What America must do to help Nicaragua restore democracy

What America must do to help Nicaragua restore democracy
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The abrupt departure of Evo Morales in Bolivia has reminded Nicaraguan dictator Daniel Ortega that the loyalty of the rifle is crucial to his survival. After Bolivians forced Morales to resign following election fraud, Ortega vowed to remain in power and insisted that there is no negotiated exit out of the current crisis, only more bloodstained revolution. In response to this promised escalation in repression, the United States needs to search for renewed pressure points by pushing for Nicaragua to be expelled from the Organization of American States, reevaluating its free trade deal with Nicaragua, and pressuring the military in Nicaragua to abandon Ortega.

To suppress the people of his country from rising up against him, Ortega counts on the loyalty of 20,000 police forces, 3,000 paramilitaries largely integrated in the Sandinistas, and the complicity of the armed forces. The opponents of Ortega are now defined as terrorists, and police forces often encircle and manhandle the brave Nicaraguans who dare to challenge the human rights violations of their country, including a siege on mothers of political prisoners who were on hunger strike in a church, demonstrating there is no sanctuary in Nicaragua. The crackdown has been especially brutal in rural areas, where protests have dropped off precipitously and where human rights organizations lack access to document the abuses.

The Treasury Department recently sanctioned a son of Ortega and three Nicaraguan front companies. This is a welcome move but is insufficient. The Nicaraguan social fabric is quickly deteriorating as the opposition is fraying under the onslaught of pressure. The final report of the recently concluded Organization of American States Commission on Nicaragua, which documents human rights violations and rupture of constitutional order, represents a great opportunity to form a shared narrative about what has happened in the country and galvanize a united international response, including a special session of the Organization of American States to debate whether Nicaragua should be expelled. Nonetheless, Nicaragua counts among its closest allies many Caribbean countries whose support of the regime makes any vote for expulsion uncertain.

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The United States should diversify its strategy and increase sanctions on regime insiders complicit in carrying out human rights abuses, as well as on members of the business elite who, through the Superior Council of Private Enterprise, lent legitimacy to the authoritarianism of Ortega with a lucrative alliance that lasted years. Between 2008 and 2014, a network of financial institutions illegally integrated several billion in off the books Venezuelan petros into accounts controlled by Ortega. These transfers have become the financial mainstays of his dictatorship in Nicaragua.

Under present sanctions, regime insiders lack incentives to change their reprehensible behavior or cease their role in the crony economy. While Nicaragua has experienced an irreversible slide equivalent to five years of productivity, Ortega continues to reap rewards by taxing the economy to fund the machinery of state repression. Military and police budgets are indeed rising, even as Ortega pursues fiscal policies that will certainly increase the poverty and unemployment among average Nicaraguans.

This reality should force the United States and the European Union to reconsider their free trade deals with Nicaragua. The United States free trade agreement with the Dominican Republic and Central America, as well as the European Union association agreement, contain democracy clauses that should prevent any trade from funding the hostile security apparatus of Nicaragua. The two agreements stipulate clear protections for worker rights and for free association, both of which the regime has violated repeatedly, according to the Organization of American States.

While the European Union has yet to issue sanctions, despite adopting a targeted framework, it leads the United States in at least considering a suspension of its association agreement. Meanwhile, the Export Import Bank has excluded financing for Nicaragua, which hopefully previews a tougher stance toward trade with the country. Nicaragua exports more than $3 billion worth of goods to the United States, its biggest trading partner, and $400 million worth of goods to the European Union a year.

To dislodge Ortega from his hold on the military, the United States must target generals like Julio Cesar Aviles Castillo, who is commander of the Nicaraguan army. It should also consider targeting the extensive holdings of the military in the United States. American policymakers could exploit the exposure of its main investment fund, which holds assets worth well above $100 million, and direct sanctions against critical members of the general staff of the army to change their calculus in supporting Ortega.

For now, Ortega has managed to contain the opposition by applying the lessons of violent revolution. Yet fissures within the business community have emerged and Ortega looks increasingly isolated. His threat to stay indefinitely at the barrel of a gun, and his willingness to perpetrate more bloodshed to avoid the fate of his erstwhile ally Morales, demands the United States to look for additional sources of potential leverage to help Nicaraguans achieve free and fair elections to restore their democracy.

Ryan Berg is a research fellow focused on Latin American government and security studies at the American Enterprise Institute based in Washington.