Envío Digital
Central American University - UCA  
  Number 425 | Febrero 2017



A presidential inauguration under clouding skies

Daniel Ortega began his third consecutive five-year term at the helm of the country’s government on January 10. Days later, while swearing in his Cabinet, he predicted that he will still be President in a decade. Notwithstanding the cocksureness of that statement, Ortega is well aware that his sky is clouding over, which could easily brew dense storm clouds threatening his stay in power.

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President Ortega began his fourth term in office in conditions bearing little resemblance to those that ushered in his second and third terms in 2007 and 2012 (his first dates back to 1984-90). On January 10, 2007, when he recovered the presidential sash he had relinquished to Violeta Chamorro in 1990, the national political scene was dominated both by fears awakened by his return to government and by the benefit of the doubt he was granted.

A great deal changed between then and January 10, 2011. Most fears had dissipated and some doubts had been cleared up. Despite the fraudulent way he had attained an absolute majority in the legislative elections the previous November, Ortega was reelected in the middle of an economic bonanza and enjoyed the sympathies of poor sectors of the population thanks to his Venezuelan-financed social programs.

Moreover, the institutional machinery that he controls totally today still hadn’t received its final tweaking: the Constitution and the Army and Police laws hadn’t yet been reformed in his favor, the Sovereign Security Law didn’t yet exist and the interoceanic canal concession hadn’t yet been granted to Chinese entrepreneur Wang Jing…

Cloudy economic skies

This January 10, however, the skies under which Ortega and his wife, Vice President Rosario Murillo, inaugurated their new term as an official rather than de facto governing couple are overcast. The clouds hanging overhead are quite visible to everyone.

Some are economic, dominated by the fact that the fragile macroeconomic stability achieved over the past decade has become even more fragile with the drastic reduction of Venezuela’s concessionary oil credit. But there are others, including a serious structural problem: a full 80% of the economically active population holds precarious jobs in the informal economy. There is also the “imperative” problem the International Monetary Fund insists the government resolve: the financial unsustainability of the Nicaraguan Social Security Institute, which could end up bankrupt by the next decade. And then there’s the debilitating backwardness of the education system, as the CIASES study in the analysis section of this issue clearly demonstrates. Even though it’s common knowledge that education is the master key to development, the quality of Nica¬ragua’s public education is deplorable and the corresponding budget is the lowest proportion of the gross domestic product of any education budget in Central America.

A makeup job

The most evident symptom of the weakening of the country’s macroeconomic stability has been the systematic drawing down of the Central Bank’s international reserves over the course of 2016. A report by independent economist Néstor Avendaño offers evidence that the government has done a “makeup job” here, manipulating the figures of the Bank’s real hard currency levels: on December 31, 2016, the private banks deposited US$79 million so Central Bank statistics could record a much lower cumulative loss of reserves over the year than the real figure. The banks then withdrew those same resources on January 4, 2017, only five days after depositing them, once the purpose of that operation had been fulfilled…!

The plummeting of Venezuela’s oil credit is the key factor explaining the Central Bank’s difficulties maintaining macroeconomic stability. Starting in 2007, Venezuelan oil imports supplied over 90% of our national market’s needs, but those imports have been dropping since 2015 and no longer cover even a third of what the country’s economy needs to function. Moreover, during the heyday of Venezuelan oil supplies, Nicaragua only had to pay the equivalent of 50% of its bill within 90 days, with the rest due over 25 years at very concessionary interest rates. That gave the Central Bank enough resources to maintain healthy international reserves. That is no longer the case and it is extremely unlikely that Ortega will attract similar financial backing in the coming years. His government will probably be obliged to turn to credit lines with the multilateral financial institutions to preserve the national currency’s stability.

Enter the Nica Act

But therein lies the rub. In September 2016 the US House of Representatives approved the Nicaragua Investment Conditionality Act, commonly known as the “Nica Act,” which is a Damocles sword hanging over the national economy. Among other things the bill proposes to use the decisive US vote in the multilateral banks to veto any soft loan requests by Nicaragua unless it holds free and transparent elections, which Ortega has blatantly refused to do for nearly a decade. The bill was introduced into the Senate the same month, but it wasn’t discussed before the end of the legislative session as a third of the senatorial seats were up for grabs in November so a number of their occupants were out campaigning. If the two houses of Congress agree on a version with its existing terms intact, the outcome will be a repeat of Nica¬ragua’s inability to access those banks’ soft loans in the eighties, with the resulting economic fragility also significantly scaring off foreign direct investment.

Political clouds abroad…

Not all the clouds are economic or national; political ones are also blowing in from abroad, as the Nica Act evidences. The list of decisions Ortega took last year to assure he would “win” the November 6 elections and not lose any of his accumulated power has isolated his regime internationally, not only in the United States, but also in Europe and Latin America. Those decisions began in June with the announcement he was prohibiting electoral observation, which was quickly followed by arbitrarily stripping the Independent Liberal Party (PLI) of its legal status and giving it to one of several splinter groups that claimed to be the authentic party, thus knocking its coalition out of the elections. Ortega then topped that with an even greater shock: the legislators from that coalition who had won their seats in 2011 were summarily kicked out of the National Assembly with only months remaining of their term in office. He did nothing to enhance his image when he subsequently announced that his wife, very clearly already the power behind the throne, would be his running mate. In the end the elections were a mere simulation of voting, with a historically high abstention level.

As a result, Ortega has lost all the friends he had managed to win over in Washington and has called negative attention to Nicaragua among both Republicans and Democrats. In a country currently even more famed for its polarization than Nicaragua, the House’s unanimous bipartisan approval of the Nica Act was the clearest expression of the bridges to Washington Ortega had so blithely burned.

…and at home

Perhaps the most important political storm clouds are in national skies, and they are casting a dark and isolating shadow over Ortega. The string of events in the second half of 2016 effectively changed the national political scene. Because Ortega gave no signs of changing anything and simply forged ahead, preparing the perfect fraud that would assure him even “more victories,” as his billboards promised, the discontented society—including sympathizers who have defended him all these years and even loyal party militants—joined together to reject him with unprecedented levels of abstention on November 6.

As there were no observers and photos of the short or even nonexistent voter lines at the polling centers were prohibited, the abstention rate is based on semi-scientific estimates at best. But Ortega himself knows the real turnout better than anyone since he has absolute control not only of the standard three branches of government but also of Nicaragua’s fourth, the electoral branch. In contrast to his 1990 electoral defeat, when he attained a new political stature by graciously—and surprisingly—accepting his loss, these elections were a major political defeat even though he still holds the presidency. The massive abstention across the country not only branded them as the most illegitimate of his three successive governments, but also showed him that only a minority of the electorate, perhaps even within his own party, continues to back the system he has imposed. This signals the opening of a new stage with the possibility of better conditions for organizing an opposition with fresh leadership.

The anti-canal movement: “We repudiate the electoral mess”

The social repudiation of the electoral simulation gained support from an actor that had previously remained strictly nonpartisan, as its single, bonding focus was shared by Sandinistas and non-Sandinistas alike. The National Council in Defense of the Land, Lake and Sovereignty, the peasant movement opposing Nicaragua’s interoceanic canal concession and corresponding law, has fought for three years with an autonomy and civic-minded¬ness never before seen in any other social movement.

A national Peasant Caravan against the canal was planned to arrive in Managua on November 30, having been turned back several times before. This time it would be joined by peasant delegations from northern and central parts of the country that had never previously participated as the canal doesn’t threaten their lands. It was predicted that up to 30,000 people would descend on the capital, spend the night there, then march through the city on December 1 joined by Managua’s urban opponents of the canal and other delegations from around the country. This time they had a new and unmistakably political slogan: “We repudiate the electoral mess.” It was no accident that the dates coincided with the scheduled visit to Managua of the secretary general of the Organization of American States (OAS) and his team.

Ortega responded by unleashing disproportionate repression to prevent them from even leaving their own districts. Peasant communities from along the canal route were surrounded and threatened for three days, while the rest of the country was virtually under a state of siege. On November 30 and December 1, the police blocked 54 points along roads and highways in 13 of the country’s 17 departments, searching cars and confiscating drivers’ licenses to prevent the peasants and supporters of their cause from gathering in Managua.

On the afternoon of the 30th, the Peasant Caravan decided to call off its initiative, considering it a “success” because it had revealed the viciousness of the government’s repression. The next day more than a thousand people, swallowing their fear, congregated in Managua in solidarity with the repressed peasants and repudiation of the government. This movement has been a milestone in last year’s change of scenario.

Different views on Rosario Murillo’s new post

President Ortega’s decision to select Rosario Murillo as his Vice President has also churned up political clouds inside the country. While she may have no more real power than she did before, it is now institutionalized, thus putting her at the head of the line of succession.

The most public commentary on that decision from within the Sandi¬nista camp was made by the President’s brother, retired Army General Hum¬berto Ortega, in a two-hour televised interview conducted by Jaime Arellano on the 100% Noticias channel. The following response to Arellano’s insistent questioning of whether Murillo is indeed his brother’s successor is pieced together from different moments of the interview: “I’ve never viewed it that way…. Right now Daniel Ortega has decided to give compañera Rosario Murillo a role as Vice President. It is simply an appointment to a post in which the Vice President has the tasks the President assigns to her…. But the succession must rest on institutions and not individualities…. After Daniel decides to retire or any other situation occurs, it is impossible for a personality who doesn’t have his characteristics to play the role he is playing. For me, compañera Rosario Murillo is playing that role because Daniel Ortega has decided to let her play it. But it would be very difficult for her to maintain Sandinismo in general and Nicaraguan society by herself.”

The suggestion of dynastic succession is unquestionably one of the gathering storm clouds and is contributing to Ortega’s domestic isolation within Nicaraguan society as a whole. But it’s also causing serious problems within the Sandinista National Liberation Front (FSLN), as Humberto Ortega alluded to and Edmundo Jarquín, a close collaborator of the FSLN back in the revolutionary years and now aligned with the Sandinista Renovation Movement, detailed more concretely: “The dynastic pretention has feet of clay. It’s exclusionary. And no few people have been excluded [referring to the FSLN’s historical cadres and militants]. They also have progeny, and these new generations aren’t removed from the affronts against their parents and grandparents. Not only that, but the exclusion is even more painful when it is forced by loyalties paid for by perks, entertainment and parties, rather than coming from idealism, mystique and commitment to just social causes.” Jarquín was referring to the “new” FSLN, today subsumed in the Sandi¬nista Youth that answers to Murillo. This was clearly demonstrated on the afternoon of the presidential inauguration when hundreds of young people, all wearing the same designer t-shirt reflecting her unmistakable esthetic, filled the plaza in the name of “the people.” They all dutifully obeyed orders to stand up or sit down, when and how much to applaud and when to shout certain slogans.

2007 was Ortega’s “miracle”

The inaugural act followed a script quite close to that of both 2007 and 2011: preceded by folkloric dances and songs from the revolutionary past, it began at dusk on a stage groaning with flowers, with a style more evocative of a family party than institutional protocol…

In his speech, which as usual lasted over an hour, Ortega evoked fragments from the recent past, interpreting them to suit his purposes. The central one was to contrast past poverty-generating conflicts with the current stability, guaranteeing development. Ortega recalled the eighties, the war and the three “unstable” governments that followed, until reaching what he called the “miracle” of 2007, when Nicaragua got on the path of prosperity thanks to his government.

Ortega made no reference to any pending issue of national importance. He said nothing about the (now discarded?) Grand Interoceanic Canal or about the Nica Act or about how he plans to deal with climate change… He made no mention of unemployment, the continuing outmigration, or how to improve the deplorable education system… He seemed to be speaking only to his closest allies, the big business leaders, pledging to provide continuity to that “great alliance” that he claims is an expression of “national unity.” Presenting himself as the surest guarantor of Nicaragua’s stability, his speech’s implicit subtext was that “You all need me because… after me there is nothing, neither sun nor dawn…” an eerie variant on “Après moi, le déluge” attributed to King Louis XV of France.

Some attended, other’s didn’t

We saw clear signs of Ortega’s isolation in this year’s inaugural act. Compared to 13 foreign heads of State who came in 2007 and 7 in 2011, only 5 were on the stage this year—Venezuela’s Maduro, Bolivia’s Morales, El Salva¬dor’s Sánchez Cerén, Honduras’ Her¬nán¬dez and Taiwan’s Tsai Ing-wen. Moreover, the level of other foreign delegations was very low. Strangest of all, even shocking, was the presence of Choe Ryong-hae, North Korea’s third man in power.

No one missed the distancing of the country’s 11 Catholic bishops, none of whom attended. That distancing was initiated by Ortega, who never even responded to, much less acted on, the document they delivered to him in May 2014, asking for his “word of honor” that he would guarantee an “absolutely transparent and honest presidential electoral process” in 2016.

The gesture by US Ambassador Laura Dogu, the only US government representative present, was even more categorical. although the cameras of the governmental and pro-government channels present chose not to show it. She quietly got up and left the stage when Ortega began his speech by once again criticizing the US role in Nica¬ragua’s history, calling it a “sower of discord.”

One of her Embassy officials confirmed the reason for her departure in writing to journalist Carlos Fernando Chamorro. The note says: “The ambassador left early because the President dedicated a good part of his speech to criticizing the relationship of our countries in the past, rather than focusing on the present and the future. The history between the United States and Nicaragua is well known. Today the United States is focused on the future of our relations with Nicaragua and on how we can help Nicaraguans. We have been working to build a future-looking agenda to support a prosperous, safe and democratic Nicaragua.” The days of ignoring Ortega’s stale anti-imperialist rhetoric just because his practice largely follows US interests in the region appear to be over.

The Nica Act and the OAS

The Nica Act was but one consequence of Ortega’s decisions to ensure his continuation in power by hook or by crook. The entry of the OAS into the fray with a document it had sent Ortega in mid-October, “weighing the facts related to the electoral process,” was another. Ten days after Ortega’s inauguration, the OAS and the government released a first report on the “constructive dialogue” they had initiated that month.

Apparently seeing no other choice, Ortega had agreed to dialogue with the OAS, a regional entity he has criticized as harshly as he has the United States for years. He needed to do another makeup job, this time on his image, to neutralize the Nica Act’s economic and political threat, particularly as, if passed, the US secretary of State, in consultation with the “intelligence community,” would have to present Congress with a report on the participation of top Nicaraguan government officials in acts of public corruption or human rights violations. Those officials include top members of the Supreme Electoral Council, the National Assembly and the judicial system. An interesting detail is that while the State Department report may contain a classified annex, the main body will have unclassified status, meaning it will be available to the public.

Great expectations

The report on the negotiation results signed by OAS Secretary General Luis Almagro sorely disappointed those who expected it to be more in line with the truth of the serious electoral crisis that had motivated it. There are several explanations for the disproportionate expectations generated by the OAS’ involvement in this issue, or, said another way, for the failure of the process to satisfy those expectations.

The main one is the sheer volume of information provided to Almagro and his team that served as the basis for the initial report sent to Ortega to prompt the dialogue. Another was Almagro’s firm and even confrontational positions in his move to resolve the Venezuelan crisis quickly. But that crisis is very different from Nica¬ragua’s, among other reasons because Venezuela’s business elite isn’t backing the government and the opposition there has a belligerence in the streets that Nicaragua lacks so far.

The high expectations are also explained by the dead-end street many people feel they are on in a country as insignificant as Nicaragua in this complex globalized world. The best metaphor to describe that feeling of desperation is the mirage desperately thirsty people feel in the desert, confusing the horizon with an oasis.

How should we read the OAS report?

The US political and financial influence in the OAS is undeniable. That regional body’s involvement in the Nicaraguan crisis was decided on after the Nica Act was approved and at a time when it was still assumed Hillary Clinton would win the US presidency. Her policy toward Nicaragua was much more predictable than Trump’s.

Now, along with so many other world institutions, the OAS is waiting to calibrate how the new Trump administration will position itself with respect to Latin America, Central America, Nicaragua, Ortega and the Nica Act. What will weigh more in the Trump team’s decision about how best to shape the relations he decides to seek with the rest of Latin America: sanctioning Ortega for having destroyed the country’s democratic institutions, or risking that doing so could alter the stability of the “safest country in Central America”? Ortega warned quite clearly in his inaugural speech that he’s the only one who can guarantee that stability.

Given the uncertain future Trump’s victory has ushered in, the OAS’ caution may not be the most desirable response, but it is certainly understandable. So is the opinion of those who consider the report “pathetic,” such as Francisca Ramírez, the anti-canal movement leader who came to Managua, sidestepping all manner of obstacles including by swimming through a swollen river to avoid police detection, to tell Almagro “the high cost” paid by those defending their rights. It is also understandable that other stakeholders feel the regional institution granted Ortega “time” in exchange for nothing.

The report’s deadlines

The time issue is this: in excessively diplomatic language, the report gives the Ortega government three years to “perfect” (which can also be interpreted simply as to “improve”) the electoral and political system. Three years can be viewed as a concession to Ortega, but also can be seen as evidence of just how “imperfect” the system Ortega destroyed now is, and thus how complex and time-consuming it will be to reconstruct it.

The other deadline the text set is February 28 of this year, when the OAS and the government will present a “memorandum of understanding” in which “the technical aspects of the joint work to be implemented” over the stipulated three years will be detailed. The OAS has committed to seek financing for these tasks, the only one of which mentioned in this first report is the cleansing of the electoral rolls.

Those who expected more from the report could take advantage of its implicit subtext to do more themselves, continuing to inform the OAS and make demands on the government. Ortega admittedly won time, but he didn’t win much else. The high cost he’s had to pay for that time is that he’s now “in the OAS framework” with no easy way out.

The next elections

Act I in the long process of “perfecting” a destroyed system will be the November 2017 municipal elections, for which the OAS has already said it “will provide objective, impartial and transparent follow-up with the appropriate technical capacity.”

What will that “follow-up” or, to use Ortega’s words, “accompaniment,” actually mean? Unless there are substantive changes beforehand, what will the municipal elections themselves mean in the context of a collapsed electoral system? And what will the results of those elections mean given that municipal autonomy has been subverted over all these years by the centralized system Ortega imposed? These questions will surely remain open for the coming months, and heavy clouds can be seen behind each possible response.

COSEP sees the OAS report as an “opportunity”…

The taking of positions around both the municipal elections and the OAS report allows us to visualize, perhaps prematurely, two groups acting in two different scenarios in this uncertain January.

Two stakeholders have already aligned themselves behind a more optimistic scenario, hoping to catch a ride on the OAS’ coattails: the big business associations grouped under the umbrella of the Superior Council of Private Enterprise (COSEP) and Citizens for Liberty (CxL), a new and not yet legalized party.

Reflecting the business elite’s view, COSEP President José Adán Aguerri wrote that the OAS Report is “positive” and represents “an opportunity” because “for the first time the possibility is opening up of working toward issues demanded for years with no response, with the OAS as a guarantor.” Actually the OAS report mentions only electoral issues, and Aguerri didn’t elucidate on any further issues he has in mind.

…and the CxL calls it “a step in the right direction”

The CxL is headed by Liberal banker-politician Eduardo Montealegre, who also headed the PLI in 2011 when its coalition ran a strong second even with the massive fraud that year, and he has attracted a good part of the PLI’s structure. In a hurry to run as opposition in the municipal elections, the CxL didn’t even wait for the new year to apply for legal status from the Supreme Electoral Council, the branch of government that organized November’s electoral farce.

In a communique, it described the OAS report as “a very small step with respect to the institutional disaster that Daniel Ortega has generated with his dictatorial ambitions, but it is a step in the right direction and provides an opportunity to again peacefully take the road to institutionality we are all demanding to move forward in liberty.”

Another CxL leader—Pedro Joaquín Chamorro, Jr.—son of the newspaperman/politician assassinated in 1978 on Somoza’s orders—seconded Monte¬alegre’s optimistic vision. “Setting aside maximalist positions of all or nothing” and participating in the municipal elections, he predicted, would establish the right conditions for Ortega to be defeated in the 2021 presidential elections, by which time a scenario similar to that of February 1990 (when Ortega lost the elections to Chamorro’s mother, Violeta Chamorro) will have been created.

However pie-in-the-sky that vision may be, the CxL may at least have a good shot at avoiding the PLI’s fate. Government journalist-spokespeople and analysts allied to Ortega’s interests feel that municipal elections “accompanied” by the OAS and with the CxL’s validating participation would provide “minimal” but sufficient conditions to calm the anti-Ortega momentum of the congressional representatives who have been pushing the Nica Act, halting it altogether, postponing it or at least reducing its worst consequences. They also think those elections would be a good omen to initiate the change the country needs.

The FAD sees it as a wasted opportunity

A number of other actors—political and social movements, independent media, other analysts and some business leaders—are identifying with the other scenario. They believe that since Ortega’s objective is to gain time and his inveterate motto both inside government and out that “you can make me sign, but never comply,” the municipal elections won’t halt the Nica Act regardless of how they are held. “For the moment, they look like another step along the wrong road,” said Edmundo Jarquín.

The Broad Front for Democracy (FAD), the other new actor to emerge from the stripping of the PLI’s legal status and splitting up of its electoral coalition, insists it won’t recognize the Ortega government and won’t stop engaging in civil struggle until both municipal and presidential elections are held following substantial changes in the electoral system.

The FAD, in which the Sandinista Renovation Movement is playing a lead role, had this to say about the OAS report: “We regret that an opportunity to avoid greater damage to the Nicaraguan people is being wasted, because the absence of democracy requires urgent responses that cannot wait three more years. Although the report recognizes some deficiencies and weaknesses in the democratic institutionality, it does not address either this govern¬ment’s lack of legitimacy, or the collapsed electoral system with the urgency required. It also reveals the Ortega-Murillo dictatorship’s lack of political will to guarantee the Nicaraguan people’s right to democracy.”

Will the Nica Act be pushed through?

Analysts familiar with US politics don’t believe the OAS’ actions go far enough to convince the Cuban-Americans promoting the Nica Act to shelve it. Ileana Ros Lehtinen, Mario Díaz Balart, Marco Rubio and Ted Cruz were all reelected and could support some of President Trump’s “important” decisions in exchange for getting that legislation revived and possibly hardened. Ever since Trump’s election they’ve all actively promised not to stop pressuring Ortega, requesting a hardline policy from the new administration and announcing that the Nica Act will be the tool to implement it.

Liberal politician Francisco Aguirre Sacasa, Nicaragua’s ambassador to the US and Canada then foreign minister during Arnoldo Alemán’s presidency (1997-2001), doesn’t believe the Nica Act will be stopped. He analyzes the risks Ortega will be running in the Trump era in this edition’s “Speaking Out” section.

Roberto Sansón, until this year president of the American-Nicaraguan Chamber of Commerce (AMCHAM), is one of the businessmen who has occasionally publicly differed from COSEP’s views and announced that he would abstain from voting in last year’s corrupted elections. Speaking only in his own name, he said the OAS Report “doesn’t fulfill the expectations there were in the country… for more short-term and forceful actions. I would have liked to see more specific commitments.”

That desire is not surprising given that the Nica Act’s impact on US investments would affect the business-people in his organization more directly than any others. Álvaro Rodríguez Zapata, the new AMCHAM president, while apparently happier with the government’s actions, still recognizes that the current electoral system “lacks credibility.”

Which scenario will unfold this year?

Which scenario do we think will get played out in the coming months: an impasse in which Ortega continues to buy time, promising and not delivering, or growing economic and political turbulence? It’s too soon to conjecture, but even if he gains time, Ortega is well aware of the storm clouds darkening his sky.

At the end of February we’ll see what “tasks” appear in the announced “memorandum of understanding.” According to political scientist José Antonio Peraza, the limited nature of the OAS report released on January 20 suggests there was no consensus between the OAS and Ortega, which is why a new deadline was needed to hammer out the memorandum they will sign.

It depends on everyoneto ensure it ends up shorter

One of the most questioned aspects of the OAS report is the three-year deadline granted Ortega. While that seems like a very long time from now, it’s only on paper.

What actually happens will depend on the political and emotional intelligence of those who are unhappy with this government, who are increasingly joining the political opposition, are already in organized civil society, or are more openly expressing their disagreements in the unorganized society of both the cities and the countryside. There is also growing discontent among historical Sandinistas. Will all of these differing segments of society be able to cooperate for the greater good, putting aside competition to build an alternative that could cut the time for us to begin the transition toward the more just, honest and decent country we deserve?

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