NicaNotes: New Sanctions Could Impoverish and Destabilize Nicaragua

By Richard Kohn

[Rick Kohn is a professor at the University of Maryland and member of Friends of Latin America. Every fall he offers a seminar course titled “Sustainable Agriculture and Environment in Nicaragua” which also includes a travel-study experience in Nicaragua.]

The Central American Bank for Economic Integration (CABEI) has financed water projects, housing, sustainable energy, reforestation, roads and bridges in Nicaragua. The proposed new sanctions would cut off these loans. Photo: CABEI

When Joe Biden was a Senator in the 1980s, he distanced himself from his Democratic colleagues like Senator John Kerry who criticized the Reagan Administration for orchestrating the sale of crack cocaine in Los Angeles and weapons to Iran to raise money for the terrorists (contras) the US had organized to overthrow the government of Nicaragua.  The bulk of the blame was cast on advisors like Elliot Abrams.  “I’m not angry with the president,” Biden said during his campaign for the Democratic presidential nomination in 1987. “I think his action was one from the heart. I think his action was not one that was political. I think his action was not one done with any malevolence.”  To Biden and Reagan, it seems that the devastation caused in the US and the Middle East was worth it to bring about the destruction of farms, schools, health clinics, and people in Nicaragua.

Eventually, after tens of thousands of deaths and horrendous suffering, the Nicaraguan people voted in a US-backed government to end the war and economic embargo.  Nicaragua has had several elected governments since those days, eventually returning the Sandinistas to power in 2007.  The Trump Administration resumed intervention in Nicaragua to try to overthrow the Sandinistas, but Biden has escalated sanctions and psychological warfare much more, and this time so far most of his Democratic colleagues are sticking with him.

Now, Senator Tim Kaine has joined Senator Marco Rubio to propose a new round of sanctions and psychological operations against Nicaragua until “regime change” is achieved. Existing sanctions against Nicaragua have slowed the economic growth from what it would have been, but the authors of US policy understand the Nicaraguan population will not readily give up on their democracy or the social programs the Sandinistas instituted.  It will take a concerted effort to cause the sort of poverty and violence needed for “regime change” in Nicaragua, and there are no signs that either party of the US regime has any qualms about imposing that sort of violence.

The Trump Administration imposed sanctions on Nicaragua starting in 2018, and Biden has renewed them annually since then. In addition, Biden signed the RENACER Act in 2021 which uses the oversized influence of the US over the World Bank and the IMF to prevent Nicaragua from receiving financing for development projects even though both institutions have reported that the Nicaraguan government is highly effective in using received funds for their intended purposes. The Act also forces the US Government to report abuses by the Nicaraguan government and report on their “cooperation” with Russia. Biden also banned imports of two of Nicaragua’s biggest export commodities: sugar and gold.

Even with these sanctions, the US is Nicaragua’s biggest trading partner followed by Mexico and Honduras.  Nicaragua exports more to the US than it imports, but trade is still important in both directions.  Because of these sanctions, China has begun sending exports to Nicaragua, but because of current and proposed sanctions, trade with China and other countries will need to increase substantially and quickly if the Nicaraguan economy is to remain stable.  The increasing sanctions will likely slow the Nicaraguan economy, as well as that of other Central American countries they trade with, and migration to the US for those seeking jobs has already started to increase because of the sanctions imposed.

The latest round of sanctions would be devastating to US trade with Nicaragua.  The new bill calls for suspension of Nicaragua’s participation in the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). But such a suspension could only occur by mutual agreement among all the countries that signed it, which is unlikely unless extreme pressure is placed on these countries, thereby disrupting harmony in the entire region. Under these new sanctions, the US government would be ordered to review any benefits that Nicaragua might be receiving from the agreement and describe violations by Nicaragua.  It should be obvious that the US cannot accept “free trade” that benefits Nicaragua.  The bill does not charge staffers with “evaluating” whether Nicaragua has violated the agreement or not, nor does it provide any evidence that they have, but rather it uses the more prescriptive language to “report” how Nicaragua is in violation.

DR-CAFTA was signed before the Sandinistas returned to power and initially, under the neo-liberal government, poverty and hunger were not reduced by the agreement.  The intent was for US companies to sell government subsidized food to Central America, increasing its dependence on the US, and Central American countries would be permitted to export non-essential goods and resources to the US.  However, today Nicaragua produces 90% of its own food and exports additional food to its neighbors, as well as exports more goods to the US than it imports. The DR-CAFTA is important to building Nicaragua’s economy and makes it possible to provide healthcare and education and other infrastructure for development.

The US government would be ordered to end imports of two more leading export commodities from Nicaragua: coffee and beef.  Nicaraguan coffee and beef exports fill a particular niche in the US market for sustainably produced commodities.  Nicaragua is a leader in agroecology.  Both large-scale commercial and cooperative-based fair-trade coffee are produced using low-impact multi-culture and organic methods.  Most of the beef for export is also sustainably produced using grass-fed systems with trees that capture more carbon than is emitted to the atmosphere.  These sanctions on Nicaragua will shift US consumption to less sustainable countries with less favorable greenhouse gas impacts.  More acutely important to Nicaraguans, it will cost them jobs and the revenue needed to fund social programs.

Moreover, the latest round of sanctions aims to further restrict loans for economic development by mandating that the US oppose loans to Nicaragua from the Central American Bank for Economic Integration (CABEI), and that the US pressure Bank members Taiwan, Argentina, Colombia, Spain, Mexico, and the Republic of Korea to join the US in ending this support for Nicaragua’s development. United States’ dominance of the world economy allows it to devastate a targeted country by bullying its “allies.”  In addition to stopping any new funding, the bill also insists on increased scrutiny of all projects and requires that projects be carried out by non-governmental entities. This could possibly mean that even existing projects could be halted so that the ongoing efforts at constructing hospitals and roads could go to waste, leaving half-built structures to visibly remind Nicaraguans of the power of the US government.

The bill would also block the property rights of US citizens and permanent residents by outlawing any investment by them in Nicaragua.  If a US citizen or resident attempts to invest in a business or improve a residence in Nicaragua, they could face a combination of civil and criminal penalties including paying twice the value of the investment, a million dollars in fines, and 20 years in prison.  Many US residents currently own property or businesses in Nicaragua and maintaining those assets would likely require further investment.

This item is surprising given past US-government defense of Nicaraguan land-owning oligarchs.  After the 1979 insurrection, the Sandinista-led government gave abandoned farms to peasant farmers. Many of the large landowners had fled to the US where they were welcomed, and many were given US citizenship.  The US then demanded these new US citizens be given their land back, and most were accommodated by receiving equivalent land from the Nicaraguan government. Today they remain US citizens with land investments in Nicaragua.  While the US government purports to be supporting wealthy Nicaraguan exiles by trying to overthrow “communist” governments, it will be directly prohibiting them from investing in their own property, and from exporting goods to the US. The US does not seem to care about harming these ideological allies, as long as the sanctions trickle down to cause far greater hardship to the poor and working-class Nicaraguans that support the government.

The additional proposed US sanctions also call for greater propagandistic warfare against Nicaragua.  It orders the government to find violations of religious freedom and corruption, and indeed the US government will find whatever it is required to find whether it exists or not.  It calls on Nicaragua to have free and fair elections to “replace the Ortega administration”.  Anyone who has observed Nicaraguan elections, as I have, will attest that the elections were free and fair and President Ortega is very popular.  Thus, any election requiring his replacement, when it is not what the population wants, could not be a free or fair election.

It calls for a “cessation of violence by police,” referring to the police in Nicaragua, most of whom don’t usually carry weapons. The bill will do nothing about the police in the US who kill about 600 of us each year.

The bill calls for a repeal of laws such as the Foreign Agents Law, a recent law in Nicaragua that prohibits foreign governments from funding its elections and requires registration of lobbying activities on behalf of foreign governments.  The US Congress does not seem to be interested in repealing the similar and more restrictive US Espionage Act (enacted in 1917), US Foreign Agents Registration Act (enacted in 1938), or the US Patriot Act (Enacted in 2001), all employed recently to allegedly prevent foreign or domestic influence on the US government.

Claims against Nicaragua are:

1) That it arrested people who attempted a US-backed coup against Nicaragua in 2018, and who planned another attempt in 2021. Nicaragua arrested people for various offenses that are also crimes in the US and for which many more people were arrested in the US for far less violence in association with the Jan. 2021 protests in Washington DC.

2) That it has persecuted the Catholic church by arresting some clergy who contributed to violence against the Nicaraguan people. The US and Europe have not “persecuted” members of the Church for crimes such as child abuse, kidnapping, murder, but in a democracy this sort of “persecution” might be expected.

3) That it provides verbal support to Russia and is establishing ties with China. Few countries outside of NATO support the US-NATO actions against Russia, so Nicaragua has quite a lot of company in this regard. Of course, a small country like Nicaragua has little it can do to provide any sort of material support to either side in a distant conflict in Europe.  Nicaragua did recently adopt a one-China policy recognizing mainland China and establishing more trade with China, just as the US has done since the mid-1970s.

The impetus for the new more draconian sanctions against the people of Nicaragua is that the country poses an extraordinary threat to the security of the United States.  This is one of the only true statements in the new bill.  Although Nicaragua clearly does not impose a military threat and it is not at all a threat to the people of the United States, it has provided free publicly funded healthcare to all its citizens, free education from pre-school through graduate school, it has eliminated hunger, and greatly reduced poverty. While it has achieved these triumphs, the economy grew consistently and even the wealthy have benefitted.  This is a dangerous refutation of the propaganda sold to the US public. We are told that providing services to the population is unaffordable in the richest country in the world, and if our government provided these things, the economy would collapse. The example Nicaragua provides is very dangerous indeed, not to the people of the US, but to the ruling US regime; therefore, the reality of Nicaragua must be obscured and negated.

The Nicaraguan people overwhelmingly support their government.  The US elite understand this fact, but they simplistically believe it is only because of the strong economy and social programs. They believe that if US sanctions weaken the Nicaraguan economy, support for the Sandinistas will weaken. US policymakers fail to understand that the Nicaraguan people have developed a sophisticated understanding of the world and they have learned to advocate for what they deserve. It is a population that won’t readily accept being ruled by oligarchs or foreign powers anymore, and which sees through the trickery and propaganda that so effectively controls the US population.  Moreover, overthrowing the Nicaraguan government should not be the aim of US policy.  We should learn from Nicaragua while also opposing the US government’s aggression against it.

By Nan McCurdy

President Highlights Importance of Solidarity at July 19th Celebration
On the 44th anniversary of the Sandinista Revolution, President Daniel Ortega highlighted the national heroes whose legacies inspire the Nicaraguan people in their struggle for peace, social justice and economic development. He also recognized the role of international solidarity, saying, “Solidarity of the peoples, which has remained firm even in the most difficult moments: We see and feel it every day when you write and defend the truth of the peoples, the truth of the revolutions, the truth about Nicaragua. Thank you, dear brothers, and sisters.” Hundreds of solidarity activists came for the July 19th celebration. The president recalled the gesture of solidarity of Burkina Faso’s legendary Marxist revolutionary leader, Thomas Sankara, who visited Nicaragua in 1986 at the height of the U.S.- backed counterrevolution. Recalling Sankara’s assassination in 1987, he said, “That solidarity is still remembered to this day.” In closing the president said “We work to create a world of justice, lucidity, intelligence, fraternity, sensitivity and joy.” “We want to see a world that knows and lives in peace, harmony and solidarity. We want a better world. Long live Nicaragua!” (Radio La Primerisima, 20 July 2023)

Trade Agreement with China Already Negotiated
The Trade Agreement to be signed with the People’s Republic of China opens possibilities and opportunities to all sectors of the economy, said Iván Acosta, Minister of Finance, on July 25. The signing of the agreement is expected to take place in August and enter into force in January 2024. “The trade agreement is recognized for its successful negotiation and rapid execution, satisfying both parties. During six months of negotiations, complex issues were resolved and mutual interests and benefits were guaranteed,” he said. This will provide space for Nicaraguan producers to access the Chinese market, with opportunities in agricultural and industrial sectors, such as meat, dairy, coffee and seafood. Given that the People’s Republic of China has more than 1.4 billion inhabitants, this market represents a large purchasing capacity. Acosta said that Acosta stated, “In the next year, industrial and textile sectors are expected to expand, along with growth in agricultural products.” And, Vice President Rosario Murillo spoke in her daily commentary about the agreement, “This is how we are moving forward against poverty, with these ties that have been created, … everything that represents prosperity and everything that strengthens peace,” said. (Radio La Primerisima, 25 July 2023)

Belarus to Send Dump Trucks and Agricultural Machinery
The governments of Nicaragua and Belarus signed a series of bilateral cooperation agreements, among which stands out the shipment of 15 dump trucks to reinforce sanitation in the city of Managua. The two countries agreed to create a Joint Commission for Economic Cooperation and Belarus will supply 236 units of machinery for the agricultural sector. The agreement to supply the dump trucks is under a credit mechanism with the Development Bank of Belarus, as a first project that opens the doors to obtain more machinery for the Ministry of Transport and for agricultural and livestock sector. A large delegation from Belarus came to accompany the celebration of the 44th anniversary of the Sandinista People’s Revolution. Plans were also signed for cooperation in cultural activities such as music, theater, and dance as well as agriculture, science and technology to improve productivity in Nicaragua. (Radio La Primerisima, 20 July 2023)

The Adelante Program Has Disbursed more than US$400 Million
Minister of Finance Iván Acosta reported on July 21 that the Adelante Credit Program has dispersed US$410 million within the framework of the financial support provided to Nicaraguan families. He said that thus far 6,152 protagonists have received low interest loans. (Radio La Primerisima, 21 July 2023)

MINSA Eliminates Covid-19 Requirements to Enter the Country
The Ministry of Health announced on July 22 that the requirements to enter the country related to Covid-19 are no longer in effect and will no longer request vaccination and PCR cards from travelers. In correspondence with the international and national epidemiological situation of Covid-19 and the immunization levels reached, it has been decided to modify the requirements to enter the country as part of the international sanitary controls. (Radio La Primerisima, 22 July 2023)

Ometepe Island Launches Aquatic Ambulance
The Ministry of Health delivered the first aquatic ambulance in the country to the families of Ometepe Island. This boat will become a valuable resource for the transfer of patients to the Gaspar García Laviana Departmental Hospital, located in Rivas. The director of the Moyogalpa hospital, Dr. Tania Calero, said that the water ambulance has all the necessary conditions to guarantee a safe and efficient transfer of patients. This represents a great advance in the health system of Ometepe Island. Now, in just 15 minutes, patients can reach the port of San Jorge safely and quickly. See photos: (Radio La Primerisima, 21 July 2023)

Employment in Free Trade Zones is Growing
According to official records of the Social Security Institute (INSS), so far this year the number of affiliates working in the free trade zone sector grew by 10%. Most of the workers operate in maquilas, said the union leaders, noting that this fact shows the recovery that the free trade zones are experiencing. Currently there are more than 140,000 workers in Nicaragua’s free trade zones, the goal is to exceed 145,000 by the end of 2023; for this purpose the opening of new companies in several municipalities of Nicaragua is foreseen. The Free Trade Zone sector includes garment factories, automotive harness factories, tobacco, fishing, and call centers, among others. (Radio La Primerisima, 24 July 2023)

Greater Use of Renewable Energy Sources
The National Electricity Transmission Company and the Ministry of Energy and Mines inaugurated the Hybrid Solar-Thermal Power Generation Plant in Karawala municipality last week. The new plant includes 600 solar panels and two thermal generators with capacity to contribute 198 KW to the National Interconnected System, benefiting more than 3,179 inhabitants in four communities and will reduce CO2 emissions, contributing to voluntary mitigation of the climate commitments of the country. (Radio La Primerisima, 24 July 2023)

Strengthening Police Investigative Capabilities
The National Police inaugurated the new Inspector Javier García Méndez Criminology Laboratory in Masaya municipality. The US$1.5 million-dollar lab, financed by the General Budget, is equipped to perform studies on ballistics, biology, chemistry and forensics, as well as crime scene inspection. (Nicaragua News, 24 July 2023)