Nicaragua’s Ortega: Socialism to opportunism?

Nicaragua’s recently re-elected third term President Daniel Ortega has morphed from socialist revolutionary to an anti-abortion zealot and promoter of tax free “special economic zones” in just a few years.

After winning Sunday’s election with more than 60 per cent of the vote amid allegations of fraud and intimidation, Ortega and his Sandinista party are set to expand their grip on power in the Western Hemisphere’s second poorest country.

With their landslide victory, the Sandinista National Liberation Front (FSLN) now controls all four branches of government: the executive, judiciary, electoral authority and national assembly. Nicaragua’s constitution is supposed to prohibit consecutive presidential terms, but Ortega and his supporters in the Supreme Court were able to lift the ban in 2009, paving the way for his most recent election. Critics say he is creating the conditions for one man rule and enriching himself at the expenss of the nation.

“Ortega is almost impossible to classify. But for the purpose of sound bites, he is more opportunist than ideologue,” Tim Rogers, editor of Nicaragua Dispatch, told Al Jazeera. “He is a masterful political operator – a pragmatist who believes in power.”

Known for fiery speeches denouncing US imperialism and his fight against military dictatorship in the 1970s, Ortega beat out his two main conservative opponents, former president Arnoldo Aleman and radio personality Fabio Gadea, by large margins.

Economy and inequality

Nicaragua’s economy grew 4.5 per cent in 2010 and is expected to continue being one of the best performers in Central America through 2011.

“People were pretty pleased with his management of the economy for the last several years,” said John Booth, a professor of political science at the University of North Texas. “His evolution into being a capitalist who runs programmes for the poor seems to be the magic formula for Nicaraguan elections.” 

Strong showing for Nicaragua’s Ortega

With about 57 per cent of the population living in poverty and wealthier citizens split between two competing conservative parties, Ortega has capitalised on his legacy as a champion of the dispossessed, even though he has allegedly amassed considerable wealth exploiting Nicaragua’s position as a low-wage manufacturing hub.

The number of companies operating in controversial special economic zones has grown from five in 1993 to 99 in 2006, according to a 2008 report from the London School of Economics. These factories and related industries, normally loathed by leftists as centres of foreign exploitation, now employ 240,000 people – or 15 per cent of Nicaragua’s labour force – the report said. 

“There are strong rumours that Daniel Ortega owns a lot of the free trade infrastructure in Nicaragua,” said Dennis Rodgers, Senior Research Fellow at the Brooks World Poverty Institute and a professor at the University of Manchester. “He certainly owns some key hotels.”

Election monitors from the European Union complained of “sometimes inexplicable obstacles” to accessing polling stations, concerns which were echoed by observers from the Organisation of American States. Compared with other elections in Central America, incidents of irregularities do not seem to have been considered particularly egregious.

Ortega almost certainly would have won the presidency without alleged fraud, according to polls. But the race for the national assembly, part of a separate vote on the same ballot, could have proved more difficult, said Karen Kampwirth, a professor at Knox College specialising in Nicaragua.

“Some people might have voted for FSLN for the presidency, but they might vote for another party for the [national] assembly,” Kampwirth told Al Jazeera. “They [the FSLN] got away with [electoral fraud] in 2008. It’s hard to resist the temptation next time. You get used to having power.”

Historical hero

It wasn’t always this way, analysts say. In the 1960s and 1970s, when socialism, Che Guevara and anti-imperialism were all the rage across Latin America, Ortega and the Sandinista National Liberation Front (FSLN) battled the corrupt, US-backed Somoza dictatorship, calling for democracy and a more equitable distribution of wealth through guerilla war.  

The Sandinistas and their allies toppled Somoza in 1979. Back then, Ortega was still a socialist idealist, rather than a political opportunist, Kampwirth said. “If you are an opportunist, are you really going to join a tiny little guerrilla group when the most likely outcome is not power and wealth, but that you will be thrown in prison and tortured and killed?” Kampwirth said.

The Sandinistas set about trying to reform the country, challenging the entrenched oligarchy and conducting a mass literacy campaign. They did not, however, outlaw private enterprise – and foreign corporations continued doing business in the country.

But the US was worried. In 1981, the CIA began selling arms to Iran, violating US rules, and using the profits to finance the Contras, an anti-Sandinista paramilitary group. The scandal became known as the Iran-Contra affair.

In justifying opposition to the leftists, US president Ronald Regan warned that the Sandinista army was “a dagger pointed at the heart of Texas”, as it was only two days marching time from the border. The conflict between Sandinistas and the Contras left about 30,000 Nicaraguans dead. Despite the fact that Ortega and the FSLN won democratic elections in 1984, the Contras continued fighting until 1989.

The FSLN lost elections in 1990. Before leaving power, officials transferred hundreds of millions of dollars worth of expropriated assets, including homes, business and agricultural land, amongst themselves in a massive corruption scandal known as the Piñata.

“This became the nucleous for a Sandinista business group,” Rodgers told Al Jazeera. “For a while, Daniel Ortega’s brother was the biggest landowner in the country.”

Many of the movement’s early supporters abandoned Ortega and the FSLN political party after the scandal, while remaining loyal to the Sandinistas’ original ideals. 

Ortega regained power in 2006, after losing elections in 1989, 1995 and 2001.

Oil diplomacy

Much of Nicaragua’s – and the FSLN’s – recent success can be linked to Venezuela’s Hugo Chavez. As part of the Bolivarian Alliance for the Alliance for the Americas, a bloc of leftist leaders designed to counter US hegemony – Venezuela has been funding the FSLN with up to $500m every year since 2007.

“There are subsidised food programmes in cities, with rice, beans and sugar sold from small neighbourhood stores,” Kampwirth said of Venezuelan assistance. “There are small loans for families to start businesses, given in the woman’s name. In the countryside, there are programmes where people get some seeds and chickens.” In 2010, Venezuela’s contribution of $511m in oil discounts and direct aid accounted for 7.6 per cent of Nicaraguan GDP, according to an article in Foreign Affairs.

Public opinion polls, cited by WikiLeaks cables, say that Nicaraguans consider Venezuela to be the country which is most supportive of their nation.

Critics say Venezuelan petro-dollars are used by the FSLN as a slush fund to buy political support from poor communities, rather than given to the state in a transparent fashion.

Ortega’s controversial stance on abortion

With Chavez suffering from cancer, some analysts wonder how long Nicaragua’s mini economic miracle will continue, given current policies of low taxes, primary commodity exports and basic, low-wage manufacturing. “Ortega has kept taxes on big business low,” Kampwirth said. “Without any real taxes, those social programmes will collapse if Nicaragua loses Chavez.”

The elite, however, are quite happy with the present tax structure. The government collects 80 per cent of its tax revenue through indirect taxation, such as value added tax (VAT), according to a London School of Economics report. This form of revenue generation disproportionately affects the poor, as they pay a greater percentage of their income for basic goods. Inequality has also risen during Ortega’s tenure, the report said.

Like his dealings with the traditional elite, Ortega has formed decent relations with the US, despite appearances to the contrary, Rodgers said.

While both sides rail against each other with hyperbolic rhetoric – the US being called hegemonic imperialists and Ortega accused of being undemocratic – Washington and Managua generally maintain cordial relations. “They are like two dogs barking at each other through a fence,” Professor Booth told Al Jazeera.

‘No choice’

As part of his campaign to appease sections of the elite, Ortega has courted the Catholic Church by outlawing all abortions, even when a woman’s life is in danger. The women’s movement, once an important backer of the FSLN, has been completely alienated from Ortega, Kampwirth said.

Persistent rape allegations against Ortega from his step-daughter Zoilamerica certainly have not helped the president in the eyes of many women.

Like human rights groups and media activists, Nicaraguan feminists would favour a leftist party more similar to Brazil’s popular Workers’ Party, but such an option does not exist.

“Ortega has carefully eliminated everyone on the left,” Rodgers said.

In left-leaning families, the older generations often vote for Ortega, Kampwirth said, but youth have a harder time stomaching his transgressions. Young people, who support Sandinista ideals of social justice but not Ortega’s brand of crony capitalism, “feel really lost,” she said, “like they do not have any electoral options at all”. 

Follow Chris Arsenault On Twitter: @AJEchris