Michael Busch

Since the days of William Walker, Nicaragua has suffered routine plunder by thieves, near and far. Americans—mercenaries and businessmen—raided the country in successive ways from the 1850s through the early twentieth century, claiming dominion and taking what they could. In the 1930s, Anastasio Somoza Garcia made ruling Nicaragua the family business, inaugurating a dynasty of dictatorship that was backed for many years by the United States, and which left the country in ruin while making the Somoza clan rich.  

The 1979 Sandinista Revolution promised an end to neocolonial exploitation and the expulsion of a ruling class which grew fat from the rewards of its complicity. While the Sandinistas were never an ideological monolith, the revolutionary government that took power after the fall of Anastasio Somoza DeBayle was united in a commitment to national self-determination and the public good. To be sure, a lot has changed in Nicaragua since the revolution, but not in the way many had hoped. If the early years were characterized by ambitious economic reforms, education programs, and political change, the past decade has been decidedly different.

Today, the Sandinista leadership appears less committed to ensuring revolutionary change than to securing its share of the country's wealth. Leading the charge is Daniel Ortega, the revolutionary leader-turned-statesman who helped steer the country through its transition from authoritarianism while fending off the US-backed Contras. Ortega was bounced from power in Nicaragua’s 1990 national elections, but returned by the ballot in 2006. Since then, Ortega has, by some accounts, treated Nicaragua like his personal property

In the past decade, the Ortega family and its closest associates have consolidated power and wealth to the exclusion of almost everyone else. While Ortega’s personal fortune is not widely known, it is generally agreed to be vast. The average Nicaraguan, by contrast, earns roughly $1,080 a year—wages that are some of the lowest per capita in the Western Hemisphere. Fifteen percent of the population subsists on roughly a dollar a day. 

The cleavage in Nicaragua between private wealth and the public good has been best exemplified recently by the fight over a proposed transoceanic canal. Building a waterway connecting the Atlantic and Pacific Oceans has been a recurring vision of Nicaraguan leaders since the nineteenth century. And now, it seems as if it might be happening. Two and a half years ago, Ortega announced that a $50 billion, 172 mile-long canal would be completed in five years, bisecting the country through Lake Nicaragua and featuring ports and development zones that would purportedly bring jobs and economic development in its tow.

The financial heft needed to construct the canal is coming from China. According to one report,

“The project is set to be developed and operated by HKND, a Chinese infrastructure development firm registered in Hong Kong. CEO and chairman Wang Jing is a successful but virtually unknown telecoms executive with no experience in large-scale civil engineering projects like building a canal. Despite this, Ortega's allies in Congress fast-tracked legislation last year granting HKND a fifty-year concession, renewable for another fifty, to build and operate the canal in return for a payment of $10 million a year once it's up and running.”

Details surrounding the planned canal have been sketchy, to say the least. How the deal went down, who exactly was involved, and what the socioeconomic and environmental effects might be are still largely unknown. Uncertain, too, is precisely how the canal will benefit local communities in the proposed canal zone, as the project’s supporters have claimed. Far clearer are the ways in which life could potentially get much worse. 

In a piece on the canal project earlier this week, Maya Colombon noted that “the Grand Canal Act meanwhile authorizes HKND to expropriate any land in Nicaragua for the needs of the project. It will displace thousands of peasants and indigenous peoples. Yet unlike the Panama project, there was no referendum on whether it should go ahead. In the face of the government’s promises about taking the country ‘out of poverty’ and providing thousands of jobs, farmers’ property rights seem to weigh little.”

Local communities that would be directly affected by the canal have been vociferously protesting the canal's destruction. Large demonstrations had been increasing in urgency leading up to the canal’s official “groundbreaking” near the end of 2014. On December 22, as Nicaraguan officials and Chinese businessmen were celebrating the start of operations in an official ceremony, dozens of protesters were arrested. Some were allegedly victimized by violence at the hands of state security forces. A chief organizer of the protests, Octavio Ortega, told the Guardian that “he was brutally beaten with batons, rifle-butted in the face and illegally detained by police,” before being tossed in jail. 

Beyond these troubling developments, it's far from clear if the planned canal is even viable. Some analysts have expressed skepticism over the available financing such a tremendous undertaking would demand. Even if the money becomes readily available, others have questioned the rationale, noting that “the construction of a Nicaraguan canal would cost at least a hundred billion dollars. In the meantime, Panama could increase its capacity by building a fourth set of locks. That would cost perhaps ten billion dollars, far less than the Nicaraguan canal, and it could be done more quickly.”

The United States doesn’t seem particularly concerned one way or the other. After a long period of silence on the subject, the US embassy in Managua issued a mild statement yesterday in which it expressed “concern” at “the lack of information and transparency that has existed, and continues to exist, over many of the important aspects of this project.” As for the violence visited upon protesters of the canal, the Americans cautioned that “all actors associated with this project…avoid violence and guarantee the respect of human rights.” 

Whether the canal is successfully completed or not, it’s pretty clear who will benefit from the scheme. Beijing, despite denying direct involvement with the canal’s construction, will certainly welcome the chance to further enlarge its rapidly growing footprint in the region. And Ortega, who seems content to swap the old neocolonial order with a new one if it fattens his wallet, will surely reap handsome profits, as well. But no matter what happens, it looks like Nicaragua’s rural population—long victimized by outsider pillaging—will once again get the short end of the stick.

Michael Busch is Senior Editor at Warscapes. Follow him on Twitter at @michaelkbusch