On January 10, 2022 Ortega was inaugurated for the fourth straight time, after elections rejected as fraudulent by most countries in the world. The same day the United States, European Union and Canada imposed new sanctions on members of the regime in expression of that rejection.
The economic, political and social failure of 15 years of dictatorship
By Enrique Sáenz, January 10, 2022 en Confidencial
After 15 years of dictatorial regime led by Daniel Ortega the balance can be summarized in one phrase: an economic, social, political and moral failure. To demonstrate it, we will base ourselves principally on official data.
The starting point of the analysis should be the examination of the conditions in which Ortega received the government in 2007. As Enrique Bolaños expressed it at one time: the table was well prepared.
Let´s recall a bit: annual economic growth rates above 4%; growing exports and investments; sustained flows of development aid, bilateral as well as multilateral, which included participation in the Millennial Challenge Account of the United States, and the budgetary aid programs from the European Union; balance in the fiscal accounts, control of inflation and stability in the exchange rate regime; start of the free trade agreement with the United States, CAFTA; substantial reduction in the foreign debt and its servicing; political and social peace internally and harmonious international relations; INSS with an operational surplus and solid reserves; police and army in process of professional and institutional maturity; framework of liberties and rights; spaces for participation for civil society; deconcentrated and pluralistic communications media.
In addition to these conditions, Ortega bathed in abundant resources of Venezuelan aid. In the end, a platform conducive to crystalizing the most successful government in the history of the country.
Hunger in the country of zero hunger
The principal banner of the dictatorship, especially in its beginnings, was “The poor of the world arise!” The parades on poverty were adorned with programs with bombastic names like “Zero Hunger.” Let us begin there, then: the regional report for 2021 of the FAO reveals that one of every 5 Nicaraguans suffers from hunger (19.3%). Even more, the proportion has been growing in recent years.
On the other hand, the estimates of ECLAC show that in 2020 the poverty rate is over 50% of the Nicaraguan population. For its part, FIDEG estimated the poverty rate in 2019 to be 45%, with a tendency to increase since 2015. According to that foundation, poverty would be beyond 50% if it were not for family remittances. Of course, the dictatorship closed down that research center in order to keep it from publishing the data for 2020.
In terms of migration: by November 2021 72,000 Nicaraguans were stopped on the border in their attempt to enter the United States in an irregular manner, and 47,000 had requested refuge in Costa Rica. In other words, at least 150,000 fellow citizens fled this past year the Ortega paradise.
Let´s continue with the family economy
You do not have to be an economist to know that stable employment and decent income represent two key factors for improving the well being of the population. And that one of the beneficial consequences of economic growth is precisely creating jobs and raising salaries. Well, reviewing the annual reports of the Central Bank, we find that in July 2007 the unemployment rate was 5.9% and underemployment was 47%. Fifteen years later, INIDE reported that in September 2021 open unemployment rose to 4.7% and underemployment by the middle of that same year represented 45% of the working population. What is an underemployed person? It is a worker without a fixed job, whose income does not even reach the minimum salary. To summarize: according to INIDE, 62% of the work force is currently found in conditions of unemployment, underemployment or in the category of “workers without a salary.”
After 15 years the “vibrant economy” of Ortega was able to reduce unemployment with great difficulty by 1% and underemployment by 2%. If we discount the hundreds of thousands of migrants who left the country in this period in search of better horizons, it is obvious that those percentages would be negative.
Now let us pass on to salaries. The Central Bank records that, in comparison with 2006, the average real salaries of workers in the formal economy rose by 1%! This is an average, because in the agricultural sector, commerce, social services, among others, they went down instead.
It is not difficult to imagine the afflictions of the 80% of the population who work in the informal economy. Of course, in 2021 the cost of living reached its highest level in the last 10 years. Go explain to the economists of the dictatorship how an economy that grew, according to them, at an average rate higher than 5% was not capable of generating full time jobs, nor improve the real salaries of the workers.
The foreign debt
For now little is said about the foreign debt, but it is a topic that has strategic implications for the medium and long term. Ortega received a debt of US$3.4 billion, in round numbers. Now the debt has multiplied by a factor of 4: it will close the year in US$14 billion. Along with the debt the payments are also growing year after year.
INSS: a full length portrait
Without a doubt, one of the most clarifying portraits of the economic and social failure of the dictatorship is the performance of social security. Ortega received INSS with a surplus of C$1.7 billion, ten years later the surplus had been turned into a deficit of C$2.4 billion. This result is logical if we consider that in 2007 the payroll registered 1,208 workers, and ten years later it had grown to 4,060 workers. For its part, the fraud with the funds of pensioners emptied out the reserves of the institution. Empty buildings were left in different points in Managua as heartrending evidence of the looting.
But there is another more in depth issue: the social security crisis is the clearest indicator of the failure of the economic, exclusive and wealth concentrating model that the dictatorship imposed: economic growth rates close to 5%, on average, were incapable of creating enough formal jobs and better income for workers, which is the basis of all social security systems. According to the data from the Central Bank, starting in September 2017 the number of workers registered in INSS began to decrease, month after month. The crisis of April 2018 was not the cause of the financial stress of the institution.
Ortega had no pity in discharging on the backs of the most vulnerable the costs of the corruption and profligacy: he stripped 300,000 pensioners of nearly 800,000 cordobas through a sinister maneuver under the cover of the modification of the Cordoba devaluation rate. He imposed two reforms that increased the contributions of employers and workers. He also imposed an invisible but devastating and implacable punishment: they changed the formula for calculating pensions for active contributors, who will only feel the scourges when they reach retirement age.
The Mafia State
Reports from Transparency International place the regime of Ortega, year after year, as the most corrupt in Central America – which is already saying a lot – and third among the worst in Latin America: only behind Haiti and Venezuela. On the other hand, in terms of money laundering the Basil Institute describes the regime among the most discredited in the world, and GAFILAT[1] even has it on its “grey list”, something like the list of the principal suspects.
And it is not without reason. Ortega turned corruption into State policy. The most flagrant acts of corruption have the status of law: the canal concession, the Tumarín hydroelectric plant, the custom scanners, just to name a few. Of course, the most shameful and largest was the appropriation of the funds of Venezuelan aid (more than $5 billion according to reports from the Central Bank). Without including the family appropriation of a fuel company, DNP, Alba generación, the fuel storage plant in Puerto Sandino and the murky acquisition of DISNORTE and DISSUR.
Political failure
The most recent and patent evidence was the repudiation of the immense majority of the population of the electoral charade of November 2021. Several post electoral surveys agree that more than 80% of the population rejected the regime. Under these conditions it is natural that the dictatorship might respond with massive human rights violations: jailing, exile, extrajudicial executions, suppression of liberties.
On the political plane maybe the most serious facts are: the transformation of the army into a personal guard and the seeds of hate that they have planted in the population.
And the economic successes?
Of course, they have to be mentioned. The macroeconomic statistics like GDP, international reserves and exports show positive records. Also the number of multimillionaires grew.
[1] Acronym for the Financial Action Task Force for Latin America