Nicaragua: Government-Private Sector Tactical Cooperation

Leaders of Nicaragua’s private sector and political opposition have teamed up with the government to press Washington not to go overboard with sanctions in response to flawed elections last November.  Their traditional allies in Congress, including the Cuban-Americans who dominate the Obama Administration policy toward Latin America, are pressing for suspension of two waivers to U.S. laws that suspend bilateral and multilateral aid to Nicaragua.  One waiver depends on progress on fiscal “transparency,” and the other on the resolution of property disputes from the 1980s.  The former, which would affect several million US dollars in bilateral aid (apparently for an AIDS program), is doomed, according to insiders.  But a decision on the property waiver – suspension of which would require the United States to oppose Nicaraguan loans from the Inter-American Development Bank, World Bank and IMF worth more than $200 million in 2011 – has not yet been made.

In public and private appearances, leaders of the Nicaraguan business community and political opposition, including Nicaraguan Liberal Alliance standard-bearer and Presidential Candidate Eduardo Montealegre, have forcefully stated their differences with the government of President Daniel Ortega, particularly regarding the conduct of elections and the lack of “institutionality” – i.e., the politicization of government institutions.  But the business community has pleaded for U.S. flexibility.  They estimate that suspension of the property waiver would threaten $1.4 billion in development assistance, deal a serious blow to their own prospects, and thrust Nicaragua into deep crisis.  Montealagre said he would lobby “neither for nor against” the waiver, but his participation in the delegation signaled a clear preference for Washington to be cautious.  Ortega’s personal emissary for foreign investment, Alvaro Baltodano, has emphasized the growing commercial links between the two countries and the benefit it provides directly to the Nicaraguan people.

The private sector and opposition are in the odd position of trying to persuade their own friends in Washington to be practical – not to be more anti-Sandinista than they.  Suspension of the property waiver would not only hurt them in the pocketbook; it would give a propaganda boost to President Daniel Ortega and make the population even more dependent on his social programs, heavily subsidized by Venezuela.  All of the U.S. aid and most of the multilateral aid provides direct benefit to the Nicaraguan people.  Ortega’s opponents do not want U.S. sanctions to close the business and political operating space they have enjoyed in recent years, despite Ortega’s excesses.

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