Instability and political conflict have been a constant in the recent history of Nicaragua. The last episode was the government crisis that broke out in April 2018. Despite being unexpected, this conflict was the logical outcome of the accumulation of undemocratic institutional transformations, unilateral social and economic policies and authoritarian political dynamics promoted over a decade by the regime led by Daniel Ortega, a Sandinista leader who came to power for the second time in 2007 with the FSLN (Frente Sandinista de Liberación Nacional).
The crisis started with popular protests against the pension reform enacted by the government that has led to increased social security contributions and lower pensions. Social discontent rapidly turned into social tensions that spread all across the country, with strong repression that has already caused more than 440 deaths. The decision of Ortega’s government to "resist" at any price has pushed the opposition and many civilians to “exit” Nicaragua and seek asylum in neighbouring countries: according to the Inter-American Commission on Human Rights, more than 64,000 Nicaraguans have fled the country since the start of the protests and 55,000 have been received by Costa Rica.
The repressive attitude demonstrated by the Nicaraguan government in the aftermath of the 2018 crisis, and the subsequent attempts – dropped or simply simulated – of negotiation between the opposition and the authorities, highlight a tough social, political and economic situation in Nicaragua with no positive outlook in the medium term. According to the International Monetary Fund (IMF), national GDP will decrease by 5% in 2019 and inflation is rapidly increasing to 5% annually. The data available for 2019 already indicate that investments (national and international), domestic consumption and the prices of assets such as housing have plummeted, while formal unemployment and hunger are increasing in a worrisome way.
The government still maintains firm control over the country: Ortega relies on the loyalty of the police and the army, with significant personal financial resources still untouched. The opposition is ideologically and generationally fragmented, territorially dispersed, and lacking in leadership. Indeed, one of the political dramas from which the country suffers is weak opposition to the regime: the leaders of the social movements that are still in Nicaragua do not dare to appear, no political parties are able to counterweight the FSLN in the institutions, and there is no freedom of assembly or expression for discussion with the authorities. In this sense, any actor (or government) who wants to maintain some kind of dialogue with the “Nicaraguan opposition” does not know how or with whom to speak. Even though the Catholic Church and the business sector (the employers' COSEP) sometimes appear as interlocutors, they only represent one of the sectors of the population that opposes Ortega.
Regarding the living conditions of Nicaraguans, it is important to point out that, according to the available surveys, the dream of the majority of young people in the country (around 70%) is to migrate to Costa Rica, the United States and Europe. In this sense, Nicaragua is joining the migratory flow of the “Northern Triangle” to which the neighboring countries of Honduras, El Salvador and Guatemala belong. A flow (and an activity) associated with family separations, illegal economic networks, violence and impunity. These main trends are already confirmed by human rights activists and migrant agents working on the southern border of Mexico, especially in the enclaves of Tapachula in Chiapas and Tenosique in Tabasco.
The crisis is also having a clear impact on the country's foreign position. Nicaragua is increasingly isolated at the international level both diplomatically and economically. The attendance of government representatives of Cuba, Bolivia and Venezuela at the 19 July 2019 celebration (the anniversary of the Nicaraguan Sandinista revolution) is a sign that the government has opted for a political alignment with the few countries that may be labeled the “Bolivarian axis”. In a regional scenario where the majority of governments are conservative, a “neutral” position of the Mexican government of López Obrador may temporarily help Nicaragua’s international stance. On the other hand, a wrong “diplomacy of sanctions” has been deployed by the United States and the European Union with uncertain results that will probably only affect the weakest part of the population and can even generate a symbolic boomerang effect. Relations with China have an increasing role in Nicaragua’s external relations. In 2013, a new era of closer political and economic ties between Beijing and Managua seemed to be on the horizon: Nicaragua’s National Assembly approved a bill to allow a Chinese company – the HK Nicaragua Canal Development Investment (HKND) – to build a canal through the nation’s territory as an alternative to the Panama Canal. However, due to wide protests across the country, the project was abandoned in May 2018. The political vacuum has been filled by Taiwan: in a desperate move to assert its existence, Taipei offered Nicaragua $ 100 million to assist Ortega’s government in the context of reduced international loans.
In the medium and long run, the crisis in Nicaragua could be a source of increasing instability for the region. First, the flow of Nicaraguan migrants into neighboring countries may lead to enhanced social and regional tensions, exacerbating the existing regional competition. Secondly, the country’s future draws the interest of great foreign powers: China and the United States are at the window, waiting for the right time to take advantage and put their geopolitical and economic weight on the table.