Nicaragua

Modern Nicaragua has struggled through natural disasters, dictatorship, civil war, revolutionary promise, and political corruption to establish itself as a constitutional democracy in Central America. Although in area (59,998 square miles), Nicaragua is the largest Central American state, its population (5.7 million in 2005) ranks among the poorest in the Western Hemisphere. Nicaragua is bordered on the north by Honduras, on the south by Costa Rica, on the east by the Caribbean Sea, and on the west by the Pacific Ocean. The country comprises three major geographic zones: the Pacific Slope, the Central Highlands, and the heavily forested Atlantic Coast. Lake Managua, the largest lake in Central America, and Lake Nicaragua are in the southwest. A string of approximately forty volcanoes runs along the Pacific Coast. Another notable feature of Nicaragua's geography is the break in this mountain chain that made Nicaragua one of the most probable sites for an interoceanic canal. Moreover, this geography has meant that unlike most of the major cities of Central America, which are in the highlands, Nicaragua's population centers—Granada, León, Masaya, and Managua—are all located near sea level. The distinctive physical and climatic characteristics of each region have resulted in varied economic and demographic patterns. Western Nicaragua is the demographic and economic heartland of the country. Managua (population 1 million) has served as the country's capital since 1852. The majority of Nicaragua's population is mixed European and Indian ancestry, and the resulting mestizo culture is centered in the Pacific lowlands and the adjacent interior highlands, where the climate is drier and more comfortable than in the tropical lowlands of the Caribbean watershed. The population of the Caribbean shore is predominantly African and West Indian, with significant enclaves of native Miskito, Sumu, and Rama Indians. In the mid-1980s the central government divided the eastern part of the country into two autonomous regions and gave the indigenous populations there limited self-rule.

Nicaragua is one of the least industrialized countries in Latin America, yet more than half of the population is urban-based. Although it is predominantly Roman Catholic, the country has a rapidly growing Evangelical Protestant population. Traditional agricultural exports including indigo, coffee, bananas, cotton, beef, and sugar have dominated economic development, though fishing, timber, and gold mining also have been somewhat important in its history. Most recently, there has been interest in the potential of hydro- and geothermal power and the growth of tourism.

INDEPENDENCE AND THE EARLY YEARS OF THE REPUBLIC

In the nineteenth century Nicaragua's political development followed the rise of León and Granada. By the close of the colonial period, León, the colonial capital, had become the focus of strong liberal sentiment and the site of the only university in Central America outside the capital city of Guatemala. Granada, in contrast, was the conservative bastion of the landed elite and the center of clerical privilege. In 1811 a creole-dominated junta in León led the first attempt at Nicaraguan independence following the French occupation of Spain in 1808. Royalist forces crushed this attempt. Division among the Creole elite again flared after a junta in Guatemala City declared Central America independent on September 15, 1821, in accordance with Agustín de Iturbide's Plan De Iguala. León favored joining Iturbide's Mexican Empire, whereas Granada favored a separate Central American nation. These diverging visions ushered in four decades of intense conflict between Conservative Granada and Liberal León, in which family feuds became an important component. Before any resolution was reached, however, Iturbide's empire collapsed, and in 1823 Nicaragua joined in the formation of the United Provinces of Central America. Torn by regional factionalism, this federation was doomed to disintegrate. On April 30, 1838, a Nicaraguan constituent assembly declared the state to be "independent and sovereign," and despite Nicaraguan Liberal attempts to resurrect the union in the 1840s, all attempts failed. Although the Conservative politician Fruto Chamorro proclaimed the Republic of Nicaragua on February 28, 1854, frequent civil wars left the country politically exhausted and economically devastated.

It was hoped that plans for an interoceanic canal would fuel Nicaraguan economic development, but the Anglo-American rivalry for control of such a route contributed to further disruption of the country. On the Caribbean coast, the British followed an aggressive policy begun by seventeenth-century buccaneers. A British protectorate over the Miskito Indians left an English-speaking legacy there that remains to this day. In 1816 the British formally founded the autonomous Kingdom of Mosquitia with the crowning of George Frederick II in Belize. They occupied San Juan del Norte from 1848 to 1850 and did not acknowledge Nicaraguan sovereignty over the region until 1860, when the Treaty of Managua ended the British protectorate. By 1894 the British had relinquished all claims to the coast, although they did not finally abandon the region until 1904.

The United States's interest in Nicaragua accelerated following its acquisition of the Pacific coast of North America. In 1850 Cornelius Vanderbilt (1794–1877) established the profitable Accessory Transit Company that ferried California-bound gold prospectors across Nicaragua, while British, French, and U.S. interests competed for control of the canal route.

In response to the Conservatives' victory in 1854, Nicaraguan Liberal leaders invited North American filibusters to aid them in regaining control. In 1855 William Walker brought fifty-eight men from California into the country and quickly took over the leadership of the Liberal armed forces. Within a year he made himself president of Nicaragua, as thousands from the southern United States joined his army in hopes of Nicaraguan land grants and other concessions. A combined Central American army, led by Costa Rican president Juan Rafael Mora Porrás with heavy backing from Guatemala's José Rafael Carrera and the British, defeated Walker in 1857. Walker attempted to return in two subsequent invasions, but was repelled each time. He ultimately was captured by the British and executed by Honduran authorities in 1860.

With the Liberals discredited by their association with Walker, Nicaragua entered a period of relative political stability under Conservative Party rule, referred to as "Los Treinta Anos" (the Thirty Years, 1863–1893). Managua rose to increased political influence, decreasing the historical competition between León and Granada. Under a new constitution, Conservative Party presidents were elected every four years. Foreign investment supported the establishment of railroads and the development of coffee and banana plantations and the timber industry. Gold production increased, and concessions were made to foreign investors in return for infrastructure development. Throughout the period, coffee planters took land from Indians and mestizo peasants. In the 1881 War of the Comuneros, the government brutally crushed a rebellion resisting these land expropriations.

JOSÉ SANTOS ZELAYA, 1893–1909

In 1893 divisions among the Conservatives enabled the Liberal José Santos Zelaya to seize power and rule until 1909. Characterized as a tyrant and a xenophobic nationalist, Zelaya implemented reforms, persecuted political opposition, and alienated foreign interests. His reforms included a new constitution that separated church and state, established civil marriage and divorce, reformed the judiciary, and set up state-controlled education. His economic policies promoted export production, but he also put the country deeply in debt. Zelaya encountered growing opposition from both Conservatives and foreign economic interests that had prospered under the Conservatives' laissez-faire administration. His meddling in the politics of the other Central American states alarmed U.S. business interests, and his anti-U.S. sentiment and taxation of U.S. investors led to a cooling of relations. His challenge to the landed Nicaraguan elite decreased his support within the country. The execution of two U.S. "adventurers" who attempted to blow up two Nicaraguan ships ultimately resulted in a U.S.-backed Conservative revolt led by Juan Estrada. In 1909 Estrada captured Managua and ousted Zelaya.

INTEROCEANIC CANAL

A recurrent theme of nineteenth-century Nicaragua was the effort to establish an interoceanic canal via the San Juan River and Lake Nicaragua. The Clayton-Bulwer Treaty of 1850 had restrained the rivalry between British and U.S. interests, with both agreeing neither to acquire territory in Central America nor to block the other from building a canal, but the agreement also prevented Nicaragua from pursuing a national project for the development of the canal. After the U.S. Maritime Canal Company collapsed in the early 1890s, having failed to build a canal through Nicaragua, Zelaya began to court German and Japanese financial interests for the project. Such actions contributed further to the alienation of the United States. Ultimately, the United States began constructing a canal in Panama in 1904, but in 1913 the United States renewed its interest in the Nicaraguan site, perhaps merely to prevent construction of a rival canal. The resulting Bryan-Chamorro Treaty granted exclusive rights to the United States for canal construction and military privileges in the country. Nicaragua received $3 million to help pay its foreign debt. The treaty was abrogated in 1970. Most recently, former president Enrique Bolaños (b. 1928) presented a plan to build a new interoceanic canal, but with his 2006 loss in the presidential elections, the future of new canal plans for Nicaragua is unclear.

U.S. INTERVENTION

Following the ousting of Zelaya in 1909, the Conservatives found themselves with a very tenuous grip on political power. The Nicaraguan congress named a Liberal, José Madriz (1867–1911), as president, but the United States forced his resignation and imposed a quadrumvirate dominated by Conservatives. A Conservative-dominated congress elected General Estrada president in 1911, but he resigned in protest against excessive U.S. political involvement. Vice President Adolfo Día z took over and began to implement traditionally Conservative policies. When the Liberals under Benjamín Francisco Zeledón revolted and engulfed Nicaragua in a serious political and financial crisis, the Conservatives again turned to the United States. In 1912 U.S. Marines crushed Zeledón's rebellion, took over the operation of the railways, and garrisoned the main cities. The United States supervised the election of Díaz as president and signed the Knox-Castrillo Treaty of 1911, which required Nicaragua to surrender control over its customs collection and other important elements of its financial system to U.S. administrators. In return, the Nicaraguan government received $14 million in loans. The United States also gained the right to intervene on behalf of U.S. interests and to arbitrate any dispute in which Nicaragua became involved. Following patterns already established by the United States in Cuba, Panama, and the Dominican Republic, Nicaragua essentially became a U.S. protectorate, with concomitant control of the Nicaraguan economy by U.S. investors.

By 1914 coffee was Nicaragua's major export, and foreign investment in bananas and gold mining had grown. In 1916 General Emiliano Chamorro Vargas was elected president, and Conservative policies continued as foreign investment grew rapidly. By the 1920s the Standard Fruit and Steamship Company had surpassed United Fruit as the largest single private employer and source of foreign exchange in Nicaragua. Initially, Standard had focused on the timber industry, but once it had cleared the land it turned to and dominated banana production.

Despite Zeledón's death and a ban on Liberal Party electoral activity, the Liberals continued to oppose both the Conservative government and the U.S. presence in the country. A series of Conservative presidents ruled Nicaragua during the early 1920s with U.S. support. The U.S. Marines withdrew in 1925 as political stability seemed assured, but immediately new revolts erupted. Fear of leftist Mexican support for the Liberals influenced U.S. president Calvin Coolidge to send the Marines back in 1926 to protect American lives and business interests. General Chamorro ousted President Carlos Solórzano, but the Liberal vice president, Juan Bautista Sacasa, opposed Chamorro's takeover. The U.S. State Department negotiated a settlement that returned Adolfo Díaz to the presidency, but U.S. military presence increased as Liberal rebels continued fighting government troops. In 1927 the Tipitapa Agreement provided for U.S.-supervised elections in 1928, which were won by Liberal General José María Moncada. Moncada had opposed U.S. military intervention, and in 1931 a gradual withdrawal of U.S. troops began. But the fact that Moncada had taken office during the U.S. occupation alienated many of his supporters, including Lieutenant Augusto César Sandino.

Sandino had fought under General Moncada against the Conservatives and the U.S. Marines. Moncada's collaboration with the Conservatives and U.S. officials and his ultimate election as president convinced Sandino that he had betrayed the Liberal cause and Nicaragua. Sandino withdrew into the hills around Matagalpa in northeastern Nicaragua and launched his nationalist guerrilla struggle against the Marines, which by 1930 included more than 5,000 rebels. Despite aerial bombing, the Marines could not defeat Sandino's peasant army. In the last U.S.-supervised election, in 1932, Sacasa came to the presidency, and in 1933 the Marines left.

U.S. military occupation left three legacies: U.S. economic domination; a guerrilla war; and the development of Nicaragua's National Guard. The United States established and trained the National Guard to assist the Marines in repressing the Sandino Revolt and to maintain order in the country after U.S. military withdrawal. By 1934 it was apparent that Anastasio Somoza García, commander of the National Guard since 1932, had eclipsed the state in terms of power and control. Increasingly, Somoza and Sacasa came into conflict over numerous issues, one of which was Sandino.

In 1934 Sacasa arranged a meeting with Sandino to negotiate a peace that would include the gradual disarming of Sandino's forces. After the meeting, members of the National Guard assassinated Sandino, ostensibly on Somoza's orders. Sandino became a folk hero and a martyr whose cause and symbol was resurrected in the 1960s.

THE SOMOZA DYNASTY

In 1936 Somoza forced Sacasa to resign and arranged for Carlos Brenes Jarquín (1884–1942) to be elected president. The new government implemented traditional Liberal policies, but ties with the United States were strengthened. Although the United States gained economic and financial concessions under Somoza's rule, it was primarily the Somoza family that monopolized the Nicaraguan economy, showing little interest in using their power to promote the general welfare of the population.

Anastasio Somoza García became president in January 1937 and began a regime in which the state, inextricably tied to him, became an increasingly repressive instrument used to prevent opposition participation and economic betterment for any Nicaraguan outside the Somoza circle. Somoza's Nationalist Liberal Party controlled Nicaraguan politics. In 1947 Leonardo Argüello won the presidency with Somoza's backing, but when he attempted to exert his independence, Argüello was ousted after only four weeks in office. His successor, Benjamín Lacayo Sacasa (1884–1959), suffered the same fate. Finally Somoza turned to a member of his own family, Victor M. Román y Reyes, to fill the office, and in 1950 Somoza himself returned to the presidency. The economy expanded, supported by the World War II cotton boom, but the country's stability was increasingly the result of political repression.

Somoza consolidated the state and its administrative, social, and judicial branches in his single person. Through the National Guard, he controlled the military, police, and judges; the awarding of business licenses; the arms, tobacco, prostitution, and liquor trades; the national health services; broadcasting; the collection of taxes; and the leading financial institutions.

Somoza's success continued as long as he maintained the support of the traditional pillars of Nicaraguan society: the ecclesiastical hierarchy; agricultural and commercial elites; the traditional party leadership; and the military. However, his candidacy for a fifth presidential term in 1956 came at a point when the political and economic environment was changing in Nicaragua. Previous support from the emerging middle class began to weaken as Somoza's vast commercial network became a major obstacle to its advancement. In addition, the repressive tactics of the Somoza state had negative repercussions among the general populace. Social discontent ultimately found its voice. On 21 September 21, 1956, a young poet, Rigoberto López Pérez (c. 1929–1956), assassinated Somoza in León. Under a state of siege, the National Assembly unanimously elected Somoza's eldest son, Colonel Luis Somoza Debayle, to complete his term, and a younger son, Anastasio "Tachito" Somoza Debayle took over the National Guard. A popular election confirmed Luis as president in 1957.

A political modernizer, Luis Somoza Debayle sought to remove his family from public office but not from influence. In 1959 he approved a law barring any individual from serving consecutive terms and from being succeeded by a blood relative. In 1963 a family associate, René Schick Gutiérrez of the Nationalist Liberal Party, won the presidential election. Schick died in office in August 1966, and his term was completed by Vice President Lorenzo Guerrero Gutiérrez (1900–1981), but the Somozas held the real power. Tachito consolidated control of theNational Guard and carried out a purge of military and civilian subversives. Opposition leaders were arrested, and despite a 1950 power-sharing arrangement between the Liberals and Conservatives that maintained a sham of democracy, the Chamorro family and its supporters found their influence in the political arena was dwindling despite their control of the leading daily newspaper, La Prensa.

The Somozas' economic interests continued to compete unfairly with other economically powerful sectors of Nicaraguan society. Capitalist investment in agriculture and industry and the worsening conditions of the majority of Nicaraguans presented a persistent contradiction that the Somoza-dominated state dealt with through increasing brutality and repression. As Gutiérrez neared the end of his term, Tachito Somoza announced his candidacy. Popular reaction was negative, and even his brother, Luis, urged him not to run. January 1967 saw mass demonstrations outside the presidential palace. The National Guard fired on the demonstrators, killing hundreds. Tachito became president of Nicaragua in February 1967, defeating, according to the official tally, the National Opposition Union coordinated by Pedro Joaquín Chamorro Cardenal, editor of La Prensa. A heart attack killed Luis in April, removing the only restraining influence over Tachito.

THE RISE OF THE FSLN

The Sandinista National Liberation Front (FSLN) began its opposition to the Somozas in 1961 when Carlos Fonseca Amador, Tomás Borge Martínez, and Silvio Mayorga, influenced by Fidel Castro's Cuban Revolution, founded a small organization that would grow into a major guerrilla force. By 1963 the FSLN was active, but it suffered under the repressive rule of Luis Somoza. By the end of 1967 most of its leaders had been killed or imprisoned, but the remnants regrouped in the northern hills and by 1970 were again actively opposing the government. Initial support for the movement came from leftist students, but the guerrillas also drew on backing from peasants, for whom the image of Sandino was still a strong symbol. The FSLN also attracted the youth of the middle and upper-middle classes, and by 1978 it had about 3,000 members.

Other opposition to Somoza increased. In 1971 the Social Democrats and other leftist parties formed the National Civic Alliance, but the Congress, dissolving itself, transferred all executive and legislative power to the office of the president. U.S. ambassador Turner Shelton helped negotiate an agreement that a triumvirate of two Liberals (General Robert Martínez Lacayo and Alfonso López Cordero) and one Conservative (Fernando Agüero) would succeed Somoza as president in 1972. Somoza, however, remained supreme commander of the National Guard, and announced his intention to stand for reelection to the presidency in 1974.

Then, on December 23, 1972 a massive earthquake destroyed Managua. Between 12,000 and 20,000 died and 300,000 were left homeless. Somoza used the emergency to extend his political and economic power, naming himself the chairman of the National Emergency Committee. His blatant misuse of relief funds further alienated Nicaraguans. His wealth increased while the Nicaraguan population became one of the poorest in Central America. Unemployment reached 36 percent, illiteracy was 74 percent, and 60 percent of the population suffered from malnutrition. Because the Constitution banned active military officers from the presidency, Somoza resigned as directive head of the National Guard in 1973 but remained its administrative head. Amid widespread repression and the imprisonment of many opposition leaders, Somoza won the 1974 election, but the breakdown of the social and economic order and an increase in crime brought rising opposition from within the middle and upper classes.

On January 10, 1978, the vocal and popular Pedro Joaquín Chamorro Cardenal, editor of La Prensa and founder of the opposition Democratic Liberation Union (UDEL), was assassinated. There followed three days of demonstrations, which the National Guard put down violently. UDEL demanded Somoza's resignation and supported a general strike. Somoza answered with a news blackout and press closures. The Catholic Church stepped up its opposition to Somoza as priests began preaching against the government from the pulpit. Student protests increased throughout the late 1970s, and clashes with the National Guard occurred. In July 1978 UDEL joined with Alfonso Callejo's Nicaraguan Democratic Movement (MDM) and Los Doce (Group of Twelve) to form the Broad Opposition Front (FAO) under the leadership of Rafael Cordova Rivas. Los Doce emerged in November 1977, when twelve prominent Nicaraguans declared in La Prensa that there could be no solution to the crisis without the full participation of the FSLN. The church, led by Archbishop Miguel Obando y Bravo, openly supported the FAO, which now demanded Somoza's resignation.

The FSLN, meanwhile, organized the United People's Movement (MPU), which incorporated trade unions, student groups, and progressive Christian activists into the revolutionary struggle. By December 1974 the FSLN had emerged as a major guerrilla force in Nicaragua. A daring raid on a Somoza associate's Christmas party in that year and the 1978 occupation of the National Palace under the leadership of Comandante Cero (Edén Pastora Gómez) brought the release of FSLN prisoners (including Daniel Ortega Saavedra), huge ransom payments, public broadcast of Sandinista objectives, and wage increases. Although Somoza retaliated with new rounds of repression, the FSLN's actions widely publicized its cause and enhanced its popularity, enabling the Sandinistas to become the largest and best-organized opposition group in the country.

By spring 1979 it was apparent that Somoza had lost control, but he was unwilling to admit defeat. His orders to bomb civilian areas left hundreds dead or homeless and merely strengthened his opponents' resolve. In May leading Somocistas fled Nicaragua, and the United States attempted unsuccessfully to impose a plan called by opponents "Somocismo sin Somoza." After terrible violence in which an estimated 50,000 Nicaraguans died, Somoza finally fled to the United States and then to Paraguay. On July 19, 1979, the FSLN took control of Nicaragua, ending the forty-six-year Somoza dynasty.

After the overthrow of Somoza, the FSLN set up a three-person junta that shared power with the Council of State, chosen in 1980 by the various interest sectors. The FSLN also dominated the legislature, although other political and economic groups were represented. Effective power was held, however, by the nine-person FSLN National Directorate. There was popular participation through organizations of workers, peasants, farm laborers, women, youth, professionals, and neighborhood Committees for the Defense of Sandinismo. Although Marxist influence was obvious and Nicaragua established close diplomatic and trade links with Cuba and the Soviet Union (USSR), the FSLN followed a nationalist party line, formally affiliating with the Socialist International in London rather than the Comintern in Moscow. But the subsequent U.S. embargo and efforts to overthrow the Sandinista government resulted in greater dependency on Cuba and the USSR.

The early years of FSLN rule were marked by successful literacy and primary health campaigns that established schools and clinics throughout the nation. An agrarian reform redistributed land, and other restructuring measures promoted a mixed capitalist-socialist economy. National elections in 1984 gave the FSLN an overwhelming victory. At the United States's urging, opposition parties boycotted the election, but international observers deemed the elections fair. Daniel Ortega was elected president of the republic with 68 percent of the votes cast.

THE CONTRA WAR

Relations with the United States deteriorated throughout the Sandinista decade. U.S. president Jimmy Carter provided some aid, but Ronald Reagan's hard-line anticommunism led him in to suspend assistance and to block International Monetary Fund (IMF) and World Bank assistance in 1981. The Reagan administration depicted Nicaragua as a destabilizing influence in the region and linked the FSLN to the guerrilla movement in El Salvador. In December 1981 the White House secretly authorized the Central Intelligence Agency (CIA) to spend $19.8 million to aid FSLN opponents and to create counterrevolutionary forces—the Contras. The Contras operated from camps in Honduras and Costa Rica. Their military operations seriously hampered the Sandinistas' ability to focus on the revolution's social and economic reforms. The CIA mined Nicaraguan harbors, and despite a May 1984 International Court of Justice ruling against the actions of the United States, it continued to support hostilities, even after the U.S. Congress, through the Boland amendments (1982–1984), had prohibited such support. In what became a major scandal for the Reagan administration, the United States began channeling funds received from illicit sale of arms to Iran to CIA-trained Contras. In May 1985 President Reagan inaugurated a total embargo on trade with Nicaragua that continued until March 1990.

The Sandinistas were receptive to international efforts to end the growing civil war, especially to the Mexican-sponsored Contadora Plan, but the United States resisted. Finally, in 1989 all sides agreed to a Central American peace plan proposed by Costa Rican president Oscar Arias Sánchez with strong support from the other Central American states. The Arias Plan brought an end to the Contra war with the promise of another free election in Nicaragua.

The last years of the FSLN's revolutionary period in power were marked by spiraling inflation and a weak economy, stemming from the financial and human costs of the Contra war, U.S. financial and trade embargoes, and government mismanagement. A rollback of many of the revolution's gains occurred as the FSLN leadership implemented an austerity program. By 1989 the currency had been devalued and prices had skyrocketed. Shortages and rationing were common. The FSLN was able to undermine support for the Contras through modifying land-reform policies, improving relations with Atlantic Coast indigenous groups, and implementing grassroots discussions of constitutional reform. The Contras suffered major military reverses as the Nicaraguan government led a sustained but costly offense, but the conflict demoralized the population. From 1983 to 1987, 40,000 lives were lost in the fighting. The damage caused by the Contra war by 1987 was estimated at between $1.5 and $4 billion. Sixty-two percent of government expenditures went to defense, which necessitated reductions in previous priority areas such as education and health care.

VIOLETA BARRIOS DE CHAMORRO AND THE UNO

As proposed by the Arias Peace Plan, Nicaragua prepared for elections in 1990, a time of extreme economic hardship. The GDP had fallen 11.7 percent from 1988 to 1990, and the country faced a $1.2 billion trade deficit. Per capita income plummeted and unemployment reached 35 percent, and the traditional support base of the FSLN was eroding as a result of the austerity measures imposed by the government to regain control over the economy. Despite pre-election polls favoring the Sandinistas, Violeta Barrios de Chamorro, the widow of the slain newspaper publisher Pedro Chamorro, won the national elections. She received the overt backing of the (George H. W.) Bush administration in Washington and was the candidate of the United Nicaraguan Opposition (UNO), a coalition of fourteen political parties from the Left to far Right. On April 25, 1990, Chamorro took office and U.S. aid to Nicaragua was restored.

Despite winning 51 of 92 National Assembly seats, internal divisions within UNO prevented a unified mandate. The FSLN remained the most unified and popular single party (with 39 seats) and was in control of the army under the command of Humberto Ortega Saavedra. Chamorro's political approach was national reconciliation, but her first year in office was characterized by private-sector and public-employee strikes and challenges from both the Right and the Left. UNO's tenuous coalition splintered; the Contras refused to disarm; and the FSLN and labor unions continued to defend the gains of the revolution. In March 1991 the Chamorro government implemented a recommended IMF policy similar to the 1988 FSLN plan, but hoped some of the negative economic repercussions would be softened with substantial U.S. aid. But the United States was slow to respond to aid requests, claiming Chamorro was not taking adequate steps to suppress the FSLN or privatize the economy. In November 1991 there was a resurgence of violence when former Contras, dissatisfied with the terms of the peace accord and opposed to the ongoing presence of the FSLN in Chamorro's government, organized themselves as the "Re-Contras." Supporting Chamorro was the Committee on Nicaraguan Recuperation and Development (CORDENIC), founded by Foreign Minister Enrique Dreyfuss and Minister to the President Antonio Lacayo. This think tank of businessmen and intellectuals advocated a moderate political approach and prepared economic policies and programs aimed at rebuilding the country.

As for the FSLN, it was headed in the early 1990s by a triumvirate of Luis Carrión, Bayardo Arce Castaño, and Henry Ruíz. Humberto Ortega resigned from the Sandinista Directorate and San-dinista Assembly to remain as head of the Nicaraguan army. Although the 1990 election forced the FSLN to reexamine its organization and policies, it emerged from the electoral loss as the best-organized political party in Nicaragua and the key to ensuring political stability.

THE RISE OF NEOLIBERALISM AND THE RETURN OF THE LEFT

As the postrevolutionary era began, the greatest threat that President Chamorro and the process of democracy faced in Nicaragua was not from the Left but from the Right. In 1994 the "Group of Three" (Vice President Virgilio Godoy, Managua mayor Jose Arnoldo Alemán Lacayo, and legislative president Alfredo César) embarked upon an international campaign to oust Chamorro, and attempted to use illegal congressional sessions to undercut her position. Chamorro's government suffered from persistent trade and budget deficits, which were exacerbated by the impact of a 1992 earthquake. Nicaragua's political system stabilized in 1995 with the reform of the 1987 Sandinista constitution, resulting in new powers for the National Assembly, including a presidential veto override for the Assembly and a more even distribution of power among the four branches of government. In 1996 Arnoldo Alemán (b. 1946) was elected president as the leader of a conservative coalition called the Liberal Alliance. Alemán accelerated the neoliberal policies of the postrevo-lutionary era, focusing on privatization and free trade. But the impact of 1998's Hurricane Mitch, which killed thousands, left two million homeless, and caused $10 billion of damage, undercut the modest economic gains of the 1990s. By 2000 Nicaragua was identified as a "Heavily Indebted Poor Country" (HIPC) by the IMF and qualified for a debt-relief initiative. The opposition parties benefited, and in local elections the FSLN swept the Managua municipal elections. In the 2001 presidential elections Alemán was ousted by the Liberal Constitutional Party leader, Enrique Bolaños, who narrowly defeated the FSLN candidate Daniel Ortega Saavedra. Despite three consecutive presidential defeats since 1990 and the taint of corruption charges, the FSLN retained Ortega as party leader.

While Bolaños continued on the neoliberal economic path, the main focus of his administration was a vigorous anticorruption campaign. In 2002 former president Alemán was convicted of corruption and embezzlement and sentenced to twenty years imprisonment, which was later changed to house arrest. Nicaragua's dire economic situation was relieved somewhat in 2004 when the World Bank erased 80 percent of Nicaragua's debt and Russia wrote off its Sovietera debt. Negotiations with the United States and other regional powers resulted in the 2005 approval of the Central American Free Trade Agreement (CAFTA), but this was not enough to promote real economic recovery. Economic growth remained centered on agricultural export production, some increase in foreign investment, remittances from Nicaraguans living abroad, and an emerging tourism economy. None of this was able to offset increasing the popular discontent that boiled over in 2005, ignited by fuel-price and cost-of-living increases. Bolaños's government faced a political crisis over a plan initiated by Congress to decrease the power of the executive through a constitutional reform. A full-blown crisis was avoided when Congress agreed to back off on the reforms until after Bolaños left office in 2007.

The political fallout of Bolaños's anticorruption campaign and continuing economic crisis provided the backdrop for the November 2006 presidential elections. A center-Right vote split resulted in Daniel Ortega Saavedra's return to the presidency. Although the Marxism of his revolutionary years has been moderated, Ortega stated that he will challenge the "savage capitalism" of the previous administrations, and he has established relations with Venezuela's Hugo Chávez and Cuba's Fidel Castro. Nicaragua's recent election results seem to reflect a swing to the Left occurring throughout Latin America. Although constitutional democracy has been clearly established in Nicaragua, and the FSLN was able to recast itself as an effective political opposition party, it will be interesting to see if the FSLN can resurrect the pragmatic socialism of the past to effectively address the economic and social problems facing Nicaragua in the twenty-first century.

See alsoBarrios de Chamorro, Violeta; Bryan-Chamorro Treaty (1914); Central America; Central Intelligence Agency (CIA); Chamorro Cardenal, Pedro Joaquín; Chamorro Vargas, Emiliano; Clayton-Bulwer Treaty (1850); Contras; Estrada, Juan José; Filibustering; Iturbide, Agustín de; Knox-Castrillo Treaty (1911); Managua; Miskitos; Moncada, José María; Mora Porrás, Juan Rafael; Nicaragua, Sandinista National Liberation Front (FSLN); Ortega Saavedra, Daniel; Ortega Saavedra, Humberto; Plan of Iguala; Prensa, La (de Nicaragua); Sandino, Augusto César; Solórzano, Carlos; Somoza Debayle, Luis; Somoza García, Anastasio; Tipitapa Agreements; United States-Latin American Relations; Walker, William; Zelaya, José Santos; Zeledón, Benjamín Francisco.

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                              Heather Thiessen-Reily