Crisis in Nicaragua
Guest Writer Anna Janson Nicaraguan democratic backsliding and American intervention.
In a letter blaming President Daniel Ortega for driving the country into a “state of terror,” Nicaraguan Supreme Court justice, Rafael Solís, resigned. According to The New York Times, Justice Solís explained that President Ortega did not follow through on his suggestions to negotiate and was pushing Nicaragua down the same path as the Somoza dictatorship they helped overthrow in the 1970s. “The country is not doing well. What is coming is worse,” he warned. With Nicaragua headed in a downward spiral, the United States has begun to step in. It is clear that something needs to change in Nicaragua, but United States intervention may not be the right option.
President Ortega played an important role in the Nicaraguan Revolution. As maintained by The New Yorker, he led the Frente Sandinista de Liberación Nacional — the F.S.L.N., translated to the Sandinista National Liberation Front — in overthrowing the Somoza regime. Due to the Sandinistas’ communist ideology and ties to the Soviet Union, the CIA created the Contras, a rebel group that The New Yorker said ultimately “led to the economic devastation of Nicaragua and the collapse of the Sandinistas’ hold on power.” When President Ortega resumed power, he had created connections with powerful people who helped keep Nicaragua going.
Consequently, the catalyst for the latest “state of terror” began when Venezuela’s economy collapsed and reduced aid to Nicaragua, according to an article by The Economist. The Washington Post said that for a long time, “Hundreds of millions of dollars in cheap Venezuelan oil provided by Hugo Chávez’s government padded the budget and boosted social programs.” After losing the influx of oil and subsequently the aid, Nicaragua’s Social Security Institute was running out of money, so President Ortega proposed some reforms to sustain it. However, the plans announced April 2018 included reducing pensions for retired workers and increasing employer and worker contributions to social security.
In response to the controversial idea, protests broke out and police responded with a strategy that Amnesty International described as “shoot to kill.” Hundreds of people died, mainly due to the police and militias. In addition, World Politics Review said that “at least three public hospitals refused to treat people who were gravely injured during the demonstrations” and “tens of thousands of Nicaraguans have fled into exile.” Many protesters who remained in Nicaragua were arrested.
Next, already swarmed with disapproval towards the government, President Ortega was accused of ordering extreme acts to suppress the media. According to Gulf Times, President Ortega blamed “hate-sowing coup-mongers” for the violence — yet reports dispute that statement. Notably, an article by The Daily Beast reported that the Nicaraguan government tortured a detained protester, Dania Valeska Alemán Sandoval, in order to get her on tape confirming the word of the government. The Daily Beast quoted Sandoval: “They brought one of my compañeros and put him on his knees and put an AK47 to his head.” Later, BBC reported that Carlos Fernando Chamorro, a popular Nicaraguan journalist, was threatened by the government and proceeded to flee to Costa Rica. The New York Times claimed that the government also “expelled teams from two branches of the Organization of American States that were investigating allegations of human rights violations” and shut down certain human rights groups and independent media outlets within the country. Nicaraguans are extremely hesitant to let outside groups meddle in their internal affairs due to the devastating intervention by the United States in the past, however, their own government is not doing them any favors.
Even before some of these incidents were uncovered, many Nicaraguans criticized President Ortega and called for moving up the 2021 elections. It became evident last year that Nicaragua was not moving in a good direction. Nicaraguans worried that the country would repeat history and suffer through a civil war, as evident by the resignation letter of Justice Solís. The economy worsened and World Politics Review stated that the country’s GDP decreased by 4 percent in 2018, even though Nicaragua was already one of the poorest countries in Latin America. To top it off, Nicaraguans felt threatened by their government. For example, Havana Times described how “the presence of police in cemeteries all over the country alarmed Nicaraguans who had arrived to leave flowers on the graves of their deceased family members” and ended up witnessing the arrest of Alex Vanegas, “who remains in jail despite a judicial order for his release.” The Global Observatory clarified that a new Nicaraguan anti-terrorism law “is being used to criminalize political dissent.” People in Nicaragua and abroad noticed the need for change.
Due to the situation, Havana Times quoted people from the “first meeting of leaders of Nicaraguan organizations and groups in the world” supporting United States and other countries’ sanctions against violators of human rights in Nicaragua. Later that month, as stated in The Washington Post, the United States imposed sanctions on Nicaragua’s national security advisor and President Ortega’s wife, Vice President Rosario Murillo. Along with the announcement, Treasury Secretary Steven Mnuchin said, “Vice President Murillo and her political operators have systematically sought to dismantle democratic institutions and loot the wealth of Nicaragua to consolidate their grip on power.” Two months later, Reuters reported that the national security advisor of the United States, John Bolton, announced sanctions placed on Nicaragua’s petroleum company: “Through sanctioning PdVSA, the United States has also sanctioned Nicaragua’s ALBANISA, the government’s joint venture with PdVSA and slush fund of the corrupt regime of Daniel Ortega.” BBC said that the European Union threatened to place sanctions on Nicaragua as well. From an outside perspective, it may seem like implementing more international sanctions is the responsible course of action. However, Nicaragua’s ‘state of terror’ stemmed from a crashed economy and further sanctions may just contribute to the existing problem.
Despite protesters and international pressure, the Nicaraguan government revealed in late January that they are implementing the reforms, as reported by World Politics Review. According to NPR, President Ortega claimed to have scrapped the idea after the pushback from protesters, but World Politics Review reflected that “His resolve only appears to have strengthened amid the crackdown” from organizations and governments around the globe.
As France 24 pointed out, President Ortega needs to “understand that if he continues down this path, the only thing that will happen is he will bury his party and every possibility that his regime survives politically," explained sociologist Oscar Vargas. President Ortega has put himself at risk of falling from power in the same way as his predecessor. Furthermore, The Global Observatory explained that the issue in Nicaragua started a bigger complication in the region: “Costa Rican authorities recently revealed that more than 20,000 Nicaraguan citizens have applied for asylum in that country, raising alarms about a potential new refugee crisis in Central America.” Over the past year, it has become undeniable that President Ortega and the Nicaraguan government forced their country into a critical period. Although something needs to be done, it is likely that international action will be detrimental. The United States should hesitate to step in, especially given its dark history with intervention in Nicaragua.
Youth as a Catalyst for Change in Nicaragua
Staff Writer Stephanie Hernandez discusses the organization and motivations of the student protests in Nicaragua that have left more than 200 dead since April.
“SOS Nicaragua” the autoconvocados, or self-organized, yell in protest across Nicaragua. College students are organizing nationwide protests in order to change their country’s leadership. Millennials are taking the lead in hopes of bringing serious reform and reversing President Daniel Ortega’s policies. In April, Ortega implemented a social security policy that would reduce benefits for retirees and increase taxes on workers. Since then, the Nicaraguan government has faced backlash. The autoconvocados garner support from the majority of people in the country, despite the authoritarian response exhibited by the Ortega government. During the last election, he banned the main opposition party. He continues to maintain control over the military, the media and most branches of government. Nicaraguan university students want to end government repression, fearing that push Nicaragua will join Venezuela in being one of the only two Latin American countries to regress from democracy.
The first wave of student protest called for democratic change and an end to the recent government policies. These protests culminated in the deaths of several students, who were killed by Ortega supporters that found the students call to action threatening to an already weakening Ortega regime. A civic insurrection followed as furious citizens responded. Journalist Kyra Gurney explains in the Miami Herald that:
“Few could have been psychologically prepared for the violence the Ortega administration has unleashed on the protesters. The intensity of the demonstrations, and the response from government forces, have come as a surprise for many in Nicaragua, which in recent years has been a relatively safe, stable country. The Ortega administration has denied responsibility for the killings, blaming criminal groups and characterizing the protesters as right-wing gangs.”
According to the Organization of American States (OAS), 1,337 have been wounded, 212 killed and 507 arrested since the protests began. This does not include several undocumented kidnappings and murders. These clashes that began in April mark the deadliest protests in Nicaragua since its civil war ended in 1990.
The United Nations condemned human rights abuses perpetrated by pro-government forces. While the UN released a statement claiming that “The UN is available to assist national dialogue efforts to strengthen the rule of law, respect for human rights and the peaceful resolution of differences,” international attention on the situation is lacking.
The United States, which has a history of intervening in Nicaragua’s internal political affairs, should help mitigate the crisis by discussing options to grant asylum and place sanctions on high ranking Nicaraguan officials. Manuel Orozco characterizes the situation well, writing in the New York Times that “Mr. Ortega has shown that he responds only to pressure. In response to the demonstrations, he rescinded the social security plan that triggered the protests, and he freed some of the demonstrators who were jailed. The pressure must be sustained.” The lack of international uproar does not help the civilian agenda calling for stronger democratic institutions and early elections in 2019. The U.S. should enforce the Global Magnitsky Act- an American law used to punish people around the world for human rights violations - to further sanction members of Ortega’s business inner circle who sponsor his political agenda. This could apply to election commissioners who aided Ortega throughout fraudulent elections. Greater sanctions on individuals can aid the peaceful transfer of power in all branches of government.
Nicaraguans are afraid to leave their homes to protest because of the chance that they will be targeted and imprisoned. The Roman Catholic church is working to build peaceful coalitions to mitigate street riots. Following peace talks between student organizers, the Catholic Church and the government, the social security policy was amended. However, this does not make up for the restrictive path the government is continuing the follow.
Nicaraguan students remain committed to political change. Kyra Gurney explains the capabilities of the student movement as such:
“Despite their lack of preparation, however, the students have managed to keep their new bunker running smoothly. Each one of the roughly 900 students living at the university which they have occupied as a main base for their protests, which normally has about 40,000 students, has a specific task based on his or her major. The medical students run makeshift clinics. The law students document human rights violations and communicate with local human rights groups. The economics students administer the meager and financial donations.”
By maintain opposition despite a lack of resource, young Nicaraguans can inspire other youth movements in repressive countries around the world. In an effort redefine their country’s future, students have used social media as an outlet to broadcast the atrocities occurring across the country, since most public broadcasting is censored by the government. Autoconvocados are active in the diaspora as well. Nicaraguan-American citizens are organizing small rallies across the United States and pressuring their politicians to draft bills to sanction multiple Nicaraguan entities. This step is the first of many in hopes of garnering greater international attention while shaping a more stable and democratic Nicaragua.
Building Influence: Chinese Infrastructure Investment in Latin America
Staff Writer Gretchen Cloutier explores China’s growing influence in Latin America through development projects.
As China’s economic power grows, the Asian giant is extending its reach around the globe. While the country has maintained strong economic ties with Africa since the early 2000s, it has also recently ramped up trade and investment in Latin America. Chinese president Xi Jinping has agreed to double bilateral trade with the region to $500 billion and increase investment to $250 billion over the next decade, according to various deals signed with Latin American countries in 2015. Currently, China is the largest trade partner of three of the leading economies in the region: Brazil, Chile, and Peru. These countries, along with the rest of Latin America, mostly export primary goods and natural resources; copper, iron, oil, and soybeans account for 75 percent of the region’s exports to China. In addition to trade and investment, Chinese loans to the region have also increased from $7 billion in 2012 to $29 billion in 2015.
This investment in Latin America often comes in the form of large infrastructure projects aimed at improving transportation and better connecting the region to lower costs for Chinese imports. As the U.S. is turning its back on relations and trade with Latin America, most prominently exemplified by protectionist calls to end NAFTA and thus free trade with Mexico, China has recognized an opportunity to supplant the U.S. as the extra-regional hegemon. However, this is not due to China’s goodwill and altruism towards the region, but rather an opportunity to control global trade flows through Chinese owned transportation links, and reduce costs of trade to Asia. This is an ambitious goal, and although China has made promises of increased investment and signed deals for large infrastructure projects, it is uncertain if the plans will actually come to fruition.
Considering China’s own domestic politics, it is no surprise that the country favors trade and investment with left-leaning Latin American nations. The former Kirchner administration in Argentina had several deals with China, including plans for a nuclear plant, a satellite tracking station, and a $1 billioncontract to buy Chinese fighter jets and maritime patrol vessels. When current center-right president Macri came into office, he said the deals made under Kirchner would be reviewed and may face rejection, however after five months of internal review, the Argentine government successfully ratified the contracts. China has also loaned $65 billion to Venezuela since 2007, more than any other country in the region. China has a growing need for energy, and Venezuela mainly pays back the loans with oil. However, the current economic crisis in Venezuela could mean that the country may not be able to supply enough oil to China or pay back the loans, and so China announced in late 2016 that it would no longer issue new loans to Venezuela.
Chinese loans and investment are particularly appealing to Latin American countries since they rarely come with political and economic conditions or other requirements, such as implementing austerity of structural adjustment programs. Unlike loans from Western international institutions such as the IMF, Chinese loans have no (apparent) strings attached. Following the Latin American debt crisis of the 1980s, countries that sought relief from the IMF were required to implement structural adjustment policies that imposed austerity measures as a condition of the loans. This resulted in a “lost decade”of economic growth for the region, during which living standards and growth both plummeted. Considering this history with lenders from Western-dominated international organizations, China has found the ideal opportunity to shape Latin America for itself by investing in infrastructure, and, in return, gaining cheap access to the primary and natural resources needed for its booming population and industry sector. Two examples of the largest infrastructure projects currently proposed in Latin America are the Nicaraguan Canal and the Twin Ocean Railway.
Nicaraguan Canal
The Nicaraguan Canal, approved by the government in 2014 with a goal date of completion in 2020, is China’s alternative to the historically U.S.-controlled Panama Canal. The proposed design would stretch 178 miles between the Atlantic to the Pacific Oceans, running across the southern portion of the country, through Lake Nicaragua. It is estimated to cost $50 billion, and Chinese businessman Wang Jing (who owns HKND, the company responsible for developing and building the Nicaraguan Canal) is the only known investor in the project.
Photo: The Guardian
It remains unclear whether or not the Chinese government is directly involved in the planning or implementation of the project. Further complicating matters is Nicaragua’s diplomatic recognition of Taiwanese independence. Every Central American country, excluding Costa Rica, is politically aligned with Taiwan. However, China refuses formal diplomatic ties with any country that recognizes the island as a separate nation. But Taiwan has little to offer Central America, and as China’s economic and political power grows, Nicaragua and its neighbors are likely to shift diplomatic ties to the mainland.
Regardless of the Chinese government’s involvement, the current project is facing setbacks due to Wang’s reported loss of 85 percent of his personal wealth in a stock market crash, which he was using to fund the canal. Additionally, the construction of the canal has faced scrutiny and backlash for its effects on the communities in the surrounding area. It is estimated that about 30,000 people will be displaced due to construction of the canal. HKND has a compensation budget of $300-$400 million, or up to $13,300 for each displaced person. This has not stopped opposition from affected communities, however, and the last two years have seen more than 80 protests against the Nicaraguan government and HKND. These demonstrations have occasionally turned violent, and there have also been reports of arbitrary detainment of protesters. Additionally, concerns have been raised over the environmental impact of the project, including the pollution of Lake Nicaragua, the largest source of fresh water in Central America, which currently supplies water to over 80,000 Nicaraguans.
The construction of a Nicaraguan Canal would give China access to a shipping route across the geopolitically strategic isthmus without having to pass through the Panama Canal. This would lower costs dramatically for Chinese imports, since tariffs and fees for trade through the Panama Canal have tripled over the past five years. It would also give China unprecedented access to the region, with control over how both their imports and exports are traded. Like the revenue the U.S. gained from the Panama Canal, China, or at least the overseeing company HKND, could also profit from other nations paying fees to ship goods through the canal. Nicaragua, too, would benefit economically from increased trade in the region and probable shared profits with China.
While the canal is likely to be economically advantageous for both countries, its environmental and social impact could prove insurmountable. The construction has already faced setbacks due to environmental concerns, and, amid questions about funding, the Nicaraguan canal seems increasingly unlikely, at least in the near future. There has not been much additional construction since ceremoniously breaking ground in 2014.
Twin Ocean Railway
Another ambitious project proposed by China is a transcontinental railway stretching from Brazil’s Atlantic coast to Peru’s Pacific coast. As with the Nicaraguan canal, this railway would facilitate movement of goods and greatly reduce trading costs for China. There are two possible routes for the railroad: one running directly from Brazil to Peru along a northern corridor, and one that passes through Bolivia further to the south. The latter, dubbed the Twin Ocean Railway, follows a more direct route and would cost about $13.5 billion to build, stretching over about 3,700km. The former is estimated at an untenable $60 billion, and would be over 1,000km longer, measuring 5,000km from start to finish. If the project moves forward, it is likely to be built along the more feasible Twin Ocean Railway corridor.
Photo from: Inter American Dialogue
This marks a win for Bolivia, who has been in discussions with China, Peru, and Brazil about being included along the route since 2014, following the signing of a Memorandum of Understanding creating a trilateral working group on the railway that did not include Bolivia. The landlocked country of Bolivia, which has the lowest GDP per capita in South America, has been looking for a way to access the sea since Chile annexed part of its territory on the Pacific coast in a war during the 1870s. The opportunity for Bolivia to once again be connected to seaports via a major trade-based railway could provide a much-needed boost to the economy.
Like the Nicaraguan Canal, the railway project has also been met with criticisms of possible environmental degradation and threats to local communities. Some of the route passes through delicate Amazon ecosystems, and it is projected to expose up to 600 remote indigenous communities that have never previously had contact with other societies. Current Peruvian president Pedro Pablo Kuzynski has also raised concerns that the railroad will be too environmentally harmful to build.
Looking Ahead
The Nicaraguan Canal and the Twin Ocean Railway are two impressive megaprojects, which, if completed, would underscore China’s economic influence abroad, and help to further cement its role as a global economic power. However, both projects are far from completion. In addition to their environmental and community impact concerns—which could halt the projects in and of themselves—many questions have been raised about their economic feasibility and long-term success, especially given China’s track record with similar endeavors in the region.
The Twin Ocean Railway’s aims are very similar to those of the InterOceanicatranscontinental highway, which also incorporated Brazil. The project began in 2006, however it was never fully completed, and the parts that were finished are not entirely structurally sound. Today, it remains a collection of unfinished, damaged, or impassable sections of highway, with no further construction or completion date in sight. Another Chinese company signed a contract with Brazil in 2011 to build a soy processing plant valued at $2 billion; however the proposed project site remains an empty field. Plans for a different railroad to be built by a Chinese company in Colombia in 2011 never materialized, along with another train project that failed in Venezuela. Given China’s history with these other infrastructure projects, it is entirely possible that the Nicaraguan Canal and the Twin Ocean Railway could end up in a similar situation – never completed or, at best, only partially built and then abandoned.
In addition to the projects that were never finished, other contracts have been pulled due to allegations of corruption between host governments and China. A rail project worth $3.7 billion slated for Mexico in 2014 was terminated after a public outcry due to evidence that the deal benefitted allies of Mexican President Enrique Peña Nieto. Additionally, a recent scandal in Bolivia revealed that the government awarded almost $500 million in no-bid contracts to a single Chinese company, raising concerns about unlawful special privileges. China’s record of not completing projects or engaging in shady contracts could sour relations with the region and foment public skepticism about foreign infrastructure investment, deterring future opportunities for China to grow its economic influence and for Latin America to develop valuable infrastructure and trade links.
Investment in large infrastructure projects in Latin America could be monumental for China’s economic influence and ever-expanding soft power, while at the same time offering sizeable benefits to many Latin American economies. However, Chinese firms must overcome their previous shortcomings and actually make progress on constructing these projects in a socially and environmentally responsible manner. Transcontinental trade and transportation links are largely missing from the region, and these proposed projects would provide much needed connections not only among neighbors, but also to Asia and the rest of the world.