Caribbean & Central America - February 2012 (ISSN 1741-4458)

The European Union (EU) and the US are starting to take a more pronounced stance vis-à-vis the 6 November election, which was controversial due to alleged fraud committed prior to, during and following election day as well as the illegality of President Daniel Ortega’s candidacy. Last month Germany revealed that it was cutting aid as a direct result of these allegations while the US warned that multilateral loans would be subject to “aggressive scrutiny”. How far the measures, which echo the international response to the highly questioned 2008 municipal vote, will impact Ortega remains to be seen, especially given the aid he continues to receive from his close ally, Venezuela’s President Hugo Chávez, which accounted for US$344.6m out of a total US$585m in foreign cooperation.

On 19 January Germany’s ambassador to Managua, Betina Kern, told the local press that, as of next year, Germany would only provide Nicaragua with cooperation for ongoing water treatment projects (worth US$15m), with all other aid (largely for the environment and governability), worth a further US$15m, to be suspended. In no uncertain terms, Germany’s minister of foreign cooperation, Dirk Niebel, told the German media that “the Nicaraguan regime must assume the consequences of its increasingly autocratic form of government”. While the absence of high-level European delegates at Ortega’s inauguration suggest a distance from the new government (only Spain’s crown prince, Felipe de Borbón, turned up), the new head of the EU delegation for Central America, Spain’s Javier Santodomingo Núñez, refused to comment on Germany’s decision, having pledged commitment to EU-Nicaragua relations upon receiving his credentials on 16 January.

Germany’s stance nonetheless comes on the heels of the suspension or phasing out of cooperation by other European countries on an individual basis, during the previous Ortega administration (2007-2012), which also owed in part to transparency concerns. Among others, these include: Norway, which, according to the most recent report by Nicaragua’s central bank (BCN), cut cooperation to US$3.4m in the first half of 2011, down from US$18m in 2007; Sweden, which has completely phased out cooperation, having provided some US$46m in 2007; and Switzerland, which provided US$0.6m in the first half of 2011, down from US$15m in 2007.

Less than a week after Germany announced it was cutting aid, the US Secretary of State, Hillary Clinton, issued a statement in which she dubbed the elections “a setback to democracy”. She also warned that “aggressive scrutiny” would be applied to “project loans at the Inter-American Development Bank [IDB] and World Bank”, which came to US$45.4m and US$16.7m in the first half of 2011 (out of a total US$87.6m in multilateral cooperation) on BCN figures. Clinton’s remarks were prompted by the release of the final report from the Organization of American States (OAS) observer mission, which reiterated familiar concerns: the refusal to authorise local electoral watchdogs to monitor the election; doubts over the legal status of the opposition Partido Liberal Independiente (PLI); the accreditation of electoral officials; the distribution of voting papers; and the composition of polling stations.

Yet, while Washington failed to send a high-ranking official to Ortega’s inauguration, the response of the Barack Obama administration has revealed divisions within the US which, for all Ortega’s rhetoric, remains a key ally for Nicaragua both in terms of trade (as its main market, accounting for roughly one third of exports via the US-Central America-Dominican Republic Free Trade Agreement [Cafta-DR]) and security. Cooperation between US and Nicaraguan armed forces is among the best in the isthmus and a factor in Nicaragua's relative success vis-à-vis the security problems afflicting its neighbours. Thus, while US Republicans such as Ileana Ros-Lehtinen (R-FL), Chairman of the House Foreign Affairs Committee, who slammed the OAS report as lacking “any concrete solutions or actions to condemn Daniel Ortega’s raid on the Nicaragua constitution”, are calling on Obama to take a stronger stance, other Ortega critics appear to reject the possibility of assuming a more extreme position. A former US envoy to Managua, Robert Callahan (2008-2011), said at the end of 2011 that despite the “illegitimacy” of the new government, it was necessary to maintain relations in order to “encourage” and “bear witness for those Nicaraguans who share our political values”.

• Opposition ends uncertainty

The PLI, which received 26 seats in the 92-member national assembly in the legislative vote, to 62 for Ortega’s Frente Sandinista de Liberación Nacional (FSLN), initially said it would not take up its seats in protest at what it maintains was a fraudulent and illegitimate election. The party has since back-tracked, arguing that a legislative presence is necessary to “denounce abuses and serve as the voice of the democratic people”. Even so, the futility of boycotting institutional process as a protest tactic was suggested with regard to the 9 January election of the seven-member congressional directorate. The PLI’s refusal to participate in the contest, following the FSLN’s failure to bow to its demands for three seats, allowed the FSLN to award itself five seats. The remaining two went to its former ally, the Partido Liberal Constitucionalista (PLC), which has just two deputies in the new congress, having won just 6% of the legislative vote. This effectively leaves the FSLN with control of the legislative agenda.

• Patchy regional attendance

Breaking a long tradition of perfect attendance in the sub-region, only three of President Daniel Ortega’s Central American peers - Guatemala’s then president, Alvaro Colom, (along with his successor Otto Pérez Molina), El Salvador’s Mauricio Funes, and Honduras’s Porfirio Lobo – turned up to Ortega’s inauguration on 10 January. Laura Chinchilla, President of Costa Rica, with whom relations are strained over the San Juan territorial dispute, sent a lower-level official. Panama’s President Ricardo Martinelli cancelled at the last minute, without providing any explanation, sending his foreign minister in his stead. While Venezuela’s President Hugo Chávez attended, other members of his left-wing regional Alianza Bolivariana para los Pueblos de Nuestra América (Alba), including Bolivia and Cuba, sent their vice-presidents.