New US Sanctions Are Designed to Hit Nicaragua’s Poorest Citizens

By John Perry – Nov 3, 2022

The Biden administration has announced new sanctions which are intended to hit the poorest Nicaraguans—both in their pockets and in the public services on which they depend. This latest attack on a small Central American country is, as usual, dressed up as promoting democracy saying that the sanctions will “deny the Ortega-Murillo regime the resources they need to continue to undermine democratic institutions in Nicaragua.”

But everyone knows the real target is ordinary Nicaraguans who voted overwhelmingly to return a Sandinista government to power in last year’s elections.

Anyone hearing or seeing the NPR news item on the sanctions will have read that they are aimed at “Nicaragua’s gold industry,” with an implicit message that this hits President Daniel Ortega’s personal treasure chest. The reality is very different. Gold mining in Nicaragua—generally speaking carried out in less environmentally damaging ways than in most other countries—is a big export industry, employing thousands of people in one of the country’s poorest regions. It also generates significant tax income for the government, which helps fund its enormous social programs. The sanctions affect not just the gold mining business but all the individuals involved in its management. The obvious aim is to scare away the industry’s investors, administrators and technicians—put your money in Nicaragua and lose any assets you have in US banks, is the explicit message.

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Was it a coincidence that the sanctions were announced on the same day that the Sandinista government presented its annual budget for 2023? The budget is 14% higher than this year’s with more than half of the expenditures devoted to social investment. Included in this are the construction of no fewer than nine new public hospitals, adding 4,300 homes to the stock of social [affordable] housing, bringing electricity to an additional 35,000 households and massive improvements in water and sanitary services. Much of the new investment is directed towards the country’s under-resourced Caribbean regions, now properly connected to the main population centers on the Pacific coast by recently completed highways and the huge new River Wawa bridge. These regions are a priority—in part—because they were heavily damaged by recent hurricanes. The government’s careful plans to protect people and rebuild affected settlements helped secure the highest levels of support for Daniel Ortega in any region during last year’s elections. Is it another coincidence that these are the areas where gold mining is a major source of employment, now to be the specific target of US sanctions?

Gold exports provide tax revenue that funds Nicaragua’s massive social expenditures, including this hospital in Bilwi, Puerto Cabezas, which will serve the towns of the Mining Triangle.

The NPR segment repeats the Trump-era argument that Nicaragua is “a threat to US national security.” This ridiculous claim, rolled out again to justify Biden’s latest actions, has no basis in reality. Nicaragua is one of Latin America’s smallest and poorest countries, with a population of under seven million, one of the lowest levels of defense spending in the world and a gross national product equivalent only to that of a mid-sized US city. The idea that it threatens the security even of its neighbors is absurd, much less that of the United States.

The State Department’s press release discloses another reason for the sanctions: Nicaragua’s alliance with Russia. Behind this is Washington’s fear that Latin American countries, and not only those with left-wing governments, are building closer ties both with Moscow and with Beijing. A second message is: make alliances with our enemies and you will be punished. Within this is a third implicit message: you may think you are a sovereign state, but, according to the “rules-based international order” where we decide the rules, you must do as we say.

As I write this, news comes in about another example of US interference in the affairs of another country, this time in neighboring Honduras. The US ambassador, Laura Dogu, is trying to protect the interests of US companies involved in unconstitutional projects known as “ZEDEs” or model cities, set up by the previous corrupt government, replaced in January by the progressive President Xiomara Castro. Castro’s foreign minister has formally requested Dogu’s attendance to explain why she is trying to undermine government attempts to reestablish the rule of law in the zones where the ZEDEs were set up, and why she opposes Castro’s other measures to clear up the previous government’s corruption. As a previous ambassador to Nicaragua, Dogu was involved in similar interference here.

In yet another recent example, The Intercept has just revealed that, in a report to the US Congress, the Biden administration continues to endorse claims of electoral fraud in Bolivia’s 2019 election, which at the time opened the door for a right-wing takeover of the government that lasted until near the end of 2020. As it happens, the left-wing governments in both Honduras and Bolivia are currently under threat from the right. In Bolivia, the opposition has mounted a general strike in the rich region of Santa Cruz. In Honduras, opposition politicians are calling for their supporters to have ready their ”white shirts,” a symbol of support for disgraced former president Hernandez and the corrupt clan that surrounded him. This is precisely the moment when Washington should be supporting elected governments, with whom they may have disagreements, not undermining them. Or is this what the State Department means when it “promotes democracy?”

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These actions are part of a wider failure on Biden’s part to come to grips with the renewed emergence of progressive governments in Latin America. The most notable recent example of this was, of course, the embarrassing Summit of the Americas in Los Angeles, which many of the continent’s governments boycotted. Since then, Colombians have elected the progressive Gustavo Petro as president and Brazilians have brought back to power their former progressive president, Luiz Inácio Lula da Silva, “Lula.”

In an article for Al Jazeera, Canadian academic John Kirk recently wrote that “it is time for the US to recognize that Latin America is being transformed, and the leftist activism of the 2020s represents a clear rejection of the policies of recent decades.” He argues that the region is open to dialogue with the US, but this has to be a respectful exchange of opinions, not “a top-down lecture.” He may be right: despite heavy sanctions, Venezuela has engaged in spasmodic dialogue with Washington as, to the limited extent possible, has Cuba.

Nicaragua, on the other hand, recently refused to accept new US ambassador Hugo Rodríguez after he promised the US Congress that he would “support using all economic and diplomatic tools to bring about a change in direction in Nicaragua.” Rodríguez went on to call Nicaragua a “pariah state,” displaying precisely the arrogance that Kirk described as the obstacle to any sensible dialogue between Washington and its southern neighbors. Meanwhile, Russia and China (and, indeed, other major states such as India, Japan and South Korea), offer development assistance free of the “top-down lectures” and “democracy promotion” which Washington believes it is entitled to employ. Until successive US governments learn to behave otherwise, they will continue to lose friends in Latin America rather than make new ones.

[Editor’s note: In the aftermath of President Biden’s recent signing of the Executive Order that bans US companies from doing business in Nicaragua’s gold industry, the Canadian transnational Calibre Mining Corp that it will continue its operations in Nicaragua. Another company, UK-based Condor Gold, said it does not expect the sanctions imposed by the US to have an impact on its operation in the country. Last year the US slapped the RENACER Act sanctions on Nicaragua just days before the presidential elections. Now more sanctions hit Nicaragua right before the November 6 municipal elections as a way to try to sway voters.]

(Alliance for Global Justice)