Latin America’s is an exciting, diverse and interesting piece of geography within the larger American continent. When we talk about Latin America we often mistakenly think in terms of the Spanish speaking countries within the larger piece of land between Canada on the north and the tip of South America in the south.

However Latin America is a little more than that as it should include the Spanish-speaking countries in the Caribbean, namely Cuba, Puerto Rico, and the Dominican Republic, as well as Brazil which is Portuguese speaking and is in South America.

Out of this group of countries this post will concentrate on Nicaragua whose rich history and often rocky relationship with the U.S. has been in the news off and on since the socialist revolutionary Sandinista government came to power in 1979.

Brief history of Socialism in Latin America

Socialism has existed in Latin America since 1848 when “European Utopian Socialism” was introduced in Chile by Francisco Bilbao. However it was not until the emergence of Fidel Castro during the latter part of the 1950’s in Cuba that a Communist / Socialist form of government was able to flourish. In Latin America prior to this time and specially since Castro came to power, Socialism, Communism, Marxism and Leninism has been studied by members of the middle class and higher that were able to get advanced university level education.

One of the reasons for the interest in Socialism within the educated population in Latin America have been the overriding concern for the social and economic improvement of the masses as well as this region’s relations with the United States broadly viewed as dealing with the bullying “colossus of the North”. The U.S. ability to make territorial gains as in the case of Mexico in 1848, Puerto Rico and special rights in Cuba in 1903 and Panama in 1904, the Banana Wars between 1898 and 1934, and the overall U.S. hegemony over the region created an important motive for interest in Socialism among the educated class. Further the willingness of the U.S. to work with military dictatorships in order to protect its interests in Latin America created another motivating factor for socialist fervor in this region.(Rollie E. Poppino – 1964)

Hugo Chavez and Oliver Stone.
Fidel Castro and Ted Turner.

There is no doubt that Cuba led the way in helping to create Latin America’s romantic affair with Socialism. Aided by American wealthy and well known socialist sympathizers such as movie director Oliver Stone who has referred to Fidel Castro as “one of the Earth’s wisest people”, and billionaire Ted Turner’s who has publicly denied Fidel Castro’s political executions in spite of confirmed records and reports to the contrary, Cuba has managed to create a false image that it was able to market and sell outside of its borders.

Left leaning newspapers in the U.S., Europe and Latin America have over the years largely avoided reporting human rights violations by Castro’s Cuba as well as by Hugo Chavez in Venezuela. However in all fairness Castro’s fight against U.S. imperialism captured many Latin American’s imagination as a possible way forward to creating a more just social, political and economic structure.

Once this image of Cuba as the benevolent anti-imperialist state was well cemented within certain international circles, especially in Latin America, the job of flipping traditional non-socialist states over to Socialism became easier. Socialists in Latin America figured out that a combination of peaceful, legal and revolutionary means were likely to be successful in creating the social outcomes they sought.

Nicaragua is one of these countries where a socialist political party managed to rise to power through a combination of popular support and a guerrilla insurgency that forced the existing political structure led by the Somoza family dynasty to crumble and fall.

Nicaragua – Brief history:

In 1909 President of Nicaragua Jose Santos Zelaya was viewed by the U.S. as a destabilizing influence in the region due to differences of opinion regarding the proposed Nicaragua Canal and Zelaya’s attempts to regulate foreign access to Nicaragua’s natural resources. This rift between the two countries led to U.S. president William Howard Taft backing of rebel forces trying to overthrow President Zelaya. During the end of 1909 President Zelaya resigned after President Taft sent U.S. warship to the area under the pretext of the protection of American lives.

After this series of events, U.S. Marines ended up occupying Nicaragua from 1912 to 1933. From 1927 until 1933, General Augusto Cesar Sandino conducted a guerrilla war against the now in place conservative government and the U. S. Marines. The series of revolts conducted by General Sandino eventually forced the U.S. Marines to withdraw from Nicaragua and a new liberal government was established and led by him.

In 1934 Anastasio Somoza Garcia the leader of the Nicaraguan National Guard became president by assassinating General Sandino on February 21, 1934. The Somoza family remained at the reins of Nicaragua until 1979. Somoza was assassinated by Rigoberto López Pérez, a liberal Nicaraguan poet in 1956, and Luis Somoza Debayle, his eldest son was appointed President by the congress.

Under Luis Somoza, Nicaragua experienced high economic growth especially during the 1960’s and 1970’s and became one of Central America’s most developed nations. However in 1972 the capital Managua suffered a major earthquake that destroyed 90% of the city. Luis Somoza’s embezzling most of the relief money coupled with the government’s corruption regarding the rebuilding of Managua gave the necessary impetus to the Sandinista National Liberation Front (FSLN) founded by Carlos Fonseca to become a popular opposition party.

The Sandinistas and a guerrilla group associated with them with the support of a large portion of the people as well as the Catholic Church took power in July of 1979. Somoza fled the country later to be himself assassinated in Paraguay in September of 1980.

Daniel Ortega

The Sandinistas, under the command of Daniel Ortega inherited a country in ruins with over 600,000 people homeless due to the earthquake, 50,000 dead from the insurgency that eventually overthrew the government, and a debt of US$1.6 billion.

The U.S. relationship with the new Nicaraguan government soured when it was discovered that the Sandinistas were providing arms to communist rebels in El Salvador. This revelation led President Reagan to authorize the CIA to aid a group of rebels known as the Contras (In English “those against”) who were organized to fight against the Sandinista government.

This action led to what became the “Iran-Contra” affair which some say could have caused President Reagan to be impeached. However in the meantime the Contras army fought the Sandinista forces until the early part of 1990, when elections were held and Daniel Ortega lost the presidential election to Violeta Chamorro, of the Democratic Union Liberation party and first woman president in the Americas.

During the war between the Contras and the Sandinista army, it is estimated that 30,000 people lost their lives.

It is worthwhile noting that Daniel Ortega was head of Nicaragua from the time the Sandinistas came to power in 1979 until 1990, and then again from 2006 until present. In 2014 the National Assembly approved changes to the constitution allowing for unlimited presidential term limits. In essence this means that Daniel Ortega can remain in the presidency indefinitely.

Daniel Ortega and Fidel Castro circa 1982

While the Daniel Ortega that is serving as president of Nicaragua today is the same person as the Daniel Ortega who ran the country from 1979 to 1990, today’s Daniel Ortega is a different president, presiding over an entirely different government. The earlier Daniel Ortega was a Marxist-Leninist, who put in place controversial programs of nationalization, land reform, wealth redistribution and the exportation of communist revolution throughout Latin America. The redux President Daniel Ortega is a political dealer, manipulator, business tycoon and pro-business president.

Ortega today still rails against the evils of “savage capitalism”, however the reality is that he owns and manages multi-million dollar business ventures providing him with a personal wealth of more than $50 million. For a man of humble beginnings from a poor country like Nicaragua, this is quite a fortune.

In addition to his personal wealth Ortega’s ruling Sandinista National Liberation Front (FSLN) controls all four branches of government: the executive, judiciary, electoral authority and national assembly and has a majority of seats in the assembly, making him a powerful and influential president. In any sort of kleptocracy, this sort of unchecked power is extremely useful to those managing the political process.

Daniel Ortega has brilliantly navigated the waters of the Socialist upsurge in Latin America by partnering with Hugo Chavez of Venezuela, Fidel Castro, Evo Morales of Bolivia, Rafael Correa of Ecuador, and Cristina Fernandez de Kirchner of Argentina while at the same time courting Foreign Direct Investments from major corporations such as Shell, Siemens, Merck and others. When Venezuela and Cuba created ALBA – the Bolivarian Alliance for the Peoples of Our America, Ortega was quick to join in 2007.

Hugo Chavez along with Fidel Castro created ALBA as a way to use profits generated by Venezuela’s oil industry to consolidate a group of Latin American countries that could rival and replace the United States’ economic influence. Billions of dollars earned through the sale of Venezuelan oil flowed to a total of eleven countries, some of which were Cuba, Bolivia, Ecuador, Saint Lucia, Grenada, Saint Vincent and the Grenadines, and of course Nicaragua. ( ( (

As a side note…have you ever wondered how it is that an oil rich country like Venezuela can be at the brink of economic collapse? This is one of the reasons – Hugo Chavez’s crazy ambition (under the tutelage of Fidel Castro) to create a Bolivarian republic at the expense of his own country’s oil wealth.

Beautiful Lake Nicaragua

Daniel Ortega also courted and reached an agreement with the Chinese government in the proposed construction of a canal that would cut across Nicaragua through the Nicaragua River, from the Pacific to the Atlantic Ocean. Conceived as a competitor to the Panama Canal and offering wider and deeper shipping lanes, the Nicaraguan canal was slated to break ground sometime in 2017. Originally proposed to be financed through the Hong Kong Nicaragua Canal Development Investment Company (HKND Group) and Chinese billionaire Wang Jing, the Canal has been put on hold due to the recent Chinese stock market crash that nearly evaporated all of Mr. Jing’s fortune. (

Thievery or Quixotism

Whatever self-serving machinations that Daniel Ortega can be accused of, one fact is clear – Nicaragua is doing much better under the Sandinista government than in the last half century. See below.

(Source: Focus Economics — May 17, 2016)

Nicaragua sustained economic growth has been the result of disciplined fiscal, financial and monetary management. This coupled with pro-business legislation and streamlined administrative procedures that have increased foreign direct investments and encouraged exports.

The top sectors that composed the GDP of Nicaragua in 2015 were:

Source: Central Bank of Nicaragua. (BCN)

This higher growth was driven by economic and social stability in recent years and as a result of good government management during the 2010- 2014 period. (Source: Focus Economics — May 17, 2016)

Other than the improved economy, Daniel Ortega is able to boast about his success in other social aspects of the country such as:

· In Central America, Nicaraguans have the second-highest levels of satisfaction with their democracy and support for democracy

· Nicaraguans have the highest approval ratings for their institutions among their regional counterparts.

· The national police rank among the country’s most trustworthy institutions

· Nicaragua is the safest country in Central America with a homicide rate of 8.7 per 100,000. This is due to the country’s successful community-policing program considered a model for others.

· Government policies at reducing poverty and inequality are providing positive outcomes. Some of these programs are:

o Zero Usury which provides microloans to the rural poor.

o Zero Hunger, which provides seeds, livestock, material and training to women in rural areas.

o Crissol, which provides loans for small businesses and farms.

o Free lunch for school children in public schools.

o Distribution of housing materials to impoverished households.

o Providing housing for the poor and marginalized.

o Maternal Houses have been built throughout the countryside providing health care and refuge to expectant mothers.

o Police stations dedicated to women and children have been established to provide assistance to vulnerable populations.

All of this has resulted in declines in poverty, maternal mortality and child malnutrition, with 43% more households being connected to the electric grid than in 2006. School enrollment is up with higher literacy rates, more access to clean water and medical services along with better access to medicines. Overall the empowerment of local communities and villages has greatly improved. The Sandinista government has also placed significant emphasis on addressing gender inequalities placing Nicaragua sixth in the World Economic Forum’s 2014 Global Gender Gap Index. Because of this approach to gender equality, women hold 39% of all seats in the legislature and 57% of all cabinet positions which includes the minister of defense and the police commissioner.

These programs have made Ortega very popular giving him a 77% approval rating. The question that remains is whether some or all of these programs are sustainable. Also, Nicaragua still remains the second poorest country in the Western Hemisphere with a per capita GDP of just over $2,000 compared to $11,900 for Panama, $10, 415 for Costa Rica, and $3,700 for Guatemala. Only Honduras has a comparatively low per capita GDP of $2,430. In fact, 43 percent of the Nicaraguan population lives in rural areas with a large percentage of these surviving on just $1.00 per day. Overall, 46.2% of the population lives below the poverty line. Considering this high level of poverty, are these programs alone enough to raise the poor out of poverty?


Government and business corruption within Nicaragua is extremely high and remains a serious problem and impediment to doing business. Widespread corruption within Nicaragua’s politics impairs the functioning of state institutions. Favoritism and impunity among public officials is extensive. Businesses report that facilitation payments are demanded from authorities at every level of government.

Although these are serious problems, a more sinister and disturbing stalker waits at the doorsteps of the country; the drug gangs terrorizing Central America’s northern triangle are moving into Nicaragua through the political class. It has been reported through several sources and from a Wikileaks document from the U.S. Embassy in Managua dating back to 2006 that Daniel Ortega and his party used money from international drug traffickers to finance political campaigns. Apparently, this is a relationship that dates back to the ‘1980s, when Daniel Ortega cut a transit deal with Pablo Escobar.

A pattern has emerged in Nicaragua, where corrupt judicial system officials either outright release or give reduce sentences to people convicted of drug trafficking. Other reports, including comments from Nicaraguan Interior Minister Ana Isabel Morales, one of President Daniel Ortega’s closest and most trusted officials lead to the fact that penetration of the drug trade into the judicial system has helped make the country a legal paradise for traffickers.

What is our take-away from Nicaragua?

The following is a rundown of what we can glean from the U.S. relationship to Nicaragua, Socialism in Latin America, and the many grey areas that we can be sure to encounter when navigating these international relations waters. It is obvious that Nicaragua is a microcosm of the issues that Latin America has faced in the last two centuries. The following should be some of our key learnings:

· The U.S. interventionist approach, perhaps even imperialistic approach in Latin America dating back to the 1800’s has caused ill feelings that in the 20th Century were manifested in the form of Communist revolution, Socialism, and anti-American fervor.

· Often times, as in the case of the Banana Wars in the early part of the 1900’s, the U.S. Marines, and the CIA were used by American corporations as their own private army and private intelligence agency in order to advance their corporate agenda.

· In a continent where so many countries are either underdeveloped or developing, Neoliberalism has been for the most part rejected by the majority of the citizens. To a great degree the people in Latin America, and as it refers to this posting – the people of Nicaragua – hunger for social programs that will give them access to education, medical services, gender equality, and access to food, water, and electricity. Social programs combined with pro-business policies that encourage foreign direct investment, markets that are not overly regulated as to encourage new business creation and allowing the local business sector to flourish, seem to be the type of middle ground that offers practical and effective solutions.

· Corruption continues to be a problem in Latin America. Corruption is not a socialist problem, or neoliberal problem, or a capitalist problem, instead it’s a problem that has plagued Latin America since the Colonial period. Perez of Venezuela, Batista of Cuba, Chavez of Venezuela, Lula of Brazil, etc., etc., etc. The list goes on and on and it touches both sides of the ideological isle equally.

· Another problem in Latin America has been the “caudillos” or strongmen that have managed to hijack the democratic processes in the region. Fidel Castro, Hugo Chavez, General Pinochet, Juan Peron, and many more are to a great degree responsible for the region’s enduring mediocre economic performance, culture of corruption, kleptocracy, and deteriorating human rights.

· Is Daniel Ortega a Robin Hood or a Captain Hook? Is he a dictator, just another caudillo seeking to stay in power at all cost? Does he have a solution to the problems that Nicaragua face or is he using populist approaches in order to enrich himself through corruption, collusion, and favoritism? Only the future will tell. If Nicaragua goes the way of Brazil’s and Venezuela’s keptocratic induced collapse, it will be a tragedy for the people of that poor country. The Nicaraguan people have suffered enough. Let’s hope Daniel Ortega is a Robin Hood who takes a little and gives a little. Unfortunately this is sometimes the best we can expect from Latin American leaders.

Other articles written by J.C.Scull