Ortega’s Cynical Strategy
The Sandinista leader has combined economic pragmatism and authoritarian tactics to bring the country to heel. (Read this article in Spanish here.)
July 21, 2011 - 12:00 am
Given this record, why isn’t the Nicaraguan business community actively campaigning for Ortega’s defeat? Simple: The Sandinista leader has embraced relatively pragmatic economic policies, and he has enjoyed a massive infusion of cash from Venezuelan strongman Hugo Chávez. Fueled by strong exports, tourism, and Venezuelan investment, the Nicaraguan economy experienced solid growth last year and has continued performing well in 2011. Nicaragua remains a very poor country (the second poorest in the Western Hemisphere, behind Haiti), but it has benefited from the Central American Free Trade Agreement (CAFTA), which took effect in 2006. Ortega fiercely opposed CAFTA as a presidential candidate, but he has upheld the trade accord since taking office.
In short, where Chávez has waged war on private enterprise and scared away foreign investors, Ortega has (thus far) governed as an economic moderate. “To my surprise,” wrote Miami Herald columnist Andres Oppenheimer after a recent trip to Managua, “the business community seems relieved with Ortega, who unlike his benefactor Chávez, has not yet nationalized or confiscated major private companies. Many business people I talked to emphasized that, despite his fiery rhetoric against capitalism, the business community, independent media and the United States, Ortega has maintained a semi-independent Central Bank and accepts pro-market economic conditions set by the International Monetary Fund.”
The business lobby’s sense of relief is understandable. But what about the fate of Nicaraguan democracy, a cause for which the country fought a bloody civil war? Are business leaders willing to let Ortega create an autocracy in return for prudent economic management? Do they really want to live under an economically enlightened dictatorship? For that matter, isn’t there a big risk that Ortega will resort to Chávez-style economics once he finishes reestablishing one-party rule?
Lest we forget, Sandinista governance led to massive capital flight and hyperinflation during the 1980s. Nicaraguans are unwilling to go down that road again. Ortega realizes this. He also realizes that appeasing the business lobby is critical to his success. So he has cynically combined economic pragmatism with authoritarian politics. Ortega supports CAFTA but also steals elections. He encourages foreign investment but also manipulates the judicial system. He promotes a good business climate but also flouts the constitution.
Thus far, his formula appears to be working. Thanks to impressive economic growth and a weak, fractious opposition, Ortega seems poised to win reelection without much trouble. Another five years of Sandinista rule may suit the Nicaraguan business community just fine. But it will undoubtedly contribute to the further erosion of democracy, and it could possibly exacerbate regional instability (if Ortega pursues more foreign adventures like his 2010 invasion of Costa Rica). Is this really the future that Nicaraguans want?
Read this article in Spanish here.