Ortega seduces in Nicaragua with its capitalist socialism
President has Socialist discourse and excellent relationship with the private sector
Tacit agreement: entrepreneurs deal with business, Ortega governs
Managua. An afternoon on the mountainous city of Matagalpa. In a dusty square of this city, located in a rich area of the country’s large coffee plantations and livestock production, thousands of Nicaraguan gathered to listen to President Daniel Ortega.
The President was directed at supporters to present Government’s plan of “Socialist, Christian and solidarity” which will be implemented if he wins the November presidential election.
In his speech, Ortega was attributed by some accomplishments of private enterprise, which showed good relations with employers. Behind was the suspicion that produced the arrival to power of the ex-gorilla, in January 2007.
According to Ortega, during their nearly five years of administration increased by 430,000 lines of fixed telephone and three millions of cell phone; Internet reached 500,000 Nicaraguan; 38,000 houses were built…
Combative Speech. Ortega took power with a promise to change the political and economic system. After 16 years in opposition, he arrived with a combative speech, attacking the “neo-liberal policies” of the three Governments that preceded him since 1990, implying that it would break the agreements with the International Monetary Fund (IMF) and that it would launch aggressive social policies to reduce inequality. “Power to the poor,” was his motto.
Private sector feared that Nicaragua would become a Socialist Republic in the Venezuelan style, admits the businessman Enrique Zamora, director of agricultural Lafise, one of the main economic groups of the country and steering of the Superior Council of private enterprise (Cosep).
The crisis of 2008 saw emerge Daniel Ortega to a pragmatist. I search in the private sector for an ally to weather the storm that threatened Nicaragua, so dependent on the market as US investments.
“Created is what is now called economic pragmatism.” “At this stage there is good communication,” explains Zamora.
Since this approach seems to be a tacit agreement between employers and the Government: the first are responsible for their business betting on the social stability that guarantees Ortega and the President is engaged in politics.
When the President was in the opposition, it used its control trade unions and social movements as a weapon to destabilize liberal governments. Now these unions have been silenced and maintain a sweetener to the Government position.
“This is a country where foreign investors can come to do business and lead your profits without any problem,” says Alberto Guevara, Chancellor of the Exchequer.
In fact, the President meets each year entrepreneurs, in meetings involving heavyweights of the economy Nicaraguan as Carlos Pellas, head of Grupo Pellas. These meetings mark the rules of the game of business in Nicaragua. “The powers that be in this country are in agreement,” said sociologist Oscar Rene Vargas.
High unemployment.Ortega was in charge of maintaining the same macroeconomic direction of Governments that preceded him, but has not endeavored in makig the economy grow more.
In fact, Néstor Avendaño Economist says that with Ortega of the country’s GDP has grown by an average of 2.5 per cent, a figure inadequate, so that the take-off country needs a continuous growth of 6 to 7%.
Avendaño explains that would help reduce one percentage point in unemployment, in a country where, according to unofficial figures, more than one million people are unemployed or underemployed.
Official data show that unemployment in Nicaragua affects 8.2 per cent of the economically active population, which according to the Government is 2.2 million.
Ortega has also failed diversify exports. The country remains producer of raw materials. Data from the Centre of formalities for the export (Cetrex) show a timid growth in sales abroad in 2010 in comparison with 2006, when Ortega assumed power.
Last year, Nicaragua exported $1920 million, while $1079 million it sold in 2006.
Good chess player.For Avendaño, economic policy that has developed Ortega “has reconfirmed him as the best chess player of Nicaraguan politics”. What he calls the “embrace of the right”, but for Arturo Grigsby, director of the Institute for research and development Nitlapan, at the Universidad Centroamericana, that “embrace” also has a historical explanation.
Grigsby said that rapprochement between Ortega and the private sector is partly because the Sandinista learned from the mistakes made in the 1980s, when he imposed controls on the economy, property confiscation and nationalization of companies.
“These policies created a strong polarization and the Sandinista paid a very high price for them.” “This left deep scars and that trauma affects the approach taken by the FSLN in this Government.”
With the happy private sector, Ortega can devote to policy without stress. “This is the President of the poor,” said Zeneida Castro, 52, who came to hear him in Matagalpa. “He will help us to move forward”. When asked in what it has benefited, replied: “the FSLN has not helped me in anything, but I’m sandinista and I hope that one day the President gives me a House, a roof to live”.