Envío Digital
Central American University - UCA  
  Number 366 | Enero 2012



A rerun with contradictions inside and out

Contradictions within the FSLN began to surface even before Daniel Ortega’s presidential rerun ceremony on January 10. In his speech, Ortega reiterated that he wanted to keep doing “the same thing we did these past five years, but even better.” Can he resolve the contradictions inside his party and those starting to affect him from outside, just by doing “more of the same”?

Envío team

By January 10, the date of President Daniel Ortega’s second consecutive inauguration, the European governments still hadn’t congratulated him and Republican legislators in the United States were getting increasingly worked up about the alleged electoral fraud perpetrated in Nicaragua’s November 6 elections. Aware of the minimal international legitimacy with which he would start his new mandate, Ortega had sent delegations to Brussels and Washington to “explain” what happened in the elections and assure that there would be changes in the electoral system, although “adapting them to the national reality.”

With only grumbling citizen discontent at home, more worrying in rural zones but barely audible in Managua except for one massive anti-fraud street demonstration on December 3, Ortega’s presidential rerun inauguration was held in an apparently “normalized” environment.

Only seven heads of State attended the ceremony in the plaza, three of them Central American. Venezuela’s Hugo Chávez was the only one from the other ALBA countries and Spain’s Prince Felipe was the only representative from Europe. His presence was largely explained by his country’s more than 30 businesses in Nicaragua—including multinational giants such as Movistar, Gas Natural, Barceló and Pescanova—which together billed some US$800 million in 2011. No representative of either the Obama government or the Nicaraguan Bishops’ Conference attended, but the main representatives of the country’s business elite did. The only reason any other part of the world took an interest in what hap¬pened in Managua that evening was the disquieting presence of Iranian President Mahmoud Ahmadinejad.

In his speech, Ortega voiced his opinion on various world problems and took time to demonstrate his excellent relations with each of the heads of State present. He referred to Gaddafi for the first time since his fall, but only indirectly, criticizing how “a head of State was assassinated in a country.” Following his speech, he swore in all of his previous Cabinet ministers “en masse.” Although all had submitted their resignations, as is customary, none had been replaced.

personal ambitions”

Only days before the event, Nelson Artola, Ortega’s number one mover and shaker in the municipal government sphere, showed up in the León mayor’s office to oblige Mayor Manuel Calderón to resign “due to orders from above.” The declarations of the fired mayor, a Sandinista who earned the title of guerrilla commander during the insurrection against the Somoza dictatorship, and of his sister, the poet Estela Calderón, suggested that things weren’t quite so “normalized” in the governing party.

“Rosario Murillo’s the one who stripped me of my post,” said Calderón “She’s the one who sent down the orders. I was obliged to resign because I wasn’t obeying the political line she’s shaping in her favor after the national elections. Compañera Rosario Murillo aspires to the presidency and is currently working to set conditions on her own behalf.”

According to Estela, “My brother’s dismissal is due the unbounded personal ambitions of First Lady Rosario Murillo. She’s the main cause of the internal split in the Sandinista Front, shoving aside revolutionary men who have built this country’s history. I respect her as a woman and a poet, but not as an FSLN leader. That merit goes to Daniel Ortega. She’s been cranking out a whole bunch of ‘bubblegum pink’ candidates, officials and political operators loyal to her who have nothing to do with the red-and-black leadership.”

This was the first time that what has been perceived since 2007 as a central contradiction slashing through the center of power and its corridors has come to public light, and it did so with astonishing clarity. An issue of apparently no consequence to the governing couple is that the precise reason a law was passed prior to the 1996 elections establishing the direct election of mayors was to prevent their being changed at will in the middle of their administration with no due process.

Opposition emerges to
hand-picked candidates

Days after the León incident, Artola reported that Daniel Ortega and Rosario Murillo would personally select the mayoral candidates for the 17 departmental capitals and other important municipal seats. In the remaining localities the candidates for this November’s municipal elections would be decided by polls or in consultation with the FSLN departmental and municipal political secretaries, almost all of whom are now virtually unconditional Murillo loyalists after Lenín Cerna was summarily booted out of his job of keeping the hinterlands in line.

In the ensuing days, however, FSLN activists and sympathizers began to discover that polls and consultations were virtually synonymous with top-down designations. Even before the month was out, Artola’s pilgrimage announcing and imposing municipal candidacies had already sparked important controversies, public protests and even demonstrations in more than 20 of Nicaragua’s 153 municipalities to demand demand party primaries, protest the handpicking and insist on secret polls… Some baptized themselves “the dissenters” and in some municipalities of the Segovias posters and flyers rejected “the dictatorship.” Not only did they demand to be heard and taken into account, but they also used the emer-gence of these contradictions to denounce abuses of authority by the political secretaries in their localities.

To avoid “terrible disputes”

Already last year Murillo had vetoed any primary in the governing party to avoid the kind of “terrible disputes among us” that she said they had previously triggered. It remains to be seen what size disputes the method Artola has announced will cause.

The FSLN’s main contradiction, however, materialized over the organizing of the electoral fraud. The contradiction is between the business group—which aspired to and expected an important, fully legitimate victory by Ortega that everyone would accept, as happened in 2006—and the group of self-defined “revolutionaries” favor¬ing a “change of system,” who decided to fabricate an overwhelming victory at any cost. The latter group won and its victory has expanded its influence. With this shift, other disputes growing out of appointments, posts, perks and other goodies can no longer be hidden.

Ortega’s now absolute power is another source of contradictions. Sergio Ramírez, Ortega’s Vice President in the eighties and a man who has extensively studied and written about the country’s past, commented just before Ortega’s new inauguration that “no one in Nicaragua’s history has ever had so much power in his hands.”

Prior to the presidential elections the FSLN’s campaign slogan was “We’re going for more victories.” This year it has been elongated: “…We’re going for all 153 municipalities!” The FSLN currently governs 109, some 40 of them allegedly acquired by fraud in the 2008 elections.

A new twist:
Mainly women candidates

The governing party announced that 60% of those designated to run for mayor and 70% of those selected to compete for Municipal Council seats will be women. In last November’s general elections, 60% of the party’s winning National Assembly candidates were also women, and all of them had been chosen by Rosario Murillo. Likewise, four of the five legislators the FSLN chose on January 9 to sit on the Assembly’s seven-member governing board are women.

This “feminization” of the Ortega-Murillo project expresses a step forward for the “revolutionary” group within the party. As Ortega acknowledged in his inaugural speech, it has been thanks to “Rosario’s determination.” The kudos to Murillo, whose many hats include that of national head of the Councils of Citizens’ Power (CPC), were repeated in El 19, the official Internet portal of “citizen’s power”: “Giving women their rightful place and weight in our society has been an uphill battle waged by First Lady Rosario Murillo for many years. It is thanks to this tenacious struggle undertaken by the First Lady.”

This massive designation of women to popularly elected posts is unquestionably a new element within the “more of the same” Ortega announced for his new term in office. It has been said in feminist circles for years that “When a woman gets into politics it changes the woman, but when women get into politics it will change politics.” That utopia was depicted with brilliant humor by Nicaraguan feminist writer Gioconda Belli in her recent novel, El país de las mujeres (The Women’s Country). Will it prove true in Nicaragua? Will we see some glimpse of that utopia here in this government, this culture, this party, using the method it did to bring so many women into politics? Or will it be a distinction without a difference?

Consensus is the
magic word of the moment

To ease fears of the total power Ortega is bringing to his new term in office, the word “consensus” appears often in the speeches of representatives from both the governing party’s business group and its “revolutionary” group. But what consensus does it refer to? Even in the midst of their tense dispute for arenas of power within the party, both groups share at least two basic agreements: although with different emphases, discourses and goals, both defend the alliance with the business elite; and they also agree not to open up to any genuine consensus with the political opposition, because doing so would mean sharing or risking power. If there’s any dialogue or negotiation, it will only be about economic or social aspects, never political ones.

The “revolutionaries” insist that the consensus has to be with “the people,” the “people President,” but they understand and pragmatically justify the utility of the alliance with the business elite, at least temporarily, leaning preferentially toward the elite being created with Venezuelan capital through the increasingly numerous and powerful businesses of the Bolivarian Alliance for the Peoples of Our America (ALBA) in Nicaragua.

Who is COSEP afraid of?

The FSLN’s business group has various origins and thus various relations with big national capital. In its origins the party attracted some left-leaning members of wealthy families. Many have since left, but some stayed and their links with the traditional big business caste are organic. In addition, while the majority who amassed resources with the “piñata” in 1990 have since gone broke, those who knew how to administer the businesses or wealth they acquired (one example is Agricorp, Nicaragua’s largest flour and rice distributor, one of whose major FSLN stockholders is former guerrilla commander, National Directorate member and currently Ortega’s econ¬omic adviser Bayardo Arce) developed links with financial and other big capitalists within the umbrella of the Superior Council of Private Enterprise (COSEP) well before Ortega returned to government. These capitalists share visions and interests, as does another group of mainly medium-sized business owners who created the “FSLN Business Bloc” in the late nineties as an economic support base for the party and hence acquired important positions in the party machinery.

COSEP’s business elite aren’t afraid of either of these two groups. But they do fear the big capitalists created since 2007 with Venezuelan resources, whose holdings include the many and varied enterprises of the presidential family recently revealed by the opposition daily newspaper La Prensa. They fear their capacity to displace the traditional big capitalists by exploiting the unfair competition facilitated by the current State-Party-Family structure. On the contrary, the groups operating with ALBA capital are the very ones the “revolutionary” group leans toward, seeing them as “leftist” capitalists, while the others in the party are dismissed as “bourgeois” capitalists, like those in COSEP.

COSEP has the
President’s ear

For the moment, both disputing groups within the governing party are sitting pretty. The corporative government is bolstering itself through the business group in solid alliance with COSEP while the “revolutionary” group, which, clinging to the old vanguard concept, aspires to win over the party, is also gaining strength with the boost it has received from Murillo. The contradictions will very probably worsen depending on the progress each group makes.

In the interim, Ortega is maintaining his alliance with COSEP. His first and only dialogue after the election and before his re-inauguration was with a delegation of its representatives headed by Carlos Pellas of the powerful Pellas economic group. That meeting produced an agreement to increase electricity rates by only 9%, even though international petroleum prices have skyrocketed. The government justified including the major business interests in the generalized subsidies maintained by the ALBA resources on the grounds that it would keep them from having to increase their production costs. Before this decision was taken, rumors that the rate increase could hit 24% were already generating panic.

Food prices began to shoot up the minute the new electricity rate was announced, after having been postponed by Ortega to avoid negatively affecting his electoral campaign. President Ortega responded by sending his huge parliamentary majority a proposal for a “mini-fiscal reform” at the end of January to stop the price rises for rice, milk and other basic products by exonerating or lowering taxes on the big industrial oligopolies that control those products. But there was no visible benefit for small and medium-sized agricultural producers and cattle ranchers.

This year the government faces two decisions that will produce particular ill will: reform of the social security pensions and a tax reform, both of which are International Monetary Fund conditions for a new financing agreement. COSEP’s major business interests are expected to play a big role in the final result of both reforms, in the first one to minimize the increase in their contributions to workers’ pensions and in the second to hold on to their privileged fiscal exonerations. They seem to have been assured that consensus.

Between competition
and alliance

Ortega is banking on maintaining his alliance with the business elite, a feature of his previous administration. And despite their rhetorical declarations demanding democratic institutionality, those same elites continue to give signs of a willingness to continue legitimizing Ortega in order to maintain that alliance.

Can everything be expected to carry on this way? Will there be “more of the same” even with the party’s absolute government power? The fraud that guaranteed that power, particularly in the legislative body, produced a decisive victory of the “revolutionary” group over the party’s currently diversified business group, which shares big capital’s interests and objectives while simultaneously competing with it in an increasing number of fields.

We’re very likely to see the emergence of contradictions. In January, once the euphoria of the electoral “victory” had subsided, we began to see signs that Ortega wants to change the rules of the game he maintained in his previous administration. First the government, backed by police, invaded a strategic and very valuable property, disputing it with a private consortium. Next it tried to intervene in milk, egg and chicken prices. After that it favored the export of beans by busi¬nesses linked to the party, limiting the same activity for COSEP businesses. How long before we start hearing screams of confiscation, price control and unfair competition in the free market?

“Grassroots power”
or “citizens’ power”?

What will come out of the tripar¬tite minimum wage negotiation by the government, the unions and the COSEP business owners? Having already turned into a theater, it will probably end with a simulated agreement in which COSEP’s proposal will win out over the demand of the unions close to the government.

In this and other scenarios, we’ve been seeing that the historic Sandinista unions and guilds—the National Union of Farmers and Ranchers, the Rural Workers’ Association, the Sandinista Workers Central and even their umbrella organization, the National Workers Front—have been gradually losing influence as their previous organized intermediation capacity has weakened. In general, the old concept of popular or grassroots power has been shifting toward “citizens’ power” in the form of the party’s current public face, the CPCs, headed locally by political secretaries and nationally by Rosario Murillo. They are precisely the ones currently being questioned and rejected by FSLN rank-and-file members calling for “primaries,” which means calling for “democracy.”

More of the same?

For five years Ortega was very skilled at making his leadership indispensable and irreplaceable for both the pro-market business group, in which he also participates; and the populist, revolutionary, pro-“system change” group headed by his wife.

This equilibrium helped his government provide continuity to the macroeconomic framework inherited from Enrique Bolaños’ neoliberal government. The good international prices for our traditional export products also contributed, as did, above all, the hundreds of millions of dollars in Venezuelan resources that allowed the government to finance social programs. With these advantages, Nicaragua weathered the worst of the fierce international economic crisis, allowing Ortega a lot of room for maneuver to balance the tensions between the two groups.

Has this balance been altered by the “revolutionary” group’s electoral fraud, which has cost Ortega’s controversial second consecutive term even more legitimacy? Will it accentuate the contradictions? While it’s certainly possible, the first signs of the high price Ortega may have to pay for the fraud came from outside.

legislators on the attack

After the “diplomatic passivity” with which the international community greeted the November 6 electoral fraud came the ides of January, with bad omens. A group of Cuban-American congresspeople, Rep. Ileana Ros-Lehtinen (R-FL), chairperson of the House Foreign Affairs Committee outstanding among them, was far less passive.

She called a special hearing in the House on December 1 ominously titled “Democracy Held Hostage in Nicara¬gua: Part I.” During the hearing, legislators heard from former US Ambassador to Nicaragua Robert Callahan, Carter Center director Jennifer McCoy and Democratic Congressman Howard Berman, among others. Although McCoy granted that “a multitude of polls from various persuasions prior to the election gave [Ortega] a large lead [and] the partial results gathered by national and international observers indicated an FSLN victory,” she called the November 6 elections “the worst [since 1990] in terms of the obstacles created by the national Electoral Council for citizens, political parties and international organizations to verify the integrity of the process.”

Some Republicans urged policies to isolate Nicaragua, but Callahan countered that pulling out would be counterproductive. He thinks Ortega’s project will probably “implode” on its own, and “if we take drastic action, I am afraid it would have a greater effect on the democratic opposition in Nicaragua than it will on Ortega.” He counseled giving “material and moral support to that opposition,” which he described as “desperately needing our help.”

Rep. Ros-Lehtenin proudly displayed her rightwing credentials with the following interpretation of history: “Twenty-five years ago, President Ronald Reagan assisted freedom fighters in pushing back the cancer of communism that Daniel Ortega and the Sandinistas were spreading into Nicaragua.” She went on to argue that “the US must not recognize Daniel Ortega as Nicaragua’s leader and should call for new free, fair and transparent elections to be held, which are in keeping with Nicaragua’s Constitution and reflect the will of the Nicaraguan people.” Not surprisingly, that call is now being made energetically in Nicaragua by the Movement for Nicaragua, which, under its funding name Fundación Iberoamericana de las Culturas (FIBRAS), received a record $100,000 from the National Endowment for Democracy (NED) in its first year, followed by an average of close to $75,000 every year thereafter except 2008, when it was granted $84,000, the highest figure for the eight to ten Nicaraguan organizations NED funded that year.

The same day as the House hearing, Cuban-American Senators Marco Rubio (R-FL) and Bob Menéndez (D-NJ), both of whom had previously rejected President Obama’s nominee to replace Callahan as ambassador to Nicaragua on the grounds that he had been too soft on Cuba while heading the US Interest Section there, introduced a resolution condemning what they called the “assault on democracy in Nicaragua” represented by Ortega’s re-election. Point 4 of the resolution “urges President Barack Obama and Secretary of State Hillary Clinton to take immediate and meaningful measures to encourage the restoration of constitutional rule in Nicaragua, including opposing loans by international financial institutions [IFIs] to Nicaragua,” while Point 6 “urges the United States Ambassador to the Organization of American States (OAS) to lead an effort to use the full power of the organization in support of meaningful steps to restore democracy and the rule of law in Nicaragua in accordance to the Inter-American Democratic Charter, including formally suspending the Nicaraguan Government under Articles 20 and 21 of the Inter-American Democratic Charter.”

The Ortega government shrugged off both events, calculating that any sanction would only come if there’s a Republic victory in the November elections in the United States.

Climate change
toward Nicaragua

That only presaged a more severe change of climate, however. On January 18, Germany announced that, starting in 2013, it would be cutting its cooperation with Nicaragua, initi¬ated 30 years ago. The reason given by Dirk Niebel, Germany’s cooperation minister, was clear: “The Nicaraguan regime has to assume the consequences of its increasingly autocratic way of governing.”

In Managua, German Ambassador Betina Kern defined the November 6 fraud as “the last straw” in deciding on the cut and stressed that “what interests us isn’t who wins elections but how they are won.” In recent years the following countries have either withdrawn or cut their aid: Sweden, United Kingdom, Denmark, Norway, Holland and Austria. But the cut by Germany, the lead country in the European Union’s representation in Nicaragua, is the most relevant.

Then on January 24, the OAS delivered to its Permanent Council the final report on the electoral observation conducted by its mission of experts in Nicaragua. The text, over 70 pages long compared to the 125-page report on the 2006 elections, essentially repeats the findings in its preliminary report. It describes the “structural faults” in the Nicaraguan electoral system and the “worrying situations” observed during the mission’s visit. It underscores the government’s refusal to give it access to the national computing center and documents dozens of concrete denunciations gathered by the mission on the ground that allowed it to illustrate the fraudulent maneuvers that occurred during the electoral process. Finally, it presents a long list of recommendations to create a profound and democratizing change in the entire tainted electoral system.

But that wasn’t nearly enough for Rep. Ros-Lehtinen, who railed that it “lacks any concrete solutions or actions to condemn Daniel Ortega’s raid on the Nicaraguan Constitution….”

OAS see-sawing

When the OAS presented its preliminary report last December, the Ortega government representative to the hemispheric organization’s Washington headquarters said it contained “false information,” and rejected it as part of a destabilizing plan concocted by the US Embassy in Managua and the PLI Alliance. It was an interpretation no one took seriously. This time, Ortega got Ricardo Seitenfus, the new OAS office director in Nicaragua, to issue declarations coinciding with the presentation of the final report that contradict it in a more plausible way.

In his first statement to the media in Managua, Seitenfus declared: “I say there was a winner: President Daniel Ortega,” backing his claim with the OAS quick count, which he said showed Ortega winning with 59.8% of the votes. (The Supreme Electoral Council gave him 62.46%). Government spokespeople applauded Seitenfus, but OAS Secretary General José Miguel Insulza immediately declared that the report issued to the Permanent Council “is the only official opinion of the General Secretariat about the election in Nicaragua,” that Seitenfus’ statement was a “verbal personal opinion that in no capacity whatsoever substi-tutes or replaces that of the formal mission” and that “the OAS never provides results or conclusions based on partial reports or quick counts, nor does it authorize any such distribution.” He did not, however, deny that the OAS conducts such quick counts, to which Jennifer McCoy also alluded, or that their results differed from what Seitenfus claimed.

The incident demonstrates the current seesaw movements of the OAS and Insulza, as well as revealing both the contradictions that Nicaragua’s electoral case is provoking and Ortega’s concerns about legitimacy. In 2010 he demanded the removal of Pedro Vuskovic, the previous OAS representative in Nicaragua, for what he called “political meddling.” In contrast, he warmly welcomed Vuskovic’s replacement, Brazilian diplomat Seitenfus, known for his strong criticisms of capitalism.

“Aggressive scrutiny”

The very day the OAS report was issued, Secretary of State Clinton issued a statement on the same theme: “Nicaragua’s recent elections were not conducted in a transparent and impartial manner, and the entire electoral process was marred by significant irregularities. The elections marked a setback to democracy in Nicaragua and undermined the ability of Nicaraguans to hold their government accountable.”

Clinton said her government supported the recommendations contained in the OAS report and would work with its partners “to assess all available initiatives to strengthen democracy in Nicaragua.” She said it was also looking forward to reviewing the final report of the European Union’s (EU) election observation mission, expected by February 20.

In line with the recommendations of the Menéndez-Rubio Senate resolution, she added that “as part of a review of our assistance and policy toward Nicaragua, the United States will continue to apply aggressive scrutiny to project loans at the Inter-American Development Bank and World Bank, and we will oppose any loan proposals that do not meet these institutions’ high standards, or do not provide sufficient development impact.” Her words barely disguised the fact that the “scrutiny” would have little or nothing to do with development impact.

friendship with Iran

While Clinton’s declaration may have been goaded in part by Ortega’s democratic institutionality deficits, it had much more to do with the antibodies generated in the United States first by Ortega’s reiterated support for his “brother” Gaddafi during the 2011 crisis in Libya and currently by Nicaragua’s continued closeness to Iran.

Managua’s recent enthusiastic welcome of Iran’s President Mahmoud Ahmadinejad on his junket through the ALBA countries in January did not go down well in either the United States or Europe. It was reckless irresponsibility by Ortega, all the more unjustifiable considering that Iranian cooperation with our country has so far only consisted of lists of rhetorical promises. Iran has not even pardoned our oil debt with that country dating back to the eighties, which, even with its ever-com¬pounding interest, now only totals some US$164 million.

A restrained response

Despite being a galling reminder of the power the Reagan administration exerted on those two lending agencies to refuse loans to Nicaragua in the eighties for reasons having nothing to do with quality standards and even less to do with development impact, the importance of Clinton’s shot over the bow was reflected in the Nicaraguan government’s sober and restrained response. While Sandinista National Assembly representatives accused the US of intervention, the Foreign Ministry’s response diplomatically revealed Clinton’s threat for what it was: “In our relations with the Inter-American Development Bank and the World Bank in the last five years, the Government of Nicaragua has prepared its project proposals with the highest technical quality, based on the high standards required by the international financial institutions to access their financial resources. All financing operations contracted in that period have focused on generating a major impact on the country’s socioeconomic development in priority areas such as health, education, energy and roads, among others. Nicaragua reiterates its willingness to continue developing rela-tions with the United States of America in the framework of respect and collaboration in the different areas of mutual interest.”

Daniel Ortega’s relations with the IFIs since his return to government in 2007 have been quite good. They have had no complaints about the project proposals presented by his government. Their represen-tatives in Managua always highlight this government’s capacity to comply with what was agreed and its desire to improve the quality of life of the poorest population, an objective always included in the agenda it presents them.

The reduction of extreme poverty by nearly 6% in Ortega’s last term has enthused both the IFIs and some bilateral cooperation agencies. They compare it favorably with the results of the Bolaños government, which, like Ortega’s, boasted stable macroeconomic indices and growth of the gross domestic product, but showed no enthusiasm for reducing poverty.

Good relations with the IMF

Due to the government’s good performance, the IMF even extended the 2008-2010 credit facility program until December 2011, after the elections. Ortega’s economic team now expects to renew a similar program in September of this year, trusting it will get good grades in the IMF’s evaluations of the macroeconomic indicators until then. It also plans on being able to finance 45% of its public investment program (schools, hospitals, roads, etc.) this year with Inter-American Development Bank (IDB) and World Bank funds.

When the mainly European countries in the budget support group cut their aid to Nicaragua’s budget due to the fraud in the 2008 municipal elections and the United States suspended the Millennium Challenge Account for the same reason, Ortega announced that those holes would be totally filled by Venezuelan cooperation. In reality, they were partly covered by World Bank and IDB loans, although Venezuela’s hundreds of millions in cooperation cushioned the loss as well, largely but not only through its oil deal. The difference is that the Venezuelan money doesn’t go through the national budget or any other kind of public scrutiny, thus leaving Ortega to dispose of some US$500 million a year virtually at will.

Positive aid and
negative collaboration

It would be suicidal to try to do without multilateral cooperation, both for its amount and soft repayment conditions and for the influence its good grades provide in the globalized economy. Economist Adolfo Acevedo warns that even though the drop in international cooperation has also been compensated for by greater tax collection, “Nicaragua still suffers major lags in the formation of its human capital and its basic infrastructure, and any withdrawal of cooperation deprives us of resources to catch up.”

But this coin has another side. Over these five years it has been easy to see, and to critique, the flexibility with which the IMF, World Bank and IDB have been ignoring the dimensions of the Ortega government’s democratic deficit. After the electoral fraud, the prestigious Nicaraguan economist José Luis Medal recalled this fact with no little indignation: The big private enterprise grouped into COSEP together with the IMF and the IDB have been the best propagandists of this government’s economic success… Although it was not their intention, COSEP, the IMF and the IDB have collaborated in the destruction of democratic institutionality.”

From flexibility
to aggressivity?

Will the IFI’s climate of tolerance change with the announced “aggressive scrutiny”? The United States has decisive weight in the World Bank and IDB. The current World Bank president is Robert Zoellick, well known in Nicaragua both for his aversion to Ortega, who he excoriated publicly in Managua in 2005 when he was the US Undersecretary of State, and for his unyielding negotiating stance when he headed up the US team that hammered out CAFTA, the free trade agreement with the Central American governments.

The IMF’s managing director has historically been European and the World Bank’s president from the United States, in a traditional understanding to bolster European and US interests. As the EU’s “partner” on the IMF board, the US thus has a decisive influence on decisions made at the Fund and the other IFIs. And those decisions don’t just determine whether loan requests will be approved or rejected. A bad IMF rating is read as a red light to international investments and bilateral government loans.

A sign sent out following the electoral fraud but well before Clinton’s threat already indicated a certain change in the IDB’s policy of flexibility. It conditioned a US$45 million loan for both budgetary support and freely available funds, already agreed to with the government, to the “unrestricted” publication by a fixed date (December 19 of last year) of the databases the government used in the 2009 Living Standard Measurement Survey and the 2010 Ongoing Household Survey, which are the most recent ones available. Only the government’s forced compliance with such external pressure brought down the wall of official secrecy that hides and reserves information that should be in the public domain. The IDB was only able to pry the data free by imposing such a condition even though it needed them to prepare its 2012-2017 strategy for Nicaragua.

The data from those surveys show that before the electoral campaign only 12% of the national population claimed it had been benefited by any of the government’s various social programs and that seven of every ten Nicaraguans were working in the precarious informal market with no fixed wage and no social security. Two years later, with the squandering of goodies the government threw at its campaign, this percentage may well have increased to 25%, especially considering the thousands of people who received zinc roofing sheets, given out via the “Plan Techo” mainly to those deemed likely to vote for the FSLN. What doesn’t seem to have changed is the high unemployment level, which is the most important of the government’s pending promises dating back to 2006. Will it achieve a passing grade on that promise after five more years of “the same”?

Will he go through that door?

As he starts his new term, Ortega thus has many contradictions to deal with both within his party and outside of it.

Will the Republicans be satisfied with Clinton’s saber-rattling or will they insist on more pressure on Nicaragua after criticizing President Obama’s soft positions on the ALBA countries’ friendship with Iran? Their two front-running candidates, Mitt Romney and Newt Gingrich, have both already mentioned their determination to turn the screws on the ALBA countries during the Republican debates. Is Clinton’s warning timed for the election campaign or will it escalate? Will she ally with her European peers to pressure Ortega?

And most important, what will Ortega decide to do? Which of the two groups in his party will carry the most weight in his decision? Common sense and responsibility to the common good in such a fragile and backward country as Nicaragua should make Ortega see the warning from the North as a door that could enable him to buy back both the legitimacy damaged by the fraud and a more “benevolent” scrutiny.

But the price would be high. First, a substantial and significant change in the whole electoral system, including the electoral law and the magistrates who administer it, accepting the recommendations listed by the OAS and EU observer missions. And second, the organization of fair and transparent municipal elections in November, which could risk the plan to further increase the nearly absolute power the FSLN has acquired.

Is Ortega prepared to do that? And even if the party’s business group might be, would the “revolutionary” group? And no less important, is the opposition prepared to make use of this possible opening and pressure the government skillfully and wisely to change its authoritarian and unlawful course? With the year just beginning, the contradictions are many.

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