Obama, Ortega and “meanwhile” in Venezuela

In Venezuela’s current situation of a Chávez government without Chávez, an unanticipated political situation and a complex economic one, Barack Obama’s government sees good opportunities to make use of while Daniel Ortega’s government is beginning to see bad signs of what it will have to cope with.

Envío team

At just before midnight on Sunday, April 14, after Venezuela’s National Electoral Council announced the unexpectedly tight results that gave Nicolás Maduro the victory at the polls, opposition candidate Henrique Capriles declared that Maduro was an illegitimate President and that his government would only be for “meanwhile.”

However long “meanwhile” lasts (will it be 2016, when Maduro faces the recall referendum?), the Latin American project that Hugo Chávez built over the 14 years he was in office has been weakened without his leadership. The United States knows it and is already taking advantage of it. We also know it in Nicaragua, and it’s already generating uncertainty.

Obama and the
business leaders

Even though already planned, US President Obama’s 20-hour visit to Mexico and 22-hour visit to Costa Rica between May 3 and 5 must be seen as part of the timing of the “meanwhile” in Venezuela.

In today’s changing world, the United States is in fierce competition with continental China. It can’t neglect any space, much less the closest one: its “backyard,” as Secretary of State John Kerry again referred to our area of the world. Mexico and Central America are the closest and simplest as well as most necessary areas for the United States to “mark its territory” in its economic war.

Despite the fact that Mexico is trapped in uncontrollable violence and an unending wave of migration, the priority of the conversations between Presidents Obama and Peña Nieto was the economy. In Obama’s geopolitical-economic vision, it is indispensable to maintain Mexico as a strategic partner. And although Central America’s economies are Lilliputian compared to Mexico’s, Obama’s priorities in our region were also economic.

Obama’s get-together with a hundred Central American business leaders invited by the Central American Institute of Business Administration (INCAE) in San José was more relevant than the two-hour dinner he had with the Central American Presidents. The only concrete project that Obama, who is very interested in the production of clean energies, took back from the business meeting was a large-scale economic one. It recalls the shelved integrationist megaprojects of Plan Puebla Panama.

Morazán and Bolívar

The project that grabbed President Obama is the construction of a gas duct from Mexico to Panama to supply the whole region. It would reduce the strong dependence on oil of the region’s economies and halve the extremely high cost of producing energy in our countries (“three times more expensive than in Washington,” Obama recognized). That in turn would increase the region’s competitiveness through new investments.

The gas duct would be built over a 10-year period at an estimated cost of US$2 billion and it is feasible that the Inter-American Development Bank (IDB), which like Obama is interested in the production of clean energy, would finance it. The IDB has already financed one regional project: SIEPAC, Central America’s electrical interconnection system.

Obama also talked about including Central America in the export of gas from the United States in 2020. It’s no accident that gas from the North seeks to compete with oil from Venezuela.

This was announced at a new political moment for Latin America, one in which Hugo Chávez’s influence could begin to decline. One Nicaraguan academic synthesized the decisions that Central America has to make in this stage this way: “At these moments Morazán must go before Bolívar.” In other words, Central American unity over continental socialism.

Maduro and Capriles

Under Daniel Ortega’s government, Nicaragua has given precedence to Chávez’s Bolivarian project for over eight years, and it has reaped important dividends. The concentration of political-economic power achieved by Ortega and his group has depended from day one on the maneuvering room permitted by the Venezuelan oil. Its supply in favorable conditions is at the heart of the hundreds of millions of dollars in cooperation provided by President Chávez to be administered by his friend Ortegawith total discretion. Without Chávez, the course of events in Nicaragua would have taken a very different turn.

Nicolás Maduro isn’t Hugo Chávez. That started to become clear back in January, when Maduro became acting President, and was confirmed during his brief electoral campaign that culminated on April 14.

Nor will Venezuela be the same after those elections. Although the Unified Socialist Party of Venezuela (PSUV), a fusion of all the currents that were loyal to Chavéz’s charisma and vision, decided to bank on the official cult to Chávez to win the elections, reality demonstrated the unexpected: Maduro couldn’t hang onto Chávez’s electoral legacy. The elections revealed the profoundly divided population more clearly than before and left the opposition stronger. Maduro lost by winning, while the opposition won by losing. The electoral victory was Maduro’s while the political one went to the opposition.

The pro-Chávez forces, Maduro among them, had bragged that their posthumous homage to Chávez would be the 10 million votes Chávez aimed for but didn’t get in the elections six months earlier. In one of his last campaign speeches Maduro asked his followers for their massive and unconditional support because—and he made his appeal dramatically—the “peace of Venezuela depends” on the electoral gap that would be produced between him and Capriles. He wasn’t wrong. The tiny, unexpected and even challenged gap of 1.7 points triggered a convulsion. The PSUV hadn’t anticipated that. Nor had Ortega.

The economy and politics

That 1.7-point gap between the winner and loser reduced the margins of political maneuver Maduro would have because he now has to deal with more contradictions inside the PSUV, a party of factions organized for electoral races not for debate. The unpopular measures he will have to apply will come up against more resistance in the half of the population of his country that didn’t vote for him. And now he’ll have to handle even tenser relations with the United States given the controversial nature of the electoral results.

This unexpectedly greater political fragility is added to the narrow margins Maduro will have to respond to the economic problems that have accumulated in Venezuela: the highest inflation rate in Latin America (20%), an oil production that has dropped 25% during Chávez’s years thus implying urgent investments to recover the oil sector, a dangerously high fiscal deficit after virtually an entire year of rampant public spending on the elections of both last October and this April...

That combination of already foreseen economic factors and unforeseen political pressures lead one to think that Venezuela’s cooperation with other countries will either be cut or at the very least some conditions will have to be changed in the coming months. In the “meanwhile” that this complication situation gets sorted out in the Venezuela without Chávez, the United States is taking advantage of the moment and some things are already beginning to change in Nicaragua.

Where does charity begin?

Venezuela’s cooperation with all the countries translates into a supply of oil on very favorable repayment terms or in prompt financial resources derived from the multimillion earnings that PDVSA, the Venezuelan state petroleum company, provides Venezuela.

PDVSA produces 90% of Vene¬zuela’s income. It is with those enormous resources—particularly in these years of rising oil prices—that Chávez financed the social “missions,” redistributing the oil profits to benefit the poorest, something the opposition never did even at home much less elsewhere.

Seventeen countries of the Caribbean and Central America (Antigua & Barbuda, Bahamas, Belize, Cuba, Dominica, El Salvador, Granada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Dominican Republic, San Cristobal & Nieves, St. Vincent & The Grenadines, St. Lucia and Surinam participate together with Venezuela in the Petrocaribe alliance initiated by Chávez in June 2005.

Cuba is the country that has received the most in this alliance: some 100,000 barrels of oil a day. We in Nicaragua receive some 30,000 barrels a day. Although the Petrocaribe countries pay for the oil at market prices, the repayment conditions—extremely long deadlines at an extremely low interest rate—amount to a subsidy.

Could Venezuela, surely soon to be embarked on unpopular economic measures, keep the generous Petrocaribe scheme unscathed in the coming months without making adjustments? Will Maduro be able to maintain Chávez’s extravagant spirit with his allies, given that half the country is criticizing that generosity as waste, demanding, among other things that “charity begin at home”? It could be argued that this is neither squandering nor charity, but rather a well thought-out plan to redistribute wealth in a way that helps upgrade the level of the weakest countries in Latin America and the Caribbean, and of their poorest populations, thus buttressing regional unity and strengthening a cooperative spirit. But if that argument is promoted, will it fly with that half of the population that adheres to the individualist “me first” values of the globalized modern world?

Eight years of
ALBA cooperation

The other cooperation arena conceived by Chávez is the Bolivarian Alliance for the Peoples of Our America (ALBA), whose members are Venezuela, Cuba, Ecuador, Bolivia, Nicaragua, Dominica, Antigua & Barbuda and St. Vincent & The Grenadines.

ALBA started in Nicaragua in 2005, first promoting the sale of Venezuelan urea, a petroleum-based chem-ical fertilizer, to cooperatives at favorable prices. At the same time Operation Miracle arrived, an ALBA campaign in which Cuban ophthalmologists treat people with cataracts or pterygium problems for free.

The next year Petrocaribe started supplying oil to mayor’s offices governed by the FSLN, similar to the system set up in El Salvador. With Ortega’s return to the presidential office in January 2007, Chávez sent Nicaragua dozens of generators that operate with bunker, also in the ALBA framework. That put an immediate end to the often eight-hour power outages that the country had been suffering most days the previous year.

In July of that year a joint-venture company (51% Venezuelan capital and 49% Nicaraguan) called ALBA de Nicaragua S.A., known better as Albanisa, to channel the oil Caracas was sending—now to cover virtually all of the country’s fuel needs—as well as manage/invest the earnings after re-channeling back to Venezuela the half of the oil invoice that has to be paid within 90 days. Nicaragua’s state oil distribution company, Petronic, at least nominally became PDVSA’s counterpart in that arrangement. Suddenly, like a tree bursting into bloom, or more aptly like an octopus with more than eight arms, Albanisa became a powerful economic conglomerate that spawned numerous new companies: ALBA-Alimentos, ALBA-Energía, ALBA-Construcción, ALBA-Forestal, ALBA-Minería, ALBA-Seguridad, ALBA-Transporte… The ALBA name spread ever further. The lights lit with Venezuelan oil illuminated the road for Ortega, his family and the FSLN, particularly its leaders closest to the family, who became big ALBA capitalists. It also initiated an important stage of subsidies of all kinds to the national economy.

Is it private or public?

Petronic, at the center of Venezuela’s oil cooperation, is run by Francisco López—also vice president of Albanisa and the FSLN’s treasure—and administered by a granddaughter of President Ortega. That’s pretty much the pattern of the companies growing out of the Albanisa consortium: all are headed by important figures in the governing party.

Today Albanisa is nearly a monopoly in the energy system (purchase and storage of oil, electricity generation by both oil and renewable energies, not to mention the distribution of electricity). Nonetheless, no information about the earnings or losses of Albanisa, Petronic or any of the other ALBA companies goes through the national budget. It is not known whether any of the companies pays taxes into the public treasury and they are frequently adjudicated state projects without any public bidding.

Ever since the Venezuelan cooperation began, and even more so as it grew into billions of dollars, there has been an interminable debate in Nicaragua about whether those resources were a contribution by Chávez to Ortega based on personal and political affinity, a collaboration between their two political parties based on the desire of both to construct 21st-century socialism, or bilateral cooperation between the two States and thus were generating a public debt. Without ever being fully transparent about it, Ortega has attempted to damp the debate by hinting that Albanisa and its various spin-off companies are private enterprise, and thus not generating any public debt. It is also his justification for why their accounts aren’t opened to the National Assembly, which oversees and must approve the national budget.

This total fusion/confusion between State and party, party and family and public and private exists in all institutional fields in Nicaragua today. In the case of the use—and of course abuse—of Venezuela’s cooperation resources, the resulting confusion is especially worrying because we’re talking about nothing less than US$600 million a year administered in that confusing context. Under which shell will the portion of the debt that has a 25-year repayment schedule be found?

Maduro and Ortega

Chávez’s relationship with Ortega was very close and personal, the same tone Chávez typically had with many of his natural allies. Beyond the emotional aspect, it was politically “a relation between two firsts without equals,” as Ortega’s former ambassador to the United States, Arturo Cruz, characterized. Cruz also offered his analysis of what has changed in that equation: “Now the relationship will be between one first without equals [Ortega] and one first with equals [Maduro], which means that what Maduro decides won’t be automatic, but will have to be hammered out with his peers. This adds a new element to the relationship between Nicaragua and Venezuela.”

What of ALBA will remain in Nicaragua following Chávez’s death? ALBA’s star project in Nicaragua, the “Bolívar’s Supreme Dream” oil refinery, which would cost more than US$4 billion and would supply oil to all of Central America, so far consists only of the cornerstone that Chávez and Ortega laid in 2007. It will surely be substituted by that gas duct, which is cheaper, cleaner and more strategic.

While the production of oil in the United States has increased thanks to new technologies and the increased price of oil that makes them profitable, production has dropped in Venezuela due to the lack of such new technologies and of capital. It is no coincidence that at this moment of weakness of Chávez’s ALBA-Petrocaribe project, Obama is stepping in to wrest power and weight from it.

Other than oil

What will become of ALBA, an alliance that other than Venezuela consists of three small countries on the continent and a few fragile and dispersed Caribbean economies? Will anything other than rhetoric remain given that the population of the ALBA member countries totals only 12.24% of the Latin American and Caribbean population and the gross domestic product (GDP) of those countries contributes only 9.17% to the GDP of the entire region?

In January of this year, while Maduro was still Venezuela’s acting President, the ALBA countries and those of Petrocaribe agreed during a meeting in Caracas on the creation of an “economic zone that goes beyond oil.” They reiterated that agreement on May 5, in the latest Petrocaribe meeting, held while Obama was still in Central America.

President Ortega, pressured to take a step in that new direction, sent Nicaragua’s National Assembly a bill for fast-track approval that establishes the creation of what is called the ALBA Economic Space - People’s Trade Agreement, otherwise known as EcoAlba-TCP. It was approved by the FSLN parliamentary majority on April 18 without the vote of the opposition.

Rhetoric and reality

The governing party representatives in the National Assembly defended that law claiming that with it they are responding to the demand of the business elite in the Superior Council of Private Enterprise (COSEP), which has indeed been demanding that the export of products to Venezuela—which has benefited them so much in these years and made Venezuela the second large trading partner for Nicaragua’s exports—move beyond being a personal relation between two heads of State, as it has been up to now, and be institutionalized into a free trade agreement.

But the law doesn’t really respond to that, as it doesn’t modify or even refer to the current export mechanism: Alba¬linisa, the acronym for ALBA Foods of Nicaragua. Albalanisa is in the hands of the governing party and acts as a monopoly intermediary, filtering who gets to export and centralizing the quotas of what is exported.

Enrique Sáenz, a legislative representative for the Sandinista Renovation Movement (MRS), denounced the contradictory rhetoric contained in the approved law: “What it institutionalizes,” he explained, “are the principles and underpinnings of the so-called 21st-century socialism. Article 2, point 6, textually says: ‘The TCP seeks to strengthen the State as a central actor of the economy of a country at all levels…. The TCP supports the nationalization and recovery of the companies and natural resources to which the peoples have the right, establishing legal defense mechanisms for them.’” Chávez nationalized a thousand and one businesses or business assets in 14 years of government.

Sáenz continues: “Point 12 of the same article affirms the ‘recognition of the sovereign right of the countries to control their services… and to provide basic and strategic services directly through the State or in mixed investments with the partner countries.’” His conclusion is that “either the government is deceiving those over there, those of ALBA, with this document, or it is deceiving those here, stating that it is to promote private sector interests. Or else it is deceiving both, because at the end of the day, the government will do whatever it feels like. What the Ortega project is certainly attempting to do is give international oxygen to the Chávez project.”

Ortega: “What will happen
if ALBA disappears?”

In addition to giving Chávez’s project international oxygen in this uncertain “meanwhile,” is Ortega’s government preparing itself for a change in the conditions or amounts of a cooperation that has subsidized his political project for more than eight years? What will happen in Nicaragua with the change in Venezuela?

On April 30, at an early celebration of International Workers’ Day following a much smaller march by state workers than in previous years, President Ortega, without referring to a single one of the labor demands expected in this commemoration, finally addressed a question that has been on the lips of nearly everyone in Nicaragua since the death of President Chávez. He did so with a strange message, speaking of what is happening outside of Nicaragua to be able to talk about what could happen here:

“Many here are wondering what will happen to Nicaragua if ALBA, the cooperation that ALBA signifies, the exchange that ALBA signifies, disappears. ‘What’s going to happen,’ they are asking themselves. But they’re not seeing the great threat to our peoples, the great threat to the world, which is what’s really happening. It’s not what could happen, but what is already happening! It’s the profound crisis of total insecurity for the peoples in the developed countries, peoples who even have to be changing their government continually because, of course, they think the government is to blame for the crisis, so they say: ‘Let’s elect another government.’ So they elect the other government and the crisis goes on the same, and gets even worse, expands even more.”

In his talk Ortega underscored the need to strengthen his alliance with big capital and with the instruments of world capital, realistically accepting what is happening to us here: “We have to admit it: we are economically dependent, we are dependent; we depend on international cooperation, we depend on the funds that the World Bank mobilizes, that the Inter-American Development Bank mobilizes. And I would like to see, to hear, what alternatives there are for Nicaragua to be able to survive without those resources. The cooperation in the ALBA framework is very important to this whole process, but we depend on those funds…. We ourselves have strongly questioned the policies of the International Monetary Fund but there’s no other choice than to work with the International Monetary Fund in our case because we aren’t self-sufficient; because we’re dependent.”

The tone of this Ortega is so different than the one of just a little while ago, when he launched diatribes against the IMF and lauded Chávez and ALBA as the “alternative” for Nicaragua. Even his face was different: downcast because of the reality of the new political moment.

It’s time for fewer promises

Only days before Ortega spoke in these new realistic terms, his economic adviser Bayardo Arce said that neither the IMF nor the government have any urgency in signing a new three-year agreement with the IMF and that the negotiations probably won’t begin until the end of the year. Two of the conditions the IMF has set for the signing of that agreement are an increase in electricity rates and the even more unpopular Social Security reform, which the government apparently won’t undertake in 2013 given its political costs.

Nonetheless, the government has already increased the electricity rate by 7.78% for consumers exceeding 150 kW of monthly usage, and announced on April 12 that another 300,000 users (82% of the total) could lose the benefits of the reduced rate subsidized with the ALBA resources. In response to the rate hike, the prices of all products and services shot up immediately.

David Castillo, director of the State’s energy institute, laid the blame on the increased price of the fuel oil the energy generating plants use to function, even though that price has remained stable. Contradicting Castillo, Bayardo Arce said the higher rate was to compensate for the losses the energy distribution company suffers because of all those who hook up directly to the electricity lines on their street. While the Spanish transnational Unión Fenosa-Gas Natural was formally bought out by TSK-Melfosur, another Spanish firm, there are indications that behind it is a company linked to Albanisa, and thus to the governing party and presidential family.

The expectation about the “meanwhile” in Venezuela also finds Nicaragua with a drop in the international prices of all its export products: coffee, sugar, peanuts, beef… even gold, exploited by voracious transnationals that leave barely any earnings in the country. Worse yet, it is being announced that the good prices of a couple of years ago won’t be back soon. The moment for the government is not exactly buoyant, as it was only a little while ago.

That is surely why Rosario Murillo, who coordinates Ortega’s ministerial Cabinet, warned emphatically on April 23 that no one should make promises they don’t have the capacity to fulfill: “If a minister pledges to implement some action in a municipality he or she visits, the next day that ministry’s work team better be there getting the actions underway.”

And time for rectification

That is surely why Daniel Ortega had to publicly retreat, for the first time ever, on one of his frequent authoritarian and arbitrary decisions. On March 22, the director of TELCOR, the State’s telecommunications regulatory body, published an administrative accord ordering all companies operating telecommunications services to “submit for that authority’s approval” the appointment of their directors and general managers as well as of their security and information technology directors and chiefs.

The business elite reacted with drastic rejection, as did the independent media. Claro and Movistar, the two transnational mobile phone service providers, held off commenting for the moment.

While arguments alleging the unconstitutionality of the accord (on the grounds that it violates free enterprise and indirectly freedom of expression and information) and its alleged political espionage motivations flew about, the TELCOR director claimed that the issue was really national security. He also covered himself by saying that “it was Daniel Ortega who instructed the issuing of the accord and the accord will stay. We have the right because we own the frequencies.”

COSEP warned that its members would not obey the order. Finally, after a month, Ortega had to find a loophole to wiggle out through: the companies would have to report who held those posts, but they would not be subject to approval.

Given that the alliance with big business grouped under the COSEP umbrella is the one the government has prioritized over attention to any other sector or economic/labor grouping, the logic of this first and so far only step backward by Ortega can be explained by the moment’s uncertainty, by Venezuela’s “meanwhile.”

The fact that there isn’t and hasn’t ever been a real alliance with small business, and that the Venezuelan resources are no longer expected to be so abundant or so free of conditions is surely why the government hasn’t responded to the damaging crisis of the blight affecting so many coffee groves, since so many of them are owned by small farmers. Nor is it responding to the crisis of bean prices, which is undermining the fragile economies of thousands of peasant families. Nor is it providing any small pension to the elderly poor who beg in the streets to alleviate some of the penuries of their old age.

Property and
transparency waivers

A year ago the government and its business allies endured another situation of major uncertainty and nervousness: Would the US grant its two annual waivers or not? With these waivers coming up again soon, the assumption is that Nicaragua will be granted the property waiver as it ultimately was last year, although the US State Department’s Human Rights Report for 2012 notes in the section on Nicaragua that “illegal land seizures continued, including reports of government seizure without due process or fair compensation.”

This is the waiver that weighs most heavily over the economy because if denied, the international financing institutions are obliged to deny credits to the country. While the government is hoping this year to resolve 66 of the remaining 285 open cases of US citizens whose properties were confiscated in the eighties, the Human Rights Report makes no mention of a similar last-minute effort last year just prior to the decision-making on the waivers.

Will the other waiver, the one on fiscal transparency, be denied again? A year ago the US ambassador to Nicaragua pointed to the persistent lack of fiscal transparency as the reason for not granting the country that waiver. US State Department spokesperson William Ostick was more specific: “While it is true that the Nicaraguan government does open its budget to the public, it does not reflect completely and with certainty the funds originating in Venezuela. Also, public funds should not be used for partisan ends….”

Corruption and impunity

The US State Department’s Human Rights Report was more severe on Nicaragua than in previous years. The extensive section dedicated to our country, mainly attributed to secondary sources, including human rights organizations, other NGOs, the media, etc., began by characterizing the situation as follows: “Nicaragua is a multiparty constitutional republic, but in recent years political power has been concentrated in a single party, with an increasingly authoritarian executive exercising significant control over the legislative, judicial, and electoral branches.” It mentions that the 2011 general elections and the 2012 municipal ones were characterized by national and international observers as “seriously flawed” and that both domestic and international organizations have raised “concerns regarding the constitutional legitimacy of Ortega’s reelection.”

It detailed examples of police abuse and for the first time cites NGO reports that President Ortega’s “use of his position as commander in chief had politicized the organization and led many to question its professionalism.” It further notes that corruption and impunity are frequent in all government institutions and dedicates a paragraph to the Venezuelan funds: “The media reported that ALBA-funded contracts were awarded to companies with ties to the Ortega family and noted that the funds from Venezuela served as a separate budget tightly controlled by the FSLN with little public oversight.”

In reacting to the report, Ortega sidestepped responsibilities, attributing all the human rights violations mentioned in Nicaragua and the rest of Central America to the massive drug use in the United States. While it hardly explains police and penal institution abuses, the argument about drug trafficking has become a leitmotif in the President’s speeches. He always links two ideas: that Nicaragua is a “retaining wall” for drugs and that the United States should give Nicaragua more resources to continue being so.

Nonetheless, while Ortega is known for his invariably belligerent speeches about the United States, he was his most cordial self during his attendance at the brief dinner meeting in Costa Rica between President Obama and his Central American counterparts.

The empire and the villages

While in Central America, Obama paid most of his attention to Costa Rica, giving it a pat on the back as the most stable ally in the region, the one with the best international image, famous for its democracy and ostensibly not besmirched with drug trafficking, although all those characteristics are more questionable than they have been in the past. Because Costa Rica is also INCAE’s headquarters, the business school that was President Kennedy’s brainchild 50 years ago as Obama reminded everyone, it ensured him the capacity to invite the region’s private sector, something no other institution could have pulled off.

Costa Rica is also the country in the region that has made the most progress in its relations with continental China and thus is a priority on the North’s radar. US diplomacy, which always works with regional alliances, could only rely on Costa Rica for this, despite the growing domestic unpopularity of its President, Laura Chinchilla.

The other countries of the region looked lackluster by comparison. What Guatemala’s Vice President Roberto Carpio Nicolle noted some months ago about one of the dramas of our region was again made clear: “We preach integration but we engage in village fights; we are turning into villages.”

The countries of the isthmus approached the negotiations and ultimate signing of the free trade agreement with the United States nearly a decade ago as “villages,” and now their Presidents treated Obama as if they were village chiefs and he the chief of the “empire.”

If the Costa Rican President, as pro-tem president of the Central American Integration System (SICA), wasn’t clever enough or perhaps interested enough to call her counterparts to a prior meeting to unify criteria, the other four heads of State also failed to take the elemental initiative to meet previously to hammer out a few common positions on issues that affect us all.

From now on, we need to recognize that the main obstacle for the Central America gas duct will be the different regulations that each village has and defends.

Ortega “for a while”

With the exception of Costa Rica, Nicaragua is currently the most stable and safest country in the region and all polls confirm that its government has the greatest popular acceptance. In large measure, Ortega has Chávez to thank for that. Because of Venezuela’s oil deal with Nicaragua, Ortega has been able to alleviate the penuries that structural poverty cause among a majority of Nicaraguans through social programs in which the poorest population receives some help or at least harbors the hope that it will in a future round.

Relying on Chávez’s resources, Ortega gave himself the luxury of scorning or at least doing nothing to hang on to the historical cooperation of a dozen European countries that have either pulled out of Nicaragua or are seriously cutting their aid. Those resources have also helped him win the favor of the business elite, which continues to be exonerated of taxes it should pay because Venezuela covers what they don’t contribute.

Venezuela has also subsidized the degree of power that Ortega has concentrated. After the latest national poll by Borge & Associates (in April), in which Ortega appears with a favorable opinion of 74.7% and an approval rating of his administration of 70.3%, the director of that polling firm synthesized its findings as follows: “No one in Nicaragua ever had so much power. Somoza never even dreamed of it. We are faced with a hegemonic power that, if it doesn’t commit any major errors, will be in power for a while.”

The lesson of April 14

For a while… or for meanwhile? Is Ortega consolidating or is the crisis starting? Has Ortega’s concentrating phase ended? Is the phase starting in which he will lose the capacity for social control and lack the resources to appease the discontent provoked by that control?

One of the most active spokespeople for the Ortega government triumphantly refused in a televised interview to accept any comparison between Chávez’s PSUV and Ortega’s FSLN: “We have a party with 50 years of experience, with a guerrilla struggle, with the taking of political power, with the defense of political power. We were in the opposition, we recovered power, we have rebuilt the party… We have a doctorate in revolution!”

In contrast he described the PSUV like this: “It was founded in 2007. In other words, what experience does it have? Furthermore, it was founded on two distinct bits. What party formation do they have? They have constructed an electoral machine, but they haven’t managed to construct the link between that machine and the people. Now they’re going to mature their process, but they’re going to do it with calcium carbide. In addition, we recall that political power in Venezuela was very centralized in Chávez, and that gets a ton of things out of whack.”

Perhaps it didn’t dawn on that spokesperson that the very features he was describing characterize today’s FSLN: an electoral machine, rebuilt some years ago on bits and pieces, totally centralized in Daniel Ortega, with an increasingly confused party formation that refuses debate and is based on slogans and “single thinking,” a party that in this stage is “maturing with calcium carbide”—forced, artificially, like the chemical painted on pineapples and other agricultural products to make them look ripe on the outside without having acquired any mature flavor inside—and with a permanent divvying up of perks and privileges…

If there’s an important lesion from April 14 for the FSLN, it’s how fragile the grassroots adhesion can be to a project that seems so invincible, and that because it was centralized in a single person got so many things out of whack.

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