Latin America Advisor

A Daily Publication of The Dialogue

Is Nicaragua’s Ortega ‘Intent on Re-creating’ a Dictatorship?

Q: Daniel Ortega was re-elected Nicaragua's president Nov. 6, winning 62 percent of the vote, according to the country's electoral council. Ortega's run for a third term came after the country's Sandinista-dominated Supreme Court ruled in 2009 that he could seek another term despite a constitutional ban on presidential re-election. Ortega 'now appears intent on re-creating the dictatorship his 1979 revolution overthrew,' The Washington Post said in a Nov. 8 editorial. What will Ortega's landslide victory allow him to do in his next term? To what can he attribute his popularity? How has Ortega's relations with Nicaragua's business community affected his hold on power and what should businesses expect from his next term?

A: Robert Callahan, former U.S. ambassador to Nicaragua: "The greatest harm that Daniel Ortega and his government have done to Nicaragua has been their systematic co-optation and destruction of the country's fragile democratic institutions. The elections and much that went before stand as cogent examples of this. Ortega now has virtual carte blanche to do as he pleases. He controls all four co-equal branches of government, owns or has decisive influence in most of the electronic media, has become wealthy in his own right and still has a formidable, albeit more benign, intelligence service. Why is he popular? CAFTA, record high prices for Nicaragua's principal exports, and the half-billion dollars a year he receives from Hugo Chávez have allowed him to undertake socio-economic programs that have benefitted the poorest Nicaraguans, who constitute a majority in this desperately impoverished country. Prudent macroeconomic policies have endeared him to the business class. A fragmented and endlessly quarrelsome opposition discouraged many Nicaraguans who might have voted against him. And although he may have won the election, I rather doubt that he got anything close to the official figure of over 62 percent of the vote. There was massive fraud during the campaign and on the day of the vote and the count. He has maintained solid economic policies, attributable in part to self-interest-he and many of his Sandinista cronies are wealthy individuals nowadays-and also because the disastrous economic policies of the 1980s contributed to his electoral defeat in 1990. He does not want to repeat those mistakes. I would expect Ortega to use his legislative super majority and his control over the Supreme Court to draft a new Constitution that will allow him and his hand-picked successors to remain indefinitely in power. I am convinced that he wants the Ortega family to become the next Somozas and hold sway over Nicaragua as if it were a family fief."

A: Katherine Hoyt, co-director of the Nicaragua Network: "Daniel Ortega won the election with 62.42 percent of the vote-almost exactly the percentage in the last CID-Gallup poll that said Nicaragua was headed in the right direction (62.5 percent). The reasons for his win are not a mystery. He won because the country's economy has been doing very well-world prices for coffee, gold and other exports are at record highs and Nicaragua has a special arrangement with Venezuela for petroleum purchases. Ortega knew how to channel these economic benefits into programs that favored the majority of the country's population. Also, independent voters appeared to have lost any lingering fears of the 'ghosts of the 1980s,' namely war, the draft, rationing and scarcity. Exports went up 70 percent in the past five years and there was a massive increase in both foreign and domestic investment, accompanied by a positive relationship between business and the government. The country's electricity crisis ended, benefitting especially the country's innumerable small businesses. Over 136,000 property titles were given to urban and rural dwellers who held parcels without titles and over 100,000 families benefited from the Zero Hunger Program, which provided farm animals, seeds and follow-up by agricultural extension workers. Internationally funded studies showed a slow but sure reduction in poverty, especially rural poverty. All of these programs can be expected to be continued in Ortega's next term. With 62 seats in the National Assembly, Ortega will be able to achieve approval for his own nominations to the many high posts with expired terms, including the Supreme Court and the Supreme Electoral Council but he will be under pressure from many quarters, not the least the business community, to pick nominees with broad support. The Assembly will also have to deal with controversial issues in the next term, including tax reform and putting the Social Security system on a more secure footing."

A: Manuel Orozco, director of the Remittances and Development Program at the Inter-American Dialogue: "Daniel Ortega's victory is not accidental but rather a byproduct of a carefully crafted political strategy, set in motion just after his 2006 victory, to re-elect himself and stay in power for 10 consecutive years. His strategy consisted in utilizing his political capital to manipulate the legal system, intimidate and weaken civic organizations and keep fragmented an already deeply divided political opposition. Also, he implemented his political vision through a populist lens that consisted of investing in welfare programs for the poor, keeping a sound macroeconomic policy without upsetting the private sector and forging alliances only with those whose ideological affinity was akin to his and would support his cause without upsetting the United States, i.e. Venezuelan President Hugo Chávez. His strength with a tampered legal system and a populist agenda flooded with Chávez-dollars gave him enough popularity as he handed food, gas tanks, zinc metal roofs and promises of a better future for a humble exchange of votes. Mr. Ortega is aware, however, that while strong on this new term with the legislature on his side, his political future is shaped by his belief that it is time to leave a legacy and work toward adopting a moderate approach, rather than perpetuate himself in power as if fulfilling a messianic dream. He also faces at least two major challenges, first, an uncertain make up of new opposition leaders who don't belong to the 'pact' and, second, diminished assistance from Venezuela, which in turn minimizes his populist policies. Accompanied to this, economic performance will not likely increase above 4 percent and will keep pressure on helping young professionals to find better paid jobs."

A: Victor Borge Gonzalez, research, marketing and electoral politics consultant and general research manager at Borge y Asociados in San José, Costa Rica: "Ortega's landslide victory will allow him to make any changes he wants to the Constitution because the FSLN will have the majority in the Congress. The main change that we can expect is promotion of indefinite re-election, which will probably produce a 'republican monarchy' like the that of the Somoza family. In this new Nicaragua, we probably will see Ortega and Rosario Murillo running in the next election. Ortega's popularity can be attributed to his campaigning around the country over the past two years. This has basically consisted of giving small things to the poor, things like pigs, corrugated roof sheets and other small gifts that help Ortega look like a president who cares about his people. Ortega is now a businessman. He and his family own a company called Alba de Nicaragua. Now Ortega has to make deals and will not do anything that could hurt his family's assets. According to the online newspaper Confidencial, this company has invested in at least 10 productive sectors including agriculture, construction, energy, banking, communications and gasoline distribution. The business sector can expect a government that doesn't interfere with the private sector and also a government that works with them."

A: Cresencio Arcos, senior advisor to the Center for Hemispheric Defense Studies at National Defense University:"Daniel Ortega's recent 'landslide' re-election signals a new direction for him. It is no longer about Sandinismo or any other leftist mantra. It means the capturing of power through 'democratic' means. The driver for fraud does not seem to have been his re-election. This was expected given the opposition's wobbly efforts and incoherence. Gadea and Alemán were never seen as serious contenders. Hence Ortega was considered the expected victor. But Ortega's grand design to truly dominate the foreseeable political future without Moscow or Havana or even without the classic correlation of forces leads him now to traditional strongman tactics. This includes fraudulently securing a majority in Congress to approve his agenda to achieve a political monopoly with wide patronage while allowing a mercantilist noncompetitive private sector to prevail. This has helped him win support, especially at a time that Chávez's handouts will probably vanish. So Ortega will now rule by the old saw: 'a dog with a bone in his mouth will neither bark nor bite.' He cleverly has stitched together the capitalist, the so-called workers and peasants, the bourgeoisie and the Lumpen sectors in re-ordering the political order to suit his needs."

Editor's note: The Advisor invited the Nicaraguan Embassy in Washington to comment, but did not receive a response.

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