Date: 01/05/2018

Key sectors: all

Key risks: violent unrest; policy instability; lootings

Recent nationwide anti-government demonstrations ended Nicaragua’s status as a regional haven of relative calm and stability. Since the end of the 1980s civil war, power has been heavily concentrated within the executive branch, dominated by President Daniel Ortega, a former guerrilla leader who became president in 1985 for a first five-year term and returned to power in 2007, and his leftist Sandinista National Liberation Front (FSLN). Ortega has since deepened an autocratic drive: he is now able to run for an unlimited amount of terms, has increased the FSLN’s control over almost all state institutions and banned the main opposition from the last electoral process, a move that helped him secure a controversial second re-election in 2016 with his wife, Rosario Murillo, securing the vice-presidency. Pragmatism and a consolidated sense of stability enabled Ortega to secure above-regional-average economic growth rates, aided by key regional ally Venezuela, currently facing its own unprecedented crisis. The decision to meet protests against a social security reform with an extremely heavy-handed security-force response, in which at least 42 people were killed, catalysed broader grievances. These will now have to be heard unless Nicaragua is to plunge into further turmoil.

On 16 April Ortega ordered a social security reform increasing contributions and lowering pensions. The decision was taken unilaterally as no accord was reached with the private sector after four consecutive meetings. On 18 April Nicaraguans took to the streets to protest the move. A day later, at least two people were killed as clashes between anti- and pro-government activists erupted across the country, particularly in the capital Managua. Media outlets were banned from broadcasting the demonstrations, journalists were specifically targeted, the security forces fired live ammunition and Ortega decided to deploy the army to the country’s main urban centres on 21 April. Lootings and arson attacks followed, with multiple commercial assets targeted and damaged, adding to the overall chaos. On 22 April Ortega cancelled the controversial reform as national and international pressure to stop the bloodshed mounted. He subsequently offered to launch a dialogue between the government and private sector actors, which the Catholic Church agreed to mediate on 24 April.

Ortega’s backpedalling was not enough to quell the unrest, although the levels of violence did recede. Anti-government demonstrations demanding justice for the at least 42 killed and urging Ortega to step down took place on 23, 24 and 28 April. The decision to launch a dialogue signals a readiness for pragmatism in approaching the crisis. At present, Ortega is likely to ultimately survive the latest unrest which will force him to change tact and could ultimately lead him to broaden the dialogue to other issues including those pertaining to the consistent erosion of Nicaragua’s democracy. While Ortega is only reluctantly engaging, it appears to recognise that returning to the previous status-quo would be extremely difficult. The effectiveness of the latest wave of unrest, which forced the government to reconsider policy measures and gave a loud and clear voice to those opposing Ortega’s rule indicates that further similar protest action could re-erupt throughout his term, which ends in 2021. Ortega’s fate will likely be defined by his capacity to adapt to the new environment, brought about by his own disproportionate use of force.