- The Washington Times - Monday, June 19, 2006

The November election in Nicaragua is “really an election between the past and the future,” claimed Eduardo Montealegre recently during a meeting with editors and reporters at The Washington Times. The current frontrunner’s prognostication of how the November election will shape Nicaragua was blunt: he would keep the small Central American country on a path toward stronger democratic institutions and in the CAFTA alliance, which he views as a political and economic pact. His opponent, former President Daniel Ortega, would quickly realign the country with the authoritarian left that Venezuelan President Hugo Chavez and Cuban leader Fidel Castro have tried to spread through South America.

A politician’s penchant for campaigning notwithstanding, Mr. Montealegre’s stark assessment is, lamentably, quite accurate. Mr. Ortega will take Nicaragua out of CAFTA and into Mr. Chavez’s Bolivarian Alternative for the Americas, and almost synonymous with this is a move to nationalize industry, much like Evo Morales did in Bolivia. Economic ripples from this move will be felt even outside of Nicaragua, mostly in the form of increased immigration to the United States.

Nicaragua’s election is a test of economic, as well as political, vision. Mr. Montealegre’s task is the challenging one that other free-market candidates — notably Lourdes Nano Flores, who lost in the first round of the Peruvian election — have struggled with: convincing the poor that good economic policy will translate into a reduction of poverty in the long run. Poverty is Nicaragua’s most pressing problem. With a per capita GDP of less than $800, Nicaragua is even poor by Latin American standards. Nicaragua receives approximately 35 percent of its budget from foreign investment and aid, and that well would dry up quickly if Mr. Ortega were elected and pursued an agenda of nationalizing industry and expropriation. Mr. Montealegre, an Ivy League-educated former banker and finance minister, can see these repercussions all too well, and would certainly keep Nicaraguan relations strong with the United States.

As with other elections in the region, Mr. Chavez has injected himself into the process in an attempt to influence the results. Nicaragua, because of its poverty, is particularly susceptible to this meddling. Mr. Chavez has offered heavily subsidized fertilizer and fuel to villages controlled by Ortega-friendly governors, and he has coupled this largess with an endorsement of the old Sandinista boss. But, as it has recently in Peru, Mr. Chavez’s presence is having the converse effect, pushing support towards Mr. Montealegre among the many Nicaraguans who detest foreign meddling.

Under the tenure of corrupt president Arnoldo Aleman, the required vote percentage for a first-round victory was decreased from 45 percent to 35 percent (with a required 5 percent margin of victory). This is significant because polls consistently show that Mr. Ortega would not be able to win in a second-round runoff. Collusion between Mr. Ortega and now-imprisoned Aleman continues to influence the political landscape, as the Aleman-backed candidate pulls some of the vote from Mr. Montealegre and has rebuked efforts from Mr. Montealegre to join forces against Mr. Ortega.

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