US policy on Nicaragua needs a reset, not just more sanctions

On June 8, Sens. Marco Rubio (R-Fla.) and Tim Kaine (D-Va.) introduced a bill to reauthorize and expand sanctions on Nicaraguan President Daniel Ortega’s dictatorial regime, five years after they crushed mass pro-democracy protests in 2018. Yet repression continues in Nicaragua, despite five years of tightening sanctions. Ortega has little interest in negotiations, and with diplomacy at an impasse, Rubio and Kaine’s bill seeks to increase pressure on Ortega.

But just adding more sanctions is not the answer. Policymakers need a clearer vision for how the bill’s provisions would lead Nicaragua closer to democracy.

The bill primarily focuses on economic measures. It would extend and expand targeted sanctions, prohibit new U.S. investment in Nicaragua, and restrict funding to Nicaragua from the Central American Bank for Economic Integration (CABEI). Nicaragua’s compliance with the Dominican Republic-Central American-United States Free Trade Agreement (CAFTA-DR), which Nicaragua has been violating, would be reviewed annually. Finally, the bill calls for supporting human rights and pro-democracy organizations, and pushing for accountability at the United Nations.

One aim of U.S. sanctions is cutting off funds Ortega might otherwise use to fund repressive security forces or line supporters’ pockets. Ortega’s complaints about sanctions make clear that they are, at least, severely inconvenient. Yet sanctions by the U.S. and other allies have not led Ortega’s inner circle to crack or his domestic base to collapse. And Ortega claims that despite having “hundreds of officials under sanctions…this doesn’t cause them any concern or fear anymore.” Sanctions are also not having any deterrent effect in other Central American nations: leaders in El Salvador and Guatemala have continued eroding democracy in their countries.

Restricting international lending and Nicaragua’s free trade privileges might have a larger impact on government finances. But it also increases the risk of job losses and greater economic hardship for more of the Nicaraguan population. This economic pain will not necessarily lead to democratic gains. Economic restrictions fulfill a desire to do something, but we know that both broad and targeted sanctions often fail to bring about political change. Ortega would feel reassured looking at his allies in Cuba and Venezuela, who have weathered sanctions without losing power.

Supporting human rights and pro-democracy organizations, the last part of Rubio and Kaine’s bill, is one area with clear payoffs. Ortega has strangled civil society within Nicaragua, with the Catholic Church the latest target, repressing Nicaragua’s main surviving independent institution. Groups working in exile, however, still have the connections and sources in Nicaragua to hold the government publicly accountable and to support underground pro-democracy efforts. Highlighting government abuses and continuing popular opposition is especially important for building dissent among state employees, whose defection could weaken Ortega’s government.

Promoting and supporting United Nations human rights and accountability efforts is also reasonable. With Ortega having cozied up to Russia and China, however, the Security Council will not take any major action on Nicaragua, and prior UN condemnations have not swayed Ortega.

Efforts to work with Latin American countries may be more fruitful. The Central American Bank’s Board of Governors voted in May against Ortega ally Dante Mossi continuing as executive president. At the Central American Integration System (SICA), Costa Rica and Guatemala rejected Nicaragua’s call to add Russia as an observer. Chilean President Gabriel Boric has consistently condemned repression in Nicaragua. Given the heavy-handed history of U.S. intervention in Nicaragua, Latin American governments leading may be more effective.

There has recently been a thaw in U.S. relations with one of the hemisphere’s other pariahs, Venezuelan President Nicolás Maduro. Venezuela’s oil reserves make it economically useful, and the U.S. hopes Venezuela’s opposition can use the upcoming 2024 elections to strengthen and unify. Nicaragua, however, does not have critical resource wealth. And any hopes of fair elections were dashed in 2021, when Ortega imprisoned opposition presidential contenders.

So long as his health holds up, there seems little prospect of Ortega leaving office before Nicaragua’s next national elections in 2026. Current policies have condemned and sanctioned Ortega and his abusive allies with limited effects.

What new approaches, if any, would loosen loyalty to Ortega? Can the opposition unify and maintain networks within Nicaragua? At what point would compromise with Ortega be deemed necessary, despite his brutality? The U.S. must work with Nicaraguan opposition and civil society leaders and with international partners to answer these questions and forge a clear pathway toward a freer, more democratic Nicaragua.

Rubio and Kaine’s proposed measures would expire in 2028. If they remain necessary then, that would be a failure.

Kai M. Thaler is Assistant Professor of Global Studies at the University of California, Santa Barbara, and has written extensive research articles and commentary on Nicaraguan politics.