Wall Street Journal
June 19, 2007
Nicaraguan President Daniel Ortega wants to party like it's 1979. And why not? He's back at the helm of his country, which is once again prime real estate for enemies of the U.S.
Three decades ago it was the Soviets who financed Mr. Ortega's fiesta, in which he and his closest commanders executed the famous "pinata" property grab and ran the country into the ground. His backers this time are a new bunch: Iran and Venezuela. But his hungering for another power trip looks very much the same. After a visit to Tehran last week where he denounced the Yankee imperialists, so too does the threat he presents to U.S. security interests.
To understand why Mr. Ortega's anti-democratic tendencies in tiny Nicaragua deserve attention, look no further than the foiled plot to blow up JFK International Airport two weeks ago and the nearby map.
Authorities are downplaying the notion that the Caribbean represents a serious terrorism threat, despite the Islamic credentials of the four individuals from the region who are charged in the scheme. Maybe, maybe not. Yet one detail of the alleged plot reveals a clear and present danger that the U.S. cannot afford to ignore: Guyanese Abdul Kadir was arrested as he boarded a plane in Trinidad for Venezuela, where he planned to pick up an Iranian visa for a trip to Tehran.
Mr. Kadir, it seems, would hardly be alone in traveling the Caracas-Tehran route. Earlier this year Venezuela's Conviasa airlines and Iran Air began direct flights between the two cities under a code sharing agreement. When the flights were initiated, Iran's ambassador to Venezuela Abdullah Zifan said that "Mr. Chavez is much loved in our country, and our people want to come here to get to know this land."
Like Soviet communism before it, Islamic fundamentalism has a strategic interest in establishing a foothold in the Western Hemisphere. But until recently its ability to penetrate the region seemed limited to the lawless border area in South America's southern cone, where Brazil, Paraguay and Argentina meet. Now, thanks to Venezuelan President Hugo Chavez, access to the Caribbean -- which State Department officials refer to as the U.S.'s "third border" -- is direct.
It's not surprising that Mr. Ortega smells opportunity here. When the Soviets wanted what Iran now wants, they paid good money and the Sandinista commandante was the beneficiary. Conversely, without some serious financing from outside, Mr. Ortega's dream of consolidating power a la Mr. Chavez doesn't have a chance, and he'll end up just another five-year, one-term president.
When Mr. Ortega was elected last November, he billed himself as the reformed rebel ready to embrace private-sector investment and democracy as a cure for his impoverished nation. Many Americans bought the claim. A majority of Nicaraguans, recalling Ortega economics and the political repression of the 1980s, did not. In the event, he won only 37% of the vote.
Today his approval rating is lower. The Nicaraguan economy, despite a global liquidity boom, slowed in the first quarter of this year. Nicaragua's Central Bank has reported annualized gross domestic product growth for the month of March was 3.5% compared to 4.4% in March 2006. The agriculture and construction industries, which are the country's biggest sources of employment, have been particularly hard hit. Agricultural-sector GDP growth in March was flat compared to a 9.6% annualized rate a year ago. Construction registered a -3.8% rate in March while in March 2006 the sector grew at 6.7%.
Predictably, a lack of business confidence seems to be behind the sluggishness. Nicaraguan economist Sergio Santamaria told the Managua-based newspaper La Prensa last week that one of the main causes of the deceleration is the uncertainty created by Mr. Ortega's economic policies. "The problem in Nicaragua is a problem of management, not of resources," Mr. Santamaria said.
The trouble for Mr. Ortega is that while a policy mix that would boost investor confidence would be good for Nicaraguans, it would go against his effort to consolidate power. Instead he has been condemning "savage capitalism" and has initiated an old-fashioned populist handout campaign that promises a cow, a pig, poultry and seeds to 75,000 rural families.
Keeping people dependent on the state is, of course, the oldest trick in the caudillo handbook and it might help Mr. Ortega meet his goal of changing the constitution so he can run for re-election. But to pull it off, he needs resources. He already has trouble on his own side of the aisle. A good number of his former comrades-in-arms resent the responsibilities he has delegated to his wife, who may be more greedy for power than he is. Even Arnold Aleman, the former president convicted of embezzlement who still runs the opposition Liberal Constitutional Party and has a reputation for corrupt power-sharing, is going to find it hard to act as Mr. Ortega's enabler if Nicaraguans remain so unhappy with their government.
Venezuelan financing was supposed to be the answer to this problem, but while promises of aid have been large, delivery has been sketchy. Diesel-powered electric generators "given" to Nicaragua from Venezuela last year, it turns out, were not a gift at all. The bill from Caracas is $100 million. Rumor has it also that Hugo likes to belittle the Sandinista hero and that, just as they have been in Cuba, Venezuelan "advisers" in Nicaragua are arrogant and irritating.
And so it is that the president has apparently decided to market his country's comparative real estate advantages to the mullahs. Ergo, his trip to Tehran, where he pledged solidarity with the Ayatollah and revolution. What exactly he has promised Iran in exchange matters not only to Nicaraguans but to the U.S. as well.