Days of ash

Christianity’s Lent is 40 days of reflection and penitence starting on Ash Wednesday and lasting till Holy Thursday. The Catholic liturgy reminds believers that everything we are, have and plan, everything we think is solid, will turn to ash; that nothing and no one is eternal. The events in the first two months of President Ortega’s new term seem to be urging the governing party to reflect as well.

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The fraud so carefully organized by the electoral branch was designed to allow the governing Sandinista National Liberation Front (FSLN) to go less heavy-handedly and with fewer obstacles for “more victories” in the next five years. The design was well crafted and had a good, solid outlook. But so far President Daniel Ortega’s follow-on term in office hasn’t been as expeditious as the designers thought. They have been days urging reflection, days of ash...

Making free with
international reserves

Ortega’s main national allies, the business elite who belong to the Supreme Council of Private Enterprise (COSEP), are more worried than ever. In fact, they’re downright disconcerted.

Ortega’s announcement at the 11th summit of the Bolivarian Alliance for the Peoples of America (ALBA), held on February 4-5, that Nicaragua would deposit 1%—some $17 million—of its gross international reserves (GIR) to help capitalize the Bank of ALBA triggered their first big concern since his new term started. The level of hard currency reserves in a country’s treasury is one of the most sensitive factors in ensuring its macroeconomic stability and the International Monetary Fund (IMF) keeps an eagle eye on it in Nicaragua and the other countries with which it has agreements.

While Ortega was still in Caracas, Central Bank President Antenor Rosales called a press conference in Managua to calm the worried business leaders: “It’s important for us to know that the GIRs aren’t managed at anyone’s whim. They are managed in accord with the Central Bank’s Organi¬zational Law, which orders that we ensure liquidity, security and financial yield.” Public opinion rightly perceived this clarification by Rosales, known for preserving the Central Bank’s legal autonomy by shielding it from some of Ortega’s more headstrong declarations and ideas, as particularly gutsy. The presidential couple perceived it the same way. Since no one in government can get away with taking their own initiative or standing out in any way, Rosales was asked to resign.

After days in which rumors flew but both Rosales and the government remained silent, Ortega confirmed Rosales’ resignation “for personal reasons” and replaced him with Alberto Guevara, who had been minister of the treasury. Guevara’s very first announcement from his new post was that Nicaragua would contribute resources to the Bank of ALBA. COSEP President José Adán Aguerri remarked icily that “governments should not aspire to having marionettes for functionaries.”

Days later, the governing party’s absolute majority in the National Assembly approved Ortega’s proposal to transfer $4.8 million of the national budget contingency spending line to the Bank of ALBA within six months. A similar amount would be transferred annually over the next five years, though it was not specified whether GIR reserves would be part of that money.

During Ortega’s previous term, the national business elite, the IMF and other international financing institutions viewed the government’s economic team, with Rosales at its head, as the guarantor of professionalism and seriousness, hence presumably “untouchable.” Why mess with that now, with a new IMF agreement coming up?

Two property cases consternate COSEP

The minimum wage dialogue among the government, unions and business leaders is dragging on without an agreement. The unions are accusing COSEP of “insensitivity,” the business representatives are defining the negotiations as a “dialogue of the deaf” and the government is doing a juggling act in hopes of getting a tripartite agreement as a sign of stability and consensus.

In the midst of all that the business elite was shaken by a second unexpected move that suggested anything but stability and consensus. In mid-February, National Police officers, acting on orders of the Attorney General’s Office (PGR) but with no judicial order, forced their way onto the 113-acre ecotourist complex of Punta Teonoste Nature Lodges and Beach Spa in the municipality of Tola, department of Rivas, a Nicaraguan-Swiss business valued at $2.4 million. The Police cordoned off 34 acres, which the PGR then deeded to former Sandinista guerrilla leader turned counterrevolutionary guerrilla leader Edén Pastora, now a government official. With his customary flippancy, Pastora, who had already received over 10 acres on the same coast, accepted the additional 34, saying he deserved it.

Majority stockholder Walter Bühler says he bought the land 13 years ago, and had no title problems until 2010, three years after he opened the hotel, when Attorney General Hernán Estrada claimed the resort only owned 8.8 acres with a “clean and transparent title.” Bühler, however, says “their legal arguments were very weak, and the court in Rivas rejected their efforts.” The government then took its claim to the Appeals Court in Granada, where the case has been sitting unresolved ever since.

It’s been years since COSEP’s upper echelons have been so nervous and both verbally and institutionally mobilized, among other things holding an extraordinary meeting at Punta Teonoste as a show of solidarity. They’ve also been joined by other voices. Estrada’s predecessor Alberto Novoa charged that “it’s not that this was done with a lack of due process; it was done with no process” as “under no circumstances can the State invade land by force without a judicial order.”

Even the government’s own tourism minister, Marino Salinas, spoke out against the government’s measure, given the negative signal it sent to foreign investors in tourism, one of the economic focal points of recent governments. With that bold criticism, rumors spread that he too would be asked to resign.

Extraordinary meetings in Punta Teonoste, alarmed declarations, pressures and negotiations all rekindled fears of the return of “confiscations” of private properties either by the PGR or via land takeovers, both spontaneous and instigated by governing party activists.

The previous month, the PGR sent police to invade some 29 acres of a pricey spread claimed by a private consortium near Managua’s attractive Galerías Santo Domingo shopping mall. And that wasn’t the first. The Nicaragua Dispatch cited an interview last July in which outgoing US Ambassador to Nicaragua Robert Callahan said that “Americans who own property, many of whom are dual [Nicaraguan] citizens, have suffered [recent] land invasions. And when they have gone to the authorities, the authorities haven’t reacted….” COSEP’s nervousness over the Punto Teonoste and Galerías cases and the INCAE think tank’s insistence on the need to resolve the property problems as a centerpiece of the country’s insti-tutionalization obviously reflect how seriously they view both cases. But they may also stem from the little publicized but accelerated purchasing offensive on which the Albanisa corporation has been embarked for some time now. Albanisa is a 51% Venezuelan-49% Nicaraguan joint ventures created to manage the income from the Venezuelan oil deal, although its administration is in the hands of the governing party.

The unending property tangle

Taking a longer view, Novoa recognized that “The property rights problem hasn’t been resolved in Nicaragua. Former Presidents Chamorro and Alemán tried to resolve it, and now this government too. But they each tried to do it their own way, according to the interests of a certain group in power at the time… to favor their own coterie.”

As Novoa pointed out, the property problem has been a major issue for 30 years. A 2011 study by Horacio Rose titled i“Mercado de tierras y seguridad en su tenencia” (Land market and tenure security”), distributed by the Nicaraguan Foundation for Economic and Social Development (FUNIDES), shows that at least one out of every two properties in Nicaragua probably can’t be sold or mortgaged without affecting the rights of a third party because of the ongoing prob¬lems that generate insecurity—double registering, outdated registry and cadastre files and the fact that a full 80% of the land has never even been officially registered.

Given the government’s lack of transparency, it’s impossible to verify whether any of this correlates with its issuing of property titles to a reported 172,000 families over the past five years or its announced goal to legalize the properties of an additional 200,000 families during this term. According to Radio La Primerísima, the properties are first surveyed by brigades from the office of the Advocate General of Property, which also coordinate with government and community organiza¬tions to identify properties that qualify for legalization.

Multiple demands and tensions

The tensions with its business elite allies and the varied and constant expressions of social malaise that have emerged in many places since Ortega began his new term suggest that the government ought to stop and reflect before acting so impetuously. Such expressions include those of the FSLN activists in various municipalities who are unhappy with the hand-appointing of candidates for the municipal elections. Although the governing party has tried to calm them with popularity surveys, the wounds remain and the memory of past purges and sanctions for those who challenge the governing couple is making things even worse.

There are also tensions among the poor. Owners of the rapidly multiplying “caponeras” (outfitted motorcycle and bicycle taxis to transport passengers in suburban zones at more economic prices) organized barricades to protest the privileges reserved for conventional taxis.

And there are tensions in the prisons. Complaining of overcrowding, lousy food and repressive treatment, prisoners in different prisons around the country are demanding more human conditions; a riot in late February in Estelí’s La Esperanza penitentiary left dozens wounded. The national human rights organizations CENIDH and CPDH have been prevented for the past three years from visiting inmates to learn more about their demands and see their living conditions. Statements by Estelí’s rioters only days after the tragic fire in the Comayagua penitentiary in Honduras demonstrated that the globalization of information penetrates all barriers.

Former draftees from the eighties have also organized various protests, the latest ones blocking the Pan-American Highway, to demand a law and social benefits that include land and pensions. They particularly resent the increasingly evident privileges for those who’ve climbed the ladder of power, specifically including the 34 acres given to Pastora, who headed one of the contra organizations they fought against in those years. They were also miffed about the 20 million córdobas the FSLN-controlled National Assembly allocated to the private Catholic University (UNICA) managed by Cardinal Obando, while refusing the opposition proposal to increase the education budget to increase teachers’ salaries. They reminded Ortega that he’s only at the top of that ladder thanks to them.

Coast land conflicts

The most complex malaise, the one hardest to resolve and most neglected by the national media, is the ongoing land conflicts in the North Caribbean region.

One of the policies the Ortega government shows off with the greatest pride in international forums has been the demarcation and titling of Caribbean lands on behalf of their original owners, the indigenous peoples. But the land expectations of mestizo settlers who continue migrating into that immense territory and have over time ended up outnumbering the native populations are generating strong conflicts over occupied, usurped and legally disputed lands, imprecise boundaries and the indigenous peoples’ insistence that the government use the “ancestral boundary markers.”

In February Miskitu groups from the communities of Sukatpin and Lapan captured a dozen mestizo settlers and volunteer police officers from the sizable mestizo community of Santa Fe de Acawacito, considered by the indigenous peoples to be a population of illegitimate colonizers. Mestizo communities responded in kind. Barricades were thrown up at various points in the region demanding the hostages’ freedom, while the Miskitus accused the police and national authorities of taking the mestizos’ side. With tempers running high, a Regional Council technical commission visited the area twice but failed to resolve the problem, even though its second attempt was accompanied by a delegation of community leaders. It’s very difficult for the government to resolve this issue in a way that satisfies everyone, including the growing mestizo population and doesnt damage its good international image in this regard.

The economic prods
in this social malaise

Some of these expressions of social malaise—none of which are easy to solve—have deep historical roots while others are more recent and superficial. All, however, are spurred on by various aggravating economic factors.

One of the key ones is the steadily rising cost of living triggered by the unstoppable increase in international petroleum prices. A large majority of the population finds it inexplicable that Nicaragua’s fuel prices are the highest in Central America given the favorable oil agreement Venezuela’s President Chávez has maintained with Ortega for the past five years. This month it was announced that the subsidies that have been absorbing the rising electricity costs but increasingly indebting Nicaragua with ALBA-CARUNA, a second-tier financing institution that gets its funds from Albanisa, could end in June. One can only wonder how much the daily cost of the vast year-round display of Christmas lights in Managua’s dozen traffic circles contributes to the electricity bill.

Five years of subsidies, perks and other fringe benefits also rankle. The ongoing government practice of giving and giving and giving has generated expectations in all sectors. They reasonably enough believe that they too deserve handouts, coveting what others already received and what they were promised in the electoral campaign.

The dependence on Chávez…

In this environment, with ill will abounding at all levels, the news released right before Ash Wednesday couldn’t have been worse: President Hugo Chávez was returning to Cuba for a new operation as a “lesion” had been detected in the same—never specified—place in which a sizable cancerous tumor had been extirpated last June. The lesion is a recurrence of that cancer.

The power-concentrating features of the FSLN’s political design have depended ever since its return to government, and even before, on the unconditional and enormous support Chávez granted Daniel Ortega to administer utterly at his own discretion. Without Chávez, events in Nicaragua would have taken a very different course.

In an extremely concessional credit deal, Venezuela supplies Nicaragua all 10 million barrels of oil a year it needs to make the economy run. The earnings from the government’s sale of this oil have put nearly US$2 billion in Ortega’s hands over the past five years, an amount unmatched by any other source of foreign cooperation.

With these resources—beyond the reach of any audit—Ortega has been able to implement diverse social programs to assuage the most immediate hardships caused by Nicaragua’s structural poverty. Being able to count on this money has allowed Ortega to disparage, scorn or at best make no effort to retain the historical cooperation of the dozen European countries that have now cut off or palpably reduced their cooperation with Nicaragua or are in the process of doing so. Finand, which has aided Nicargua for three decades, is strongly considering leaving due to the lack of governance and democratic backpedaling. It is following closely in Germany’s footsteps and for the same reasons. And those that leave won’t be back.

…raises many questions

What will happen in Nicaragua if Chávez is no longer around, either through physical deterioration or death, or through a political change in Venezuela? What will happen if the terms of the oil deal change? What if Chávez’s unconditional generosity to Ortega is suspended altogether and turns into a public debt and we’re asked to show accounts for it all? The only response is that Nicaragua had better prepare itself. Is it prepared? Is the Ortega government preparing itself? Or is Albanisa the only one preparing, by buying up real estate all over the country?

In these days of reflection on how everything turns to ash, the prayers for Chávez to receive “healing energy” that the government says it is “uninterruptedly” sending to heaven won’t be quite enough. With the municipal elections coming up later this year and the memory of the two recent fraudulent elections still fresh in people’s minds, Ortega ought to make some “electoral gestures” that demonstrate not only his “penitence” but also his preparation for the scenario without Chávez that might be just around the corner and would be extremely negative for both the government and the whole of Nicaragua.

What gestures?

The 24 recommendations of the Euro¬pean Union election observation mission’s final report, presented in Managua on February 20, point the way. They fully coincide with the proposal made in 2000 by the national election monitoring organizations IPADE and Ethics & Transparency (E&T), at that time with no backing, warning of the risks of the electoral reform agreed to between Daniel Ortega, then in the opposition, and Arnoldo Alemán, then in the presidency.

That pioneering proposal, presented to the entire political spectrum and lobbied ever since with the different legislative benches of three distinct legislatures, now has the backing of over a dozen social organizations and around a hundred unions and professional and trade guilds that have joined together in recent years to form the Electoral Reform Promotion Group. There is almost universal support for the reforms.

The directors of IPADE and E&T agree that, despite the gaps and flaws of the pact’s electoral law, it worked with acceptable technical parameters through the 2006 elections, when Ortega returned to government, though 8% of the ballot count was suspiciously missing even in those elections. The system really began to lurch with the alleged fraud in the 2008 municipal elections because the officials adminis-tering the law had become totally subservient to the governing party. And the strong suspicion of fraud in last November’s general elections, which returned Daniel Ortega to the presi¬dency, marked the system’s definitive collapse.

E&T described those elections as “impossible to certify” and IPADE called them “unauditable and impos¬sible to verify given the number of actions and omissions committed by the Supreme Electoral Council.” EU parliamentarian Luis Yáñez, head of the European Union observer mission, diplomatically condemned them as developing in a way that “does not meet the minimally acceptable international standards and with such a process of hiding and obscuring that we could not see the process and do not have elements to say with certainty what the results were.” President Ortega really should make certain electoral gestures to recover Nicaragua’s prestige, legiti¬mate himself, restore his party’s credibility and even demonstrate his capacity as a statesman.

The first gesture

IPADE and E&T agree that the path to improve Nicaragua’s electoral system is a long one, but some first steps are urgent given that municipal elections are coming up again in November. They propose that the first gesture that would send a signal of political volition for change would be to reconstruct the electoral branch of government with enough new authorities to allow it to recover its lost credibility. Because they believe there was a point at which even the current electoral law was administered acceptably, these new authorities could go back to doing that, allowing the municipal elections to be held in better conditions. After that, they could concentrate all their energies on a genuine reform of the electoral law.

Doing this presupposes the governing party revising its political design, which is based on concentrating power and imposing the will of personal and group power over the general will.

Could Ortega opt for the path of rectification, if not out of democratic conviction, at least in recognition of the complex and hardly encouraging horizon Nicaragua will be facing if everything changes in Venezuela? As we concluded these pages, half way through Lent, there was no such signal yet.

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