Central America has been a hot spot for political strife and poverty for decades. (I’m working on a backgrounder on the surprising history to this story. You will see it soon.) But Nicaragua has been seen as more stable among the countries in the region during recent years especially when compared to Guatemala, El Salvador, and Honduras.
In the last year, we have witnessed a significant shift in that state of affairs.
Subscribe to JB Shreve & the End of History
[This backgrounder and explainer on the crisis in Nicaragua will be updated regularly.]
Prior to 2017 Nicaragua remained poor but its future was hopeful. High levels of tourism and a growing economy allowed the country, and its four-term President Daniel Ortega, to maintain consistent growth rates and a satisfied public. Nicaragua’s economic growth rates were among the best in the region at 5% a year.
Things shifted in 2017 when Venezuela, in the midst of its own economic collapse, withdrew aid that had been given to Nicaragua for years. The aid from Venezuela to Nicaragua was a signature feature of the Chavismo policies of former Venezuelan leader Hugo Chavez in which loyalty and support were purchased from the surrounding nations of Central and South America with aid and low priced oil. As Venezuela’s economy collapsed under his successor Nicolas Maduro, Venezuela could no longer afford these payments of diplomatic aid.
- Learn about the Background of the Venezuela Crisis here.
As a consequence of this loss of aid, President Ortega was forced to cut back on the social welfare programs of Nicaragua beginning in 2017 and continuing into 2018.
Who Is President Daniel Ortega
Ortega is a name familiar to many observers of Central America. In the 1980s he was a leader within the Sandinista movement who US President Ronald Reagan accused of importing Cuban-styled socialism and guerilla tactics into Central America.
Prior to his work with the Sandinistas, Ortega was an active voice and proponent of revolution in Nicaragua. He won the presidency in 1984. Upon becoming President, he immediately implemented widespread policies of reform including improving the education system of Nicaragua, land reforms and wealth distribution.
As President, Ortega’s government continued to support the Sandinistas in Central America and oppose the Contras who were funded and supported by the US government.
In 1990 he lost his bid for reelection but remained active in Nicaragua’s politics, gradually taking on a more moderate tone after the fall of the communist states in Europe and the Soviet Union. He lost several bids for reelection before once again retaking the presidency in 2006. While Ortega remained a socialist a lot of his more revolutionary politics of the past were replaced with religious language and imagery as the politician linked himself to the influential Catholic church of Latin America.
Ortega’s government has since passed laws that removed term limits for the President, and he has maintained his hold on the government and the nation of Nicaragua to the present. His administration is known for corruption and nepotism. His own wife serves as Vice President.
The Current Crisis in Nicaragua
The levels of corruption and abuses of power by the Ortega government in Nicaragua were tolerable as long as the wider social welfare remained intact. As this was cut back following the loss of Venezuelan aid however, the situation began to change. The economy which had previously been growing by 5% per year, shrank by 4% in 2018.
In April 2018 a protest movement began demanding the removal of President Ortega from office. Ortega identified these protests as a soft coup effort and quickly cracked down on the protesters.
In the crackdown, it was quickly revealed how much power the President had consolidated to himself within Nicaragua. The Ortegas control the courts, the National Assembly, the electoral council and the police.
In the months that followed, hundreds were arrested, and thousands began to flee Nicaragua and the long arm of their President’s response. A crackdown on the media was also seen throughout 2018 as several outspoken publications and outlets were closed down and editors charged with conspiracy to commit terrorism. In January of 2019, 565 of the protesters remained in Nicaraguan jails and more than 23,000 people had fled the country.
Meanwhile, Nicaragua’s financial outlook continued to decline. Outside observers say the conflict has already cost the country in losses of over $1.6 billion.
Peace Talks and International Responses
Subscribe to JB Shreve & the End of History
In February the Catholic Church in Nicaragua began arbitrating discussions between the Ortega government and the protesters. One hundred political prisoners were released in the days before the discussions began as an act of goodwill but Ortega himself did not initially show for the talks.
The talks have continued intermittently over the last month. The opposition is calling for a resumption of freedoms in the media, electoral reforms, and elections to be held earlier than their currently scheduled dates in 2021. Many believe Ortega is seeking to bide his time in hopes that Venezuela and Maduro will outlast their own crisis and come to his aid once again.
At the end of 2018, the United States officially blocked loans and aid from international finance organizations that were scheduled to be made to Nicaragua. This was part of the Nicaraguan Investment Conditionality Act signed by President Trump and intended to “squeeze Nicaragua with tough sanctions until the rule of law is restored.” It will result in further contraction within the economy and more tensions between Ortega and his opposition.
More recently the European Parliament approved a resolution criticizing the Nicaraguan government on human rights and calling for more sanctions.
Observers have voiced their concern that if the economic sanctions and peace talks don’t succeed, Nicaragua could be on the verge of the bloodiest wars they have ever seen.
