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Private Sector: Economy before politics

MANAGUA – When President Daniel Ortega returned to power in 2007, the Superior Private Business Council (COSEP) – a conglomerate of 10 national business chambers – was worried about what might happen to Nicaragua’s already shaky business climate.

And they had good reason for concern. Ortega’s first term as president was marked by massive property and business confiscations, persecution of private sector leaders, hyper-inflation and mismanaged state controls imposed on the country’s economic and productive models.

Though President-elect Ortega made an effort to reach out to business and banking leaders immediately after winning the election in November 2006, COSEP was leery about the prospects of a fresh start.

“When I became president of COSEP four years ago, they said that the private sector was going to disappear entirely,” COSEP President José Adán Aguirre told The Nica Times in a recent interview. “They said that the private sector was going to be confiscated and would disappear like it did in the ‘80s.”

On a personal level, Aguirre also had cause for concern. In the 1980s, COSEP played a leading opposition role to the first Sandinista government. And its president, Masaya businessman Enrique Bolaños (who later became President of Nicaragua from 2001-2006), paid the price for the private sector’s antagonism by getting jailed on three separate occasions.

Aguirre said the second time around, COSEP decided to give Ortega a public vote of confidence. Still, as Ortega returned to power, COSEP was quietly “preparing to defend the private sector from the trenches,” Aguirre admits.

Four years later, the relations between the Ortega government and the private sector could hardly be considered trench warfare. Instead, Nicaragua’s economy is growing faster than any other in Central America (except Panama) and many private businesses are turning record profits.

Indeed, President Ortega – far from the Marxist many thought he was in the 1980s – is predicting private sector investment will top $1 billion for the first time ever this year, doubling 2010 investment totals.

Aguirre admits that communication between the private sector and the government is now better than ever, and says the “economic agenda” is being promoted here like never before. Indeed, the Sandinista government of today appears to be more like COSEP’s partner than its adversary.

That cozy relationship was exemplified Jan. 17, when Ortega met with COSEP and stressed the importance of the continued alliance between public and private sectors. Business leaders ate it up and were quick to congratulate Ortega. Said one participant at the meeting, speaking afterwards on the condition of confidentially, “I’ve never seen that much ass-kissing in my life.”

Aguirre, however, insists COSEP is not brownnosing, rather defending the interests of the business community, which is the main purpose of its existence. Politicians, he said, are in charge of politics. But COSEP’s main concern is the economy – something Aguirre feels has been historically overshadowed by Nicaragua’s tumultuous political situation.

“What we have said is that politics can’t go before economics,” he said. “And that’s what has always happened in this country, which is why Nicaragua, despite all its resources, is the second poorest country in Latin America. We can’t continue to allow political discourse to disrupt our country’s economic and social expectations. And that is our commitment, to prioritize economic issues alongside political issues and not allow political issues to dominate everything else in our society.”

However, Aguirre admits, good politics makes for good business.

“The private sector is also looking for more political stability and respect for [democratic] institutions,” Aguirre said.

In an electoral year in which Ortega is expected to seek a counter-constitutional reelection bid, the lofty ideals of political stability and respect for democratic institutions might be a tall order.

Aguirre said COSEP is “concerned” about the possibility of Ortega’s candidacy, but says, “We’ll to wait and see what happens in the coming weeks.”

Regardless whether Ortega runs, Aguirre said COSEP feels it’s imperative to have credible electoral observers, despite the Sandinistas’ resistance to transparency. If the electoral process is not legitimate, Aguirre said, it doesn’t make sense to forecast continued economic growth in Nicaragua.

“If there is no legitimacy, the [financial] support we have from multilateral organizations would be at risk and so too would the economy,” Aguirre said.

While admittedly concerned about the political process in the country, Aguirre says the best thing COSEP can do is to focus on economic development, which he says will give Nicaragua a better chance at democracy in the long run.

“To strengthen the economy is to strengthen democracy in this country,” he said. “We have said that we cannot have a strong institutional democracy without having a strong economy.”


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