to reverse this law, at least for Nicaraguans. I realized that those most opposed to liberalizing the law were Republicans, so I began working with Republican leaders who then—as now—controlled the Senate and House of Representatives.

I remember buying a map of the United States on which we colored all the counties where Latinos lived in different tones of red to indicate just how numerous and potentially important the Latino vote was in each one. With this map I went from office to office of Republican senators and representatives explaining to them that they’ll never have a Republican President if their party continues to be seen as hostile to the Latino community, the largest and fastest growing minority in the country.

The other part of my message was that most of the undocumented Nicaraguans were refugees who had entered the US “wetback” in the 1980s when the Sandinistas ruled Nicaragua and that most of them would vote Republican. This argument was crucial to my strategy. Thanks to it I won the help of powerful Republican Congress members as well as columnists and editorialists from the conservative media who internalized this message and supported NACARA. For the Republicans it was a way to demonstrate sympathy for Latinos without undermining their political position on migration.

One of the hottest issues in US politics today is achieving amnesty for the 11 million undocumented Latinos living there. What all illegal Latinos want—Mexicans, Dominicans and those from the three countries of Central America’s northern triangle—is something like NACARA, which we Nicaraguans achieved in 1997.

Nicaragua and the US unions

Another example of something I was able to achieve in the United States by assessing that country’s correlation of forces, was to thwart US unions’ attempts to destroy Nicaraguan free trade zones in the years 1997-99.

Their strategy was to denounce the mistreatment of those employed in the Nicaraguan maquilas (assembly and processing plants that benefit from duty-free agreements in free trade zones—FTZ—to import raw materials and export manufactured goods). Their intention wasn’t to improve the conditions in our maquilas, but to protect workers employed in US garment factories, which would be affected by Nicaraguan competition. Remember that the US garment industry wasn’t competitive because of its high labor costs. Furthermore, the workers in those factories were union members who paid part of their wages to the unions, which thus had a clear interest in protecting them from foreign competition. Even though our FTZ exports to the US were minimal at that time, these unions tried to make “an example” of our maquilas, based on the adage that “fleas stick to the skinniest dog.” They could then use the precedent of a victory in Nicaragua to convince Democratic Congress members to penalize the Dominican Republic, Mexico, Bangladesh and even China, countries with greater textile exports.

In any event, by understanding the correlation of forces in the US and collaborating with influential media and companies that bought clothing manufactured in Nicaragua, such as Fruit of the Loom, we managed to convince Congress members that there were no such abuses. In this effort I had support from our FTZ management, the Ministry of Labor and some Nicaraguan FTZ union leaders, who explained to my interlocutors that our maquilas observed ILO standards and keeping them open benefitted thousands of women whose economic emancipation depended on this work. That’s how we managed to dismantle the very intense campaign against our Nicaraguan FTZs.

Manipulating the political system

My objective with these examples is to demonstrate that although we’re a small country, we can successfully operate in a large country’s system and defend our interests if we’re purposeful, act wisely and seek influential allies. I stress this because we in Nicaragua are used to great powers manipulating us and we even like them to dominate us. Proof of this is that when our politicians run into trouble in the domestic political game they often resort to foreign embassies seeking support for their causes. But we need to be aware that we too can manipulate the system of larger countries if we understand them and know how to move in their domestic politics.

Obama: A President with different baggage

Let’s now address other elements of the Nicaraguan government’s international relations. We say we try to maintain harmonious relations with all countries. This sounds good but in practice it seems the current government doesn’t understand that not all countries have equal geopolitical importance for us and our relationship with the most important of them—I’m referring to the United States—is correct but cold. Historically, our relationship with the US hasn’t always been the happiest but at least it’s been the most significant power for us since the mid-19th century.

Perhaps the poor state of our relations with the US is because certain sectors of our government see it as a declining power, a kind of “paper tiger.” This may be because, relatively speaking, the United States is no longer the military and economic colossus it was a few years ago.

Or maybe this perception comes from a mistaken reading of the worldview and actions of President Barack Obama, whose personal baggage is totally different to that of all his predecessors in the White House. It’s not only different because he’s black, but because he’s the son of a foreigner who was born in Kenya and returned there. He’s also different because he lived part of his formative years outside the United States, in Indonesia, then later lived with his grandparents in Hawaii, a five hour flight from the mainland out into the Pacific Ocean. Hawaii is also an atypical US state in that most of its population doesn’t have Anglo-Saxon origins; its largest ethnic group has Japanese roots and there are many people of Polynesian or Portuguese descent.

This accumulation of factors gives Obama a more internationalist, more tolerant, worldview than his predecessors. He sees the world as it really is: a very diverse planet where there isn’t always a communality of interests among what the different countries want and what the United States wants. I’m convinced that Obama understands that there are limits to US power and he’s not necessarily a believer in US “exceptionalism.” All this, and especially his tolerance in international affairs, makes him sometimes seem like a weak and indecisive President.

The superpower in our backyard

Leaving aside Obama’s baggage, the United States remains the world’s only economic and military superpower since the USSR disappeared and until China gains more strength. Among the data demonstrating this is that the US annual armaments expenditure is greater than the combined armaments expenditure of the second to tenth world powers, among them Russia, China and the NATO powers. Its economy also remains the largest in the world. With only 4% of the world’s population, the United States produces 16% of the world’s GDP. No other country is currently playing in this league and no other country is as important for Nicaragua given its geographic proximity and its historical and business relations. The United States is our most important trading partner and the bulk of those $1.2 billion in remittances entering Nicaragua annually from the work of our compatriots in the diaspora come from there.

Furthermore, the US vote is decisive in such international financial institutions as the International Monetary Fund, the World Bank and the Inter-American Development Bank. All these institutions are crucial to our economy and we must be clear that with just one telephone call, Washington can decide if they suspend, reduce or increase aid to Nicaragua, without even taking the issue to their respective board. I’m telling you this as someone who worked in the World Bank for almost thirty years, including more than ten years as departmental director.

Correct but not cordial

How is Nicaragua handling its relations with the United States today? As I have already hinted, badly and recklessly. In recent years, from 2007 to 2014, I have been saying that our relations with the US were correct but not cordial. I would now call them correct but cold. Instead of improving they have deteriorated. They have worsened through our closeness with four of the five countries in the world formally sanctioned by Washington: Venezuela, Cuba, Iran and Russia. The fifth country in this group is North Korea.

Washington has had tense relations with some of these countries. They have been tense for decades with Cuba, though they are now improving and rapidly so. In Russia’s case, Washington and Moscow had a kind of kupia-kumi agreement [A Miskitu term meaning “single heart” derisively used in Nicaragua to define a 1971 pact between Somoza and Conservative leader Fernando Agüero] from 1989 until a couple of years ago but this has broken down through Russia’s actions in the Ukraine. Washington’s perception is that Russia and the US are again in a “cold war” so countries friendly to Russia are viewed as adversaries of the United States. Despite Nicaragua’s insignificance, our friendship with US enemies gets us on Washington’s radar, which does us no good.

Daniel Ortega doesn’t have a single friend in Washington at the moment. Paradoxically this wasn’t the case in the 1980s when, even in the middle of the contra war some politicians, influential academics and NGOs were sympathetic to the Sandinista revolution. But, since 2007 they have all been distancing themselves from Ortega and no one with any influence would now give a dime for him. No one. This isn’t to say the United States is going to invade Nicaragua or destabilize its government. It just means no one wants to do the government any favors. We saw that, for example, in the failed lobbying by both our private sector and government to extend the 10-year Tariff Preference Level (TPL) that allowed apparel made of certain fabrics assembled here to enter the US duty free, regardless of the fabric’s origin. There’s simply no willingness to help a President who is friends with Maduro, Putin and the Castros. Nor is Comandante Ortega helped by his virulent anti-US rhetoric, his hostility to Israel and his votes on issues sensitive to Washington in organizations such as the UN and the OAS. And, believe me, Washington notices those votes!

US foreign policy

Moving on to another issue: how important is democracy to US relations with Nicaragua today? I’d say it’s definitely less important than a few years ago. With a State Department overwhelmed by crises throughout the world, US foreign policy is simply: “Don’t create any more problems.”

Obama has many headaches. About five or six months ago he announced that one of his greatest successes in the Middle East was to have taken Al Qaeda out of Yemen, and now there’s a civil war in Yemen that has forced the US to withdraw all its people from there, including special ops. In Iraq the US got into an unnecessary war. It was George W. Bush’s great mistake because Saddam Hussein wasn’t involved in the attacks on the Twin Towers.

After overthrowing Saddam, the US could never control the situation in Iraq. It put in 150,000 men who, while there, maintained Saddam’s successor, the new Iraqi dictator, in power while he robbed billions of dollars and never even managed to control the situation. The proof is that when the Islamic State appeared, the Iraqi army disappeared… I laugh now when I hear retired US generals saying the US is once again training Iraqi military so it will now have a good army. They’re wrong! The US has never understood or known how to handle the Middle East’s political complexity.

Clearly, US commitment to democracy and human rights varies from administration to administration, country to country, and time to time. I think Bush Sr. had a more decided interest in democracy than Obama, but couldn’t translate that interest into policies that really promote it. The way his administration intervened in Nicaragua is an example of that ineptitude and devastated our fragile democracy. And, of course, we Nicaraguans also helped weaken it with our own ineptitude.

Nicaragua’s relations with other countries

Let’s now move on to Nicaragua’s relations with other countries that are or could be important to us: Cuba, Venezuela, Russia and China.
Cuba: President Ortega’s relationship with Cuba is today facing a new reality: the desire of both the United States and Cuba to normalize diplomatic and economic relations. One of Obama’s characteristics is that he’s not afraid of tackling taboo issues, as long as they aren’t likely to harm the domestic political game. In 2008, when he was running for President, he announced that he was going to normalize relations with Cuba and justified it by saying that the policy of isolating Cuba hadn’t yielded positive results in 50 years so it was time to change it. I think Obama expects a lot from these agreements and my perception is that Cuba is also seeking a pragmatic rapprochement with Washington, especially in view of the political and socioeconomic collapse of Venezuela, until now Cuba’s benefactor.

Venezuela: This is another very important country in Nicaragua’s international relations, although its importance is declining. We’ve had close political ties with Venezuela ever since Arnoldo Aleman’s government. I remember Hugo Chávez visiting Nicaragua when I was foreign minister. On that occasion I recommended to Arnoldo that we take Chávez to Matiguás and give him an accolade there, in the heart of Nicaragua. President Alemán liked the idea and Chávez was delighted with it. So we went to Matiguás in a Venezuelan Air Force helicopter and the welcome he received was spectacular, not only because Matiguás was a Liberal municipality and we were well organized there, but because you could see the affection between the poor farmers and Chávez, an undeniably charismatic leader.

Hugo Chávez devised 21st Century Socialism thinking that Venezuelan oil could achieve Bolivar’s dream: to unify Latin America under Venezuelan leadership. But today we all know that Venezuela’s going over Niagara Falls in a barrel. We know its economy is devastated; it has the second highest homicide rate in the world, only surpassed by that of our neighbor Honduras; there’s a tremendous shortage of everything; the economy is being badly mishandled—according to the International Monetary Fund the Vene¬¬zuelan economy will contract by 7% this year—and it has the highest inflation in the world and is indebted to levels as high as Nicaragua’s in the late eighties.

President Maduro talks a lot about Venezuela’s special relationship with China, but this relationship boils down to China buying Venezuelan oil. Venezuela is selling increasingly more crude to China because the US is buying increasingly less due to its technological revolution—extracting oil by fracking—to become a net energy exporter. The irony is that Venezuela exports about 850,000 barrels of crude daily to the US, which re-exports part of it back to Venezuela as refined products at a much higher price, i.e. the US gains more from this deal than Venezuela.

Nicaragua’s relations with Venezuela are important because since 2007 Nicaragua has been the beneficiary of Venezuelan “aid,” although we’re already seeing a reduction and a change in its nature. If this relationship were subjected to a cost-benefit analysis, I’d venture that the impact of those resources would be negative. Let’s face it, most of us haven’t benefitted at all, mostly because we’ve continued to pay top dollar for electricity and oil derivatives. Furthermore, this aid doesn’t come here transparently; it comes invisibly, unaccounted for. This suggests that, instead of acting in the nation’s interests—one of the pillars of serious countries’ international relations—the Nicaraguan government is using it to meet “different” interests… I’ll be diplomatic and call them that.

Who owes Venezuela for all this “aid”?

Before closing on the issue of Venezuela, I want to clarify a very important point. Does Nicaragua owe Venezuela for this “aid”? In the early years of Daniel Ortega’s second term in office I was a representative and president of the National Assembly’s Economic Commission and was appointed to chair a special commission to examine the framework agreement for the support Venezuela would be giving Nicaragua. That commission, which included representatives from all parties, including the FSLN, unanimously concluded that wasn’t a State to State loan and, therefore, wouldn’t constitute a liability or public debt of the Republic of Nicaragua with the Bolivarian Republic of Venezuela. Nicaragua’s Constitution categorically stipulates that only the National Assembly can approve indebtedness of the Republic of Nicaragua and this debt with Venezuela was never approved in our Parliament. What existed was a framework agreement based on what was formerly called the San José Agreement, which Hugo Chávez and Daniel Ortega changed into a virtually personal agreement between them. They created Albanisa, a private joint-venture association partially formed with capital from PETRONIC, Nicaragua’s state oil company, and PDVSA, Venezuela’s state oil company, and it has a debt. I repeat, the State of Nicaragua has no debt with the State of Venezuela. So what will happen with this debt? Possibly, the same as happened with the debt Nicaragua had in the eighties with Iran, Russia, Libya and Costa Rica… we won’t pay it. Or Albanisa or Alba Caruna or one of those Albas that are everywhere will take responsibility for it. But it isn’t our country’s liability and there’s no reason why the country should pay it.

Russia: The government of Nicaragua is now strengthening its relations with Russia. Daniel Ortega remembers that the Soviet Union was his benefactor in the 1980s and dreams of reviving that special relationship with Moscow. But today’s Russia isn’t the Soviet Union of yesterday. Russia is greatly diminished, a very different animal. It is no longer a first-rate military power. It’s true that it has considerably increased its military spending and still has a stockpile of nuclear weapons, but the Russian armed forces are extremely degraded compared to what they were 25 years ago. And the Russian arms industry is also reduced. They can’t even build sophisticated ships for their navy, as evidenced by the fact that Russia is building four large ships in France for its navy because its shipyards don’t have the “know how” to build them.

Ortega’s government has managed to get some shipments of wheat and buses from Russia but I doubt it will go further than that. I don’t believe Nicaragua will acquire even one MiG plane. Nor would it suit us to get one because we don’t have the financial resources to keep it operational and it isn’t even an ideal weapon to fight drug trafficking, put forward as the justification for getting them. Also, acquiring these planes would be seen as a provocation in influential Washington circles.

China: Let’s now talk about China. In the first place it has to be clarified that Nicaragua doesn’t have diplomatic relations with the People’s Republic of China (PRC); our relations are with the Republic of China (Taiwan). It’s true that the PRC is already the second largest and fastest growing economy in the world and ranks second place in military spending. Both economically and militarily, it is going to be a major competitor for the United States in 10 to 15 years. At the same time, however, there’s been a symbiotic relationship between the two nations ever since the seventies, when Nixon established relations between the United States and China: each one needs the other.

I’ll give you some facts: China is the second most important trading partner for the US and the US is the third biggest exporter to China. In this commerce, China had a surplus in its favor of US$345 billion in 2014, a figure equal to the entire GDP of Venezuela or South Africa. Another fact: China is the United States’ largest foreign creditor, holding US$1.6 trillion in US treasury bonds, a figure we can’t even comprehend. These figures show us how both countries need each other.

They need each other, they know each other… and they are rivals with different interests. Let’s look at another fact: the Chinese are in the process of establishing a development bank that will allegedly rival the World Bank and the Asian Development Bank (ADB). China’s bank will have seed capital of US$50 billion, most of which will come from China. Although the US asked its European allies not to participate in this bank, France, Britain, Germany and Italy have decided to do so, which is a diplomatic setback for the US. This gives an idea how powerful a magnet the PRC has become in today’s world.

China now has a new “emperor,” President Xi Jinping. Like his father, Xi was persecuted during Mao Zedong’s Cultural Revolution. As a young man, he visited the United States 25 years ago and stayed in the house of a US family in Iowa, which he has since revisited as a high official of his country. His daughter also studied at Harvard University. This shows us that Xi has personal links with the US and knows its economic muscle and its strength. Although he is aware that his country is a great Eurasian power, he also knows it isn’t yet playing in the US leagues and that it’s wise to maintain close relations with the United States. Xi travels to the States frequently and high-level consultations are held twice a year between the two governments about economic, military and foreign policy issues. This year he’ll be received on an official visit with a gala dinner at the White House.

China and the interoceanic canal

The apologists for Nicaragua’s interoceanic canal project who insinuate that the People’s Republic of China is behind this project are mistaken. If Nicaragua has such good relations with the PRC why was there no important Nicaraguan representative at the China-CELAC Summit held in Beijing in January 2015? Why didn’t President Daniel Ortega or Vice President Omar Halleslevens or Foreign Minister Samuel Santos go to Beijing? How believable is it that the Chinese are going to put $50 billion dollars into a canal in Nicaragua when Xi Jinping visited six Latin American countries in 2014, including neighboring countries such as Venezuela, Trinidad & Tobago, Mexico, Cuba and Costa Rica, but not Nicaragua? Despite all this evidence, some Nicaraguan entrepreneurs believe in this canal, perhaps because they’ve been to China, saw the Great Wall, saw large businesses and so much abundance that they confused China with the canal!

Who’s behind Wang Jing? Some people claim it’s the Chinese People’s Army. When I worked in the World Bank, we studied China’s reality and clearly saw that its large state enterprises—some belonging to China’s army—are the most inefficient in the economy. I can also assure you that Mr. Xi, with his rigorous anti-corruption campaign, has his eye on these para-state enterprises and is controlling them. In view of all this, and using common sense, I’d be willing to bet there’s no way the Chinese army is going to get into an adventure like the canal in Nicaragua.

I’d like to see a canal constructed in Nicaragua, but not with an agreement that’s even more one-sided than the one the US imposed over a century ago on Panama, a country the US itself created to build its canal. The difference is that the force behind the Panama Canal was the United States, with all its technology and ability to see the project through. It’s now 100 years later and who’s behind the project here? Wang Jing, a man who studied natural medicine…

Ortega’s rhetoric is embedded in the 1980s

Why does Ortega’s government act as it does? Why is it allied to Russia and Iran? And why does it criticize “US imperialism” so much? I think it’s something in Ortega’s blood, part of his DNA. Let’s remember that he’s a product of the eighties. He was young when he was traveling around the world hobnobbing with the great leaders of the nonaligned movement and has been enamored of international relations ever since. I know they interest him because I’ve spoken to him about both foreign and economic policy.

Perhaps he yearns for those years when he was a star in the nonaligned world. A required element in their rhetoric at that time was to attack the United States and after so long making this same speech it seems to have become embedded in his mental hard drive and erasing it is difficult. But there are also vested interests, especially in the case of his relationship with Venezuela. He’s benefitted considerably from this relationship and in his desire to please his benefactor he assumes positions “more Catholic than the Pope” that are harming our country.

The interests of the nation

I want repeat a core concept I mentioned at the beginning that it’s essential for a nation’s foreign relations to reflect its interests. They can’t be based on defending the interests of a political group or a particular family because once the nation becomes confused with the ruling party and family it’s fatal not only for the country but also for its international relations. And this is what’s happening today.

I believe Nicaragua’s international relations have to reflect national interests. Anyone who believes in eternal friendships in diplomacy is mistaken. The Germans and English have taught us that realpolitik is what’s important in international relations. What matters are the country’s interests and each nation has to defend those interests and the interests of its people both within and outside the country. Confusing the interests of the nation and its people’s with those of a party or family is the mistake that Nicaragua is unfortunately committing today.

Francisco Aguirre Sacasa was President Alemán’s ambassador to the United States and Canada (1997-1999) then his foreign minister (2000-2001). He was the Constitutional Liberal Party’s vice presidential candidate in 2011 but resigned from that party the following year.

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