Economic pressure on Nicaragua may wear Ortega down

Subject

Nicaragua crisis.

Significance

The Organization of American States (OAS) on December 29 activated a legal process that could lead to sanctions being imposed on Nicaragua or the country being suspended from the OAS. This came a week after US President Donald Trump approved the Nicaragua Investment Conditionality Act (NICA), placing conditions on foreign aid and financing to the country. The measures illustrate the pressure being placed on Managua to seek a negotiated exit to Nicaragua’s political and social crisis, which has left the country in turmoil.

Impacts

• Links between Nicaragua and Venezuela will strengthen as both countries portray themselves as victims of US sanctions.
• Some international financing may continue, as the United States does not have a veto over IFI loan agreements.
• Violence will continue to drive outward migration, Costa Rica likely to receive the most refugees.
• Mexico’s recent offer to mediate talks could help ease Ortega’s departure if and when the crisis reaches that point.