2012: continuity or crisis?

Analysis.

For the first time in Nicaragua’s modern democratic history, the country will watch on Jan. 10 as an incumbent president hands himself the presidential sash for another term in office.

The opposition claims Daniel Ortega’s reelection has ruptured Nicaragua’s constitutional order, which bans consecutive presidential terms. They claim Ortega has pushed Nicaragua too far, tripping a dashboard warning light indicating the wheels are about to fall off the country’s democracy if the government doesn’t pull over immediately for a tune-up.

The Sandinistas, however, insist Ortega’s longevity offers Nicaragua a unique opportunity for continuity, growth and progress under a popular government that’s supported by the majority of voters. And many in Nicaragua’s business class seem to agree—at least in quieter moments— that the continuation of a strong government is good for business, if Ortega’s politics don’t trip up the economy.

That could be a big “if” as Nicaragua faces a number of daunting domestic and international challenges in the 2012, starting with next week’s scheduled visit by Iranian President Mahmoud Ahmadinejad, amid heightened tensions with Washington.

Next week the world will turn its eyes to Nicaragua as Ortega swears in for another term. But it’s Ahmadinejad they’ll be watching. And it could be a harbinger of trouble to come for Nicaragua if the Sandinista leader tries to cozy-up too much with his Iranian guest of honor, as he did with Venezuela’s Hugo Chávez during his 2007 inauguration.

What does continuity mean under Ortega?

Most Nicaraguans—all of them under 40—have never experienced government continuity. For the first time in more than three decades, the new boss will be the same as the old boss, and he won’t spend the first half of his term in office trying to undo the achievements of his predecessor.

Instead, Ortega will hit the ground running. When the Sandinista chief festoons himself in the presidential sash next week, he’ll already have political momentum, a solid working relationship with the IMF and the business community, a solid managerial grip on a growing economy, and a working government program already in place. Social programs will continue without upheaval or major tinkering, and the Sandinistas’ supermajority in the legislative National Assembly will be like handing Ortega the political football with nothing but open field between him and the end zone.

“I think the people voted for Daniel Ortega because they want to see continuity in something,” Comandante Bayardo Arce, Ortega’s top economic advisor, told The Nicaragua Dispatch in an interview after the presidential elections. “The people were afraid that another government was going to come along and start saying, ‘This is going to change, and no more ALBA, and no more this, that or the other thing.’ And once again, we would have to start from zero. We always start over.”

Arce says that part of Ortega’s success during his first five years in office was due, in fact, to his efforts to offer continuity to several of the programs implemented by his predecessor, President Enrique Bolaños. The radical changes that some feared Ortega would bring to bear in 2007 never happened, he said.

“I think this is the only government that didn’t erase everything (inherited from the previous administration). And that is one of the things that people recognize,” Arce said. “There were things that señor Bolaños was doing that were working well, and we continued to do them.”

Ortega’s reelection means continuity can now happen to an even greater degree, in all projects big and small. Even some of the megaprojects such as the Venezuelan-funded “Supreme Dream of Simon Bolivar” Oil Refinery, the 220-MW Tumarin Hydroelectric plant and the deep-water port at Monkey Point (projects that once seemed like populist-addled stargazing destined to be stuck in the same musty file holding the blueprints for the Nicaraguan Canal and filed under “D” for “Si Dios Quiere”) might now have at least a fighting chance of actually becoming real.

“No one can resolve, even minimally, the problems of a country in only five years,” says Arce. “A strategic project like Tumarin takes more than five years to do, so that extends beyond one presidential term.”

Arce, however, is not in favor of anyone—including Ortega—becoming president-for-life.  “I think that after 10 years, if you don’t have your project moving forward, it’s time to stop trying,” he says.

Critics, meanwhile, claim it’s already time for Ortega to stop trying.

“When there is no legitimacy of origin, as is the case with the next Ortega government, because it’s not the product of a credible electoral process, sooner than later there will be a crisis and (the government) will have to pay for it,” predicts former opposition vice-presidential candidate Edmundo Jarquín.

Challenges Ahead

In addition to questions of legitimacy and legality, which threaten to hound Ortega’s administration for the next five years, the administration will also face a series of daunting challenges to both domestic and foreign policy.

Despite winning reelection with what appears to be an authoritative mandate and wresting unchecked control over all branches of government, the Ortega administration will be facing a difficult year ahead. Some of its main challenges are:

     1. To Build political consensus for economic reforms.

The Sandinistas have enough votes to legislate unilaterally in the National Assembly, but they’ll need consensus to be successful.

According to Bayardo Arce, the most pressing agenda items on the docket for 2012 will be reforming the social security system, reforming the tax code and reforming the energy sector (namely, figuring out how Nicaragua is going to deal with rising energy costs without continuing to subsidize half the population).

The government and the private sector agreed to push off those issues until 2012, which allowed the Ortega administration to maintain relatively calm and harmonious relations with the business class for the past few years. But the government cannot continue to kick that can down the road any longer; the time to face those issues has come, and they will require political savvy.

“We have these three big and pressing issues that require ample consensus,” Arce told The Nicaragua Dispatch. “In none of these areas can we make decisions that favor workers over business, or business over workers. All of these decisions need to be made in agreement, even though we have the majority.”

     2. Deepen social programs, improve poverty-relief programs

The government will be challenged to increase the effectiveness and reach of its social programs, as well as figure out new ways to make them more inclusive and sustainable.

New data from the Nicaraguan Development Institute (INDE) suggests the government programs aren’t as effective at reducing poverty as the administration claims, according to economic analyst Adolfo Acevedo.

At the behest of the Inter-American Development Bank (IDB, or BID in Spanish), INDE recently published its poverty relief numbers for 2009—data that, until now, has been guarded jealously by the Sandinista administration; it reveals that  only 12.5% of the population has received aid from government programs, while 87.5% said they haven’t received anything.

Acevedo broke those numbers down even further to discover that only 10% of benefiting families are living in extreme poverty, while almost 65% of households getting government social aid were already above the poverty line.

“This is a little strange for programs that are designed to reduce poverty,” Acevedo says.

The economist also found that the great majority of those who say they have benefited from government programs were referring to traditional government aid in the form of vaccination campaigns and efforts to improve education enrollment.  Acevedo says that only 3.2% of the population has benefited from new “ALBA” social programs funded by Venezuelan aid, suggesting that the perception of ALBA aid is greater than its real impact.

The government, meanwhile, is focusing on other statistics. The same home survey suggests that extreme poverty in Nicaragua dropped from 48.3% in 2005 to 42.5% in 2009, an achievement the administration is happy to take credit for.

The government notes that it has benefited thousands of people with poverty-relief programs such as Hambre Cero, which provides small farmers with pregnant chickens, pigs and cows, and Usura Cero, which provides women with micro-loans. The government has also advanced on efforts to provide roofing materials and property titles to tens of thousands of Nicaraguans.

The challenge moving forward will be for the government to show that these programs are not designed only as vote-generating charity for party supporters, rather programs that are able in reduce poverty in a sustainable way.

The Sandinistas will have to deliver this term; blaming every shortcoming on the “16 years of neoliberal governments” doesn’t cut it after more than five years in office.

     3. Respect freedom of expression, reduce polarization  

New claims of political persecutions and government intolerance towards the opposition continue to punch holes in the administration’s slogan of “reconciliation and national unity.”

Since the elections, the opposition claims the number of death threats, arbitrary police detentions and cases of political persecution have increased dramatically.

“There are now political prisoners and people who are being persecuted politically,” Molina told the daily La Prensa this week. “We are documenting the information and will file formal complaints with the human-rights organizations.

Activist lawyer Lulio Marenco claims he is one of the people the government has recently started to persecute for political reasons. Last week, police raided Marenco’s home and office with a capture order issued by a supplemental judge (the root of much judicial mischief in Nicaragua).  

Marenco, who claims he is on the lam,  emailed The Nicaragua Dispatch this week from a cyber café in Managua to say the warrant for his arrest was issued without due cause as political retribution for filing a criminal complaint against Supreme Electoral Council president Roberto Rivas, whom the lawyer accused late last year of illegal enrichment, fraud and corruption, among other charges (the case was thrown out of Nicaraguan court without consideration).

If tolerance is not improved quickly—especially in Nicaragua’s allegedly independent government institutions— the situation will only complicate the Sandinistas’ legitimacy issues.

     4. Maintain majority support

Ortega’s victory in the Nov. 6 general elections was thanks to independent voters. But winning the elections was the easy part; maintaining that support will be a challenge in the New Year.

Veteran Nicaraguan pollster Raúl Obregón cautions Ortega to not let the support of independents go to his head, the way the opposition did in the past. He says the president would be “making a serious mistake” if he thinks his party has grown and that he has a mandate for change.

“Ortega’s support is still 34 percent hard-line Sandinistas, and 24 percent soft vote (independents),” Obregón said. “The Sandinista Front has not grown, but its support has.”

     5. Improve citizen security

Nicaragua likes to advertise itself as the safest country in Central America. But given that Central America is the most violent region in the world, Nicaragua’s superlative claim is a bit like bragging about being the best arm-wrestler in the nursing home.

Rather than comparing itself to its horribly messed-up neighbors, Nicaragua needs to focus on improving its own situation.

Nicaragua’s police and army have done a commendable job combating organized crime, drugs and gangs. But they need to avoid the traps of Sandinista triumphalism and politicization, both of which threaten to weaken their institutional response to crime and insecurity.

The recent reappearance of armed groups in the rural north and northeast of the country is also worrisome and potentially represents the visible tip of an iceberg of political discontent and social unrest.

The government has responded militarily, hunting down and killing leaders of the armed groups. But history warns that military solutions and repression could exacerbate the violence if the government is not willing to take an honest look at what’s causing the problems.

     6. Avoid crazy foreign policy

The Sandinista government’s approach to foreign policy could be its Achilles’ heel in 2012.

The success of Ortega’s government over the past five years has been thanks to its ability to play all sides by establishing beneficial relations with Venezuela and other “new friends” while maintaining solid ties to the United States, traditional allies and international financial institutions.

This will all go to pot if Ortega continues to defiantly court the friendship of Iranian leader Mahmoud Ahmadinejad, who will take time off from test-firing cruise missiles to attend Ortega’s inaugural fiesta next week.

The delicacy of the Iranian issue was underscored last weekend when U.S. President Barack Obama signed into law tough new sanctions that could punish foreign governments that deal with Iran’s central bank on oil transactions. Though Nicaragua does not buy oil from Iran, the sanctions send a clear message on the eve of Ahmadinejad’s tour of the Americas that the United States will not be sympathetic to foreign countries that try to deepen relations with Tehran.

For Nicaragua, this could spell serious trouble if Ahmadinejad arrives in Managua with a basket full of goodies and promises to strengthen ties with Nicaragua.

If Ortega embraces Ahmadinejad on his find-a-friend tour of the hemisphere, it will make Nicaragua a pariah in Central America and give the United States the excuse it needs to turn the screws on Nicaragua—just at a time when the country appears to be coming into bloom.

Climbing into bed with Ahmadinejad would play into the hands of hard-line Republican lawmakers on Capitol Hill who are already trying to move Nicaragua from the category of “drug-war ally” to “friend of my enemy.”

Ortega is a pragmatic leader, despite his administration’s frequent rhetorical outbursts—a sort of political Tourette syndrome that the president has been able to manage with responsible actions to compensate for the kooky comments.

But Ortega is taking a bad gamble if thinks he can manage the same balancing act with Iran that he has pulled off so admirably with Venezuela.

Sandinista officials like to say they can be friends with any country they want to, regardless of what the United States thinks. And they are right.

But in the world of realpolitik, which is still the world to which Nicaragua belongs, it matters who your friends are. By flirting with countries like Iran and North Korea, Nicaragua appears to be modeling its foreign policy on the social behaviors of a rebellious high school student who doesn’t know which group to sit with in the cafeteria.

Just because Nicaragua can befriend whomever it wants, doesn’t mean it’s a good idea for it to chum around with the pipeheads hanging out by the train tracks.

The Sandinistas’ economic success over the past five years has been due, in great part, to its continued ties to the United States, Nicaragua’s main trade partner and main source of tourism.

It would be foolish to give that up to hang out with the oddball members of the world’s “Breakfast Club.”