Amid calls for an alternative drug-control policy for Central America, President Daniel Ortega insists Nicaragua can’t afford to give up the fight because it’s winning the war on drugs.

“Nicaragua, with the people, the army and the police, is fighting drug trafficking and organized crime and defeating them,” Ortega said during a speech to the military last week. “We already know what Sandino’s slogan was; Sandino said, ‘I won’t sellout and I won’t give up.”

Despite his steadfast support for the war on drugs, Ortega’s view of the issue appears to be a bit quaint and outdated. The president maintains that Nicaragua is still only a “transit country” that doesn’t have a drug problem of its own.

Yet according to the U.S. State Department’s 2012 International Narcotics Control Strategy Report, released earlier this month, Nicaragua has become a producer of crack cocaine, methamphetamines and marijuana. The report also found, “Drug consumption in Nicaragua rose in 2011, particularly on the Atlantic coast where the transshipment of drugs is highest.”

Nicaraguan authorities last year seized $5 million in cash and $11 million drug assets—including 50 vehicles, six airplanes, 15 boats and $900,000 worth of livestock from farming operations that were fronts for the drug trade. Nicaragua also arrested 168 individuals for drug-related crimes.

While those numbers are impressive, Nicaragua’s actual drug seizures decreased last year, according to the State Department.

“Border security remained a concern. Border police officials blamed a decrease in seizures on the lack of personnel, poor working conditions and low morale at the border. Corruption also likely contributed to the underreporting of seizures,” the State Department’s drug report reads.

The States Department also raises concerns that Nicaragua’s overly politicized judiciary presents “another impediment to serious law enforcement efforts in the country.”

The Nicaraguan Navy and the police’s Mobile Inspection Unit received higher praise in this year’s report.

“Nicaragua and the United States share common national security interests and in 2011 the (Nicaraguan Police) began to exhibit a greater willingness to cooperate with the United States on law enforcement issues. The Nicaraguan Navy’s success with interdictions continued and demonstrated the willingness of Nicaragua to confront drug trafficking organizations,” the State Department report reads.

So while the U.S. considers Nicaragua a partner in the drug war, it claims the country still has work to do before it can claim victory in the drug war.

“Nicaraguan achievements will increase if the government places greater emphasis on combating corruption and money laundering; professionalizing and removing political influences on the judiciary and the Prosecutor General’s office,” the report reads.