The Economist Sees Ortega in Power in Nicaragua Through 2022

The only vulnerable point of the Ortega-Murillo regime is its susceptibility to US sanctions, according to the latest report from the British-based Economist Intelligence Unit (EIU), which provides forecasting and advisory services in business risks and opportunities. The EIU maintains its prediction that the FSLN will not leave power before 2022, even if this means, “Nicaragua’s descent into a Venezuelan-style quagmire.”

This advisory business within the Economist Group further notes that the presidential couple “has adopted an ever more authoritarian focus,” and “has strengthened” his already robust state security apparatus.

As in previous reports, the EIU predicts that the FSLN “will remain in power until 2022 and “beyond”, although they clarify that their forecast could fail in the face of the hardening of US sanctions against the regime.

“The political scene is highly volatile and there are substantial risks for our forecast. One of the principal weak spots of the Ortega regime is its susceptibility to actions from the United States,” the report emphasizes.

It recalls that the United States administration has already issued sanctions to some high-echelon government officials, including first lady and vice president Rosario Murillo. In the latest round of sanctions last week, the United States Treasury Department sanctioned Laureano Ortega Murillo, the presidential couple’s son, and BanCorp, the regime’s financial arm.

Sanctions and internal fractures

The EIU report also mentions the US Congress’ approval of the Nica Act that threatens to apply individual sanctions to functionaries of the regime, as well as putting conditions on loans to the government from international financial institutions such as the World Bank, the International Monetary Fund and the Inter-American Development Bank.

“We assume that the Nicaraguan government will be able to guarantee financing from alternative sources such as the Central American Bank for Economic Integration. However, there’s a grave risk to this supposition, given the increased global and regional isolation of Nicaragua,” the report warns.

The Economic Intelligence Unit specified that in case of a significant escalation of political and economic pressures, Ortega’s grip on power “will depend on the role undertaken by the country’s security forces”.

In that sense, it underlines the fact that Ortega “exercises significant influence” on the National Police and the Army. “High military officials have been placated with access to business assets,” the publication states, adding: “Even though up until now this has been enough to assure the loyalty of the security forces, there’s a high risk of fractures within the regime if the economic or political conditions worsen.”

The failing national dialogue

With respect to the negotiations between the government and the Civic Alliance, the Economist states that “formidable” obstacles exist for “any progress in the dialogue,” since there’s “sharp” mutual distrust. “The majority of the leaders from the opposition believe that Ortega is just playing to gain time, and not negotiating in good faith. The Civic Alliance insists firmly that they won’t negotiate the rest of the agenda, unless the government demonstrates their will to implement the accords already reached.”

“Along a similar line, it’s very probable that the Ortega duo sees the Civic Alliance as spearheading the efforts of the international community, especially the United States, to depose them, and they doubt the sincerity of their opponents’ intentions,” it adds.

The British publication highlights the fact that “prospects for a political compromise remain distant”, since the opposition has “little” political influence and the government lacks “the will” to undertake a serious democratic reform. “Given the extreme secrecy in which they operate, it’s impossible to know if Mr. Ortega and Mrs. Murillo are really committed to negotiating a solution to the crisis in Nicaragua, especially if that means their giving up power.”

Negotiating with the political parties

“In fact, it would seem that the Ortega’s are moving in a direction that won’t allow a political agreement. On April 11, a deputy from the governing FSLN party proclaimed that the government would not tolerate the opposition’s demands for a complete overhaul of the Supreme Electoral Council,” the document indicates.

The EIU also reports that “there are indications that the government might soon transfer the entire dialogue process to the National Assembly and negotiate some kind of electoral change with the minority political parties represented there, whose opposition is largely in name only, excluding the Civic Alliance from any other function.”

It foresees that the regime will continue “a two-pronged negotiation process”. The government will continue talking with the Civic Alliance about the implementation of the two initial accords, while the problems of justice and reparations for the repression’s victims will be broken up.”

The report warns that although Ortega may cede some “electoral concessions,” these would be superficial” ones as a gesture to the opposition and the international community; meanwhile, the regime “will maintain control” over the Supreme Electoral Council, the judicial power and other key institutions.

“The absence of a negotiated situation will assure the political status quo, since Ortega’s regime continues controlling all the levers of power. Presently, we assume that, as the efforts to effect a regime change fail to produce results, the opposition will be gradually worn down, allowing for a process of political normalization and, by extension, the economic normalization in the medium term,” predicts the EIU.

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