Storm Season – Heavy rains from Hurricane Stan have affected much of Central America over the past week, driving 16,700 Salvadorans from their homes and killing dozens of people in Nicaragua, Guatemala, and Honduras. The rain threatens to ruin the postrera (second planting) for this year, as in many places crops are rotting in the fields.
Escalating fuel prices have contributed to higher prices for everything from food to housing, and rising tempers. Several strikes rocked the capital in September related to the fuel prices. Bus drivers that form the transportation cooperative in Managua and Ciudad Sandino went on strike to protest the government’s refusal to release promised subsidies. Then toward the end of the month, truck drivers blocked highways throughout the country to protest rising fuel prices.
Union Fenosa, the Spanish multinational that controls the electrical distribution network for most of Nicaragua went on strike as well, after the Supreme Court declared that rate hikes were not justified. The company wreaked havoc throughout the country with unscheduled rolling blackouts that left hospitals without power, and communities without water. The tantrum was finally quelled when the government promised company executives a subsidy to the tune of $12 million in lieu of a rate hike.
The chess match between the FSLN leadership, Alemanistas in the liberal party and president Bolaños continues. The latest stage has seen Aleman released from prison, members of Bolaños government stripped of immunity by the National Assembly, members of Aleman’s family and many Sandinista officials stripped of U.S. visas, and a visit from the U.S. State Department’s #2, Robert Zoellick.

Big Brother – For the past 15 years, U.S. policy in Nicaragua has been driven by 2 related goals: 1) mandating market reform and privatization of state enterprises, and 2) ensuring that the Sandinistas never win another election. The current crisis threatens to challenge the Bush administration on both fronts. Nicaragua has yet to ratify the Central America Free Trade Agreement (CAFTA), and may not get to it this year if the political situation remains as is. The current political crisis has also seriously divided the right wing in Nicaragua, for the time being. As long as Ortega remains one of the most unpopular political figures in Nicaragua, surpassed perhaps only by Aleman, a divided right is Ortega’s only path to the presidency.
The Bush administration has made clear that this is unacceptable, and like every U.S. administration since the 1980s, is working over time to get the right unified behind a single candidate for next year’s election. The U.S. choice seems to be Eduardo Monteleagre, former banker, finance minister, and Nicaragua representative to the IMF. Unfortunately, while popular with U.S. policy makers, Monty has no base in Nicaragua outside the banking community.

Carrots and Sticks – The United States does not negotiate, period. Rather, it has offered a “carrot,” e.g. fulfillment of a debt cancellation package proposed by the Group of Seven, if Nicaragua’s Assembly plays nice with Bolaños and passes CAFTA. BUT the carrot was offered with the shadow of a big stick swaying in the background: Complete suspension of all aid if Nicaragua’s National Assembly does not back off from challenges to Bolaños’ authority. This was coupled with a multitude of veiled threats about the dire consequences of allowing the Sandinistas to regain power next year.

Don Quixote de Jinotepe – Meanwhile, if one can believe the polls, the most popular politician in Nicaragua, Herty Lewites, remains without a strong electoral vehicle for his candidacy. Having been suspended from the FSLN for challenging the monopolia de Danielista, Herty has partnered with Sandinista Renovation Movement for his run for the presidency. The Renovation Movement has yet to be a serious contender in any national election since 1996.