How the United States Continues to Manipulate Nicaragua's Economic and Polical Future

Council On Hemispheric Affairs

Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere

Thursday, June 22, 2006

COHA REPORT ON NICARAGUA:

Last April, the Nicaragua Network, a Washington-based solidarity group, “condemned” the intervention of U.S. Ambassador Paul Trivelli in Nicaragua’s election process. Arnold Matlin, of Nicanet’s board of directors, asserted that “what the U.S. government is doing in Nicaragua would be illegal if a foreign government tried to do it in the U.S.” The April 1961 Vienna Convention on Diplomatic Relations supports Matlin’s assertion, providing that representatives or diplomats “have a duty not to interfere in the internal affairs of that state” to which they may be assigned. But regardless of international law, the U.S. has rarely felt constrained over intervening in the internal affairs of many countries, and for 150 years Nicaragua has borne the brunt of more interventions than almost any other country in this hemisphere. However, it is far from being alone.

Nicaragua, a Colony by any other Name
In the middle of the 19th Century, the California Gold Rush attracted early U.S. interest in developing a trans-oceanic route through Nicaragua. Shortly after this, political unrest in Nicaragua attracted U.S. interest in the internal politics of the country. The result was that the U.S. came to employ two kinds of intervention in Nicaragua, which established a modus operandi for many years to come: first, a direct U.S. invasion led by the soldier of fortune William Walker to take control of the country; second, a political intervention to assist ambitious Nicaraguan leaders who offered Walker money and land grants to help them take control of the government. Since then, the U.S. has acted much as any other colonial power operating at that time: stopping short of seizing and declaring Nicaragua a colony, but still largely controlling its destiny. In Nicaragua, there have been repeated interventions of various descriptions, and virtually all of them for the professed purpose of helping the Nicaraguan people, while at the same time always promoting self-perceived U.S. security interests in the region.

The most extensive and explosive U.S.-backed intervention in Nicaragua was the effort to remove the Sandinista National Liberation Front (FSLN) government that ruled the country throughout the 1980s. Claiming that Nicaragua was a Moscow puppet and charging that it was systematically supplying arms to the rebels in El Salvador, the U.S. authorized assistance for anybody who opposed the Sandinistas. Members of the country’s Somoza-era National Guard, who had fled the country after the dictatorship had been defeated, becoming the core cadres of the opposition which came to be known as the contras (from the Spanish term contrarevolucionarios). As the U.S. had done in earlier interventions, the Reagan administration enthusiastically assisted the contras, who habitually conducted terrorist raids from occupied sites in Honduras to frighten the civilian population into fleeing or joining up with them. Some 30,000 civilians were killed as a result of these raids.

A Low Intensity Conflict
Called at the time a “low intensity” conflict because U.S. soldiers weren’t formally involved or being killed, the contras, with U.S. backing, and the Nicaraguan authorities fought each other for a decade. In proportion to Nicaragua’s total population, the casualties which then ensued were almost equal to all the U.S. casualties combined in all the wars which the U.S. fought since its independence. The Nicaraguan economy was also devastated, and the government was unable to fund or provide adequate personnel for its social programs. After the war, massive U.S. financial support and encouragement of the UNO (United Nicaraguan Opposition) and its candidate, Violetta Chamorro, were enough to defeat the Sandinistas in the 1990 elections. Although the FSLN remained a legitimate political party after the war, it was unable to elect a president or obtain a National Assembly majority in either of the elections since 1990. Ironically, the U.S. played a tenacious interventionist role in those elections, determined never again to see a Sandinista jefe wearing the presidential sash, by fair means or foul.

The U.S. continues to rely upon almost all the methods previously employs in Nicaragua – except for direct military invasion – to influence, if not dominate, the country’s economics and politics. But its methods have been modified by modern international developments and control techniques. One is the manipulation of the local economy that has been part of a world-wide effort to impose the so-called “Washington Consensus,” that has been forced on developing countries, via procedures of the U.S. government, the World Bank, the International Monetary Fund, and the World Trade Organization. Developed by the renowned British economist John Williamson of the Institute for International Economics in 1990, its basic tenets are found in reforms calling for economic deregulation, privatization, encouragement of foreign investment, unrestricted movement of capital, liberalization of trade policies, reduction in public expenditures, etc. Also called “neo-liberalism,” these “reforms” have been aggressively pushed as primary U.S. foreign policy goals. The strategy has been to pressure developing countries that are dependent on aid from the international lending agencies and the U.S. to implement Structural Adjustment Programs (SAPs) that spell out the details of the required changes that a specific country must make in order to be considered credit worthy.

According to The National Security Strategy of the United States of America, March 2006, “History has judged the market economy as the single most effective economic system and the greatest antidote to poverty.” Therefore, “the United States promotes free and fair trade, open markets, a stable financial system, the integration of the global economy, and secure, clean energy development.” In other words, Washington has in effect invaded the economies of many developing countries, including Nicaragua, using in some instances a check book, in others a sword.

Intervention Takes Many Forms
The other form of intervention that has been modified by modern international developments, is the influence on the selection and election of governments in countries that have more or less democratically-rooted political institutions, or at least seem to. Nicaragua is an outstanding example of this kind of intervention, particularly since the Sandinista regime came to an end in 1990 as a direct result of a massive introduction of U.S. funds aimed at buying the elections. Washington’s intervention in Nicaragua has been quite blatant and has included economic assistance for selected candidates and/or political parties, assisting in writing constitutions and drafting legislation, arranging for the publication of articles about local politicians and candidates in U.S.-subsidized Nicaraguan media, pressuring local leaders and groups to mold their policies to reflect U.S. interests and threatening anti-U.S. political leaders, including pushing them from power.

The question, of course, is why the U.S. is now trying so hard to influence the November 2006 elections in Nicaragua, a poor country with only slightly more than five million people, and few, if any, strategic assets. Most importantly is the fact that during the past few years, U.S. intervention in Latin America has been crafted as part of a strategy of countering what is called “radical populism.” By this, the foreign policy makers in Washington are referring to the “demagogic and anti-democratic” activities of leaders like Fidel Castro of Cuba and Hugo Chavez of Venezuela. The National Security Strategy of the United States of America, 2006, lists among the “remaining regional challenges,” Venezuela, where “a demagogue awash in oil money is undermining democracy and seeking to destabilize the region,” and Cuba, where “an anti-American dictator continues to oppress his people and seeks to subvert freedom in the region.” For Washington, Nicaragua stands out as an obvious target for such destabilization and subversion because the Sandinistas now pose a serious challenge to the U.S.-backed government.

“Radical Populism”
The concept of radical populism has been attributed to former Commander-in-Chief of the Southern Command, General James Hill, who testified to the House Armed Services Committee in March 2004, that the U.S. is now facing two types of threats in the region: “traditional” and “emerging.” Traditional threats are from “narcoterrorists and their ilk,” and poses threat to “law and order…from urban gangs and other illegal armed groups.” But the emerging, and more dangerous, threat is “radical populism in which the democratic process is undermined to decrease rather than protect individual rights.” The radical populists are “tapping into deep-seated frustrations of the failure of democratic reforms to deliver expected goods and services. By tapping into these frustrations, which run concurrently with those caused by social and economic inequality, the leaders are able to reinforce radical positions by inflaming anti-U.S. sentiment.”

Radical populism is also presented as a U.S. national security threat that must be countered by higher levels of military and police aid and, as well as, increased U.S. military presence in the region. General Bantz Craddock, who succeeded General Hill, carried the new concept further by coupling it with the War on Terror that he said should be this country’s highest priority. He also accused President Hugo Chavez of trying to influence the outcomes of elections in Nicaragua and Peru, and of exporting radical populism all over the hemisphere. “There is a destabilizing effect throughout the region. I believe that the worrying aspect is what is being exported…is radical populism to immature and unstable democracies.”

More startling in its import, is a recent article by the noted Central American specialist, Prof. William LeoGrande, of American University. Leogrande asserts that the U.S. Army War College Strategic Studies Institute published a monograph on radical populism, claiming that the populists are anti-democratic, anti-American, and a threat to U.S. security and that Washington should work to “preempt” their coming to power and be prepared to deal militarily with any “burst of populist turbulence.” Thus, radical populism has replaced the Communist threat as the perceived new enemy of stability and democracy, or at least the democratic formula that Washington regards as best for this Hemisphere.

Defining Private Enterprise
Threats to the economic and free trade aspects of U.S. policy toward Nicaragua are a second important element of concern. This was indicated in a February talk, in which Mark Culliname, Economic Officer at the U.S. embassy in Managua, stressed private investment and economic development as factors to help achieve political stability and progress. “You can equate economic development and political stability. If you have one, the other follows pretty quickly.” As part of economic reform, the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), that was approved by the Nicaraguan National Assembly over the strong opposition of the Sandinistas, will provide new market access, while international cooperation and aid is being spent to improve schools and infrastructure. The implication here is that economic aid will be forthcoming only if the government continues on the path toward free-trade democracy.

Upcoming Elections
Currently, Nicaragua’s electoral picture features four leading candidates for the presidency in November. The FSLN’s choice is its perennial candidate Daniel Ortega, who was president from 1986 until 1990. Populist Ortega is evidently obsessed with winning the presidency, probably in large part because he decisively lost in his last three attempts to do so. Herty Lewites, former mayor of Managua, a Jewish businessman and veteran Sandinista, was originally a serious contender for the FSLN nomination. He was denied the opportunity to challenge Ortega, who, as the real boss of the FSLN, induced the party to bypass its usual primary election and expel Lewites. Afterwards, Lewites joined a protest party, the Sandinista Reform Movement (MRS), and now has become one of the leading Nicaraguan contenders for the presidency.

The Liberal Constitutional Party (PLC), led by former President Arnoldo Alemán – who was convicted of stealing almost $100 million in public funds – has a relatively unknown and weak candidate, former Vice President José Rizo, as its presidential standard bearer. After his nomination, Rizo commented “I am the one who will send [Ortega] to his fourth and final defeat.” The fourth candidate is Eduardo Montealegre, now of the National Liberal Alliance-Conservative Party (ALN-PC), who was denied the PLC’s nomination by Aleman. Montealegre, an investment banker, was the Minister of the Presidency and Minister of Foreign Relations during Aleman’s Presidency. He was educated in the United States, is strongly pro-U.S., and has endorsed the U.S. free trade position. Although the U.S. State Department probably prefers Montealegre among the four candidates, it will probably ultimately lend its support to Rizo because he is the candidate of a leading legitimate political party, with perhaps a better chance of winning. There are indications that the U.S. will help finance a coalition to back Rizo’s campaign.

Just how is the U.S. intervening in the electoral affairs of Nicaragua at this time? Current Ambassador, Paul Trivelli, has reached new heights for institutional arrogance and assertiveness. For example, in April he sent letters to Nicaraguan conservative party leaders as well as presidential candidates offering them financial and technical assistance worth some $16 million and proposing that a primary election be held to unify all right-wing parties behind one presidential candidate. The PLC leaders chose not to meet with Trivelli, but they remained unanimously behind Rizo. Montealegre’s ALN-PC leaders met with the Ambassador as well, but they insisted that no alliance with the PLC would be possible as long as Aleman runs the party. Accused of intervening in Nicaragua’s political affairs, Trivelli insisted that his efforts were just “part of my job.” Nicaragua’s El Nuevo Diario (as quoted by the Nicaragua Network) lashed back that “the U.S. intervention was so blatant that even some right-wing sectors felt awkward and had to reject the offer.”

Trivelli was recently interviewed by a highly regarded Nicaraguan journalist, Carlos Chamorro, who pointed out that no foreign diplomat had acted with such “belligerence” in Nicaragua’s politics since the U.S. occupation of the 1930’s. Trivelli’s answer was “I am not going to stop defending democracy – that is part of our policy and it will continue to be part of our policy.” When asked what the U.S. would do if Daniel Ortega should win a clean democratic election, Trivelli answered that the U.S. cooperates with all democratically elected governments with “sensible” economic policies and a willingness to cooperate with the U.S. on security matters. However, he also commented in March that “Ortega is a tiger who has not changed his stripes,” who therefore must be defeated.

More U.S. “Democratization” on the Way
That there are implied threats coupled with U.S. offers to help with the elections, is shown in a statement by former Assistant Secretary of State for Western Hemisphere Affairs, Roger Noriega, last July: “The Nicaraguan people probably value their relationship with the United States, but also value their own wellbeing and I believe that they recognize that with a Sandinista president, the country would sink like a stone and reach depths such as that of Cuba; and that the economy would probably be affected.”

Another sly threat against the status quo was seen in a statement by U.S. Director of Intelligence John Negroponte (former Ambassador to Honduras in the 1980’s who actively promoted the Honduras-based contras), who in March said “U.S. intelligence services are closely observing the presidential election processes in…Nicaragua.” There is thus a very real fear that the U.S. has sent intelligence agents to Nicaragua to observe their electoral process, as it did in the Atlanti c coast area of the country last year. The reaction of former foreign minister Francisco Aguirre was sharp: “We want them to respect us as a country and not to intervene.”

There is no doubt that the election campaign, which officially will begin in the high summer, will become much more heated, and that the U.S. will do and say far more to influence its outcome. The U.S. put a great deal of effort into influencing all of Nicaragua’s previous elections: no stone was left unturned as Washington continues to treat Nicaragua as its satrapy – and favorite Banana republic. Washington has played a similar role in elections in other countries over the years, where it was feared that voters might possibly choose anti-U.S. candidates who, as presidents, might threaten the goals of the “community” of nations united behind the “Washington Consensus.”

There has also been a marked negative reaction on the part of the Nicaraguan population to the U.S. intervention, which has been apparent in almost every opinion poll. Daniel Ortega currently has emerged as a leading contender. This may not mean very much because older Nicaraguans will remember the devastation that was poured on their country by the U.S. in the 1980’s and may now have to think twice before casting their ballots for more of the same. Most Nicaraguans understand very well what the dark side of U.S. attention to their country can be, and it’s a burden many of them are not prepared to bear.