Nicaragua: the story of the Daniel Ortega-Rosario Murillo regime

26 July 2018 by Eric Toussaint

The violence against demonstrators protesting against brutal neoliberal policies is just one of the reasons why different social movements have condemned the Nicaraguan regime led by Daniel Ortega and the Vice-president Rosario Murillo. The left has many more reasons to denounce the policies of the regime. To understand this, we must go back to 1979.

An authentic revolution in 1979

On 9 July 1979, an authentic popular revolution triumphed over the dictatorial dynasty of the Somoza regime. The Sandinista National Liberation Front (in Spanish - Frente Sandinista de Liberación Nacional-FSLN) played a fundamental part in the victory thanks to its role in the armed struggle, its political initiatives and its capacity to represent the aspirations of the people. Nevertheless, the FSLN would never have won out against the dictatorship without the immense mobilization of the majority of the Nicaraguan population. Without the courage and abnegation of the people, the Somoza dictatorship, supported by Washington for several decades, could not have been decisively overthrown. Support from Cuba also had a decisive effect.

The FSLN played a fundamental role in the victory of an authentic popular revolution in 1979

In the years that followed, the health, education, housing, freedom of expression and organization, and labour rights in both town and country and the living conditions of a large portion of the popular classes improved significantly. Banks along with a number of industrial and food corporations were nationalized. This resulted in great domestic enthusiasm and a really important international support. Tens of thousands of volunteers from all over the World (mainly from Latin America, North America and Europe) arrived in Nicaragua to help in the work brigades, to contribute to the improvements in health, education and housing and to prevent the revolution from becoming isolated.

At the beginning of the 1980s, Nicaraguan big capital, big multinationals present in the region (food industry, mining, etc.), US imperialism and its vassals (such as the “socialist” regime of Carlos Andrès Perez in Venezuela or dictatorships as in Honduras) formed a coalition to try to put an end to this extraordinary experiment in social liberation and renewal of national dignity. They found it necessary to contain the spreading of such tendencies which became very vigorous in the 1990s. In fact, social revolt was rampant in the region, in particularly in Salvador and Guatemala where revolutionary forces close to the Sandinistas had been active for decades. Neither did Cuba hesitate to defy Washington and the American dominant classes by bringing its support to the Central American revolution.

The Contras

The revolution’s enemies at home and abroad created the Contras, a counter revolutionary army that aimed at overthrowing the Sandinistas. They obtained so much fire-power that they had the capacity to hit the revolution very hard and prolong the conflict until 1989. It was financed, trained and advised by Washington, who presented the Contras to the international community as a liberation army. What’s more, US forces mined the ports, an act condemned in 1986 by the International Court of Justice at The Hague. The US ceased forthwith to recognize the competence of the International Court of Justice.

Washington financed and trained the Contras

In spite of social and democratic achievements, the policies of the Sandinistas quickly showed their limits. The agricultural reform, so long awaited by so many in rural Nicaragua, was quite insufficient: the authorities took too long to redistribute land and property titles to small farmers. It was among these small farmers who were disappointed by such reticence that the Contras developed a social base. The majority of the urban population took part in the revolution whilst feelings were more mixed in the rural areas.

“Direction: Command”

Of course, the primary cause of the difficult situation with which Nicaraguan society had to cope was the imperialism of the US and the local elites who wished to maintain their privileges and continue to exploit the people. But the policies of the Sandinistas themselves also played a part in the failure to extend, consolidate and develop the revolution. Among the causes that originated among the leaders were their authoritarian tendencies, expressed by the slogan “Direction: Command”. This meant that the Masses should await orders from above to apply the revolution. This advice sapped the Masses’ revolutionary ardour.

The Sandinista leaders’ slogan “Direction: command” sapped the Masses’ revolutionary ardour

The way the war was conducted was also cause for concern. The left of the FSLN (particularly through the magazine Nicaragua Desde Adentro) criticized Humberto Ortega, the head of the army and Daniel Ortega’s brother, for forming a regular army equiped with expensive heavy tanks, unsuitable against the guerrilla methods of the Contras. [1] The conscription of the country’s youth in order to reinforce the army was also badly perceived by the population.

The Sandinista government introduced a structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).


As from 1988, the Sandinista leaders introduced a structural adjustment plan that degraded the conditions of the poor without affecting the rich. [2] These policies very much resembled the usual conditions imposed by the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
and World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

while at the same time, under pressure from Washington, the two institutions had suspended their aid to the Sandinista authorities. [3] These adjustment policies were very much criticized by certain tendencies within the FSLN because it burdened the popular classes with the adjustment effort.

A structural adjustment plan is like a kalashnikov, it all depends on who’s doing it

I remember well the reply by Omar Cabezas, [4] revolutionary leader and member of the Sandinista Assembly, in a public gathering in 1989 when we asked him how it was possible that the Sandinista government could apply a structural adjustment plan just like an IMF plan. The gist of his reply was that a structural adjustment plan is like a kalashnikov or a FAL rifle, it all depends on who’s doing it. If it’s the revolutionaries that are doing it then it’s fine. We certainly cannot be satisfied with this kind of answer.

The export-oriented extractivist model with low wages is maintained

Actually the Sandinista leaders conceded a lot to the employers, especially concerning wages, which remained very low. The argument that was used to vindicate this policy was that Nicaragua had to export as much as possible on the global market and that in order to be competitive it had to squeeze wages. Few or no measures were taken to move away from the export-oriented extractivist model with low wages. If they had really wanted to break away from that model that depends on competitiveness on the global market, they should have gone against the interests of the capitalists that still dominated the export-oriented extractivist industry. They should have supported the small and medium-sized producers who supplied the domestic market.

They should have supported the small and medium-sized producers who supplied the domestic market

In 1989 the FSLN government reached an agreement with the Contras on putting an end to fighting, which was of course a good thing. It was presented as the victorious outcome of the strategy that had been adopted. Yet it was a Pyrrhic victory. The Sandinista leadership called a general election in April 1990 and felt certain they would win. Election results struck the Sandinista leadership with an amazed wave of panic: the right had won because it had told voters that if the FSLN won, fighting would resume. The majority of the people wanted to avoid further bloodshed [5] and thus reluctantly voted for the right. They were hoping for an end to war for good. Some were also disappointed by the FSLN government’s policies in the countryside (deficient agrarian reform) and in cities (negative consequences of the austerity measures enforced by the structural adjustment programme begun in 1988) though Sandinista organizations could still rely on a lot of support among young people, workers and civil servants, as well as among a significant number of farm labourers.

The Sandinista leadership expected to reap 70% of the votes in the April 1990 elections, so it was flabbergasted, as it hadn’t perceived the growing discontent in a large portion of the population. This illustrates the gap between the majority of the people and a leadership that had become used to giving orders.

The orientation of the Sandinista leadership was mostly determined by Daniel Ortega and his brother Humberto.

The piñata

After the victory of the right, a significant part of the estates formerly expropriated from the Somozistas after the 1979 victory were appropriated by a few Sandinista leaders, who consequently became very rich. This process was called piñata. Those who organized the piñata accounted for it as meeting the need to secure assets for the FSLN against a government that might want to confiscate the Party’s assets.

They claimed that it was better to turn them into private property owned by trustworthy people such as themselves. In fact, quite a lot of those historical leaders acquired the mindset of the nouveaux riches.

The Sandinista Army after the defeat in the April 1990 elections

The Sandinista leadership, with Daniel and Humberto Ortega at its head, negotiated the transition with Violeta Chamorro’s new government. Humberto was still General in Chief of a starkly reduced army. The most left-wing members of the army had been dismissed, under the pretext that they had supplied missiles to the “Farabundo Martí National Liberation Front” (FMLN), which was still attempting to bring about a general uprising in Salvador. In the context of presidents Gorbachev [6] and Bush [7] coming closer together, Soviet authorities had denounced the fact that SAM 7 and SAM 14 missiles that had been supplied by the USSR [8] to the Sandinistas had been passed on to the FMLN and used to shoot down US army helicopters operating in El Salvador. [9] Four Sandinista officers were imprisoned on an order from Humberto Ortega with the following explanation: “Blinded by their political passion and guided by extremist arguments, this small group of officers flouted military honour and the Institution’s and Military Command’s loyalty, which is the same as flouting the sacred, patriotic and revolutionary interests of Nicaragua.” [10]

This led to strong criticism from the Workers’ National Front (which included Sandinista trade union organizations), from the Sandinista Youth as well as from a number of FSLN activists. Moreover a left-wing faction of the FSLN disapproved of Humberto Ortega remaining head of the army under a right-wing presidency instead of joining the political opposition to the new regime and leaving his position to his deputy, who was also a member of the FSLN.

The FSLN and the Chamorro government

Only a few months after Violeta Chamorro started her mandate as president, a massive protest movement spread throughout the country in July 1990. Managua and other cities were covered with Sandinista barricades and the trade unions launched a general strike. This resulted in a compromise with Violeta Chamorro’s government, which was forced to withdraw some measures, but the Sandinista grassroots was disgruntled at the FSLN leadership having halted protest actions. Later, the Front’s leadership gradually made concessions to Chamorro, accepting the dismantling of the public banking sector, the reduction of the public sector in both agriculture and manufacturing, the end of the State’s monopoly on foreign trade. Chamorro also organized the cleansing of the police force and incorporated former Contras into it. This police force was in the front line to repress social protests in 2018, along with paramilitary militia, about which more will be said below. Chamorro did not directly tackle the army, in the context of the co-existence agreement with the FSLN leadership. Now in the opposition the Sandinistas committed themselves to disarming the people.

In July 1990, Managua and other cities were covered with Sandinista barricades and the trade unions launched a general strike

The first six months of 1991 were marked by a radicalization of the FSLN leadership, under the combined pressure of Sandinista trade union leaders and of actions initiated by the grassroots movement that wanted to stand up for the revolution’s achievements. We can only stand in awe in front of the degree of self-mobilization of the popular masses, who, determined to resist, adopted various forms of struggle: land occupation, occupation of plants, worker-managed production, general forms of struggle (strikes, marches, barricades) addressing various sectors. Young people’s dynamism was an essential factor.

Some of the Sandinista leaders, however (not members of the national leadership but rather former Sandinista ministers such as Alejandro Martinez-Cuenca) openly mention the need for a ‘co-gobierno,’ a kind of conditional external support to Violeta Chamorro’s government, and support the policy enforced by the International Monetary Funds, for to some extent it can be perceived as in line with the policy followed by the Sandinista government from 1988. [11]

The first FSLN Congress in July 1991

The first FSLN Congress, held in July 1991, still displayed the movement’s great vitality and the leadership submitted a text in which it criticized the deficiencies in its own agrarian policy in the 1980s and the verticality in the way it functioned. [12] A token of this radicalization was that the Sandinista MPs left parliament for an unlimited period to protest against neoliberal reforms and the offensive of the right.

However, in the run-up to the 1996 elections Daniel Ortega initiated a shift to the right.

Daniel Ortega’s sharp right turn in 1996

During the 1996 electoral campaign, Daniel Ortega bent over backwards to reach out to the upper classes, showing he had been converted to the benefits of the market economy and moderating his discourse towards Washington. The right-wing candidate Arnoldo Alemán won the elections with 51 % while Daniel Ortega only gained 38 % of the votes. Sergio Ramirez, former member of the National Directorate that broke away from the Sandinista National Liberation Front to start the Sandinista Renovation Movement, got no more than 0.44 % of the votes.

According to Monica Baltodano, former FSLN activist: [13] “The confrontations at the heart of the Sandinista Front between1993-1995 [Author’s note: of which one of the outcomes was the foundation of the Sandinista Renovation Movement] convinced Ortega and his inner circle of the importance of controlling the party apparatus. This came to a head at the Front’s 1998 Congress, where what was left of the National Directorate, the Sandinista Assembly and the Congress of the Front began to fall apart. They were replaced by an assembly where most of the participants were leaders of popular organizations faithful to Ortega. Eventually even this assembly ceased to meet. At that point, there was a significant fracture. It was by then obvious that Ortega was drifting ever further from left-wing positions and was centering his strategy on broadening his power-base. He sought power for power’s sake.

From then on, to increase his power, he embarked upon a series of alliances. The first one, with President Arnoldo Alemán, resulted in the constitutional reforms of 1999-2000. The central proposition of the alliance with Alemán consisted of reducing by the percentage required to win the elections to 35%, sharing the posts of all State institutions between the two parties and guaranteeing the safety of properties and companies belonging to the leaders of the FSLN. In exchange, Ortega gave Alemán assurances of “governability”. It was the end of strikes and industrial action. The Sandinista Front stopped opposing neoliberal policies. Organizations whose main leaders became elected Members of Parliament in the ensuing years or integrated the structures of Ortega’s circle of power ceased to resist or struggle”. [14]

In other words, at the end of his mandate, Arnoldo Alemán made a pact with Daniel Ortega so that they could have more loyal representatives in the institutions thereafter. Thus they strengthened their presence in such institutions as the Electoral Council, the Court of Auditors and the Supreme Court.

Daniel Ortega lost the presidential elections in 2001 with 42 % of the votes against Enrique Bolaños, former Vice-President of Arnoldo Alemán, who gained 56 %.

Daniel Ortega made a pact with Arnoldo Alemán, one of the main right-wing leaders

The Alemán-Ortega Pact was triggered by the decision of Enrique Bolaños, now president, to lash out at his former team-mate Alemán by supporting his indictment for corruption and the subsequent conviction of 20 years imprisonment. In 2003, Daniel Ortega saw to it that the men he had placed in the judicial system arranged preferential treatment for Alemán, allowing him to serve out his sentence in house arrest.

Later, in 2009, two years after his election as president of Nicaragua, Daniel Ortega gave his support to the Supreme Court’s decision to quash Alemán’s conviction and release him. A few days later Alemán returned the favour by ensuring that the parliamentary group of the Liberal Party he led voted for the election of a Sandinista at the head of the National Assembly.

In 2005, Daniel Ortega reconciles with the ultra-conservative Cardinal Miguel Obando y Bravo, converts to Catholicism and marries in Church

In 2007 Daniel Ortega won the presidential elections by making pledges to several major enemies of Sandinismo. Daniel Ortega had won over Cardinal Miguel Obando y Bravo, who had fought hard against him as he had fought hard against the Sandinista Revolution throughout the 1980s and 1990s, to the extent that he had openly supported the Contras. To improve his relationship with the reactionary cardinal, Daniel Ortega apologized for the way the Church had been treated during the revolutionary process. He converted to Catholicism and asked Cardinal Miguel Obando y Bravo to officiate at his marriage to his companion Rosario Murillo in September 2005. [15]

In 2006, Daniel Ortega gave his support to the adoption of an ultra-reactionary law totally prohibiting abortion

In 2006, Daniel Ortega supported the total prohibition of abortion

In 2006, a few months before the elections, the FSLN’s parliamentary group, led by Daniel Ortega, gave their support to the adoption of an ultra-reactionary law totally banning abortion, including in cases where the pregnant woman’s health or life are in danger or where the pregnancy resulted from rape. This legislation came into effect with the new Penal Code in July 2008, under the presidency of Daniel Ortega. Previously, “therapeutic” abortion (in case of danger to the woman’s health or when the pregnancy resulted from rape) had been authorized in the country since 1837. [16]

Part Two will cover the period that begins with Daniel Ortega’s election to the presidency of Nicaragua in October 2006.

See others parts:
1- Nicaragua: the story of the Daniel Ortega-Rosario Murillo regime
2- Nicaragua: The evolution of the regime of President Daniel Ortega since 2007
3- A Brief History of the Relations between the World Bank, the IMF, the US Government and Nicaragua
4- From 2007 to 2018, Daniel Ortega Had the Support of the IMF and Conducted Policies Favourable to Big National and International Capital

The author made frequent visits to Nicaragua and the rest of Central America between 1984 and 1992. He took part in the organization of the voluntary work brigades with trade unionists and other militants of international solidarity that went out from Belgium to Nicaragua between 1985 and 1989. He was one of the FGTB (General Federation of Belgian Labour) activists on Nicaraguan issues. He met with various members of the Sandinista Directorate: Tomas Borge, Henry Ruiz, Luis Carrion, Victor Tirado Lopez in the period from 1984 – 1992. He had close links with the ATC, the Sandinist association of agricultural workers. He was invited to the 1st Congress of the FSLN in July 1991 and the 3rd Forum of Sao Paulo held in Managua in July 1992. At the International Institute for Research and Education in Amsterdam, he taught courses in the 1980s on the FSLN’s revolutionary strategy before they came to power and in the post-1979 period.

The author would like to thank Nathan Legrand for revising the text and helping with documentary research, Claude Quémar and Brigitte Ponet for reading it through.

Translated by Vicki Briault, Mike Krolikowski and Christine Pagnoulle


[1See Inprecor N° 328, April 1991

[2See the Nicaraguan publication Envio, August 1988 extracts were published in Inprecor, n°273 October 1988 under the title “Nicaragua: shock therapy”

[3See Éric Toussaint, World Bank, a never ending coup d’Etat, chapiter 5.

[4For more information on Omar Cabezas:

[5The following comparison gives an idea of human losses in the struggle against the Contras: if they were extrapolated on a scale proportionate to the US population, they would amount to two million dead.

[6Mikhail Gorbachev, born in 1931, was President of the Soviet Union from 1985 to 1991.

[7George H. Bush, born in 1924, was the 41st President of the United States for one single term from January 1989 to January 1993. He is the father of George W. Bush, born in 1946, who was the 43rd President of the United States, from January 2001 to January 2009.

[8In 1990, the USSR still existed; it was led by Mikhail Gorbachev. It went through a process of dislocation between March 1990 and December 1991, resulting in the Federation of Russia, Lithuania, Latvia, Estonia, Ukraine, Belarus, Moldavia, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Azerbaijan, Armenia and Georgia.

[9See Éric Toussaint, ‘Le dilemme de l’armée sandiniste,’ Inprecor n° 328, 12 April 1991. (in French)

[10Quoted in Éric Toussaint, “Le dilemme de l’armée sandiniste,” (The dilemma of the Sandinista Army) Inprecor n° 328, 12 April 1991 (in French).

[11See Éric Toussaint, « Front ou parti : que choisir ? »(Front or party: which shall it be?) Inprecor n° 329, 26 April 1991 (in French).

[12See Éric Toussaint, ‘Renouvellement du Front sandiniste,’ Inprecor n° 337, 27 September 1991 (in French)

[13Mónica Baltodano (“Isabel 104” in the underground), one of the leaders of the urban uprising of June 1979 in Managua, a guerillera commandante, former member of the National Directorate of the Sandinista National Liberation Front (FSLN) and former Member of Parliament for the FSLN. At the FSLN congresses of 1994 and 1998, Mónica Baltodano was promoting the Izquierda Democratica (Democratic Left) tendency, in opposition to those who were to found the Movimiento renovador sandinista (MRS or Sandinista Renovation Movement) led by Sergio Ramirez who had been Vice-President of Nicaragua from 1985 to 1990 at Daniel Ortega’s side. She had then supported Daniel Ortega as General Secretary of the FSLN (against Henry Ruíz, who challenged Daniel Ortega in 1994), convinced by his “left wing discourse”. She left the FSLN in 1998, at the time of the Ortega-Alemán pact. In 2005 Baltodano, with former commandante Henry Ruiz, helped found the Movimiento por el Rescate del Sandinismo (MpRS, Movement to Rescue Sandinismo) see (in Spanish): She remains politically active in Nicaragua.

[14Mónica Baltodano, What is this regime? How has the FSLN changed to reach its present-day situation ?, Inprecor n° 651/652, May-June 2018 or at:’est ce%20que%20ce%20régime%C2%A0%20%20Quelles%20ont%20été%20les%20mutations%20le%20FSLN%20pour%20arriver%20à%20ce%20qu’il%20est%20aujourd’hui%20%20?id=2144

[15See the interesting Obituary published 4 June 2018 on the official Swiss portal of the Catholic Church: Centre catholique des médias Cath-Info, « Nicaragua: décès du cardinal Miguel Obando Bravo à l’âge de 92 ans » (Nicaragua : Cardinal Miguel Obando Bravo has died at the age of 92) (in French)

[16See Amnesty International, The Impact of the Complete Ban on Abortion : Women’s lives and health endangered, medical professionals criminalized, 2009 : On the American continent, there are five countries other than Nicaragua which impose a total ban on abortion: El Salvador, Honduras, Suriname, Haiti and the Dominican Republic. Three countries authorize unconditional abortion: Cuba, Uruguay and Guyana. Source: or in English, see “Global, regional and sub-regional classification of abortions by safety, 2010–14”, The Lancet Vol. 390 No. 10110 p.2372-2381, 25 November 2017:

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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