On December 10, the Nicaraguan Congress approved a package of more than three dozen changes to the constitution. President Daniel Ortega claims the reforms will lay the foundation for a system of "direct democracy." But the president's critics contend that the result will be the perpetuation of Ortega's hold on the presidency and the further concentration of political power in the executive branch.

The changes must be approved in two separate legislative sessions. But given the large legislative majority controlled by the governing FSLN, there is every reason to assume that ratification will be completed early next year.

Once that happens, President Ortega will be eligible to seek a third consecutive term (and his fourth overall) at the election scheduled for November 2016. Ortega has yet to state publicly whether he will stand for another five-year term in 2016, but that certainly seems to be the rationale for several of the reforms, and so it can probably be assumed that he intends to do so.

Opposition to the changes include civil society groups, the Catholic Church, and the Nicaraguan-American Chamber of Commerce.

Non-party organizations that have come out in opposition to the changes include civil society groups, the Catholic Church, and the Nicaraguan-American Chamber of Commerce. However, Ortega will have little reason for concern if, as history suggests is likely, his political opponents fail to find a way of working cooperatively to establish an effective grassroots movement committed to the defense of democracy.

Some proposed reforms have received less attention, but are potentially no less controversial than those that reinforce President Ortega's already dominant political position. Particularly noteworthy is a provision that grants the weight of constitutionality to Ortega's ambitious plan to build an inter-oceanic canal through Nicaragua.

Back in June, Hong Kong-based HKND Group was granted a 50-year concession to design, build, and manage an inter-oceanic canal across Nicaragua. Ortega's opponents argue that the agreement amounts to an unlawful surrender of Nicaragua's sovereignty in a future canal zone. By granting the project constitutional status, the government has effectively immunized the canal plan from court challenges.

Critics of the canal project have cited logistical issues and environmental concerns, as well as HKND's complete lack of experience with infrastructure projects. Skeptics have questioned how an obscure private firm could possibly secure the financing required for such a massive undertaking, a point that has fueled speculation that HKND is a private-sector front company for the Chinese government.

Officials in Managua know full well that the economy cannot continue to perform at the recent level without sustained outside assistance, and the central rationale for the canal project is that it will free the country from dependence on foreign financial support.

It may turn out that the canal deal instead trades financial dependence on Venezuela for a similarly dependent relationship with China, which, given the relative power of Venezuela and China, and the willingness of the U.S. to tolerate such a relationship, is potentially a much more risky scenario.


The PRS Group
About The Author The PRS Group
The PRS Group is a leading global provider of political and country risk analysis and forecasts, covering 140 countries. Based on proprietary, quantitative risk models, the firm's clientele includes financial institutions, multilateral agencies, and trans-national firms.


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