U.S. Neglect Helped Cement Ortega’s Nicaragua Takeover

(Bloomberg Opinion) -- Nicaragua’s presidential vote was, just as the secretary-general of the Organization of American States had predicted, the worst possible election. 

Repression had been ratcheting up leading up to the poll, with the detention of high-profile opposition figures, including all credible presidential hopefuls and leaders of the country’s main business association. Tens of thousands of Nicaraguans have already been forced to seek asylum in neighboring Costa Rica, or fled further. Abstention rates on Sunday climbed to over 80%, according to independent observers. Daniel Ortega, Sandinista revolutionary turned autocrat, claimed a landslide victory anyway.

It’s a sham. It’s also the moment that should prompt the United States and the world to turn their attention to one of the hemisphere’s poorest and least stable nations — and act forcefully. First, because of the obvious suffering of the Nicaraguan people, and the risks to a region ill-equipped to deal with a creaking police state. But also because Washington’s policy of seeing Central America largely through the lens of migration made this democratic deterioration more likely. Today, there’s no swift means of removing the increasingly paranoid Ortega and his wife and vice president, Rosario Murillo: Nicaraguans must ultimately resolve this crisis themselves, yet civil society and the opposition have been smothered and every critic is now a “traitor” to the nation. That set of circumstances suggests prudence, though, not inaction.

Ortega, a former guerrilla leader who helped overthrow dictator Anastasio Somoza in 1979, regained power in 2007 and now runs the country much as his old nemesis did. He has undermined institutions and basic freedoms, presiding over a sharp deterioration from 2018, when protests against pension reform turned into a popular uprising against him, violently quashed. More than 300 were killed in the crackdown. Since 2020, the government has brought in new coercive rules, including a Russian-inspired “foreign agent” law that limits non-governmental organizations, plus cybercrime legislation that regulates what can be published on social media and effectively criminalizes any unwelcome online content. There is already no remaining printed newspaper. 

The economic backdrop has been no less grim after three years of contraction, with the lingering consequences of devastating hurricanes and a bungled pandemic. Nicaragua is still one of the least vaccinated nations.

It’s not easy to influence isolated autocracies, particularly those led by aging leaders backed by the security forces, who see few safe exits. Siege mentality rules: Belarus, Myanmar and others tell us that. It’s especially thorny in a region where the United States has a history of misguided and damaging intervention, and worse still, of course, when extreme poverty makes it hard to squeeze the government without hurting the population. Opprobrium makes little difference, targeted sanctions work slowly. That doesn’t mean the world must stand by. 

The first order of business is to condemn the vote, as many regional and international powers already have, and demand the release of political prisoners. Back-channel diplomacy may help, given the government is entrenched but also rattled by empty polling stations that belie its claims to popularity. Absent any positive moves, Ortega should be further isolated, with the withdrawal of ambassadors, even potentially the expulsion from gatherings like the Organization of American States. Washington and Brussels must push regional powers, including those who have abstained from condemnation or perched on the fence, like Mexico and Argentina, to do their part. Focus on Taiwan too — another one of a tiny group of backers.

There is also room for significant additional coordinated international sanctions aimed at individuals enabling the regime, as called for with the U.S. Renacer Act signed into law on Wednesday — and especially on the military, cutting off any cooperation.

Even more crucially, the West can stop undermining its own diplomacy. According to Fitch Ratings, between January and September this year, the Nicaraguan public sector received a bumper $880 million from official creditors like the Central American Bank for Economic Integration and the World Bank, including a contribution equivalent to $354 million from the International Monetary Fund, an organization the West still dominates — part of a global allocation of special drawing rights. That’s inexplicable generosity, not least given the United States had already introduced legislation in 2018 to restrict funds for Nicaragua from international financial institutions. 

There is still the revocation of Nicaragua’s trade privileges, as part of the Dominican Republic-Central America Free Trade Agreement. That’s easier said than done, given the United States buys nearly half of the country’s exports and ordinary people will suffer more than a regime that has already cushioned itself. It’s a powerful threat nonetheless.

But there’s more. This might also be a moment for Washington to consider the damage done by years of narrow, self-interested and short-term policies in Central America that overemphasized intervention at the expense of reconstruction and democracy. The focus on limiting migration ultimately blinded officials to other problems, including Ortega himself, now running a brutal regime supported by Caracas and Moscow.

It’s wise to invest in the root causes of migration, but who receives that money? Why criticize Nicaragua and then do little to constrain Salvadoran President Nayib Bukele, who has cleared out senior judges and is accused of dismantling institutions at a more alarming pace than Hugo Chavez did in Venezuela? Or to halt democratic deterioration in Honduras? As Christine Wade, a political science professor at Washington College and author of several books on the region, put it to me: “Democracy and rule of law in the region are backsliding and U.S. policy has been very ineffective, if not counterproductive, in thwarting that.”

Supporting the region’s democracies is easier when they are alive. Doing so when they are already seriously ailing is far harder. Nicaragua is proof.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.

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