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Nicaragua: Between Revolution and Kleptocracy

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Published October 22, 2009

Daniel Ortega's no dummy.  Having witnessed what's recently transpired in neighboring Honduras -- where President Manuel Zelaya was forced from power after trying to override constitutional limits preventing him from seeking reelection -- the Nicaraguan leader has acted more shrewdly in the hunt to extend his own power indefinitely.   According to the Nicaraguan constitution, presidents are prohibited from seeking consecutive terms, and are allowed a maximum of two terms no consecutively. 

Instead of messing around with national assembly approval -- which is mandated by law but which Ortega would undoubtedly not get -- or a public referendum -- where public disapproval would most certainly swat his dreams of a perpetual presidency to the floor -- Ortega went straight to the country's Supreme Court -- and asked for their blessing instead. 

In a sweeping verdict supporting Ortega's proposal, the court struck down all obstacles standing between the president and his bid for reelection.  The BBC reports that the "Six justices, all regarded as supporters of Mr. Ortega's Sandinista party, determined that the constitutional ban on allowing re-election was 'unenforceable.'"  Complicating matters further, Boz argues that the unanimous ruling was far from clear-cut.   

"A number of the events [surrounding the court's decision] will be called into question. Among the more obscure maneuverings to make this happen, the head of the constitutional branch called the case at 1PM for 3PM. When four Liberal (anti-Ortega) judges were not present for the vote two hours later, several pro-Ortega judges were allowed to rule in their place, leading to the 6-0 vote. It also appears (though I'm still trying to clarify this issue) they took advantage of the timing of a recent death of an anti-Ortega judge on the main court, giving the FSLN a temporary 8-7 advantage on the 16 member court which will help get the approval through the next step of the case."    

Ortega was defiantly triumphant following the verdict, announcing to the world that nothing would stand between him and a reelection bid in 2011. Invoking the rhetoric that propelled him to power during the Nicaraguan revolution in 1979, and secured him the presidency in 1984, Ortega warned his opponents in "That ruling...is unappealable and this is important for the oligarchies and sellouts to keep clear."

To be sure, Ortega's power grab will confirm conservative fears that Hugo Chavez-brand leftism is increasing its authoritarian stranglehold over the region.  Ortega, like the hapless Zelaya, shrewdly aligned himself behind the Venezuelan president during Venezuela's unusually robust period of petro-diplomacy.  Since then, Ortega has been castigated by opponents for being a radical socialist seeking to overturn gains made by the country during the years of Washington Consensus neo-liberalism.

But Ortega is hardly a revolutionary, Bolivarian or otherwise. In fact, it appears that Ortega has learned the lessons of liberal capitalism all too well.   These days the former firebrand seems more intent on raiding public coffers for personal enrichment-in ways, frankly, that would make the greedy Goldman gang blush-than working to make life better for regular Nicaraguans.  A recent report by The Christian Science Monitor, quoted here at length, spells out in jaw-dropping detail the extent to which Ortega and his cronies have robbed Nicaragua. 

"Despite his rhetorical stance against the "failed imperialist model," Mr. Ortega and his inner circle of Sandinista confidants are quickly and quietly becoming the new masters of the impoverished country's economy.

Since returning to the presidency in 2007...Ortega has created a network of private businesses that operate under the auspices of the Bolivarian Alliance for the Americas (ALBA), an opaque cooperation agreement of leftist countries bankrolled primarily by Venezuelan President Hugo Chávez.

Ortega's "ALBA businesses" - known by an alphabet soup of acronyms, including ALBANISA, ALBALINISA, and ALBACARUNA - have cornered Nicaragua's petroleum import and distribution markets, become the country's leading energy supplier and cattle exporter, turned profits on the sale of donated Russian buses, and purchased a hotel in downtown Managua, among other lucrative investment moves.

...In 2008, Nicaragua's Central Bank reported that Venezuela gave Nicaragua $457 million in aid, all of which was managed privately by Ortega's ALBA holdings, with no third-party oversight. ALBANISA, a joint Venezuelan-Nicaraguan oil company linked to Ortega, recently signed a 15-year energy contract expected to net the company upwards of $500 million, depending on price fluctuations. And last year's oil imports earned the ALBA group an additional $280 million in revenue, according to calculations by opposition leader and former Inter-American Development Bank analyst Edmundo Jarquín.

...Despite being denied access to government sources and companies such as ALBANISA, journalists have uncovered a web of almost a dozen ALBA business holdings, which Martinez claims has made Ortega and his family one of the most important economic players in the country, on par with Nicaraguan business tycoon Carlos Pellas. "The difference," Martinez says; "is that it took the Pellas family 80 years to accumulate their wealth. Ortega has done it in two years."

Yet unlike most nouveau riche, Ortega and his Sandinista confidants - who first rose to economic power in 1990 during a $1.5 billion land grab known as the "piñata" - still identify as the poor and downtrodden. In fact, Ortega, who has had no other job in his life other than president, claims a net worth of only $200,000, according to his last declaration in 2006."

This is among the reasons why Nicaraguans, half of whom live below the poverty line, have come to despise their president.  It is also the reason why Ortega's quest for reelection should be resisted -- especially by leftists.  Any arguments made on ideological grounds, in support of Ortega or otherwise, are nothing short of hogwash.  The only thing at issue here is greed, and securing future opportunities to soothe the impulses of avarice.

One need look no further than the president's brother, a retired General and stakeholder in the family's wealth, to get a sense of what Ortega is actually about.  In a fit of disarmingly forthright honesty, Humberto Ortega recently told an American reporter that "if there is a free market, there needs to be a system in which people are free to get rich." As for the anti-capitalist rhetoric of Ortega's Sandinista party, it shouldn't alarm anyone-especially defenders of the free market-Ortega insisted, because "one thing is discourse for the political clients, and another thing is what the reality shows you are doing."

Sounds like some revolution.

About the author

Michael Busch

Michael Busch

Michael Busch is a doctoral student in International Relations at the Graduate Center, the City University of New York. In addition, he is a research associate at the Ralph Bunche Institute for…

4 Comments

"Ortega went straight to the country's Supreme Court and asked for their blessing instead." Clearly, Daniel Ortega is no dummy. Not only did he learn lessens from his Southern brethern, he looked North and learnt from Bush II, too; you wanna win an election? Go straight to the country's Supreme Court.


Very interesting. Michael, are you surprised that it remains politically viable in Latin America to be aligned with Hugo Chavez and to couch political ambition in Chavez-esque style and rhetoric? Does the political trajectory of the region seem to generally align with the "electoral" ambition of authoritarian leftists? What is the key to the staying power of these regimes? The political exploitation of the people's poverty? Or perhaps I'm letting my own political instincts get in the way, blinding me to genuine socio-economic progress under these leaders?

Cheers,

M

PS: Mr. Fitzpatrick, your comparison of US presidential elections to this sort of banana republicanism represents what in my very humble view is a dubious recollection of history.


Matt, Thanks for the note. 

 You pose what to my mind are some of the most important questions concerning the future trajectory of Latin American politics.  To answer your questions, I think we need to be careful in our label usage.  I don't think that the authoritarian impulses of certain leaders are exlusively held by those on the left.  Indeed, Colombia's Alvaro Uribe strikes me as perhaps the most "authoritarian" (though this label may too be too strong) of the group and he's highly conservative. 

As for their staying power, my own guess is that the answer, while complicated, and varied depending on which country it is that we are discussing, revolves largely around the problem of socioeconic and political institutions.  In the case of Hugo Chavez. for example, the president has played on people's frustration with traditional institutions that served the interests of the elite, and has simply either done away with them, or created an alternative set of institutions which, for all their problems in the short and long run, have proved capable of providing short-term benefits to vulnerable Venezuelans. 

Indeed, I think this has less to do with leftist ideology than observers such as Jorge Castenada argue.  Survey data suggests that the great majority of Latin Americans are firmly in the political center in their personal views.  In fact, and far from the supposed "left turn" in the region, we have seen so-called ideological leftists woo the centrist vote in election after election.  From what I can tell, leftists leaders are turning to the "right" (or center more accurately) just as much as the right has been forced to move left. The result: centrism.  Evidence of this can be found when it comes to domestic policies.  Most leaders have been reticent to enact radical reforms at home; they save these for international foreign policy decision making instead, where polling data doesn't count.  It bears noting that Chavez is the exception to this, as usual. 


More on this when I get a moment to catch my breath.  Matt, hope you are well.

-M.


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