Envío Digital
Central American University - UCA  
  Number 396 | Julio 2014
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Signs of climate change North and South

The presence along the Pacific Coast of the ocean current called El Niño, a regular phenomenon, is combining with signs of global climate change to produce delayed and irregular rains, with livestock already dying in the driest areas. The possibility of a severe drought is causing alarm and uncertainty about the effects this could have on the fragile national and individual economies. There are also signs of a climate change in the United States and Venezuela. What effects will they have on the economy and on our national political scene?

Envío team

After Nicaragua’s bishops presented their 14-page list of Social, institutional and environmental problems and challenges to President Ortega on May 21, virtually everyone expressed support for their proposal for a comprehensive national dialogue with all sectors of the country, then waited expectantly to see what would happen. The next day the First Lady offered the bishops the opportunity to meet with ministers, who would “inform them in detail and greater depth” about the government’s programs and projects, but made no mention of any national dialogue. For his part, President Ortega said nothing at all at the time.

A month later, according to Cardinal Brenes, even those meetings hadn’t yet happened, although admittedly the bishop of Matagalpa had personally responded that “neither we nor they have enough time to dedicate ourselves to a series of meetings,” reiterating that work commissions between the two parties would be the most appropriate.

“Dialogue for death”

Ortega finally spoke on June 20, a full month later, during his unusually brief speech opening the annual commemoration of the FSLN guerrilla’s audacious tactical retreat in which thousands fell back from Managua to Masaya in the final weeks of the insurrection against Somoza in 1979.

Instead of focusing on the historic date being celebrated, he began his disjointed speech recalling how Sandino had been assassinated in 1934: “As they couldn’t defeat him, they had no other choice but dialogue, they promoted dialogue… Dialogue for what? Dialogue for betrayal, dialogue for death… President Sacasa invited Sandino for dinner, and it was his last supper… The Yankees had organized that dialogue, they were the ones who promoted and organized that trap, that betrayal, and after Somoza had hugged him, and President Sacasa dined with him, when Sandino was leaving the presidential residence, they captured him right there and then, and they murdered him as cowardly traitors, sell-outs, do!”

Although the bishops didn’t publicly admit to feeling alluded to, it was difficult not to feel that this opening salvo of the president’s speech was his first, and perhaps only, response to the idea they had put on the table. It was, after all, a time in which the word “dialogue” was being repeated on a daily bases in both hopeful and skeptical commentaries and analyses.

Why did President Ortega up the ante by equating dialogue with betrayal and death? Was it necessary? He has no apparent urgency or even need to call for a dialogue with those concerned about the country’s course, those opposing him, those who from different perspectives have something to offer to help resolve the national problems. He considers himself safe from that obligation. It’s something only responsible statespeople do, whether or not their mandate is in crisis.

The passivity he observes in the population that doesn’t support him, the dependence he has been creating with his new sympathizers in the poorest sectors, the loyalty he enjoys among those who have always been with him, the certainty that the opposition is weak or buyable, and above all the structure of laws he has erected with his parliamentary majority, employed in the 2011 elections, combine to assure him that “Ortega forever” is more than an empty slogan.

The “three angels” strategy

Three years ago in this same monthly analysis, when Ortega’s second consecutive term in office was just beginning, we referred to the strategy one of his close allies advised him to apply in order to return to government “from above” after losing the 1990 elections.

It consisted of neutralizing “the unsheathed swords of fire” of the three angels who had prevented the first biblical couple from returning to their previous bliss. In the case of Nicaragua’s ruling couple that bliss was the paradise of power and their three fiercest enemies in the eighties were big national capital, the US government and the Catholic Church hierarchy.

Will they recycle the strategy?

The bishop’s recent document has the potential to become a roadmap. Or in the words of Cardinal Brenes, it has the vital potential of a “little seed” that could germinate with time. Even if it never becomes more than a piece of paper, however, it’s a sign that the “sword” of that particular “angel” isn’t totally back in its sheath, that the neutralization achieved 10 years ago by drawing Cardinal Obando into the presidential couple’s project is at its end.

The 2004 celebration of the 25th anniversary of the revolution involving a Mass in Managua’s Cathedral concelebrated by two dozen priests, presided by Cardinal Obando and attended even by the papal nuncio, symbolically sealed the “reconciliation” between Ortega and the Catholic Church hierarchy and kicked off a tight alliance that surprised many. Today, although the foundations of the traditional religiosity promoted among the faithful by the Catholic hierarchy hasn’t changed much, as priest Rafael Aragón explains in “Speaking Out” in this issue, changes are evident in the Church institutionality: there’s a new pope in Rome and a new cardinal in Managua, and since 2007 we’ve witnessed many disagreements between the government and the Catholic hierarchy that have been patched up later.

With the decline in Cardinal Obando’s influence, Ortega is seeking to recycle his neutralization strategy, now with the new cardinal, Leopoldo Brenes. We can see it in the insistent lauding coverage the pro-government media give to his Masses, homilies and parish visits. But neutralizing Leopoldo Brenes stacks up as a much harder objective than winning over Obando was. He’s very close to the people, has a quite different personality than Cardinal Obando’s and boasts the kind of personal friendship with Pope Francis that Obando and Pope John Paul II never had.

The government-
big capital alliance

The second “angel” Ortega had to neutralize, the powerful national business elite that led the opposition to the FSLN government in the eighties, now insists that Ortega has learned from past errors. As proof of his repentance, they brandish the corporative alliance and ongoing dialogue the representatives of big national capital maintain with him.

This has kept sheathed the sword that this sector maintained whetted and drawn for years. José Adán Aguerri, president of the Superior Council of Private Enterprise (COSEP), boasts of the advantages Ortega’s corporative model provide the business chambers COSEP represents. They are so far institutionalized in 81 laws approved by consensus in conversations exclusively between the business leaders and the government.

They are currently negotiating a new tax reform that will increase the fiscal exonerations favoring that elite’s businesses, which also just happen to be businesses in which the governing party’s own business sector is participating. The two allies justify their efforts on the grounds that they will attract investments, generate employment, make the economy grow, increase exports… and of course contribute to the struggle to eradicate poverty via the discredited trickle-down theory and, who knows, even possibly world peace.

Despite big capital’s extended honeymoon with the government, there are two unconcealable focal points of tension. The business executives know that the crisis in the country’s institu¬tionality, including the chain of electoral frauds, is affecting the business climate. They also know and are experiencing firsthand the effects of the government’s favoritist treatment of the FSLN business group’s own companies in that climate. So, while their sword is still sheathed, they have their reasons for keeping it honed…

Those never mentioned and
their unmentioned contribution

All the government-COSEP alliance’s justifications that speak of economic prosperity, fed by government propaganda, have been pure smoke and mirrors. There are data that reveal that the alliance to which so many national benefits are attributed actually only benefits the two allies.

What’s really moving the economy? In 2013 Nicaraguan households received over US$1.2 billion in remittances from emigrant relatives, a 4.3% increase over the previous year representing 10% of Nicaragua’s gross domestic product (GDP). While those resources are moving the economy, the households that receive them largely use them to buy things, often the most basic items they need and couldn’t otherwise have.

“The Nicaraguan economy is growing more from consumption than from private investment,” says independent economist Adolfo Ace­vedo, “and that means that the greatest demand is centered on imports, which is why domestic production is growing more slowly. We have to make the economy grow depending more on investments.”

Remittances have increased because migration has continued to rise. The largest migrant stream of Nicaraguans, which is to Costa Rica, grew another 20% in recent months, according to Costa Rican migration officials. Yet the speeches of neither the government nor its business allies ever mention our emigrants’ contribution to the economy back home, which is improving the life of so many families and making a powerful contribution to social stability here.

If the government-COSEP alliance propaganda about the country’s “economic successes” never mentions migrants, it also sidesteps something even more elementary: economic growth doesn’t mean sustainable development. The “growth” in the northwestern areas of the country (León-Chinandega), for example, has a very high cost for both the country and the people: the unstoppable expansion of sugarcane plantations involves the continual concentration and deforestation of lands. It means mammoth landholdings and mono-cropping, and we all know the environmental, social and health disasters that entails.

Is poverty being reduced?

At the end of May, as is now his custom, President Ortega ignored the mandate to personally present the annual report on his administration to the National Assembly, instead sending Treasury Minister Iván Acosta to read it. This presentation of the results for 2013 is crammed with figures, but not a single line analyzes trends or explains the reasons for the advances, slow-downs or obstacles. It’s this government’s standard operating procedure: shower with numbers, percentages and statistics to drown out any issue-based debate.

The report begins with this sentence: “We are continuing to reduce hunger, poverty and inequality.” From there it leaps to state that general poverty dropped from 48.3% of the population in 2005 to 42.5% in 2009. It’s a surprising choice of dates given that over half of that period (2005-2007) corresponded to the Bolaños government (2002-2006) while the first year of Ortega’s government (2007) only harvested previous efforts.

According to a more recent source, the 2012 Household Survey by Nicara¬gua’s International Foundation for the Global Economic Challenge (FIDEG), which was cited in the government report without naming FIDEG, general poverty fell from 44.7% in 2009 to 42.7% in 2012, the latter a little higher than the government’s 2009 figure. If FIDEG’s figures are correct, it is a minimal reduction in those four years, all of which correspond to the Ortega government, particularly since they were also the years of the best export prices and most abundant Venezuelan cooperation. Unlike the government report, FIDEG adds that without the money emigrants send home, the general poverty in 2012 would have actually risen to 46.8%, slightly higher than during the Bolaños administration’s last full year.

The structural roots
of the poverty

The persistence of such high levels of poverty in our country is closely linked to the pattern of economic growth in the past decade, which was not started by the current government but has been continued by it. It’s a pattern stimulated by the economic liberalization policies and is based on sectors that generate relatively little employment—transnational commerce, banking, energy, transport and communications, traditional extensive cattle-raising and highly mechanized agro-industry producing crops such as sugar and peanuts. The only exception has been the maquila industry, mainly in textiles and apparel. These assembly plants for re-export—basically sweatshops subsidized by the host company—have had a significant impact on creating jobs for young women from marginal urban and semi-urban areas.

The government’s development strategy has also opted not to attack the structural roots of poverty, found in the acutely unequal distribution of income and assets such as land, credit and access to roads and markets. Research by the Central American Uni¬versity’s Nitlapan research institute, done to support the World Bank, reveals that almost half of Nicaragua’s rural population is landless.

Taxes are another
untouchable root

Central Bank President Ovidio Reyes admitted that the tax exonerations that considerably benefit the business elite amount to over US$600 million, 6% of the GDP.

One root of the inequality that must be attacked by a government that identifies itself—now even constitutionally—as one of “Christian principles, socialist ideas and solidarity practices,” is our unfair tax law, which needs replacing with a truly fair one that makes those who earn more pay more. The new tax law and the reforms to it being announced by the Ortega-COSEP alliance maintain the eternal injustice. People with lower incomes currently pay and will keep paying more taxes than wealthy people relative to what they earn because the latter enjoy and are even thinking of increasing the special treatment that exonerates their businesses from taxes.

“It is through fiscal policy that the essence and limits of a political community is defined,” said international finance specialist Aaron Schneider, when presenting his 2012 book State-Building and Tax Regimes in Central America. The book provides the first analysis of the models used in Central America’s State-building as expressed in their capacity to collect taxes.

According to Schneider, an associate professor at the Josef Korbel School of International Studies, the most singular aspect in Nicaragua’s case is the frequency of its tax reforms: three in the past three years and three more already announced by Aguerri for the next three years, taking us up to 2017, the year Ortega’s current term in office ends. Schneider sees the present time in Nicaragua, with a government of a leftist tradition, as “the ideal moment to pressure the wealthy to pay taxes to support the building of the State.” Nonetheless, his analysis does not lead one to think that could happen. He instead thinks that our tax system, which he characterizes as “full of exonerations, exemptions and special regimes that exacerbate the inequity,” will go on being exactly what it is now: unjust.

The Venezuelan crisis

For very powerful legal, tax and business reasons, not only has the second “angel” been neutralized, it seems quite happy with things as they are. If the business elite have any complaint, it’s the knowledge that this happiness is fragile. They are paying close attention to the signs of climate change they perceive both in the North and in the South.

Let’s look first at the South, particularly the increasingly difficult situation in Venezuela. In a speech on June 20, President Ortega agreed with all the independent analyses when he lamented: “In these moments the Bolivarian revolution is facing the greatest onslaught by the enemy forces.”

But these attacks aren’t coming only from the Right. Maduro’s leadership and his ability to deal with the critical economic and political situation are being questioned from within the movement Hugo Chávez built. The power struggles and contradictions of interests that have been present in the Chavist ranks for the past seven years were expected to become public following Chávez’s death. Although we don’t know the financial consequences of Venezuela’s crisis on the governing party’s own treasure chest, it’s can’t be assumed there are none.

The more visible and public effect has been a reduction in exports to Venezuela and that country’s late payment for them, which is serious because Venezuela has become our second largest trade partner after the United States and the oil agreement closely links our national economy to Venezuela’s. The World Bank predicts three years of scant growth for Venezuela’s economy, while Moody’s has rated Nicaragua’s economy “high risk,” considering that its strong dependence on Venezuela makes it “especially vulnerable.”

The Carter Center communiqué

In addition to these uncertainties caused by the southern climate, various signs of changes in temperature, cloudiness and pressure presage a climate change in the North, the “third angel” Ortega had to neutralize.

Although Nicaragua’s governing upper echelons have said nothing about the Carter Center’s brief June 2 statement regarding the reelection of most magistrates to the highly questioned Supreme Electoral Council (CSE), it seems to have concerned the presidential couple more than the bishops’ extensive document of some days earlier. The official silence is a sign of that concern.

The Carter Center’s harsh statement is one more expression that US government relations with Nicaragua “although correct are not cordial,” as Liberal leader and former Nicaraguan Foreign Minister Francisco Aguirre Sacasa has been warning. Aguirre has a good nose for what’s cooking in the US government kitchens.

Former President Jimmy Carter created his center in 1982 after losing his bid for a second term to Ronald Reagan. Carter, who played a decisive role in Somoza’s stepping down from power, always kept a concerned eye on what was happening in Nicaragua during the revolutionary government. Be it ever so humble, he and his center were the FSLN’s best friends in the Democratic Party at that time.

The night of February 25, 1990

Heading the US electoral observers who participated in the historical elections of February 25, 1990, Carter demonstrated that closeness when he persuaded Ortega to recognize, albeit very reluctantly, his defeat.

This is how Dionisio Marenco, a privileged witness during that long night, recounted it to envío: “At about 10 at night Jimmy Carter called me: ‘I want to speak to President Ortega.’ When I told him he wasn’t there, he said: ‘Tell him I want to talk to him.’ But Daniel didn’t answer him. About an hour later Carter called again, more insistently: ‘Tell President Ortega that if he doesn’t get on the phone with me I’m going to announce that he lost the elections. I don’t want to do it without him knowing’….” At midnight, Carter, his wife and other international observers showed up at the campaign headquarters. Then Ortega entered as Marenco watched from the side: “Carter said, ‘Hi Daniel, how are you? Look, I want to tell you that you lost the elections, but don’t worry; it happens. It happened to me and although you feel awful at the beginning, you pull it together afterward.’ ‘No,’ said Daniel, ‘that isn’t true. The results still haven’t come in from a thousand tables.’ But Carter insisted: ‘No, no, if you aren’t going to recognize it, I’m going to say it now and things will get really messy.’ So Daniel recognized it and the only thing he asked was not to make it public until 6 in the morning.”

The Carter Center, no longer headed by its 90-year-old founder, began in 1989 to observe elections around the world to judge whether they were “free and fair,” gaining credibility and prestige for its findings. Thus, in 2012, when Carter himself stated in the Center’s annual speech that “the electoral process in Venezuela is the best in the world,” referring to the 92 elections they had monitored, Chávez, Maduro and their sympathizers took that validation up as a banner. It was also used as an argument for backing Chávez in Nicaragua, with Carter’s words providing the seal of approval. That reputation gave the Carter Center’s recent statement the effect of a bucket of ice water.

“An unfortunate episode”

There have been frictions between the Ortega project and the Carter Center for a while now. Ortega didn’t permit either the Organization of American States (OAS) or the Center to send electoral observers to the 2008 municipal elections, even though both had observed all Nicaragua’s elections since 1990. “They aren’t impartial,” said Ortega in defense of his decision.

For the 2011 presidential elections, CSE president Roberto Rivas called the Carter Center’s earlier comments about anomalies in the ID-voter card process and preparation of the electoral rolls “offensive,” concluding that it had effectively “excluded itself” and would no longer be invited.

After such contemptuous treatment, the Carter Center’s current statement is virtually a sum-up of how it sees Nicaragua’s electoral democracy at this point. It refers to the reelection of Roberto Rivas and four other magistrates as an “unfortunate episode” representing “a significant lost opportunity for this country to strengthen its battered electoral institutions.”

In the Center’s view, “the image and credibility of the CSE, together with the standards governing democracy and elections in Nicaragua, have degenerated significantly in the wake of the confirmed fraud perpetrated in the 2008 municipal elections” under the leadership of the recently reappointed electoral authorities. The statement further charges the same magistrates with having “organized and held the least transparent national election in Nicaragua in the last 20 years [referring to the 2011 general elections], the results of which have proven to be impossible to verify, setting a damaging precedent for the future of democracy in Nicaragua.”

Losing friends in the North

The Carter Center closed its statement by asking the international community to “make sure it keeps its eyes on the status of democracy in Nicaragua in order to encourage and facilitate the return of free, fair and transparent elections with widely-accepted results….” Having once been so close to Nicaragua and even its current President, this straightforwardly critical message indicates that the center has not forgotten the country; that it’s still paying attention, albeit from afar.

That’s only one among various signs during Ortega’s return to the presidency that the democracy lobby is beginning to revive its interest in Nicaragua. In December 2011, less than a month after that year’s electoral fraud, the US House of Representatives’ Committee on Foreign Affairs, chaired by Cuban-American Congresswoman Ileana Ros-Lehtinen of Florida, held a hearing titled “Democracy held hostage in Nicaragua,” in which former US Ambassador to Nicaragua Robert Callahan, and Jennifer Lynn McCoy, director of the Carter Center’s Americas Program, were witnesses. The hearing’s harsh conclusions included urging President Obama and then-Secretary of State Hillary Clinton to immediately adopt “significant measures” to foster the restoration of constitutional order in Nicaragua.

The next month, Clinton, who is currently projecting herself as Obama’s successor in the White House, declared that her government was taking on board the severe criticisms in the OAS and European Union election observer reports about the process that ended in Ortega’s reelection. She added that, given the irregularities reported, the United States would exercise “severe scrutiny” of the project funds provided to Nicaragua by the Inter-American Development Bank (IDB) and World Bank. It was the first shot over the Ortega government’s bow by the Democratic Party, always sensitive to the rituals of electoral democracy.

An ambassador with an
antiquated discourse

Aguirre Sacasa says Ortega no longer has the admittedly few, basically Democratic friends he had in the North in the eighties. He insists that “it’s not true that the United States is looking to destabilize the Ortega government, but it would be equally wrong to think it wants to do it any favors.”

This month having just returned from one of his frequent trips to Washington, Aguirre Sacasa said in a TV interview that he had perceived an impact on “today’s small universe of Latin Americanists” by both the bishops’ document, particularly its reference to the back-pedaling of governance, and the Carter Center statement.

In a mid-May interview posted in the Foreign Policy News blog, Nicaraguan ambassador in Washington Francisco Campbell revealed a discourse about Nicaragua-US relations that didn’t venture off safe turf. Asked what the three most important items of Nicaragua’s bilateral agenda were, Campbell ticked off “security, trade and investment, and development of renewable energy.” Not a word about democratic institutionality or electoral democracy.

His discourse is more appropriate for 2007, when Ortega started his first new term. For the Obama State Department, in contrast, it’s one thing for Ortega to govern having won legitimately, and quite another to continue governing as he now is, after several electoral frauds. The interview was posted two weeks before the Carter Center put its finger on the electoral sore point and pressed firmly, thus highlighting the unspoken issues in Campbell’s official discourse, which is so out of step with current reality.

The strategy with the “angel of the North” is wearing out as well… and will have to be recalibrated.

A common front
with a common cause

Aguirre Sacasa explained how some in Washington find the harmonious relations between the Ortega government and big private enterprise “hard to fathom.” The two parties to these relations went to Washington on June 25 to present them in a two-hour forum on the political and economic climate organized by the Council of the Americas, one of the most influential US think tanks, whose current director, notoriously well known in Central America, is John Negro¬ponte. It brought together more than a hundred politicians, government officials, US congress people and business executives as well as officials of the World Bank, International Monetary Fund and IDB. The presence of both Nicaragua’s big business and the Ortega government was yet another example of them presenting a common front with a common cause.

Ortega now has no better company to present himself with in Washington. He knows his negotiation capacity with the United States is increasingly diminished. He also knows that Aguirre Sacasa is right: the Obama government isn’t hostile to him, but it isn’t his friend either. And of course he knows that the United States is keeping an eye on the crisis affecting Cuba and Venezuela in its rearview mirror, and is known to be involved in those dominos.

Retired General Álvaro Baltodano, Ortega’s delegate for investments, spoke in the name of the Nicaraguan government and José Adán Aguerri in the name of private enterprise. Both underscored the stability and governability the country currently enjoys and both attributed it to the alliance between the government and the business elite, which is guaranteeing a good business climate.

Baltodano manipulated the situation of the migrant minors from different Central American countries who are crossing the US border unaccompanied in mounting numbers, a tragedy causing alarm in the United States right now. He stated that “no Nicaraguan child is among them,” presenting this as proof of the stability, citizen security, social inclusion and advances in education assured by Ortega’s model of alliances.

Aguirre Sacasa provided the political counterweight in the forum. Without denying the macroeconomic stability and economic governance, he pointed out the rollback in political governance, which has been worsening for years and bringing economic consequences with it. He reminded the audience that elections in Nicaragua have been “tainted” since 2006 and that the corrupting of the 2008 municipal elections had cost the country the withdrawal of US$60 million in Millennium Challenge Account funds and US$90 million of European Union cooperation.

Aguirre buttressed his concerns with the bishops’ May 21 message and the Carter Center’s June 2 statement. He was honest enough, however, to admit that while people like him saw these democratic deficits as a very serious issue, the polls indicate that this perception isn’t shared by the majority of the Nicaraguan population.

Is the preferential tariff treatment ending?

The most immediate concern for the Ortega-COSEP corporative alliance with regard to the signs of climate change in the United States is economic, related to fears that the preferential tariff treatment the United States granted Nicaragua when it signed the free trade agreement with Central America and the Dominican Republic (CAFTA-DR) in 1994 won’t be extended. This particular privilege, given exclusively to Nicaragua, has allowed it to export to the United States textile products fabricated with materials not produced in any of the countries that signed that agreement.

This advantage attracted foreign investors to set up their sewing machines in our country. What more could they want than duty-free and nearby access to one of the largest apparel markets in the world, plus the low wages Nicaragua allows its workers to be paid to sew together clothes made with cheap raw materials imported without restrictions from any country?

Will the sweatshops leave?

The preferential tariffs expire this year. If they aren’t renewed it would affect the “favorable business climate” the corporative alliance is lauding as the government’s great achievement. Their reinstatement depends on the political climate in the North, which in turn will be influenced by the congressional elections this November. According to Aguirre Sacasa, continuation of the preferential tariffs is decided in Congress where, he says, political rather than technical criteria predominate in 90% of its decisions.

If they aren’t extended, calculates Dean García, executive director of the Nicaraguan Textile and Apparel Industry Association, the assembly plants’ production costs will go up some 30-40%, which will lead them to move to countries with lower costs. It’s not a major decision for them since it’s the governments that have to lay the roads, install the utilities and even build the factories for these free trade zones, which benefit so much and offer so little to their host country. All the companies have to do is load their sewing and cutting machines onto a moving van. Since they pay no taxes and repatriate all their profits, the “little” they offer the host country is employment. If Nicaragua loses this particular preferential tariff it could lose up to a third of the more than 110,000 jobs generated by the maquilas, 53% of which are held by young women, many of them single mothers.

We mustn’t forget that absorbing some of Nicaragua’s unemployment, even at the cost of low salaries and turning a blind eye to labor abuses of all sorts, is a large part of the “business climate” that’s so favorable to the maquilas in Nicaragua. When the Koreans running a maquila in the Diri¬amba area left the country last October after declaring bankruptcy, they left thousands of workers without three months of pay owed them in what amounted to an unpunished labor crime.

No child is Nica...

Nicaragua’s preferential tariff turned it into the Central American country that has grown the most as an exporter of textiles and garments to the United States, and 60% of the assembly plants for these goods are of US origin. Maquilas are the second largest employer in our country after the government, which has inflated the public employee payroll list significantly.

José Adán Aguerri also spoke in the name of Nicaragua’s business class at a special session of the 43rd Central American Integration System summit, held in Punta Cana, Dominican Republic, in late June. There he referred to the issue of the preferential tariff and, like Baltodano, took advantage of the sensitive issue of child migrants, repeating that there are no Nicaraguans among them. He urged Washington to bear in mind which three countries they’re fleeing from and to avoid economic decisions such as the cancellation of the preferential treatment that could destabilize the region’s three “stable” countries: Nicaragua, Costa Rica and Panama. All these messages carefully avoid mentioning all the Nicaraguan children who go to Costa Rica for economic reasons...

The greatest
national consensus

Behind the tariff issue, it’s the electoral issue that’s aggravating the slow but sure change of climate being felt in the governing party’s relations with the US establishment. In a little over a year we’ll be coming up to another presidential election. One of the most widespread agreements today in a country that seems congenitally unable to reach consensus on virtually anything is the urgent need for the 2016 elections be run transparently, fairly and honestly.

Daniel Ortega has sullied his legitimacy due to the lack of scruples exhibited in the four alleged or proven electoral frauds conducted by his government, giving him a huge majority of municipal mayors and an overwhelming legislative majority. He even assured his own reelection by overriding the Constitution with a clearly partisan ruling by Supreme Court justices loyal to the FSLN in a session held without a quorum.

This stain separates him from all other Latin American rulers today, and even from his peers in the Bolivarian Alliance for the Peoples of America (ALBA), who are governing after winning elections fairly. If Ortega wants to “leave the nation a historical legacy worthy of being remembered by future generations,” as the bishops encouraged him to do in their message, he must respect that consensus.

Would Daniel Ortega
win fair and square?

Some say Daniel Ortega would lose any transparent, fair and honest election, while others believe it would all depend on who his opponent was. And then there are those who say he would win no matter who he ran against. That, interestingly, is the group that includes his corporate allies. While they claim they’re sure he would win, they insist that doing so fair and square would go a long way to improving the investment climate. That also puts them in the camp clamoring for honest referees who could guarantee clean elections.

Achieving this is no easy task, because it wouldn’t be enough just to change the discredited Roberto Rivas or even replace all the old reinstated magistrates—which in itself has so far proven impossible. The electoral law would also have to be changed, and all the electoral structures, even the most basic ones, would have to be uprooted because it is at that level that tricks have been practiced for years with the blessing of the power at the top. An authentic political and ethical make¬over would be necessary.

Is there any opposition?

After winning the November 2006 elections, Ortega commented that the best pact he’d made in his political life was the one with his predecessor, Enrique Bolaños, since it had allowed him to divide the Liberals, sentencing their leader Arnoldo Alemán for embezzlement and money-laundering, discrediting Alemán’s Constitutionalist Liberal Party (PLC) in the process and bribing and blackmailing those Liberals disenchanted with Alemán.

The Liberal opposition to Ortega is also in desperate need of a political and ethical makeover. It would have to be able to transform the consequences of the pact Ortega boasted of, a negotiation that worsened the personalism, sectarianism and short-sightedness that abounds in liberalism and can also be identified in the overall political atmosphere that has prevailed for a very long time.

The US government may not have cordial relations with Ortega, but it also no longer trusts Nicaragua’s Liberal opposition. Both in the State Department and among Democrats and Republicans in Congress, banker and presidential aspirant Eduardo Montealegre, head of the now second-place Independent Liberal Party (PLI), is as questioned an opposition leader as Alemán, still the strong boss of the now depleted PLC.

Nor do they see any figure on the horizon capable of playing the role Fabio Gadea assumed as the PLI Alliance presidential candidate who challenged Ortega in 2011. That 79-year-old journalist, writer and head of the most popular radio station in rural areas has a clear rightwing Liberal profile but an honest and anti-Somocista background and was respected even by those who didn’t share his thinking. He was a worthy and validated opponent for Ortega.

Does Washington truly see the
MRS as the “real opposition”?

Already feeling the pressure of the 2016 elections, the PLI leaders and their dissidents are beginning to hold meetings with the PLC leaders and their dissidents to see if they can come back together under one Liberal banner and a single leadership, patching up the unity they lost when Ortega succeeded in dividing them.
But if, lacking a man of Gadea’s caliber, the Liberal family wants a really competitive unity against Ortega, it has to factor in the FSLN dissidence, represented politically by the Sandi-nista Renovation Movement (MRS). The apple of discord in that plan, however, is Alemán and what’s left of his followers, who ideologically justify their distrust of “those Sandinistas,” considering the MRS a small group of professional and intellectual elites and suspicious that it’s working as a fifth column for the FSLN. So far that distrust has been outspokenly mutual.

In March of this year, after both Democrats and Republicans gave MRS leaders an important welcome in Washington, diplomatic sources in Managua told the pro-government Informe Pastrán e-bulletin, that Washington sees the MRS as Ortega’s “real opposition.” No similar center-left party had ever been given “such a welcome” in Washington, where some even consider the members of the Democratic Party’s small “left wing” to be outside the center of political debate. The bulletin went on to add that the leadership of the two Liberal parties preferred to maintain “a sepulchral silence” on the subject.

We’ve lost a
historic opportunity

So that’s how things are, and we have no idea how they will be when the curtain rises on the electoral stage. What’s already clear today, with the climate in both North and South, the United States and Venezuela, starting to turn, is that Nicaragua has lost a historic opportunity.

The decisions Daniel Ortega made about the use of the generously huge Venezuelan cooperation puts Nicaragua in a very fragile position today. He didn’t choose to build, develop and strengthen the social economy sector, transforming the large segments of the grassroots economy that generate the majority of the country’s jobs. The government of the “second stage of the revolution” didn’t trust those grass¬roots sectors to head up Nicaragua’s transformation in alliance with it, using Venezuela’s resources. It preferred to deposit its trust in the traditional business elite and foreign investors. It also opted to create, consolidate and enrich its own new hegemonic business group around Albanisa, the joint venture with Venezuela charged with distributing the Venezuelan oil, making the short-term payments on it with part of the income and investing the rest in social programs and business ventures favoring the FSLN. Those decisions make its project more fragile now, when the climate outside is changing.

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