Nicaragua hasn’t attracted much attention from U.S. policymakers or the media since the 1980s, when Sandinista-run Nicaragua was the Central American theater of the Cold War and the United States was abuzz with the fallout of the Iran-Contra Affair, the Reagan administration’s covert funding of the Contra resistance in Nicaragua by arms sales to Iran. In the run-up to Nicaragua’s presidential elections on Sunday, the United States once again caused a stir, this time with its vocal opposition to the candidacy of Sandinista Daniel Ortega. Winning 38 percent of the vote, Ortega emerged victorious on Tuesday and said, "This is a sign that Nicaraguans want to work for the common good" (LAT). The United States is unlikely to agree. U.S. Ambassador Paul Trivelli earlier this year cautioned that an Ortega victory would result in “an introduction of a Chavez model here on the Isthmus,” and Commerce Secretary Carlos Gutierrez recently warned that an Ortega victory could endanger the Central American Free Trade Agreement and scare off foreign investors.
Washington hoped to counter the regional influence of Venezuelan President Hugo Chavez, an anti-American firebrand who has publicly endorsed Ortega. Chavez’s involvement was more than rhetorical: He signed deals in May to provide fertilizer and oil (CSMonitor) to Sandinista mayors before the election. But analysts agree U.S. fears regarding Ortega are overblown, and some say its efforts to counter him might have backfired (Houston Chronicle).
Ortega, who last held power sixteen years ago and has lost every presidential election since, has made an extraordinary political comeback (NYT). Running on a platform of reconciliation and peace, Ortega—who was careful not to mention the United States on the campaign trail—broadened his base by forming alliances with former Contras and making peace with the Roman Catholic Church, once one of his harshest critics (Times of London). “Ortega has turned his movement into a buffet lunch and everyone is invited,” says Emilio Alvarez Montalvan, a conservative former foreign minister. “The essential question people are asking themselves is if Daniel Ortega has really changed” (LAT).
The most significant, and troubling, of Ortega’s political deals is el Pacto, an alliance between the Sandinistas and the PLC, Nicaragua’s other leading party. As discussed in this new Backgrounder, it gave Ortega and former President Arnoldo Aleman lifetime parliamentary seats and immunity from prosecution and has weakened many of Nicaragua’s political institutions. El Pacto has “kept the façade of democracy while gutting it out from the inside,” said presidential candidate Eduardo Montealegre in a speech at the Heritage Foundation. Montealegre, the preferred candidate of the United States, ran for a dissident offshoot of the PLC, and hoped to appeal to Nicaraguans disillusioned with the corruption in both major political parties. “Many Nicaraguans are hoping they might see the end of the caudillo [strongman] system,” says veteran New York Times reporter Stephen Kinzer in a CFR.org Podcast.
Many also hoped to elect someone who will pull them out of poverty. The second-poorest country in the Western Hemisphere behind Haiti, Nicaragua is expected to grow a meager 2.5 percent this year, reports the Economist Intelligence Unit. Experts say the constant struggle for power within the government has prevented any significant progress toward alleviating poverty or developing the economy. Nicaragua signed a $175 million agreement with the Millennium Challenge Corporation in 2005 to fund poverty-reduction projects. However, with Ortega as president, analysts say the funds might be withdrawn.