Ortega sends a “suicide” message to big capital: “I am willing to do anything”
By Maynor Salazar, June 17, 2021 in Divergentes
Experts analyze the latest repressive actions that the Ortega-Murillo dictatorship have carried out. The general manager of the Promerica Group is in jail, and the Prosecutor imposed migratory retention and froze the accounts of 13 former officials of FUNIDES. These decisions will have a negative effect on the economy: “It is a suicide operation.”
The arrest of Luis Rivas Anduray, Executive Director of BANPRO and the Promerica Group, in addition to the freezing of the bank accounts of thirteen former board members of the Nicaraguan Foundation for Economic and Social Development (FUNIDES), places Nicaragua “on the edge of a cliff” and puts at risk the economic path of the country, coincided experts consulted by DIVERGENTES. The order issued from El Carmen are considered by the specialists as a “suicide operation” that would cause financial panic and dilapidate any expectation of economic improvement in the country.
“Ortega committed a mistake on entering that repressive logic, because he is going to have a negative effect on the economy. Possibly it is not going to grow by 0.9%, as the World Bank says it will. It is not going to grow because there will be no foreign investment nor local investment. In other words, it is going to produce a type of paralysis of capital investment and a lot of uncertainty,” estimated the political analyst Óscar René Vargas.
Rivas Anduray was arrested on Tuesday June 15. The Prosecutor´s office requested an expansion of the investigation and legal detention. They accuse the CEO of the Promerica Group “of the possible commission of illicit acts through FUNIDES by allowing the financial statements to be doctored and abusive management.” They also cite him within the framework of Law 1055, “Law in defense of the rights of the people to independence, sovereignty and self-determination for peace”; one of the three repressive laws approved by the parliament with a Sandinista majority at the end of 2020.
In addition to Anduray, the Police have arrested 15 citizens in the last month: four presidential candidates, nine opponents from civil society organizations, and two former workers of the defunct Violeta Barrios de Chamorro Foundation. In total the regime has more than 120 political prisoners in its jails.
The Ortega-Murillo dictatorship aims at pressuring the business sector that until now has maintained silence and has not positioned itself in the face of the abuses committed by the regime. This Wednesday Judge Karen Chavarría Morales ordered the bank accounts frozen of 13 former board members of FUNIDES and established migratory retention for all of them. The Foundation is investigated for “non-compliance with the Law for the Regulation of Foreign Agents.”
Among those investigated are Juan Carlos Sansón Caldera, general manager of the Banco de América Central (BAC) and Edwin Alejandro Mendieta Chamorro, secretary of the Banco Avanz, which belongs to the Pellas Group. Also investigated are Jaime Montealegre Lacayo and José Antonio Baltodano Cabrera, two of the 10 largest businessmen of Nicaragua.
This Thursday the Prosecutor´s Office ordered the National Police to capture Humberto Antonio Belli and Gerardo José Baltodano Cantarero, both investigated for the case against FUNIDES. According to the press release, both did not show up for the citation scheduled for June 16 and did not present any justification.
On the night of June 17th, the National Police executed a raid on the home of Belli. His sister, the poet and novelist Gioconda Belli, through Twitter issued the alert about the intrusion of the officers in the home.
“Ortega is trying to equalize forces in order to negotiate. His decision is political. He is afraid that the United States will sanction him and place more restrictive measures on his circle. If they block financing from multilateral organizations, Nicaragua will take a nose-dive. Loans and donations are the two pillars that maintain the public finances of the country. He needs to have something with which to negotiate the pressure that is going to come from the US government,” analyzed an economist, an expert on public policies who requested to remain anonymous for this interview.
The reading that the political analyst makes is similar to that made by the economist. Vargas thinks that Ortega is clear that all the international pressure is going to come and that is why he decided to aim his cannons against one of the de facto powers of the country with the objective that it not have the capacity to react and abet that external pressure.
“Before they (business people) act, he is putting them up against the wall and sending a message to big capital: `Do not move,´ he is telling them, `because I am willing to do anything.´ He is saying that to Juan so that Pedro gets the message,” explained the political analyst.
The impact on the economy
This new path of repression against the business sector can cause destabilization in the business climate of Nicaragua, and a lot of uncertainty among business people who are assessing whether to set up and invest in the country. The economist states that big business before settling in any nation, in addition to assessing the return on their capital, also take into account the political climate.
“With these actions of the government, I do not believe that large businesses would come to Nicaragua. The level of investment from multinationals in the country is less than what possibly they would have thought before 2018 or prior to the pandemic. And if we add to those factors the political uncertainty that the arrest of the business people is creating, they definitely make it impossible for greater investment to come. It is not known what is going to happen from here,” maintained the expert.
The economist expressed his concern about a scenario in which the regime would continue with the attack against private banks. If the government exercises more pressure, it is possible that Nicaragua would experience another bout of capital flight as what occurred in April 2018 during the peaceful rebellion of the self-convened demonstrators who protested against Ortega Murillo.
“But that we might be able to detect once the Central Bank publishes their monetary report in July. Then we might be able to see whether there was a withdrawal of deposits in the financial system. We do not know the reaction of the population, but obviously there is fear in the economic environment because of the uncertainty,” said the economist.
If the political situation persists and the state repression increases, the economist predicts that in Nicaragua the only investment or capital effort that will remain is what is already in Nicaragua. Likewise, with the possibility that they do not see stability and observe a lot of uncertainty in the country, it might be said that it is not worth continuing with their businesses.
“And I will give you an example. There are people who would like to invest in the tourism sector, for example, but are not doing so yet. They know that Nicaragua has a lot of comparative advantage in the tourism sector, but the pandemic as well as the crisis are not allowing foreign tourists to return to Nicaragua, and therefore the return on the investment is much longer. Investors ask themselves what is going to happen in Nicaragua from here to November, whether this political crisis is going to persist. This really affects private investment economically,” stated the economist.
Enrique Sáenz, economist and former deputy in the National Assembly, stated in an interview to 100% Noticias that this escalation of repression of Ortega will have an important economic impact on the country. “What he did was send a boomerang that will come back even harder against him. It is a suicide operation because financial panic is a matter of a spark, and it has a psychological aspect. Ortega is throwing overboard any expectation of economic improvement,” he stated.
RENACER bill on the way, another fear of Ortega
The radical posture of Daniel Ortega also has its origins, according to the experts, on the possible approval of the RENACER bill which expands sanctions on officials of the Ortega regime and that will be discussed this coming Tuesday June 22 and approved by the Senators of the Foreign Relations Committee of the Senate.
The RENACER bill, whose full name is the Bill for the Strengthening of the Adherence of Nicaragua to the Conditions for Electoral Reform, was presented in March of this year by Democrats and Republicans to the Senate. Democratic Senator Bob Menéndez President of the Foreign Relations Committee, is leading the initiative which has been supported by Democrats Tim Kaine, Dick Durbin, Ben Cardin and Chris Murphy, and the Republican Marco Rubio.
In the face of the imminent approval of this bill, Ortega has tried to fill the jails with opponents who will serve him as negotiating cards with the US Government, nevertheless, this could end up being a risky bet even for the regime itself.
“The RENACER bill could hit hard the inner circle of Daniel Ortega and create fissures within that circle. I am referring to the Army,” analyzed Vargas. “He wants to put everyone face down on the floor. And he is doing it because he is desperate,” he said.
The final strategy of Ortega, according to Vargas, is to negotiate with the objective of getting to the November 7th elections, and if he is re-elected, to call for a national dialogue to lower the pressure that he might have on the part of the international community.
“His objective has always been to buy time. It does not matter how, but he will always try to buy time. He wants to get to January 2022 so that they recognize him another five years in power in exchange for making some concessions. He is going to negotiate with everything that he has available to him,” concluded Vargas.