Daniel Ortega's new best friend: Hugo Chavez
Former Sandinista revolutionary Ortega is back on top in Nicaragua. Will his alliance with Venezuela -- complete with subsidized oil -- be a model for the rest of Central America?
By Lydia Chávez
Read more: Politics, Brazil, Cuba, Capitalism, News, Immigration, International Monetary Fund, Free Trade, Venezuela, Latin America, Guatemala, Central America, Nicaragua, Hugo Chavez
Reuters/Oswaldo Rivas
Daniel Ortega, left, and Venezuela's Hugo Chávez embrace after Ortega's swearing-in ceremony in Managua, Nicaragua, Jan. 10, 2007.
Feb. 8, 2007 | MANAGUA, Nicaragua -- President Ronald Reagan referred to him in 1986 as the leader of a repressive regime and the only president in Central America who wore a military uniform. Then he asked Congress for an additional $100 million to get rid of Daniel Ortega and his 1979 Sandinista revolution.
By 1990 Ortega was out. Now, 16 years later, he's back, but this time the 61-year-old Sandinista has shelved his fatigues for white button-down shirts. The former Marxist sounds almost Smithesque on private property, but Ortega also made it clear at his January inauguration as president of Nicaragua that after nearly two decades of Washington-style democracy in that country, he has something different in mind.
"It has been 16 years in which the people have paid a big cost with the economic policies known as neoliberalism," Ortega told a crowd of thousands gathered at the Pope John Paul II Plaza of Faith in Managua. "Now we have the challenge to open a new road, a road that will permit Nicaraguan families to live in dignity."
It took only one and a half hours for Ortega to reveal his trump card for restoring dignity in Central America's poorest country: Venezuelan President Hugo Chávez. The oil-rich rebel may have been 90 minutes late to the inauguration -- keeping more than a dozen heads of state waiting -- but he arrived with so many goodies, it hardly appeared to matter to Ortega, who might as well have been humming "It's Beginning to Feel a Lot Like Christmas." The bounty included preferential pricing on crude oil in an amount equal to about a third of Nicaragua's annual oil consumption, a refinery, the forgiveness of some $30 million in debt, new interest-free or low-interest loans of $20 million, and a good chunk of free money for homes and healthcare.
The new alliance between Venezuela and Nicaragua offers Central America its first alternative to Washington since the 1980s. Those were the years the Reagan administration spent billions of dollars to prevent leftist revolutions in El Salvador and Guatemala and to undo the 1979 Sandinista revolution, which allied with Cuba and the Soviet Union after being rebuffed by Washington.
Now, after a series of center-right governments and a steady dose of remedies by the International Monetary Fund -- privatizing public companies, lifting trade barriers and reforming the banking sector -- the region could use, well, a few revolutions.
Corruption and governments incapable of collecting taxes and spurring growth to improve wages have failed many Central Americans. In El Salvador, Guatemala and Honduras, misery plus surging violent crime has turned hope into one word: emigration, preferably to El Norte.
It's as if Central America has pressed the Mute button on the ugly immigration debate in their promised land. Few care or even seem aware of how difficult their journey might be. It's simply too important. The money sent home from relatives living legally -- and illegally -- in the United States holds their lives together.
Enter Chávez -- into a Central America doing poorly in nearly every measure of quality of life, economics and security being at the top of the list.
His Bolívarian revolution -- named for Simón Bolívar, who liberated much of South America from colonial powers -- is far from the Cuban model, but it is still a work in progress. So far that means a mix of nationalism, demagogy and some old-fashioned conservative monetary policies, which include increasing tax collection at home by more than 50 percent. (Ouch, no wonder the rich hate him.)
Chávez has shrewdly played to the poor of Venezuela with handouts while placating the international community by respecting trade agreements. It's too early to tell what he will do with the powers he recently won to legislate by decree, but even Thomas Shannon, U.S. assistant secretary of state for Western Hemisphere affairs, is sanguine. The new law, he says, is valid under the Venezuelan Constitution and it depends, "as with any tool of democracy," on how it is used.
If the past is any indication, Chávez is unlikely to do anything too far out of the mainstream. Even in his approach to aid, Chávez rants against capitalism while using its moneymaking possibilities in an inspired way.
He has raised his profile in Latin America through savvy business deals -- buying Argentine debt, for example, and making money off it, or giving Cuba oil in exchange for keeping his base healthy (and happy) with Cuban doctors and free education in Cuba for Venezuelan medical students. He's trying to finance pipelines in Brazil, but there's money to be made in those too.