MANAGUA—One of the Clinton administration’s former top advisors on Latin America says he thinks the U.S. government doesn’t know what to do about Nicaragua.

Since 2008, the U.S. has repeatedly expressed concerns over Nicaragua’s eroding democracy, and slashed bilateral aid by the millions to show they mean it. The pressure tactics haven’t worked. Four years later, Nicaragua’s economy continues to expand while its political system continues to contract—a situation neatly illustrated last week by the country’s third dubious election process in four years.

Washington, meanwhile, doesn’t seem to have any low-suit cards left to play.

“People don’t really know what to do. They don’t know what to do,” says Richard Feinberg, who served as special assistant to President Bill Clinton and senior director of the National Security Council’s Office of Inter-American Affairs.

“The State Department is concerned about the erosion of democratic institutions here and they have made that very clear, but the U.S. doesn’t have at its ready disposal levers to solve these problems; it’s largely up to the Nicaraguans themselves,” Feinberg told The Nicaragua Dispatch during a visit here this week.

Nicaragua, Feinberg says, is a complicated case. On one hand the U.S. recognizes that Nicaragua’s economy is doing well and that the Sandinista government is working well with multilateral lending institutions and the private sector. But on the “more problematic side,” Feinberg says, folks in Washington are “deeply worried” about Nicaragua’s election system and the “erosion of its democratic constitutional government.”

Nicaragua’s feckless and balkanized opposition isn’t helping the situation.

“After a couple of beers, people in the State Department might say, ‘We, as an outside power, cannot do what the domestic political process in Nicaragua is unable to do. We can’t do the work of the opposition for it. If they are unable to get themselves more organized and put forward attractive political positions, we can’t do that for them,” says Feinberg, who head of the Inter-American Dialogue in the early 1990s and is now a nonresident Senior Fellow for the Brookings Institution’s Latin America Initiative.

Plus, the analyst says, the U.S.’ democracy-building efforts in other parts of the world aren’t exactly seamless.

“Even in the places where we have boots on the ground in Afghanistan and Iraq, how well is that going in terms of building political institutions? I would say problematic at best,” Feinberg says.

Nicaraguans are also conflicted over what role, if any, the U.S. should play in helping their country stay on the rails of democracy. While many Nicaraguans have traditionally looked to the U.S. for help with things get wonky in their own country, no one wants to throw the baby out with the bathwater.

“Nicaraguans see their economy doing well and being managed responsibly, so they wouldn’t want economic sanctions. So what are the levers that the U.S. has at this point?” Feinberg says. “(Nicaragua) is not vulnerable to marginal economic pressures, so U.S. leverage with regard to the internal politics of Nicaragua is limited, it’s quite circumspect.”

Feinberg thinks the U.S. will also continue to take it easy with Venezuela. He says the Obama administration’s approach with Venezuelan President Hugo Chávez has been to let him talk alone without getting into rhetorical jousting matches.

“The view is that responding in kind to hostile rhetoric is exactly what he wants, and it’s silly to feed into that,” Feinberg says. “I think the general view is that his health is bad, and, though nobody knows for sure, he is unlikely to last out his term, so (the U.S. should continue) to play the long game in Venezuela.”

Presidente Obama’s latino constituency

Feinberg rejects the argument that the Obama administration mostly ignored Central America during its first term in office. He says the region didn’t make many international headlines, but that’s not necessarily a bad thing.

“You don’t want to be in the headlines. What does it mean to be in the headlines? It means you have a civil war, blood in the streets, your economy is in total collapse, you have nuclear weapons or terrorists running around, and isn’t it nice that is not the situation in Central America or Latin America these days?” Feinberg says.

The difficulty in addressing Latin American relations is that most of the major issues—drug war, immigration, trade—all contain strong domestic components in the United States. So addressing these issues means bringing everyone onboard, from State Department and Congress to the White House and special interest groups.

Still, after winning reelection with a strong latino constituency, el presidente will now be more likely to take a stronger look at the issues concerning the Hispanic population, and there Latin America in general. That is especially true for immigration reform and anti-narcotics policies, Feinberg predicts.

“If Obama can give citizenship to 10 million latinos in the U.S., that’s 10 million families who will always be Democrats. So I do think Obama will make an effort at comprehensive immigration reform,” Feinberg says.

Is the White House rethinking drug policy?

Another interesting lesson from the U.S. elections was the news that voters in Colorado and Washington State approved the ballot measures to legalize marijuana without so much as a peep of protest from the Department of Justice.

Feinberg, who teaches at University of California’s School of International Relations and Pacific Studies in San Diego, recalls that a similar ballot initiative in California was narrowly defeated two years ago when the Department of Justice came out in strong opposition right before the vote. So the administration’s silence this time is telling.

“That silence is a signal that the administration has second thoughts,” Feinberg says. “I have no doubt in my mind the White House was involved in the decision by Justice Department to not inject itself in the debate on the state level on marijuana decriminalization and legalization.”

When the silence eventually breaks, it could be the beginning of a more rational and measured discussion on the U.S. drug policy, and how it affects Latin America, Feinberg predicts.

“The issue is on the agenda. There is a recognition that counternarcotics policies have not had desired results over the decades. Drugs continue to flow and the collateral damage in Latin America and the U.S. is unacceptable. So we need to be open-minded and look at alternative ways to address the problem,” Feinberg says. “The basic idea is that we need to differentiate among drugs; they are not all the same and we may want to think about different approaches to different types of drugs. That is a signal coming out of these referendums on the treatment of marijuana in Colorado in Washington.”

In that context, leaders and intellectuals in Latin America who have been calling for a new approach to the drug war might start to find more echo in Washington.

“The increasing upsurge in voices from Latin America are all saying, ‘What we have been doing hasn’t been producing desirable results, so if we keep doing the same thing and expect different results, that’s the definition of stupid’,” Feinberg says. “I think one of the first starting points for a more rational discussion is to start to differentiate between types of drugs and that is starting to happen as a result of the referendums in these two states.”