Ortega’s Synthesis

On 7 November, Nicaraguans went to the polls for the first time since the dramatic spring of 2018, when the country experienced a sustained insurrectionary challenge to president Daniel Ortega’s Sandinista administration. Ortega stood for a fourth consecutive term with no viable opposition: the only other candidates were from marginal government-aligned parties. The dearth of challengers was a result of the Sandinistas’ unrelenting campaign of repression, which intensified in recent months to include the jailing of nearly every announced or anticipated anti-Sandinista presidential candidate, as well as a slew of other political and civil society leaders. Voters sympathetic to the opposition abstained from the election, rallying around slogans like Mi candidato está preso (‘my candidate is in jail’). Predictably, Ortega’s ticket, which also includes his wife and incumbent vice president Rosario Murillo, won a clear majority of votes: about 75%, according to the Supreme Electoral Council.

The 1979 Nicaraguan revolution, which issued in the first Ortega-led government, still occupies a totemic position for many socialists around the world. Arriving in the twilight of the Cold War, the Sandinista triumph promised to revitalize the global left, still reeling from the disappointments of decolonization and the failure of the Soviet experiment. But as international interest in the country receded following the Sandinistas’ surprise electoral defeat in 1990, the chasm between Ortega’s heroic image and political realities in Nicaragua grew ever wider.

Now, with pro- and anti-Ortega factions presenting sharply divergent interpretations not only of the 2018 civic rebellion, but also of the political character of his administration, reasoned debate on Nicaragua has become increasingly elusive. Unless the contradictions of the Sandinistas’ programme can be resolved, another period of unrest is likely to erupt during Ortega’s next five-year term. In this context, it is vital for internationalists to clear the fog of the Cold War and look with fresh eyes on the political-economic coordinates of 21st-century sandinismo.

The neoliberal period (1990-2006) left 70% of Nicaraguan workers unabsorbed by the formal labour market, prompting waves of popular protest in which Ortega, as leader of the opposition, played a prominent role. At the same time, by the mid-2000s a new class fragment had taken shape. An ascendant business sector – including a number of millionaire investors with revolutionary pedigrees, like Ortega himself – now chafed against the thin layer of hyper-wealthy families that had controlled the country’s export economy since the dictatorship era (1936-1979).

Ortega’s return to office in 2007 was, in large part, the fruit of an opportunistic power-sharing agreement struck by the Sandinista National Liberation Front (FSLN) and its historic rival, the Liberal Constitutionalist Party (PLC). But it was also a rejection the Washington Consensus which coincided with the Pink Tide then cresting in Latin America. In Venezuela, Bolivia and Ecuador, left-led governments were preceded by disruptive social movements that provoked crises in the national political system. Unlike Chávez, Morales and Correa, however, Ortega never promised to deliver transformative change by using the state to meet the demands of grassroots activists. Rather, Ortega pitched himself to both political elites and the wider public as the only figure capable of stabilizing the country’s political system by containing disruptive social conflicts within the state itself. (In this way, he bears a striking similarity to Lula in Brazil – another outsider among the Pink Tide cohort.) 

From the outset, the Ortega synthesis was an unstable class compromise in which the interests of private employers and un- and informally employed workers were sutured precariously together. This contradiction crystallized in the president’s vision of 21st-century Sandinista developmentalism. With one hand, the state extends generous social welfare programmes to unemployed and informal workers, whom it identifies as the protagonists of national development; with the other, it guarantees the acquiescence, and continued investment, of private employers by enhancing the conditions of exploitation in the wage-labour sector, for instance by restricting formally employed workers’ ability to organize.

The day after his inauguration in 2007, Ortega announced Nicaragua’s enrollment in the Bolivarian Alliance for Our Americas (ALBA), an incipient economic bloc, led by Venezuela, which sought to resist US hegemony through regional economic cooperation. This new relationship pleased Nicaraguan producers by opening up the Venezuelan consumer market to their exports. For a time it also provided the Nicaraguan state with a reliable source of foreign aid; in 2014, Venezuelan assistance provided Nicaragua with almost a fifth of its annual budgeted income. The Ortega administration used that revenue to fund a range of means-tested welfare programmes, typically targeted at the jobless or informally employed, which provided direct grants of cash, construction materials and agricultural inputs to tens of thousands of poor households.

When Ortega first governed during the 1980s, the Sandinista revolution faced vehement opposition from Nicaraguan elites. When he returned to power in 2007, however, Ortega brought business associations – notably the Superior Council of Private Enterprise (COSEP) – into government in official advisory roles, while also satisfying domestic investors’ demands for tax reductions. Exploiting the FSLN’s historically strong influence in the labour movement, the Ortega administration established tripartite agreements between the state, employers’ associations and Sandinista-aligned labour federations, minimizing conflict in nearly every industrial sector. The arrangement particularly benefited employers in the free trade sector, which during the 1990s and 2000s had been roiled by strikes and walkouts. New maquila factories proliferated during Ortega’s first term, and by 2012 the free trade sector employed one in six formal sector workers in Nicaragua.

The short-term economic effects of the Ortega synthesis raised eyebrows the world over. GDP expanded by 74% between 2006 and 2014, bringing Nicaragua into line with regional growth rates. Foreign direct investment, much of it aimed at free trade zones, grew at an annual rate of 22% during the same period. But the most impressive figures measured the country’s reduction in poverty. In 2005, the year before Ortega’s election, 48.2% of Nicaraguans subsisted on less than two US dollars per day; by 2017, that number had fallen to 20.1%.

Yet these achievements were never a pathway to socialism, nor even to sustainable developmentalism. Contemporary sandinismo triaged neoliberalism’s unruliest effects by maintaining, through targeted welfare grants, the livelihoods of workers excluded from the formal labour market; this, in turn, produced a steep drop in national poverty rates without disciplining the hyper-exploitative business class. Under this settlement, working-class organizations were co-opted by the state, and the Nicaraguan proletariat remained fragmented – partially enrolled in a constricted formal labour market; partially sustained by welfare programs that could only mitigate, but never transform, the conditions that suppressed wages in the formal sector. In the absence of external support – Venezuelan aid dropped dramatically in the years prior to 2018 – Ortega’s precarious compromise came apart.  

The immediate cause of the protests in 2018 was a proposed social security reform that would have increased personal and employer contributions while imposing a 5% reduction in benefits. Denouncing perceived corruption in the social security administration, university students in several cities organized demonstrations beginning in mid-April. Though they were violently disbanded by the national police and groups of Sandinista supporters, the unrest quickly spread, as urban youth and farmers joined the student uprisings. In May and June, protestors erected tranques – fortified roadblocks characteristic of militant protests in Central America – in neighborhoods and on highways throughout the country, paralyzing travel, limiting commerce, and sparking conflict with the national police.

In addition to organizing through student associations and formal opposition coalitions, militants established local groups (comités) and maintained informal communication through regional and national online networks. They referred to themselves as ‘los autoconvocados’, or ‘the self-organized’. As they mobilized, sections of the country became ungovernable, and stayed that way for months. Opinion polling conducted in the midst of the protests indicated that a majority of Nicaraguans in the most precarious employment situations supported Ortega’s immediate removal from office. Downward mobility, very often associated with ejection from formal employment in Nicaragua, was a significant predictor of dissatisfaction with Ortega. By contrast, those who felt their economic situation had improved or was unchanged since the previous year tended to back the president.

At first, the national business community, represented by COSEP and other chambers of commerce, maintained its support for the administration. Representatives from the free trade sector (including US- and Taiwan-based investors) even appeared onstage with the president when he announced the hasty withdrawal of his social security reform on 29 April. But COSEP soon responded to popular pressure by formally separating itself from the government. After over a decade as a stalwart Ortega ally, Nicaragua’s most powerful business association assumed a clear role in civil society-based opposition coalitions, where it was joined by other private sector groups. Together with associations of farmers and merchant vendors, business organizations staged periodic national work stoppages throughout 2018 that further weakened Ortega’s legitimacy.

The cross-class character of sandinismo was reflected in its opposition. A single narrow objective – Ortega’s removal from office – held together a broad but contradictory coalition, joining intersecting but uneven social sectors whose interests were mostly counterpoised. The demonstrators consistently rejected ideological labels, failing to formulate either a long-term vision or a concrete set of demands. This made the opposition movement especially vulnerable to state repression. For over a decade now, the Ortega government has unleashed the police on striking workers and underwritten settler violence in Nicaragua’s indigenous regions. But the behaviour of the national police force in 2018 was shocking even by those standards.

Groups of armed Sandinistas collaborated with national police to confront and detain protestors, especially during the ‘Clean Up Operation’ that razed tranques in June and July 2018. In a country only a generation removed from civil war, the emergence of these paramilitares had a chilling effect on protests, as did legislation ratified by the FSLN-controlled legislature that effectively criminalized public assembly. On Mother’s Day, hundreds of thousands marched to mourn the university students slain by state forces. Police responded by firing bullets into the crowd.

The rebellion sharply polarized opinion on the international left. Capitalizing on the mutually supportive dynamic between Nicaraguan state media and anti-imperialist observers abroad, the Ortega administration framed the protests as a CIA-orchestrated coup attempt – a narrative broadcast by sections of the Anglophone left with large online followings. Commentators sympathetic to Ortega continue to defend his government as a bulwark of ‘21st century socialism’ amid an ongoing crisis of the Latin American progressive politics. They correctly point out that a resurgent regional right, abetted at every step by international bodies such as the Organization of American States, is invested in the outcome of Nicaragua’s political crisis. The US, moreover, has imposed ‘targeted’ sanctions against Sandinista figures and passed the RENACER Act, a bundle of recommended sanctions which could result in Nicaragua’s expulsion from CAFTA. Ortega’s supporters are right that such mechanisms are intended to usher in a new regime that will neither be progressive nor democratic. But clear-headedness demands we acknowledge the barriers to socialist renewal that Ortega himself has erected. If the country soon takes a rightward turn, its roots will lie in the Sandinistas’ untenable programme, which ties the fortunes of workers to the profits of their exploiters. With the government’s reputation further damaged by the 7 November elections – which a significant portion of the public regards as illegitimate – it is now unclear how long these contradictions can be contained. Ortega has been re-elected, but he may not be president for long.

Read on: Dennis Rodgers, ‘A Symptom Called Managua’, NLR 49.