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Economic growth and cronyism give Ortega upper hand in Nicaragua elections
The Tico Times / October 28, 2011

By Larry Luxner

WASHINGTON — Nicaraguans will go to the polls Nov. 6 to elect a president, but there’s no mystery concering the outcome. Daniel Ortega, the aging revolutionary who led his leftist comrades to a military victory in 1979 and has been a key figure in this Central American nation ever since, will in all likelihood trounce his two adversaries — despite past allegations of voter manipulation and outright fraud by Ortega’s ruling Sandinista Party.

The reason: Nicaragua’s economy is doing relatively well, buoyed by record factory exports, the sale of Venezuelan oil to other countries and a steadily growing tourism industry. It also helps that Ortega enjoys widespread popularity in a still-impoverished country where personalities usually matter far more than issues.

Ortega’s hand-picked man in Washington, Ambassador Francisco Campbell, wouldn’t discuss the upcoming elections, though a variety of Nicaragua experts agree that something doesn’t smell quite right in that 50,000-square-mile country prone to earthquakes, dictatorships, revolutions and widespread corruption.

“At least 55 percent of the population says Ortega has been doing a good job, so the allegations that he’s corrupt — even though they’re right — are not an issue for the majority of Nicaraguans,” says Manuel Orozco, a senior analyst at the Washington-based Inter-American Dialogue.

For one thing, Orozco told The Tico Times, the president has succeeded in keeping the opposition weak and divided. Secondly, he enjoys strong support from two of Nicaragua’s most important institutions: the private sector and the church. And thirdly, “he’s been able to adopt a populist stand, basically using government resources to provide favors for the people.”

Orozco, a Nicaraguan who was approached by a close ally of Ortega after the president’s 2007 election victory and asked to advise the government on economic policy (he politely refused), said Ortega has basically won the support of businessmen through handouts and old-fashioned cronyism.

“He learned right after his defeat in 1990 that in order to win an election, you have to gain the favor of the private sector,” Orozco said. “So for the past 15 years, he’s been respecting private property and doesn’t charge high taxes on the private sector. He was able to keep the country relatively stable during the recession, mainly by utilizing revenues from the sale of Venezuelan oil to pay for welfare services.”

Orozco estimates that Nicaragua — thanks to Ortega’s solidarity with fellow populist President Hugo Chávez of Venezuela — receives $500 million a year worth of Venezuelan oil at subsidized prices.

According to the latest CID-Gallup poll, Ortega is by far the leading candidate, with a 45.5 percent margin of support among likely Nicaraguan voters. In second place is Fabio Gadea Mantilla of the Independent Liberal Party (PLI), with 33.5 percent. Trailing Gadea in the polls is the Liberal Constitutional Party (PLC) candidate Arnoldo Alemán Lacayo — a former president of Nicaragua who was convicted of embezzlement in 2003, with 10.1 percent.

Thanks to a deal hatched in 1999 between then-President Alemán and Ortega, whose FSLN party was in the opposition, a presidential candidate needs only 35 percent of the vote in order to avoid a runoff election.

The CID-Gallup poll, released Sep. 30, found that 68.9 percent of voters are sure of their candidate and don’t plan on changing their minds. Only 5.2 percent of respondents said they might switch candidates on Election Day.

“Politics in many Central American countries, especially Nicaragua, is based on personal appeal, and Ortega has that. He’s also an experienced politician, and he knows how to move money and satisfy constituencies,” said Steve Johnson, an analyst at Washington’s Center for Strategic and International Studies. “The problem with the opposition is coming up with a candidate who knows how to appeal to the people and spread patronage around.”

Johnson said Ortega has avoided the radical anti-American agenda that marked his years as a Sandinista comandante. In fact, he’s gone out of his way to take full advantage of Nicaragua’s free-trade agreement with the United States under DR-CAFTA.

“By not upsetting the apple cart with a wholesale return to the days of sandinismo, he’s managed to maintain good graces with a broad base of the population,” said the CSIS expert, who traveled to Nicaragua frequently during the 1980s as a military attaché with the U.S. Embassy in Honduras, and in 2001 as an election observer.

What irks Ortega’s opponents is the way in which he circumvented Nicaragua’s own election laws to be able to run again, even though the constitution specifically forbids re-election following a five-year presidential term.

Tim Rogers, editor of The Nicaragua Dispatch, says Ortega and his cronies in the judicial system blatantly sidestepped the constitution in 2009 in order to allow him to stand for re-election.

“The Sandinista judge decided that [Article 147 of the constitution], which says there are no consecutive re-elections, does not apply to Ortega. They said it violates other articles which state that everyone is created equally, so if the president can’t run again, he’s not being treated equally,” Rogers said from Managua.

He added that the term of Roberto Rivas, president of Nicaragua’s Supreme Electoral Council — which counts the votes — expired a year ago, but that he remains on the job thanks to a decree passed by none other than Ortega.

“This could mark a real turning point in Nicaragua’s fragile democracy, in that here’s essentially a candidate whom the opposition calls illegal, running in an electoral system controlled by his party,” he said. “That electoral council has already been accused of various kinds of electoral fraud. It’s a very precarious situation.”

Ortega’s running mate is retired Gen. Omar Halleslevens, one of the founders of the Sandinista army, who until last year commanded the country’s armed forces.

“Halleslevens is highly regarded and gives that ticket a great deal of respectability which Ortega lacks, particularly on constitutional grounds,” said Rogers, though he warns that the general’s inclusion on the ticket is also seen as a thinly veiled attempt by Ortega to curry favor with Nicaragua’s military.

“The country has become very polarized, and the Sandinistas are constantly keeping tabs on their neighbors, on who’s supporting whom,” he said. “Whether or not you’re a Sandinista determines whether or not you receive government aid.”

Yet with all the focus on Libya, Syria, Afghanistan and Iran, Foggy Bottom has been strangely silent on the dubious dealings in Nicaragua, notes CSIS’s Johnson.

“You don’t hear anyone in the State Department complaining very loudly about how he manipulated the constitution to run again, so it’s likely our government will live with it, although an Ortega victory will certainly leave an unsavory aftertaste,” he said.

One reason might be that the Washington political establishment — while not exactly in love with Ortega — prefers to look the other way as long as the old rebel stays out of trouble and keeps the door open to U.S. investors.

There’s no question that since Ortega’s return to power in 2007, Nicaraguan exports have doubled and foreign direct investment has grown nearly five-fold.

“Nicaragua now has the fastest-growing economy in Central America. Ironically, it’s become the poster child for the IMF,” noted Rogers. “Every year Ortega’s been in power, Nicaragua has set new records for exports and FDI. The macroeconomic numbers are encouraging, and at the end of the day, that’s what people care about.”

The numbers evidently speak for themselves. In the first half of 2011, Nicaragua attracted $284 million in FDI. While the rate of investment may cause the country to fall short of the $1 billion goal Ortega set at the beginning of the year, it still represents a 32 percent increase from the year-ago period, according to Veronica Rojas, vice-minister of the country’s Ministry of Industry, Commerce and Development.

Nicaragua is also the only country in Central America to not only recover the free-trade zone jobs it lost during the 2008-09 global economic slump, but surpass previous employment highs in that sector.

Gen. Alvaro Baltodano, presidential delegate to the investment agency ProNicaragua, said that by the end of this year, 97,000 Nicaraguans will be employed in the country’s free zones — producing everything from women’s underwear to blue jeans for the nearby U.S. market.

If past is prologue, Johnson observed, Ortega may be populist enough to satisfy his Sandinista support base, but pragmatic enough not to irritate close neighbors.

“He might offer refuge to old fellow travelers like Muammar Qaddafi, but probably won’t block commerce with the United States. It’s not a strategy that will help Nicaragua progress in any sense of the term, but that was never the point,” Johnson said. “It’s about running a political machine, nothing more. And until the majority of voters get sick of the corruption, that’s all it will ever be about.”

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