Caribbean & Central America - April 2019

Since 19 April 2018, Nicaragua’s President Daniel Ortega and the ruling Frente Sandinista de Liberación Nacional (FSLN) have faced growing international scrutiny due to the State’s repressive crackdown on anti-government demonstrations, sparking domestic unrest and international condemnation. For some this came as a surprise given previously glowing reports from institutions like the International Monetary Fund (IMF) regarding the state of Nicaragua’s economy and resultant efforts to address poverty. Here we consider these efforts more closely.

On 11 January 2019, the Organization of American States (OAS) invoked the Inter-American Democratic Charter, which means the body is now in the process of formally assessing the state of democracy in Nicaragua. Major human rights organisations, too, including Amnesty International, Human Rights Watch, and the Inter-American Commission on Human Rights, have denounced the “serious human rights violations” of the Nicaraguan state, which include killing, torturing, and imprisoning hundreds of protesters, journalists, and opposition activists. In one of the latest blows to Ortega’s government, supreme court judge Rafael Solís, a long-term ally of Ortega and the FSLN, announced his resignation, also in January, warning that Nicaragua is now closer to a new civil war than ever before.

For many international observers, the government crackdown on the opposition came as an unwelcome surprise since, before chaos broke out in April 2018, Nicaragua appeared to be moving in the right direction. Some lone voices might have complained that Ortega, a former left-wing guerrilla leader who returned to power after winning the 2006 elections, was slowly dismantling Nicaragua’s democratic institutions to cement his hold on the country. However, most commentators focused on Ortega’s exemplary economic performance and anti-poverty efforts.

Up until 19 April 2018, it was certainly easy to point out that under the FSLN government, tourism was booming and the economy growing. According to a concluding statement dated 6 February by the IMF following a staff visit to Nicaragua the country’s economic performance in 2017 was above expectations. The IMF also predicted that GDP would grow above potential in 2018, to reach 4.7%. Back in 2015, the Nicaraguan government had highlighted the contribution of the rapidly growing tourism industry to the country’s economic growth, suggesting that it generated around 82,000 jobs (3.3% of total employment) and contributed around 4% to the country’s GDP.

Addressing poverty

Positive evaluations of the FSLN government often stress that Ortega’s social and economic policies had drastically improved the lives of the poor, particularly in the country’s rural and coastal regions. In 2007, the FSLN government launched an ambitious project to fight poverty and malnutrition, called the Zero Hunger Programme. As part of this initiative, which was partly funded by the European Union, thousands of Nicaraguan women living in extreme poverty received government aid in the form of cows, sheep, hens, seeds, and construction materials. In addition, the Nicaraguan state set up training sessions so that poor campesinos would become more self-sufficient.

Overall, the FSLN’s anti-poverty efforts seemed to have had a positive impact on the Nicaraguan population. According to a Standard of Living Survey published in June 2016 by the Nicaraguan government’s national institute of development information (INIDE), for instance, general poverty between 2014 and 2016 fell from 26.6% to 24.9%. Extreme poverty, which according to the World Bank means that people are deprived of basic human needs such as clean water, health care and shelter also fell from 8.3% to 6.9% according to INIDE.

However, poverty is an extremely complex and difficult to measure phenomenon and a 2018 report by independent Nicaraguan research institution (Fundación International para el Desafío Económico Global, Fideg) shows that, despite claims to the contrary, poverty remains still deeply entrenched in Nicaraguan society. According to the Fideg report, between 2009 and 2017, poverty only declined from 44.7% to 41.1%. While this is of course an improvement, it is striking that despite the substantial economic growth, at least 40% of the Nicaraguan population continues to live below the poverty line.

What is more, the results of the FIDEG report contradict the numbers of the Nicaraguan government, which paint a much rosier picture. Because of these contradictions, Nicaraguan newspapers claim, the FSLN government actually tried to prevent the FIDEG researchers from publishing their results. Moreover, the FIDEG report also demonstrates that, while general poverty somewhat declined in the period 2016-2017, extreme poverty in Nicaraguan cities, most notably the capital Managua, almost doubled (from 1.7% in 2016 to 3.3% in 2017).

By taking a closer look at the policies of Ortega’s government since his return to power in 2007, it becomes clear that reducing long-term poverty might not have been his administration’s priority. Rather, some argue that it appears that Ortega and the FSLN used anti-poverty measures and rhetoric as a means of mobilising voters and consolidating FSLN power. The Zero Hunger Programme is an excellent example of this strategy. By directly providing rural families with much-needed goods, from a cow, to free medicine, to pencils, to grains, the FSLN connected with the Nicaraguan population at a personal and emotional level but failed to make a long-term impact on the country’s more structural problems. Indeed, despite all the public attention given to food security, a Dutch embassy report on Zero Hunger concluded in 2009, found that the FSLN government “lacks a coherent policy” to fight inequality and poverty.

Another example is the Ortega administration’s Plan Techo, a nation-wide programme that provided thousands of poor Nicaraguan families with ten free sheets of zinc to replace or repair their houses. According to an October 2011 survey by a Nicaraguan consultancy firm M&R Consultores, this was the most highly appreciated project by the Sandinista government, even though it did not solve any structural problems with regards to poverty.

So, why did so many international observers fail to notice the growing tensions and inequalities within the Nicaraguan society? Firstly, positive assessments of Ortega’s government were mostly based on the assumption that economic growth and anti-poverty campaigns matter more than press freedom, pluralism, and other democratic values. Optimistic predictions by the IMF and the World Bank were often cited, but these overlooked the allegations of growing corruption and increasingly authoritarian attitude of Ortega and his FSLN allies.

Similarly, but for wholly different reasons, activists and politicians in Europe and the US ignored the decline of Nicaraguan democracy, as having viewed the FSLN government in the light of Ortega’s past as a left-wing guerrilla and socialist leader, who fought against a corrupt dictatorship and US-sponsored counterrevolutionary forces in the 1970s and 80s. From their perspective, accusations against Ortega and the FSLN were “counterrevolutionary” or part of a US-funded campaign to undermine socialist governments in Latin America. Yet the decision announced in January 2019 by the Socialist International group of world socialist and labour parties to expel the FSLN from its ranks, suggests that the tables are turning in this respect.