Daniel Ortega boasts of being part of an exclusive club of political allies, on whom he wastes no time displaying a shocking political subservience, dedicating far-fetched flattery and flattery in his public speeches.
However, this “club of friends” – made up of Cuba, Venezuela, Iran, Russia and, recently joined by mainland China – does not show reciprocal enthusiasm for his regime, less in terms of economic cooperation, donations or loans. that add up to zero in the last five years, when the regime began to lose the support of the international democratic community, which condemned its brutal repression and massacre against the citizen protests of the April Rebellion of 2018, and currently continues to demand the immediate freedom of prisoners of conscience for their political persecution.
Beyond speeches loaded with ideological rhetoric or prefabricated communiqués, these countries aligned with the dictatorships of Daniel Ortega and Rosario Murillo have not functioned as the economic alternative that the regime needs to overcome the financial bleeding in their coffers, due to the reduction of loans, budget support and donations, by the severe international self-isolation in which he is trapped.
A data analysis of CONFIDENTIALwith the reports of the General Budget of the Republic from 2018 to 2023, confirmed that the contribution of the club of friends of the regime in the category of donations or loans is zero.
Even China, the second most powerful economy in the world and therefore the richest member of this club of friends of the regime, does not appear in the General Budget of the Republic (PGR) 2023, despite the paraphernalia unleashed by the propaganda of the regime since who announced the resumption of diplomatic relations with the Asian giantin December 2021.
Ironically, Taiwan, the small island that China claims as its own and which the regime expelled to favor the reestablishment of diplomatic relations with the Asian power, was one of the main donors in the finances of Nicaragua, in the midst of the crisis of isolation of the dictatorship.
In fact, more than a year after the break with Taiwan, the so-called rebel island continues to appear on the list of donors for the regime’s coffers in the PGR 2023, due to the remaining disbursements scheduled from 2020.
The Budget Execution report from January to November 2022 from the Ministry of Finance and Public Credit (MHCP), detailed that in that period, the Ortega regime executed 349.1 million córdobas of “remaining funds” from Taiwan, one year after the rupture with the rebel island. The regime received from China-Taiwan those 349.1 million córdobas as “remaining income received in 2021”, of which it executed 68.5%. The report reveals that, with this figure, the island of Taiwan was the second largest external donor from Nicaragua this year.
Zero contribution from the “club of friends” and poor commercial exchanges
In contrast, the “club of friends” of the regime, in addition to the zero contribution to Nicaragua’s finances, has not been interested in capitalizing on the trade agreements signed with the dictatorship.
These agreements are, up to now, the only mechanism with which the battered finances of the dictatorship could be injected with resources from these countries, in order to overcome the bleak economic outlook for 2023.
A report by the Economist Intelligence Unit forecasts economic growth of 1.8% in Nicaragua in 2023, while the World Bank and the Economic Commission for Latin America and the Caribbean (Cepal) forecast that it could reach 2.1%.
These projections are insufficient to lower the poverty rates in the country, in a context in which the regime’s sources of international financing are closed; and the lack of employment, high inflation and lacerating poverty continue to gallop as a consequence of the political decisions of the regime.
A report of CONFIDENTIAL released on January 2, 2023, cites that 328,443 Nicaraguans they were forced to leave their homeland in 2022, including those who left for other destinations. This figure exceeds the 161,269 Nicaraguans who left in 2021, which had also set a record in the Nicaraguan exodus.
Specialists consulted by CONFIDENTIAL for previous reports they explained that although forced migration translates into an increase in remittances-which reached in 2022 the record of 2578.3 million dollars according to figures from the Central Bank – relying on them to develop economic growth, “is a recipe for failure, since economies based on service and consumption are usually very small, and work until the economy needs to diversify” .
Agreements come and go, without results
In 2022, Nicaragua signed various trade agreements, mainly with China and Iran that, to date, have not produced concrete economic results, despite having been in force for several months.
This year, trade with China it barely exceeded 11.3 million dollars. By contrast, United States, which is Nicaragua’s largest trading partner and with which the regime maintains an open confrontation, registered in the same period 1425.9 million dollars in exports.
Reports released on Twitter by the United States Embassy in Nicaragua reported that the North American nation recorded almost 5 billion dollars in bilateral trade, only between January and July 2022. “The US represents more than 60% of exports of Nicaragua (by including the Free Zone) and 35% of its imports”, detailed one of the reports published by the Embassy in mid-October 2022.
On May 7, 2022, during the visit of the Iranian oil minister, Javab Owji, to Nicaragua, memorandums of understanding and contracts were signed for the oil supply and agricultural inputs. In addition, Owji said that they would study the possibility of investing in the failed refinery on Supreme Dream of Bolívar, a project of 4000 million dollars devised in 2007 by the then Venezuelan president Hugo Chávez, which was reduced to a storage plant in which 510 million dollars were invested.
The mysterious Free Trade Agreement with China
With China, the Agreement for the Incorporation of Nicaragua into the Silk Road was signed and the Early Harvest Agreement, in addition to the start of negotiations for the signing of a Free Trade Agreement.
The official reports of the Treasury and Public Credit do not reflect to date that the Nicaragua’s trade with China has increased after the signing of these two mechanisms. Regarding the Free Trade Agreement, the talks that began at the beginning of September 2022, according to information from the regime, are kept secret, with no information on their degree of progress.
On December 1, 2022, Nicaragua and Russia announced the signing of agreements in areas such as land transport, customs and Information and Communication Technologies (ICT), in addition to an agreement on the use of atomic energy that even led to a United States warning. However, in strictly economic matters, the only concrete exchange with Russia to date is the occasional shipment of wheat flour.
Oil aid repealed, the exchange with Venezuela is over
The case of Venezuela is the most curious of all. The South American country was Nicaragua’s second trading partner in 2016, an exchange supported mainly by the oil agreement between the two countries. However the collapse of international hydrocarbon prices It led Venezuela to cut off the favorable conditions for the purchase of oil from Nicaragua, and that at the same time put an end to the commercial bonanza between the two nations.
The economist Enrique Sáenz believes that this trend of much discourse and zero contribution to Nicaragua’s finances from the club of friends of Daniel Ortega will continue in 2023.
“These times are not the times of the socialist or social democratic solidarity of the 80s. But each country has its particularity. For example: the agreements with Iran have been lying offers. Ortega has been in power for 16 years and there has been nothing significant about the Iranians. In the case of Russia, if they did not support when they did not have a crisis like the invasion of Ukraine, even less now that they are ‘pour water on me, I’ll burn’, looking for help”, Sáenz opined.
“The case of Venezuela is emblematic. Ortega bought oil from Venezuela when the concessional conditions of the Venezuelan cooperation were in place. When the concessionality ended, Ortega now buys from the United States, which according to him is the ‘enemy of humanity,’” he added.
Ideological affinity does not exist: “The Chinese do not give reals”
Regarding the newest member of the club, Saénz points out that one should take, for example, how China has acted with Panama, Costa Rica and El Salvador – economies that are more thriving than Nicaragua’s – to establish the type of economic relationship that can be expected from the giant Asian.
“It is not part of Chinese culture or its foreign relations policy to be giving away reals, much less for someone like Daniel Ortega. There is nothing here of “ideological affinities” as Ortega claimed at the time. Chinese culture bets on long-term projects. What can Ortega offer him in this sense?, when what he shows is a regime with no guarantee of continuity and rather with signs of decomposition”, he stressed.
ortega justified the break in relations diplomatic relations with Taiwan, alleging the existence of a supposed “revolutionary twinning” and a historical political and ideological affinity with People’s China.
Logistical factors and the political subservience of Daniel Ortega
Sáenz also draws attention to the geographical and logistical factors that make it unfeasible to implement commercial exchange agreements with countries such as China, Iran and Russia.
“You cannot lose sight of the objective factors to develop these trade agreements. First, the costs of transportation, freight, insurance. For example: to send 50 tons of coffee to Iran, it is much cheaper to buy it in a closer market. Trade routes must also be taken into account. How many ports do you have to go through to take products to Iran, China or Russia? This does not guarantee competitive prices”, he explained.
However, Ortega does not miss an opportunity to defend or support any diplomatic situation that involves his club of friends. Thus, he sought to ingratiate himself with China protesting the visit of Nancy Pelosi to Taiwan, and previously supported the illegal referendums promoted by the Government of Vladimir Putin to annex territories of Ukraine.
About to expire 2022, he also sent his chancellor, Denis Moncada Colindres, to Iran to strengthen ties of friendship “with that brother government”, as the regime official expressed, at the same time that its authorities unleashed a round of hangings of citizens for participating in protests, accused of the “crime of treason against the homeland”, similar to the political trials undertaken by the dictatorship in Nicaragua.
