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.

The Demise of Partnership?

Graphic: Summit of the Americas organization; public domain.

The real news at the Summit of the Americas in Cartagena, Colombia, in April was the dissonance between the Obama administration – with its sincere but content-free rhetoric of partnership – and Latin American leaders across the political spectrum, even among the friendliest.  This was in sharp contrast to the Summit in 2009, when the region was palpably excited about the new American President.  This year, press reports portrayed President Obama as unaware that the hemisphere is changing, and noted that he oddly said that criticism of U.S. policy was reminiscent of the Cold War, while he put himself out on the fragile limb of defending a Cuba policy rooted in, precisely, the Cold War.

Most observers in the region judge that the main takeaway from Cartagena is that while Washington offers little and listens less, Latin America is moving away.  Over the past decade South America has sustained rates of economic growth higher than any since before the oil shock of 1973, and the U.S. is hardly an unchallenged source of trade and investment.  (Chinese and EU trade with South America has surpassed that with the United States.)  Chavez’s aid to Cuba and Nicaragua far exceeds Washington’s meager offerings to even best friends like El Salvador.  The Brazilian National Development Bank, BNDES, provides more loans in the region than the World Bank and Inter-American Bank combined.

Americans’ fascination with the Cartagena prostitutes dwarfs interest in the lessons of the serious regional dynamics that played out in the Summit.  Whether U.S. political leaders and pundits acknowledge it or not, failure to dialogue seriously with neighbors about the 50-year effort to change the Cuban regime or the failure of the 40-year “War on Drugs” will have consequences for the United States.  Washington rejects the region’s efforts to re-think issues, such as the wisdom of the current approach to narcotics, at its peril.  Central America was an unhappy front-page story in the 1980s and now threatens to reemerge as a major headache because of domestic crime (fueled by U.S. deportations) and the drug trade – while Washington fiddles with time-worn formulas and programs.  The Obama Administration still has time to make good on its pledge of “partnership” and get serious about listening to and working with our neighbors.