Battling Neoliberalism Through Anti-Autocracy in Nicaragua

The anti-autocracy movement in Nicaragua is a reflection of broader popular struggles against neoliberal policies across Central America. It shouldn’t be dismissed or reduced to its most reactionary elements.

Anti-Ortega graffiti in Nicaragua. (Jon Skilling / Flickr)

You wouldn’t know it from the North American news media, but Central America is in the midst of a mass rejection of corruption and autocracy.

Honduran president Juan Orlando Hernández (known popularly as “JOH”) faces a militant movement demanding his ouster through extensive organizing and mass protests. In neighboring Guatemala, president Jimmy Morales faces his own unrest, four years after a corruption investigation followed by mass protests toppled his predecessor. Salvadoran president Nayib Bukele, a slippery “post-ideology” reformer, just announced the formation of an anti-corruption commission in his country — which, despite Bukele’s obvious interest in using it against rivals in the left-wing FMLN party, nonetheless reflects widespread support for tough anti-corruption measures.

Even Costa Rica and Panama, historically the wealthiest and most stable countries in the isthmus, have seen anti-corruption protests. In the aftermath of the Panama Papers, which caused scandal up and down the hemisphere, Panamanians took to the streets. And Costa Rican unions staged a three-month strike last year, partly in response to perceived corruption in the state’s financial dealings and widespread tax evasion.

Of course, anti-corruption movements are often politically ambiguous, and can advance anti-democratic and regressive demands nearly as easily as principled calls for democracy. But calls for fairness and honesty in government can also reflect deeper criticisms of the status quo, particularly in contexts like contemporary Central America, where the twinned legacies of counterrevolution and neoliberalism have distorted political institutions while leaving millions destitute and vulnerable. Like a slow-motion Caracazo, spread out over six countries and dozens of cities, the sustained public outcry over corruption and autocracy in Central America represents a widespread rejection of the neoliberal consensus that has governed the region since the free-trade agreement CAFTA-DR began taking effect in 2006, and which in many places has since hardened into a militarized crony capitalism.

In Nicaragua, too, this past year has seen the emergence of a protest movement against president Daniel Ortega, a man once regarded as a hero to the international left for his role in the Sandinista revolution of the 1980s. Like anti-corruption movements elsewhere in the region, the anti-Ortega coalition is heterogeneous and ideologically imprecise, containing a range of actors that, in many cases, are united only by their shared opposition to the president.

Many international observers, particularly those with roots in the solidarity movement of the 1980s, have been quick to defend Ortega’s government, pointing to new welfare programs (including the laudable Hambre Cero) as evidence of its left-wing credentials. But, in truth, Ortega’s governing strategy has always rested on a volatile and unsustainable class compromise. Sandinismo for the twenty-first century attempted to unite the interests of big investors and deprived workers inside the state by linking private capital accumulation to state-managed poverty-alleviation programs.

When Ortega took office in 2007, many people in and out of Nicaragua were optimistic — and they had good reason to be. Booming commodity prices, plus the prospect of economic collaboration with Venezuela, allowed Ortega to credibly promise better paydays for all. Following nearly two decades of disastrous neoliberalization (during which the president Arnoldo Alemán pilfered something like $100 million), Ortega’s class compromise seemed like a fair bet — a far cry from the militancy of his earlier administration in the 1980s, but perhaps the most humane development agenda available to Nicaragua in the new millennium.

The economic crisis in 2008 rattled Ortega’s delicate coalition somewhat, but his government weathered the storm. Over his next two terms in office, he managed to preside over years of sustained economic growth, building a loyal constituency not only among small farmers (the Sandinistas’ historic base) but also within Nicaragua’s business class. Throughout it all, Ortega was able to keep both constituencies happy by eliminating barriers to investment and profit-taking, on one hand, while on the other channeling government revenues (mostly derived from international assistance, not direct taxation) into welfare programs targeted at some of the most vulnerable members of Nicaraguan society.

Merely measuring the rate of social expenditure is a poor way to evaluate a government’s progressive character, much less its socialist credentials. The more relevant question for socialists is whether a government enhances or diminishes workers’ ability to organize, build power, and win lasting concessions from capital. Since at least 2008, Ortega’s corporatist neoliberalism has consistently frustrated workers’ attempts at self-activity — including by hollowing out previously militant union federations; establishing moderating routines that guarantee labor peace for international manufacturers; and even, when all else fails, repressing and brutalizing dissident workers.

For example, nearly every economic sector in Nicaragua is governed by a “tripartite agreement” between the national state, the Sandinista union federations, and business associations like the Superior Council of Private Enterprise (COSEP). In the booming free-trade sector — which employs a labor force of around 100,000, or one-sixth of formally employed workers in Nicaragua — this tripartite agreement has transformed a once-lively arena of worker protest into a captive industry, in which historically militant union federations are deputized to state agencies and boss’s associations as enforcers of labor peace.

“The workers who want to organize themselves end up run out of their jobs and blacklisted so they can’t work in the free trade zones again,” said former free-trade-zone worker Darwing Lopez, as I previously reported in NACLA. “That’s how they [the union federations] maintain the fear that they cannot organize.” After attempting to organize a union at a Korean-owned garment factory in 2012, Lopez was stonewalled by the Ministry of Labor, illegally fired (with the Ministry’s collaboration) in retaliation, and then physically assaulted and driven from the factory gates after organizing a picket.

Plenty of people, even longtime Sandinistas, were shocked at the level of state violence unleashed against anti-government demonstrators in spring and summer 2018 — the hottest months of protest, during which hundreds were shot and killed at rallies and tranques, the fortified roadblocks that are a common feature of militant politics in the region. For many Nicaraguan workers, however, the threat of such repression is an ordinary feature of working-class political activity under Ortega. Nicaraguan workers confront a sticky paradox — you may organize within the limits of the state’s corporate governing strategy, but step outside the carefully bounded tripartite routines and you’ll be shut down.

As Mónica Baltodano, a veteran of the Sandinista struggle who split from the party in 2005, said shortly after the protests began, “The [Ortega] regime’s neoliberal policies resulted in an accumulation of dignified rage. It was the explosion of an entire people subjected, hand and foot, to the free market and to the interests of transnationals — that is, to capital.”

Nicaragua, thankfully, managed to avoid some of the darkest aspects of neoliberalization in Central America — including the mass proliferation of organized crime networks (inside and outside the state) that is currently driving large numbers of Hondurans, Salvadorans, and Guatemalans from their homes. But Ortega’s government never represented a substantive break from neoliberalism.

With the decline in international commodity prices and the near-total collapse of Venezuela as a trading partner and source of credit, the contradictions at the heart of Ortega’s coalition reached a breaking point in 2018. His government has entered another crisis, much deeper than the earlier crisis of 2008, from which it may not emerge.

It’s true that, in the context of a global rightward turn, the protest movement in Nicaragua faces great difficulties presenting a progressive vision of the future. And, certainly, there are reactionary elements, in Nicaragua and elsewhere, desperately hoping for an outcome that may fortify arch-conservative neighbors like JOH in Honduras.

But to characterize the mass outpouring of grievances against Ortega as irreducibly reactionary — or, worse yet, a straightforward result of CIA meddling, without any social base beyond conspirators and dupes — is to ignore the wider context. Central Americans are in the midst of a mass popular struggle against neoliberal policies — and against the kinds of political leaders neoliberalism has elevated in the region, from narco-presidents like JOH to authoritarian developmentalists like Ortega.