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“Corruption in Nicaragua Building Since 2012”

Research and policy expert from Transparency International, warns of the regime’s appropriation of state powers. There’s no sign of upcoming reforms

Octavio Enríquez

7 de abril 2021


The human rights abuses committed in 2018 propelled Nicaragua to the edge of a cliff. For now, there’s no sign of light at the end of the tunnel. That’s the conclusion of Peruvian Jorge Valladares, research and policy expert with the Germany-based NGO Transparency International. In the case of Nicaragua, he sees a process of “increased autocracy and appropriation of the state powers”.

Valladares works in the area of democratic reform, examining issues such as political, electoral and parliamentary financing. He works on this as part of a team with Transparency International.

The issues affecting Nicaragua range from corruption to the opaque way the political parties manage their revenue. Last January, Transparency International’s annual report on perceived corruption ranked the country 159 among 180 nations. Nicaragua’s rating hasn’t improved in over a decade. It’s now almost on a par with countries like Venezuela and Haiti, severe examples of this scourge.

Nicaragua’s situation is the consequence of the model bequeathed by Daniel Ortega, who’ll be up for reelection again next November. The Ortega regime has been denounced for the misuse of state funds, violating human rights and promoting a culture of impunity.

“Autocracy and abuse of state power are mitigated by political pluralism, genuine competition in access to power, and control over the exercise of said power. The road to that competitive pluralism goes through free elections with fair rules. Is Nicaragua headed towards a credible electoral reform? There’s very little indication of that.” These are some of Valladares’ thoughts during his recent interview with Confidencial.

Looking at International Transparency’s annual corruption perceptions index, there are countries like Nicaragua that never improve their status.  Why is that?

The deterioration in the perception of corruption in Nicaragua goes back a decade now. In terms of our index, the country fell after 2012. Clearly, corruption has intensified right alongside the concentration of power. As such, it’s a structural problem. It’s manifested in the public services, whose face is visible to citizens, but also in the rules in play for private investment. In both cases, Nicaragua’s ranking on Transparency International’s index of perceived corruption has fallen.

When you use the verb “fallen” in the case of Nicaragua, what are you referring to?

I’m referring to a structural problem. The State’s function of providing public goods and services to benefit the entire population has been taken over and deformed.  It’s been hijacked by the concentration of power in the hands of the ruler.

What’s happening in Nicaragua is similar to what’s happened in Guatemala, Venezuela, and other countries of the region. The same is true in South Africa and Vietnam as well.  In all these countries, the State has stopped serving the whole of society. Instead, the results of the State actions have undergone a de facto privatization. That is, they’re being appropriated by certain economic, political, or other groups. In the case of Nicaragua, it’s ceased being a free democracy, and there’s also been a State capture [an appropriation of government institutions in the service of the regime.]  That’s not just corruption, it goes deeper.

Judging by our perceptions from outside, Nicaragua is one of the most aggravated cases of growing autocracy in Latin America. It has already stopped being a free, open, competitive, pluralistic democracy. That represents a significant move backwards. In other parts of the world, there’ve been dictatorships that lead to development. However, in addition to no longer being a democracy, Nicaragua runs the risk of ceasing to be a functioning state.

Where could this process lead, if these tendencies worsen?

The processes of state capture are difficult to reverse. You have to look at what has happened in Venezuela and Honduras. There, the loss of democratic quality has allowed criminal organizations to take over the government institutions, including the judicial powers. They’ve then used them for their own enrichment. Takeovers of this kind bring with them a deep instability.

Maintaining these groups in power frequently requires increasing control and abuse, which can be violent. Above all, we must seek to avoid a scenario of social conflict with loss of human lives. That’s what we’re seeing today in Myanmar. We’ve seen it in Nicaragua as well, a little over two years ago.

Nicaragua came to the edge of a cliff in 2018. A deepening of that situation should be avoided. One thing that’s clear in countries is the notion of hitting bottom is very relative. It’s always possible for countries to descend to yet further depths. Currently, the direction of the Nicaraguan reforms and political process doesn’t seem to be leading them away from that 2018 abyss.

Along what route do you see the process of deterioration in Nicaragua going?

Growing autocracy and state capture are mitigated by political pluralism, genuine competition in access to power, and control over the exercise of said power. The road to that competitive pluralism passes through free elections with fair rules. Is Nicaragua heading towards a credible electoral reform? There’s very little indication of that.

In Confidencial, we recently published an investigation on the revenue received by the government party. We denounced the administration’s opacity with such information. Why is it important for political organizations to be transparent with their finances?

Political financing fulfills two key functions. First of all, it evens the playing field, so all those who compete in an election have the same opportunities. You need minimum conditions for democratic competition. Without those minimum conditions, money, and not votes, ends up deciding who wins. The second key function, equally important, is avoiding the introduction of corrupt interests into the decision-making process. Electoral campaigns open a great window of opportunity for corrupt interests to buy political favors.  In Nicaragua, neither of these two functions are being fulfilled.

In any democracy that respects itself, donors must identify themselves, and can contribute only a certain amount of money. You must maintain a registry of your expenses. You have an obligation to declare both your expenses and income to the Treasury Office. In Nicaragua, the only thing that’s known are the financial balances. That summary offers no information on the interests the political parties must respond to, nor how the public money is spent. We’re speaking of a ton of public money, and the citizens have the right to know.

If you make a bank transaction, there are controls. But if I hand that money over to the party, it’s much safer. There, the controls are so weak that they’re nearly an invitation to launder money through the political process.

It seems to me that this is important in the context of the Putin Law (“Law of Foreign Agents”). What can a society do to change this?  A light must be shone on this sort of thing. The work done by Confidencial is extraordinary, so citizens can understand which interests are influencing our representatives. That function could be exercised by civil society organizations, but they need resources for that. If they can’t receive support from foreign sources, their possibility of building and maintaining capability for this is weakened. They have less capacity to give citizens control over their democratic life.

How did Nicaragua arrive at this situation? Was it the populism or the corruption?

Every people have their own history, and the answers are found in that history. It appears that we’ve failed in the region. We haven’t known how to build institutions outside of personal leaderships. Populism isn’t a new problem in Latin America. We’ve had caudillos (strongmen) since we began trying to become independent republics. This personalism has tripped us up. It’s kept us from being able to build institutions within which all citizens can feel we’re equals.

Building institutions doesn’t mean constructing an edifice for a ministry. It means forming intertwined relations among different groups of citizens. Relations based on equal rules for all, rights and social safety nets, guarantees of access to education and health. That, of course, is achieved through building society’s trust, and by pushing out and closing the door to corruption.

In the last decades, and we can see this in other parts of Latin America, beginning with the Odebrecht scandal. These processes have been interrupted by corruption. It’s played a role in this resurgence of populism in the region, because the opportunity arose to privatize public resources for personal benefit.

How do you view the impact of corruption in cases like Nicaragua, where a single party controls all the State powers?

Structural corruption converts public services into out-of-reach luxury goods. It makes for a few winners, while the rest of us become losers. And the appropriation of the state legalizes this injustice.


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Octavio Enríquez

Octavio Enríquez

Periodista nicaragüense, exiliado. Comenzó su carrera en el año 2000, cuando todavía era estudiante. Por sus destacadas investigaciones periodísticas ha ganado el Premio Ortega y Gasset, el Premio Internacional de Periodismo Rey de España, el Premio a la Excelencia de la Sociedad Interamericana de Prensa, y el Premio Latinoamericano de Periodismo de Investigación del Instituto Prensa y Sociedad (IPYS).