Nicaragua: A Model of Corruption and Impunity in Central America
Transparency International's latest report on perceptions of government corruption around the world places Nicaragua among the most corrupt countries, ranking 159th out of 180 countries. In the Americas we are the third most corrupt country, surpassed only by Haiti and Venezuela.
This is one of the most costly and painful legacies of fourteen years of misrule by the Ortega dictatorship. In the massive theft and waste of state resources, which were destined to combat poverty and for national development, there are immense economic costs. But, in addition, there are intangible losses even more difficult to recover in the long term.
Not only did Ortega dismantle all public institutions of control and accountability that existed; he turned those very institutions into accomplices in crime, blurring the lines between public and private sectors. Doing business and investing outside the law, without competition or transparency, but with the strongman’s endorsement.
It’s true that corruption in the public sector is a long-standing tradition and didn’t begin with Ortega. During his time in power, though, it was perfected as a structural link in governing both public and private power. From the failed megaprojects to welfare programs, the model has included extensive bribes of the Judiciary, the Police and the state’s political operators.
Ortega’s original contribution consists in having institutionalized corruption. Dismantling it, and rebuilding control entities, will be a huge task that will demand the continuity of several governments and a genuine institutional revolution. However, the first step is a political change to get rid of the dictatorship.
The Transparency International Index is based on perceptions gathered by experts in governance and surveys carried out with international businesspeople. Therefore, it is also an indicator of the business climate that prevails in Nicaragua. A system that offers short-term incentives for “crony capitalism,” but discourages sustainable investment due to the lack of transparent rules, and the discretion of the state-party-family system.
On a scale of 1 to 100, where 100 means zero corruption and 0 more corruption, in the Transparency International Index the countries with the least corruption on the continent, such as Canada and Uruguay, obtain 77 and 71 points, respectively, while Nicaragua leads corruption in the Central American region with 22 points.
Under the Ortega regime, corruption has been part of a political and economic power system that punishes businesspeople who promote competition, and rewards accomplices, who take advantage of corruption to obtain economic advantages. But those most affected have always been the poorest.
The corruption amounts to massive theft of resources from the poor, for the benefit of the elites. A case in point was the misuse of more than 4 billion dollars from the Venezuelan state cooperation, to finance the private businesses of the presidential family and their partners.
Corruption has flourished due to the lack of democracy and public transparency and extends to all areas of the economy. These include energy distribution and its overpricing, infrastructure projects, real estate investments with funds from Social Security, and much more.
The state has turned a blind eye. What little we know about corruption and the effect it has produced on inequality, is the result of journalistic investigations by the independent press with the support of experts from of civil society.
Fortunately, the winds of change are blowing in favor of fighting corruption and impunity in Central America. The issue is being put on the international agenda by the new administration of President Joe Biden.
In his governing program, Biden proposed to create a regional commission to investigate and punish corruption in Central America. It would focus on the Northern Triangle of the region, where there is an institutional legacy of the reforms promoted by the International Commissions against Impunity (CICIG in Guatemala and MACCIH in Honduras), where the Public Ministry has autonomy to investigate and prosecute corruption.
In an interview with “El Faro,” Juan Gonzalez, President Biden’s advisor for Latin America in the National Security Council, said the objective is not to create a new regional institution, but rather a “task force” with the support of the US Department of Justice, to support the work of prosecutors from El Salvador, Honduras and Guatemala. He warned that “the leader who is not ready to fight corruption will not be an ally for the United States.”
In Nicaragua, under the protection of the dictatorship, corruption is much more serious than in these three countries. The Attorney General’s Office and the Judicial Power act as an official hit squad at the service of impunity. In the absence of a democratic state, it is up to civil society and the new leaders of the opposition to put the issue of corruption and impunity at the top of the agenda for political change.
Under a future democratic government in Nicaragua, it will be imperative to establish a Truth Commission, a Special Prosecutor’s Office, and a profound judicial reform, to investigate crimes against humanity and simultaneously investigate and punish corruption.
It is possible to create these new political control institutions, if Nicaragua gets international assistance, as has happened in recent years in Guatemala and Honduras.
And the only way to achieve that international support is by electing a new democratic government. One with strong majority support that gives it the unequivocal mandate to dismantle the structures of the dictatorship, fight corruption and impunity, and do justice.
But that won’t happen without credible elections or if the opposition is divided and the political majority’s vote is dispersed. Under another term for Ortega, or with a weak government and Ortega 'ruling from below,' corruption and impunity will go on and the poor will continue to suffer the most.
Editor's Note: This column first appeared in Confidencial.
FI name: February 2021