Nicaragua's government unlikely to adopt opposition-proposed reforms; raises risks of roadblocks, protester deaths, and weakens government outlook

Anti-government demonstrators established a tyre-barricade to block a road, during protests in the Nicaraguan town of Las Maderas, some 50 kilometres from Managua, on 6 June 2018.

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Roundtable talks were suspended 31 May after police opened fire on the so-called 'Mother's Day' march, with 16 killed and almost 100 injured. The Episcopal Conference of Nicaragua (Conferencia Episcopal de Nicaragua: CEN) has been mediating negotiations which had begun 16 May between the anti-government 'Civic Alliance for Justice and Democracy' comprised of students, local civil society organisations, anti-canal activists, and business and government representatives over countrywide protests (see Nicaragua: 16 May 2018: Government concessions during national dialogue central to Nicaraguan president's ability to withstand anti-government protests in three-month outlook). Over the past 50 days of protests that began 18 April, police and paramilitary groups have killed over 120 individuals and injured over 1,000 according to the Nicaraguan Centre for Human Rights (CENIDH), most of whom have been youths.

Although protests began over the government's unilateral decision to amend the Social Security Laws governing contributions to the Nicaraguan Institute of Social Security (INSS) (see Nicaragua: 1 May 2018: Nicaraguan government instability risks highlighted by anti-government protests unlikely to be mitigated by upcoming protest resolution talks), the size and frequency of the demonstrations escalated after police containment measures against mostly peaceful demonstrators resulted in targeted killings (see Nicaragua: 14 May 2018: Protests in Nicaragua highlight looting and property damage risks to commercial assets, particularly in Masaya and Managua). Continuing police and paramilitary violence against civilians has served to sever support among Ortega's main allies. Consequently, Ortega's government is facing increasing risks of a forced exit in 2018, ahead of the end of his term in 2021, and a recent CID-Gallup poll indicated that almost 70% of Nicaraguans were now in favour of his ouster.

Negotiation delays increase violence against protesters

Ortega's request for time to consider the CEN's proposals to pursue immediate democratisation reforms and a resumption of the national dialogue with opposition groups will exacerbate existing violence. Violence against protesters has been heaviest in the former Ortega strong-hold of Masaya but has also resulted in deaths in Chinandega, Diriamba, Granada, Jinotega, Jinotepe, León, the capital Managua, Matagalpa, and Rivas. Paramilitary groups roam city streets accompanied by gunfire that sometimes directly targets protestors in marches or manning roadblocks.

Medical services have reported that some gunfire injuries appear to be caused from Dragunov sniper rifles, a weapon distributed to irregular armed units during the Contra conflict in the 1980s, with a range of up to 800m and remaining in the hands of former pro-Sandinista fighters after Ortega lost power during his first tenure in 1990. IHS Markit sources indicate that it is likely these same individuals continuing to support the government that comprise paramilitary groups responsible for most of recent shooting deaths. The Nicaraguan military issued a statement 13 May that they would not engage in repression of civilian protesters and have stayed out of the conflict to date.

Business allies break with Ortega over economic impacts

To continue peaceful demonstrations, protestors have solidified over 50 roadblocks throughout the country on up to 70% of roads, delaying cargo shipments across the country and through the wider region from Panama to Guatemala. Blockages are causing fuel and basic product shortages while transnational cargo vehicles have faced up to 10 days' delay along the highway from Managua to Peñas Blancas on the Costa Rican border. Although protesters have not targeted cargo directly, drivers have reported concerns of cargo loses due to damage and opportunistic looting as well as personal injury due to crossfire on main roads near roadblocks, according to Hector Fajardo, head of Central American Transportation Federation (FECATRANS). The Nicaraguan Foundation for Economic and Social Development (FUNIDES) has reported up to USD600 million in private-sector losses to date with a potential loss of up to 150,000 jobs. Economic losses combined with the use of gunfire against unarmed protestors has served to sever relations between the government and the Council for Private Enterprise (COSEP) which had formerly balanced government authoritarianism with a private-sector consensus model used to negotiate business-friendly regulations. COSEP has requested its members to resign all posts held in public institutions.

Outlook and implications

Ortega's increasing isolation increases the likelihood that his government will be forced into making power concessions in 2018. The most likely scenario is that the government agrees to push ahead with the Organization of American States (OAS) on the electoral reform project, which would allow it to demonstrate increased responsiveness to protester demands while holding onto power until at least January 2019. However, protest groups have already expressed discontent at the lengthy timeline for the proposed reform negotiations, meaning that roadblocks would be unlikely to be dismantled immediately, even in the event of transparent and multi-party participation in OAS-led reform developments.

Furthermore, if Ortega refuses to agree to reopen existing democratisation talks with the CEN and opposition groups, his likely action will be to attempt to dismantle protests with continued anti-protest policing and paramilitary tactics. An indicator that he is likely to preference policing actions would be an escalation of targeted shootings and the destruction of an increased number of small businesses in a larger number of towns. In this case the military, which has stated that it will not repress civilian protests, is likely to reissue statements condemning violence against civilian populations. An indication that Ortega is losing the support of security institutions would be strong statements from such institutions against government-supported violence combined with an escalation of police and special forces resignations. This would increase the likelihood of Ortega's flight from the country. The emergence of a leader capable of forming an alternative or interim government would expedite the timeline for Ortega's likely departure prior to the end of his term in 2021.