Nicaragua has enjoyed better than average economic growth and expanding opportunity over the past two decades, in large part because of political stability and the economic consensus that has existed between the government and private sector. But the increasingly authoritarian tendencies of the government of President Daniel Ortega have undermined its legitimacy, leading to a sudden and sustained political crisis over the last year that has unraveled the economy and that threatens the country’s future.

In this event, experts discuss Nicaragua’s economy over the last 25 years and how Nicaragua’s private sector can contribute to resolving the current political crisis and reestablishing economic growth.

Selected Quotes

Cynthia Arnson

“Even for those of us who have been critical of the antidemocratic practices of the Nicaraguan government of President Daniel Ortega, what has taken place over the last 11 months I think is truly astonishing.”

Eric Olson

"Not only has economic performance suffered, the currency been weakened and foreign investment slowed, but the Nicaraguan people are suffering the dual tragedies of repression and increasing economic despair.” 

Richard Feinberg

“For a moment in time, Nicaragua had overcome what arguably has been the main obstacle to sustained economic and social growth throughout Central America, and that main obstacle is that the public and private sectors can just not get along. They are endlessly arguing in bitter disputes among themselves, the result of that is discontinuity in policy, lack of confidence, short term-ism and lack of progress in general.”

“We have to recognize that the repression did give the government time, it gave the government some space in the political sphere, but the economy immediately began to contract. Not the result of some conspiracy, not the result of some complot. Rather, each markets’ actor- households, investors, financial institutions--- protecting their own interest, began to restrict their activities.”

Julie J. Chung

“The crisis in Nicaragua is not just an economic crisis by accident, it’s a political one. It’s caused by the gradual dismantling of the rule of law and public institutions over a long period of time. This is what many have likened to a ‘slow, moving coup’ against democratic norms and constitutional order. So early, free, fair elections, full respect for human rights and restoration of truly independent democratic institutions- that’s the only viable path back to democracy and sustainable economic development in the country.” 

“We call for the immediate release of individuals arrested for simply expressing their opposition peacefully to the Ortega regime, house arrest for some of those arbitrarily detained is not enough. Media representatives must be allowed to operate freely in Nicaragua, and their strong, independent voices are vital as Nicaraguans undertake dialogue to restore democracy, rule of law, and respect for human rights.”

Luis Rivas

“The financial system continues to contract and the economy indicators continue to deteriorate. This situation is coupled by clumsy economic policy, mainly contractionary fiscal policy, as the government tries to replace shrinking external sources of financing due to increasing international pressure with internal taxation. At a time where the country faces serious liquidity problems, this could be a time bomb exacerbating the crisis.”

"We [the business community] don’t see an option for history to repeat itself in the form of a conflict that will claim the lives of thousands of Nicaraguans and that will leave the economy in an ill position to face the challenges of restoring growth and employment. The private sector has played an important role in achieving changes we all want for our country. As I said, we asked for advanced elections since May of last year before any other actor had put that option on the table. This is real for us, and it presents real risks for us.”

Opening remarks

Cynthia J. Arnson, Director, Latin American Program, Wilson Center

Speakers

Richard Feinberg, Professor of International Political Economy, University of California, San Diego

Julie J. Chung, Principal Deputy Assistant Secretary of State, Bureau of Western Hemisphere Affairs, Department of State

Luis Rivas, Chief Operating Officer, Grupo Promérica

Moderator

Eric L. Olson, Latin American Program, Wilson Center

Photo Credit: Richard Feinberg. Used with permission.