Carlos F. Chamorro on the Crossroads of Big Business in Nicaragua

By Carlos F. Chamorro (translated by Julia Byrd)

A citizens’ demonstration in favor of national dialogue in Nicaragua, May 2018. (Photo by Jorge Mejía Peralta).

Exactly one year ago, I published an essay titled, “‘¿Modelo Cosep’, o el régimen de Ortega?” (“The ‘COSEP Model,’ or the Ortega Regime?”), which analyzed the corporatist alliance between the authoritarian regime of Daniel Ortega and big business owners. This alliance was formed in 2009, in the midst of the international economic crisis, when the Ortega government faced its worst political crisis after having secured the fraudulent 2008 municipal elections with violence. This led to international economic sanctions by the United States and the European Union. After the elimination of the counter balance of democratic political parties, and with economic support from Venezuela, the Ortega regime designated COSEP and big businesses as their only representative with Nicaraguan society. The regime ignored even the bishops and the Catholic Church, with whom they met just once a decade, and installed an economic “co-government.” Thus, an exclusive dialogue was created, in which big national and foreign businesses became political actors, providing legitimacy to the authoritarian regime in exchange for economic benefits and investment opportunities – a system of social control that is neither democratic nor transparent.

A year ago, I published my essay with the intention to promote public debate about this “model” of authoritarian stability. I intended to provide a warning about the lack of viability and sustainability of a personalist regime – the State-Party-Family built upon a shaky foundation of centralization, nepotism, repression, and corruption – and corruption’s heavy opportunity cost for the national economy. It is worthwhile to return to these lines and those of my colleagues (a few respected journalists, economists, political scientists, and Nicaraguan and foreign researchers) who questioned the “Model”. We questioned it not because the analysis had its own predictive value – this was not our intention – but rather because it reveals how much remains to be done to dismantle the corporatism that teeters along with the political system which created it, and which should be replaced by an economic management system with democratic and transparent standards.

Critics of the poorly-named “COSEP model” were embraced by the few independent media channels that have survived in this country. They were also embraced by the agenda of FUNIDES (Fundación Nicaragüense para el Desarrollo Económico y Social, or the Nicaraguan Foundation for Economic and Social Development), the influential thought leader for the private sector that has systematically shed light upon the inseparable link between democratic institutionality and economic development. However, some business leaders tried to stop the debate, so much so that COSEP associations were invited to endorse a statement in solidarity with the president, affirming that they were victims of a “disqualification” campaign that intended to divide the private sector.

A citizens’ demonstration in favor of national dialogue in Nicaragua, May 2018. (Photo by Jorge Mejía Peralta).

The unofficial spokesperson of the private sector absurdly claimed that they tried to move towards a confrontation with the Government. At the same time, a business owner with a larger strategic vision summarized the dilemma in this way: “We agree with the analysis, but what can we do in the face of the Government, if we do not have the power that it claims we have?” In reality, challenging “authoritarian corporatism,” (as economist José Luis Medal calls it) was never a suggestion that the private sector should abandon the dialogue with the Government, or that it become a political party to gain power. Instead, the challenge intended to reveal corruption and lack of transparency in the face of an authoritarian power and defend the private sector’s medium-term interests and those of society as a whole. Then the U.S. Congress threatened sanctions on Nicaragua with the Nica Act. This was possibly the last opportunity to correct course, but the business sector did not respond by risking to “bell the cat” and put pressure on the Ortega regime. Instead, a prominent business leader contracted the Carmen Group to lobby – not in Managua, where the tumor is located, but rather in Washington D.C.

Whether they were accomplices or hostages of authoritarianism, or a combination of the two, big business owners succumbed to the promise of authoritarian stability, at least until the end of the “fat cow” days of Venezuelan support. Since then, the regime has not been able to navigate through the financial crisis nor tolerate expressions of social protest, which led to the recent April slaughter and rebellion. Grievances that have accumulated after more than a decade finally exploded. Young people and university students, including Sandinista sympathizers, led a national protest against repression and infringement of democracy and public liberties. The rebellion was made up of diverse economic sectors, social movements, and media channels, all of which represent enormous human, social, economic, and political costs. The country is paying that cost to liberate itself from a dictatorship that has closed all space for democratic participation.

COSEP’s initial reaction to the April massacre was to condemn repression, voice support for the right to peaceful protest, and acknowledge that it is not possible to negotiate Social Security and other issues of national importance behind closed doors. This reaction represented an important step in distancing COSEP from the regime. However, COSEP’s lack of credibility demands an unambiguous compromise with democratization – more than just stating the value of democracy, it must endorse it with irreversible changes.

The massacre perpetuated by the Ortega regime has already resulted in more than 50 deaths. It has also created an increased legitimacy of popular protest and the growth of the university student movement as a socio-political actor. It has produced a watershed moment in which it is taken for granted that “the country changed, and nothing would be as it was before.” However, big business owners, who had until recently been allied with the authoritarian Ortega regime, owe the nation a self-critical analysis of their responsibilities and the so-called “dialogue and consensus model.” They must define new rules that will govern negotiations for the end of the dictatorship, the transition, and the reconstruction of our country.

A citizens’ demonstration in favor of national dialogue in Nicaragua, May 2018. Sign reads: Justice so there may be peace. (Photo by Jorge Mejía Peralta).

The May Third declaration was signed by fourteen big business owners, COSEP advisors, 27 business chambers, AMCHAM (Cámara Americana de Comercio de Nicaragua, or the American Chamber of Commerce of Nicaragua) and FUNIDES. It no longer refers to the “COSEP model” and proclaims that “it is fundamental to rebuild the rule of law within the institutional framework established by the Constitution and laws to respond peacefully and democratically to the social, political, legal, and economic demands of all sectors of society.” Consequently, big business owners must recognize that if before they were in support of authoritarian stability, the reconstruction of the rule of law that they now promote assumes that they become an agent of change and a democratic actor, which is different from a political party. Otherwise, if they cling to the status quo so that Ortega and Murillo stay in power until 2021, they run the risk of sinking with a regime that is no longer capable of restoring the country’s stability without more repression.

On the eve of the national debate, the government has appointed four key figures as delegates to the “COSEP model:” Bayardo Arce and Álvaro Baltodano, its main business  dealers with the private sector; and the Ministers of Finance and the Central Bank, who are in charge of tax exemptions and financial and banking regulation. It is clear that Ortega’s priority, apart from demands for democratization and the national clamor over the killings, is to restore the old order: big business.

According to the latest CID/Gallup poll, 69% of the population, including a significant percentage of Sandinista sympathizers, agree that Daniel Ortega and Rosario Murillo should resign from power to facilitate a negotiation process leading to institutional reforms and early elections, within a framework of constitutional continuity. However, faced with a familiar dictatorship that clings to power in an attempt to replicate Maduro’s plan in Venezuela, peaceful and constitutional change will only be possible through a combination of passionate civic pressure and international solidarity. The force of this pressure comes from protests led by students and supported by workers, farmers, public employees, agricultural producers, merchants, the middle class, and the private sector. And because of the weight and the influence they exert in key sectors of the economy and the State, big business owners have a greater share of the responsibility to contribute to this exit. Nicaragua does not have autonomous institutions that can solve the crisis caused by Ortega and Murillo – who are, according to the majority of people, politically and morally incapable to govern – because they were simply liquidated by the dictatorship. A negotiation is imperative, therefore, to reduce the terms and exit times of the rulers peacefully. This will only be possible through a national alliance that is determined to apply the highest level of civic pressure to achieve a restoration of democracy. If this exit is considered uncertain, the alternative is inaction, which would create more economic wear and tear and the incalculable costs of more repression, death, and rebellion.

A citizens’ demonstration in favor of national dialogue in Nicaragua, May 2018. (Photo by Jorge Mejía Peralta).

In opposition to this argument, it is alleged that big business’s aversion to political risk is justified not only by economic logic, but also because of the traumatic experience in 1979, when they supported the revolution against the Somoza dictatorship and the national alliance was broken and exchanged a socialist-oriented revolution. However, there is a false déjà vu with 1979. Then, there was a revolution led by a political-military movement, the FSLN, which headed the popular insurrection to overthrow the Somoza regime. What is being proposed today is not an armed revolution, nor a socialist revolution, but a civic and peaceful rebellion that demands the end of a dictatorship by constitutional means, in order to promote profound reform. The political banner of this civic insurrection proclaims, as my father dreamed 40 years ago, that “Nicaragua will be a republic again;” a republic that would enact the pending reforms of democratization. This is a popular rebellion that lacks visible leaders and organizations. If any parallels do exist between 2018 and 1979, they are reduced to the alarming coincidences between the dictatorships of Somoza and Ortega, matched in corruption, confusion of the public and private, nepotism, dynastic vocation, and now also genocide and killings.

Big business owners are now facing the collapse of the authoritarian regime, of which they were both accomplices and hostages. They are at a crossroads, where they can either once again bet on inertia and leave their luck in the regime’s hands, or finally become agents of democratic change.

This article originally appeared in Spanish in the May 16, 2018 edition of Confidencial and was translated to English by Julia Byrd, with the author’s permission.

CARLOS F. CHAMORRO is a renowned Nicaraguan journalist and was formerly the editor of the Sandinista newspaper La Barricada. Chamorro currently serves as director of the television program Esta Semana and as editor of the weekly paper Confidencial, which he founded. He is president of the Centro de Investigaciones de la Comunicación (CINCO, the Center of Investigations of Communication), a nonprofit research and polling firm in Nicaragua. He spoke at CLAS in 2006.


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3 Responses to Carlos F. Chamorro on the Crossroads of Big Business in Nicaragua

  1. Pingback: La encrucijada de los grandes empresarios de Nicaragua por Carlos F. Chamorro | Center for Latin American Studies, UC Berkeley

  2. Pingback: Nicaragua Dividida - Holding Pattern

  3. Pingback: Cómo los sandinistas se convirtieron en una mafia – Centroamérica Informativa

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