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In 2006, the alliance between the two dominant political parties in Nicaragua—the left-leaning Sandinista National Liberation Front (FSLN) and the right-leaning Liberal Constitutional Party (PLC)—continued throughout the presidential election campaign, which featured an attempt to discredit their chief rival, Eduardo Montealegre of the Nicaraguan Liberal Alliance. FSLN candidate Daniel Ortega won the balloting in November, returning to the presidency for the first time in 16 years. Also in 2006, the country confronted an energy crisis and a slowdown in economic growth.
The independent Republic of Nicaragua was established in 1838, 17 years after the end of Spanish rule. Its subsequent history has been marked by internal strife and dictatorship. The Sandinista National Liberation Front (FSLN), a leftist rebel group, overthrew the authoritarian regime of the Somoza family in 1979. The FSLN then moved to establish a Marxist government, leading to a civil war. The United States intervened indirectly, supporting irregular forces known as the contras , which established bases in neighboring Honduras and Costa Rica. The FSLN wrote a new constitution in 1987.
In 1990, National Opposition Union presidential candidate Violeta Chamorro defeated the FSLN’s Daniel Ortega in free and open elections. Before leaving power, the Sandinistas revised laws and sold off state property to party leaders, guaranteeing that they would have political and economic clout in the evolving political climate. Chamorro oversaw a transition of power, with the Sandinista military finally coming under civilian rule in 1995, and the amendment of the 1987 constitution to provide for a more even distribution of power among the three branches of government.
In the 1996 elections, former Managua mayor Arnoldo Aleman of the Liberal Constitutional Party (PLC) captured the presidency, soundly defeating Ortega. Throughout his presidency, Aleman was accused of corruption, although he never faced formal legal proceedings while in office. In 1999, the PLC government agreed to a governing pact with the FSLN opposition, led by Ortega. The pact was translated into a package of constitutional and legal reforms and guaranteed Aleman a seat in both the Nicaraguan and the Central American parliaments, thus assuring him immunity from prosecution. Moreover, the reforms included more than nine changes to the constitution, including a reform to the electoral law, which established constraints on the formation of political parties. Two of the most damaging reforms were the lowering of the percentage of votes required to win an election in a first round from 45 to 40 percent (or to 35 percent if the leading party has a 5 percent lead over the other parties), and the new requirement that aspiring political parties garner 3 percent of loyal endorsement from registered voters in order to register for an election.
In the November 2001 elections, PLC candidate Enrique Bolaños, a conservative businessman respected for his personal integrity, defeated Ortega. Although Bolaños was elected president under the PLC banner, he vowed to prosecute corrupt members of the Aleman administration, including the former president himself, who was accused of giving his family, friends, and political supporters as much as $100 million siphoned from state coffers. Bolaños’s vow to fight corruption caused a break with the PLC, and the president went on to form his own party, the Alliance for the Republic (APRE). The effort to convict Aleman of fraud and embezzlement was protracted but eventually successful, and in 2003, he received a 20-year prison sentence for money laundering. However, since his conviction, Aleman has used his political alliance with Ortega to petition the FSLN-controlled courts to allow him to enjoy fewer penalties of his sentence, and his case is currently being reviewed by the Supreme Court.
Aleman and Ortega strengthened their political cooperation to thwart Bolaños’s political initiatives. Since his election in 2001, the PLC- and FSLN-controlled National Assembly has blocked virtually all proposed legislation, and the FSLN-controlled courts have upheld the actions of the National Assembly. In 2005, the National Assembly passed legislation to strip Bolaños of several presidential powers and replace his political appointees, including directors of autonomous institutions such as state utilities. Bolaños attempted to block the replacement of his officials and appealed the case to the Central American Court of Justice, which ruled in his favor and ordered the National Assembly to repeal the legislation. After a long standoff, the two sides agreed to postpone implementation of the reforms until after Bolaños left office.
Political activity in 2006 focused on the November presidential election. Ortega, again the FSLN candidate, and Eduardo Montealegre of the Nicaraguan Liberal Alliance (ALN)—a prominent businessman and former finance minister under Bolaños—led in the polls ahead of the voting. PLC candidate and former Bolaños vice president Jose Rizo Castellon and Edmundo Jarquin of the Sandinista Renewal Movement (MRS), who had been appointed after initial MRS candidate Herty Lewites’s death in July, held steady behind the two front-runners.
During the campaign in late July, PLC officials had alleged that Montealegre was directly involved in Nicaragua’s internal debt scandal, known as the CENIS scandal, and demanded that he be prosecuted. Montealegre denied the claims, which held that the renegotiation of interest rates of CENIS bonds while he was finance minister had added $1.7 million to his personal fortune. The National Assembly’s Transparency Committee and the comptroller-general’s office opened an investigation into the allegations, and the FSLN and PLC used the issue to damage Montealegre’s presidential campaign.
Nicaragua’s energy crisis represented another critical issue in 2006. Power cuts were routine in the capital and across the country, prompting protests against Union Fenosa, the Spanish utility company responsible for the distribution of electricity. In response to the crisis, the comptroller-general’s office proposed a nullification of Union Fenosa’s contract, and the Bolaños administration proposed an Energy Emergency Law that would reform electricity rates; however, the measure failed in the National Assembly. The FSLN proposed that the best solution was to accept Venezuela’s offer to provide oil to Nicaragua on preferential terms. Party officials maintained that if Ortega were elected president, such a deal would be brokered and ties between Ortega and leftist Venezuelan President Hugo Chavez would be strengthened. The FSLN’s discussion of a future relationship between Ortega and Chavez elicited concern from the United States, whose ambassador stated that a leftist leader in Central America would undermine U.S. interests.
On election day, November 5, Ortega won the presidency in the first round of voting, with 38 percent of the popular vote. He had needed at least 35 percent and a five-point lead on his closest opponent to avoid a runoff. Although the win raised some concerns about the return of the Sandinista leader, Ortega stated after his victory that he would not introduce radical changes to economic policy and would support national reconciliation. He also called on business and political leaders to work together to maintain economic stability. Although Ortega had previously agreed to approve the constitutional reforms that had been postponed in December 2005 and forced against Bolaños, making them effective on January 20, 2007, he stepped back and argued that these reforms needed further scrutiny
The presidential and legislative elections were regarded as free and fair. The FSLN obtained 38 percent of the vote; the PLC obtained 27 percent; the ALN 28 percent; and the MRS 6 percent. The FSLN obtained 37 out of 91 seats in the National Assembly, while the ALN secured 30; the PLC 18; and the MRS 6. Regional elections held in the Atlantic Coast region on March 5, highlighted concerns about Nicaragua’s Supreme Electoral Council (CSE). The Atlantic Coast, which is populated primarily by indigenous and Afro-Caribbean communities, is the poorest region in the country and is often neglected by the central government. Since the passage of the Autonomy Law in 1987, the Atlantic Coast populations have elected regional authorities who are meant to respond directly to local needs. Although the elections were declared free and fair, the winning candidates were members of the allied PLC and FSLN, which raised doubts about whether they would represent local concerns. Since the PLC and FSLN controlled the CSE, the elections also called into question the partisan nature of the country’s electoral institution. CSE voting rules limited voter participation and many voters abstained, further undermining confidence in the results and in the CSE’s ability to function independently. The election results showed a total of 100,000 votes, of which the PLC obtained 41 percent, and the FSLN (27 percent) and Yatama (16 percent) ran in an alliance.
The Nicaraguan economy slowed again in 2006 after its initial slump in 2005. The growth in gross domestic product dropped to 2.5 percent, from 4 percent the previous year, and remittance transfers lagged compared with the 2005 amount. Unemployment fell from 7 percent to 5.6 percent in 2005, although many of the recently employed were thought to have entered the informal sector. Since 2003 and the International Monetary Fund’s classification of Nicaragua as a heavily indebted poor country (HIPC), the country has benefited from debt forgiveness and assistance to pay its external debt.
The Dominican Republic–Central American Free Trade Agreement (DR-CAFTA) with the United States came into effect in 2006. As the United States is Nicaragua’s primary trading partner, proponents of the trade agreement predicted that it would spur further investment in several sectors of Nicaragua’s lagging economy. To date, DR-CAFTA has led to a 20 percent increase in exports from Nicaragua. However, reactions to the treaty have been mixed, and complaints that small businesses and national production would suffer under the export-oriented model of DR-CAFTA have recently arisen. The country’s trade deficit with the United States widened from US$555 to US$771 million from 2005 to 2006.
Nicaragua is an electoral democracy. The constitution provides for a directly elected president and a 92-member, unicameral National Assembly. Both presidential and legislative elections are held every five years. The 2006 presidential and legislative elections were both regarded as free and fair by the Electoral Council as well as by the international community. Currently, the FSLN holds 37 out of 91 seats in the Assembly, the ALN holds 30, the PLC holds 18, and the MRS holds 6; the current Assembly has 92 seats.
The climate for political and civic activities is often affected by corruption, political pacts, violence, and drug-related crime directed by street gangs. Nicaragua was ranked 111 out of 163 countries surveyed in Transparency International’s 2006 Corruption Perceptions Index.
The constitution calls for a free press but allows some government censorship. Although the government has not invoked these powers recently, there has been no movement to change the constitutional provisions. Journalists have received death threats and some have been killed in recent years, in what some observers consider politically motivated attacks, some of which are alleged to be the work of FSLN sympathizers. Various judges, aligned with the FSLN, have ordered restrictions on the reporting of particular legal stories. Radio remains the main source of information. Before leaving office in 1990, the Sandinistas privatized some radio stations which were handed to Sandinista loyalists. There are six television networks based in the capital, including one government-owned network. Many of the stations slant the news in favor of various partisan factions. Three national newspapers based in the capital cover the news from a variety of political views. There is unrestricted access to the internet. Investigative journalism played a predominant role in raising political issues. The investigation of corruption and political party conduct during the election was critical to informing public opinion and balancing the debate.
Freedom of religion is respected, and academic freedom is generally honored.
Freedoms of assembly and association are recognized by law and largely upheld in practice. Nongovernmental organizations are active and operate freely. Generally, public demonstrations are allowed. The Sandinistas control many of the country’s labor unions and, while in opposition, used them to stage rallies and to protest against government policies. However, the legal rights of non-Sandinista unions are not fully guaranteed, and there are allegations of violations of the right to organize, often in the form of employers firing employees who attempt to form bargaining units. Although the law recognizes the right to strike, unions must receive approval from the Ministry of Labor, which has declared only one strike legal since 1996. Citizens have no effective recourse when labor laws are violated by the government or by the Sandinista organization, and child labor continues to be a problem.
Nicaragua’s judiciary remains dominated by Sandinista appointees. Many judges are susceptible to political influence and corruption. Concessions granted to former President Aleman in 2005 after his money laundering sentence was handed down are the most recent example of this susceptibility. Because of long delays in trials and a large backlog of cases, the National Assembly has investigated ways to reform the judiciary, but no reforms have been enacted of late. The FSLN and the PLC have used their influence over the judicial system and their political appointees on the bench to uphold laws that make it difficult for minor parties to form and get their candidates on ballots. Judicial backing for these laws has also served to keep splinter groups from breaking away from Nicaragua’s two major parties.
The Ministry of Government oversees the National Police, the agency that is formally charged with internal security; in practice, the police share this responsibility with the army in rural areas. The conduct of security forces continues to improve, reflecting enhanced civilian control, although abuses of human rights still occur. Forced confessions to the police remain a problem, as do cases in which security forces arbitrarily arrest and detain citizens. Insufficient funding of the National Police also affects police performance and has led to a shortage of officers. Prison and detention center conditions continue to be poor, and the facilities remain underfunded.
Although gang violence is increasing in Managua and other Nicaraguan cities, the crisis of drug gangs threatening national security elsewhere in the region has not come to Nicaragua. Although the gangs, or maras , do have members in the country, Nicaragua has not felt the need to call out troops to quell them. Nicaragua remains an important transshipment point for drugs making their way north from South America. The Pan-American Highway in Nicaragua’s southwest region is a primary route for narcotics traffickers, although smuggling by air is increasing.
Nicaragua nominally recognizes the rights of indigenous communities in its constitution and laws, but those rights have not been respected in practice. Approximately 5 percent of the population is indigenous and lives mostly in the Northern Autonomous Atlantic Region (RAAN) and Southern Autonomous Atlantic Region (RAAS). In 2005, the Inter-American Court of Human Rights ruled that the government had violated the rights of the Miskito and Sumo groups in 2000 when the electoral commission prevented the majority-indigenous Yatama party from competing in municipal elections held that year. The court ruling stipulated that the government must acknowledge the rights violation and pay damages to the two indigenous groups. The government has agreed to abide by the ruling, but no known steps have been taken to do so. Subsequently, during the 2006 autonomous regional elections, Yatama (the only regional party) won 16 percent of the vote.
Violence against women and children, including sexual and domestic abuse, remains a widespread and underreported problem. Nicaragua is also a source and transshipment point for the trafficking of women and children for purposes of prostitution. In order to combat Nicaragua’s growing problem with trafficking, various government ministries and civil society groups have been working together to carry out awareness campaigns, to improve the repatriation of victims, and to conduct a major survey to provide reliable statistics on the extent of trafficking in Nicaragua.