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CENTRAL AMERICA |
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Nicaragua's
Newest Tycoon? 'Socialist' President Daniel
Ortega
By
Tim Rogers
MANAGUA - Nicaraguan President Daniel Ortega
doesn't talk like most successful
businessmen. The former revolutionary leader
is much more likely to rail against the
evils of "savage capitalism" than he is to
discuss his multi-million dollar business
ventures.
Yet despite his rhetorical stance against
the "failed imperialist model," Mr. Ortega
and his inner circle of Sandinista
confidants are quickly and quietly becoming
the new masters of the impoverished
country's economy.
Since returning to the presidency in 2007 –
17 years after being voted out of office at
the end of the Sandinista revolution in 1990
– Ortega has created a network of private
businesses that operate under the auspices
of the Bolivarian Alliance for the Americas
(ALBA), an opaque cooperation agreement of
leftist countries bankrolled primarily by
Venezuelan President Hugo Chávez.
Ortega's "ALBA businesses" – known by an
alphabet soup of acronyms, including
ALBANISA, ALBALINISA, and ALBACARUNA – have
cornered Nicaragua's petroleum import and
distribution markets, become the country's
leading energy supplier and cattle exporter,
turned profits on the sale of donated
Russian buses, and purchased a hotel in
downtown Managua, among other lucrative
investment moves.
While government secrecy has cast a long
shadow over the business operations, the
light that gets through reveals profits
registering in the hundreds of millions of
dollars, despite the economy's slip into
recession.
In 2008, Nicaragua's Central Bank reported
that Venezuela gave Nicaragua $457 million
in aid, all of which was managed privately
by Ortega's ALBA holdings, with no
third-party oversight. ALBANISA, a joint
Venezuelan-Nicaraguan oil company linked to
Ortega, recently signed a 15-year energy
contract expected to net the company upwards
of $500 million, depending on price
fluctuations. And last year's oil imports
earned the ALBA group an additional $280
million in revenue, according to
calculations by opposition leader and former
Inter-American Development Bank analyst
Edmundo Jarquín.
"Maybe Ortega isn't the richest man in the
country, but he is making more than anyone
else in Nicaragua," Mr. Jarquín said.
Blurring the line between state and first
family?
Critics say President Ortega and the
Sandinista Front have created a web of
businesses operations that have blurred the
distinction between party, state, and first
family. For example, Ortega's personal
confidant Francisco López is the treasurer
of the Sandinista Front, as well as the
president of the government-run Petronic
petroleum company, the vice-president of the
private-run ALBANISA, the president of
ALALINISA, and the administration's
representative to power-distributor Unión
Fenosa, of which the Sandinista government
recently purchased 16 percent. At this
point, critics say, it's impossible to know
whose interests he or his businesses
represent.
"Wherever there is confusion or a conflict
of interests between the state and the
government, and the ruling party and the
first family, the situation becomes
corrupted," said former Attorney General
Alberto Novoa, who spearheaded the
anti-corruption campaign against former
President Arnoldo Alemán, accused of bilking
the country of $100 million during his turn
in government. "The separation of state and
party is an unfinished task in Nicaragua."
'Cuba-inspired model'
Untangling the web of business interests has
been a difficult task.
Moises Martínez, an award-winning
investigative journalist for the leading
daily La Prensa, says the government secrecy
of Nicaragua's "Cuban-inspired model" has
made his two-year investigation of Ortega's
ALBA business dealings "like trying to dig a
tunnel with a hand shovel."
Despite being denied access to government
sources and companies such as ALBANISA,
journalists have uncovered a web of almost a
dozen ALBA business holdings, which Martinez
claims has made Ortega and his family one of
the most important economic players in the
country, on par with Nicaraguan business
tycoon Carlos Pellas. "The difference,"
Martinez says; "is that it took the Pellas
family 80 years to accumulate their wealth.
Ortega has done it in two years."
Yet unlike most nouveau riche, Ortega and
his Sandinista confidants – who first rose
to economic power in 1990 during a $1.5
billion land grab known as the "piñata" –
still identify as the poor and downtrodden.
In fact, Ortega, who has had no other job in
his life other than president, claims a net
worth of only $200,000, according to his
last declaration in 2006.
But Ortega failed to report any property or
"piñata" holdings, including his personal
compound, which he confiscated in the 1980s
and is estimated to be worth around $1
million.
Tight-lipped Sandinistas
The Sandinista leadership is decidedly
tight-lipped on the subject of its business
dealings. Ortega's wife, Rosario Murillo,
spokeswoman for the government, the
president and the Sandinista Front, did not
respond to the Christian Science Monitor's
requests for an interview. And presidential
adviser and economist Orlando Núñez also
failed to return requests for comment.
President Ortega's brother, however, says
the Sandinistas' new capitalist clout and
economic rise to power is nothing to be
ashamed of.
"If there is a free market, there needs to
be a system in which people are free to get
rich, so the poor can stop being poor, so
the poor can become middle class and the
middle class can become business owners and
be better off," says retired Gen. Humberto
Ortega, adding that the Sandinista
revolution broke the economic stranglehold
of a small ruling class and allowed the
Sandinistas to become "new actors" in
today's modern free-market economy, which he
defends.
People shouldn't pay too much attention to
the Sandinista government's anti-capitalist
rhetoric, says General Ortega, because "one
thing is discourse for the political
clients, and another thing is what the
reality shows you are doing."
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