In a sharp reversal from nearly a decade of almost continuous improvement, Nicaragua has taken a sharp turn to rank as the third most-worsened country on the 2019 Fragile States Index (FSI). The eruption of mass protests (quelled only after months of violent crackdowns) has shaken the image of Nicaragua as an island of recent, relative stability and tourist destination in a tumultuous region.

Despite the bloodshed involved in crushing and dispersing the protests, President Daniel Ortega reportedly continues to enjoy the support of nearly one-third of Nicaraguans and has shown no signs of relinquishing power before elections in 2021, when it is widely feared that he will rig the vote to ensure his wife, Rosario Murillo, succeeds him.

Mr. Ortega ruled Nicaragua throughout the 1980s as leader of the Sandanista regime. After returning to the presidency in 2007, Mr. Ortega established important alliances with the business community and the Catholic Church. To secure that support, he guaranteed a high level of private sector input into government economic policy and co-opted the support of the church by supporting a blanket ban on abortion days before the 2006 election. Mr. Ortega began frequently referring to a “Christian, socialist, and caring Nicaragua” and secured the support even of some of the harshest critics of the 1980s Sandinista regime. Mr. Ortega also spent freely on programs like “Zero Hunger” and the distribution of food and housing to ensure a solid base of support in a country with the second-highest poverty rate in the Western Hemisphere. Abroad, he mirrored the broad coalition he had built at home, receiving hundreds of millions of dollars every year from both Venezuela and from international financial institutions (IFIs) like the International Monetary Fund (IMF).

Under Mr. Ortega’s second presidency, Nicaragua had enjoyed strong and sustained economic growth of between 4-5% annually and inflation was eventually brought below 4% for three straight years from 2015 to 2017.1 This success was reflected in the steady improvement in the FSI Economy indicator, which went from 7.8 the year before Mr. Ortega took office to 5.6 in last year’s FSI. Nicaragua’s economic performance was similarly and repeatedly praised by both the World Bank and IMF. Mr. Ortega also managed to protect Nicaragua from the violence occurring in its northern neighbors – the homicide rate fell by 44% from 2006 to 2016 while in El Salvador and Honduras it grew by 28% and 37%, to 11.5 and 7.5 times higher than in Nicaragua, respectively.2 Nicaragua’s Demographic Pressures indicator score also improved substantially, improving from 7.5 the first year Mr. Ortega took office to 5.4 in last year’s FSI, reflecting improvements in population and health pressures.

As the economy grew and crime fell, Ortega and the Sandinistas were eroding democratic checks and balances, reflected in a worsening in the State Legitimacy indicator score from 6.3 in FSI 2008 to 7.9 in FSI 2017. This backsliding of democracy began even before his election, when Ortega made a wide-ranging pact with the leader of the Liberal Party, Arnoldo Alemán. Alemán received protection from corruption charges, and in exchange facilitated Mr. Ortega’s election and permitted the installation of Sandinista loyalists throughout key oversight institutions, including the Supreme Electoral Council and the Supreme Court. The Sandinistas leveraged this control to widen their margin of victory in municipal elections in 2008 through electoral fraud and open the door for Mr. Ortega to run for re-election in 2011 and 2016. Mr. Ortega further consolidated his power by gaining greater control over the media and using state institutions to harass and disqualify opponent parties and politicians as well as many non-governmental organizations.

In the 2016 elections, Mr. Ortega barred international observers and named his wife, Ms. Murillo, as the vice-presidential candidate, in a clear move towards establishing a familial dynasty reminiscent of the Somoza regime that he himself had fought against in the 1960s and 1970s. This was followed by concentrating increasing power in Ms. Murillo’s hands, including by replacing traditional Sandinistas with her supporters. By this time, however, internal and external support had begun falling away. Aid from the Venezuelan government declined precipitously, dropping by 10% in 2014 and falling to only 5% of the 2013 level by 2017. Although the IFIs did not immediately follow suit, the United States blocked a loan to Nicaragua from the Inter-American Development Bank after the 2016 elections and in early 2017 a bill requiring the U.S. to block all IFI loans to the Nicaraguan government was introduced. Later that year, the U.S. used its new powers under the Magnitsky Act to sanction the President of Nicaragua’s Supreme Electoral Council. At home, the loss of Venezuelan funds forced the Ortega administration to cut back on social spending which, combined with increasingly brazen corruption, undermined their popular support. The business community had also begun to back away from their alliance with the president and the leadership of the Catholic Church passed to a new generation of bishops uncomfortable with the Sandinista regime.

The spark that escalated the building tension came in April 2018. On the 16th, on the day of the IMF Spring Session, the government announced a series of cuts to social security programs. No warning was given to either the public or the private sector, prompting the final dissolution of the alliance with the business community, which came out in open opposition to the announcement. The next day, there was a protest by senior citizens against the announced cuts to pensions. The protesters were roughed up by government forces, provoking student protests over the next few days. The government responded by opening fire, killing several protestors. Hundreds of thousands across the country responded by taking to the streets where they were met with a bloody crackdown by the security services and paramilitary forces. Hundreds were killed and thousands more disappeared, and former First Police Commissioner Francisco Díaz confirmed to a Norwegian newspaper that vigilante groups, which the government had claimed were composed of pro-government civilians, were an organized and centrally directed force of undercover police officers. Another former police officer reported that Mr. Ortega ordered criminal investigators within the police to hunt down and eliminate opposition leaders. One particularly brutal incident occurred on May 30 – Mother’s Day – when a march led by mothers of victims killed during the protests ended with 15 dead.

By the end of August, the protesters had largely been defeated and scattered, and on October 13 the police announced that protests without prior approval were banned. Mass arrests forced anti-government leaders into hiding or exile, many to neighboring Costa Rica. A report by the Organization of American States found that the Ortega administration committed crimes against humanity, including extrajudicial killings, torture, sexual violence, arbitrary arrests and detentions, criminalization of protest, and failure to investigate the deaths of citizens. Since the end of the protests, the government has increasingly cracked down on the remaining free media and in January 2019, re-introduced the same reforms that triggered the protests.

The brutal repression of protesters – captured in the unprecedented 2.4-point increase in the Human Rights and Rule of Law indicator – has reflected a shattering of the government’s legitimacy both at home and abroad. However, the regime appears to be solidly in control, without danger of imminent collapse, regardless of the claims of some opposition figures. The fragmentation of the opposition makes future dialogue difficult and the re-introduction of the same reforms that touched off the protests suggests an unwillingness on the part of the government to back down in any meaningful way.

However, Sandinista political history has been marked by the granting of concessions to ensure its survival, even to its erstwhile enemies. Mr. Ortega even opened the door to talks with the United States at the height of the protest movement, offering a some hope that the events of 2018 need not repeat themselves in the near future. Nevertheless, Nicaragua provides a lesson on how a country’s relative stability and be both fragile and temporary, and how quickly the fortunes of a country, lacking sufficient resilience, can rapidly change.

1. According to World Bank statistics
2. Ibid.