The Sandinistas engaged in an ambitious program to develop Nicaragua under leftist ideals. They nationalized Somoza’s land and commercial interests. They also initiated agrarian reform, and announced a series of social programs, including literacy and public health campaigns. Politically, they professed democratic ideals, but delivered only sporadically. A Statute on Rights and Guarantees was adopted, but elections were postponed. As antigovernment activity increased, the government became increasingly authoritarian. A state of emergency, proclaimed in March 1982 and extended into 1987, introduced prior censorship, particularly felt by La Prensa. Daniel Ortega emerged as the leader of the Sandinistas, and became president when elections were finally held in 1984. However, in that election, the major opposition groups withdrew from the election, making it a rather hollow victory.
In April 1981, the Reagan administration cut off aid to Nicaragua and, citing the Sandinistas’ support for leftist guerrillas in El Salvador, began aiding the contras with funds channeled through the CIA. The Reagan administration sent military aid to Honduras and Costa Rica and sought increases in funding for the contras. Despite some overtures from the Sandinistas, including the expulsion of 2,200 Cuban advisors, the United States continued to support the contras.
Internationally, the Sandinistas made some gains. In 1986, the World Court ruled that the United States had violated international law by mining the harbors in Nicaragua. The rulings made little difference because the United States refused to recognize the decision. In the United States, Congress proved reluctant to fund the Nicaraguan resistance. In 1986, it was revealed that US government funds derived from covert arms sales to Iran had been secretly diverted to provide aid to the contras in violation of a US congressional ban on such aid.
On the domestic scene, the Sandinistas were less successful. Their economic policies had not produced impressive results. The inflation rate reached 33,000% in 1988 and reserves dwindled. Price controls had led to serious shortages in basic foodstuffs. Lacking any capital for investment, the situation was becoming hopeless. Attempts to pin the economic woes on the civil war fell on deaf ears as the economic situation worsened.
The Sandinistas continued to seek negotiated settlements for their internal strife. In 1986, they signed an accord with leaders of the Miskito Amerindians, granting autonomy to their region. In August 1987 Nicaragua signed the Arias peace plan for Central America. Nicaragua promised guarantees of democratic rights, and a reduction of hostilities with the contras, including a cease-fire, a reduction in the armed forces, repatriation or resettlement of refugees, and amnesty for the rebels. In exchange, the Nicaraguans were to receive guarantees of nonintervention by outside powers. Implementation was sporadic, but elections were held in 1990. The United States, for its part, pledged $9 million in support of free elections, and urged all other outside donors to tie aid to the holding of elections.
The 1990 elections had a surprise winner—Violeta Chamorro. Heading a 10-party alliance called the National Opposition Union (UNO), Chamorro received 54% of the vote to Daniel Ortega’s 41%. UNO also took a majority in the National Assembly. Chamorro moved to liberalize the Nicaraguan economy, but found it sluggish. Austerity measures led to dislocations and political disquiet. The United States delivered miniscule amounts of economic aid, to the disappointment of hopeful Nicaraguans. Nevertheless, Chamorro’s government succeeded in driving down hyperinflation that had reached 13,500% to an acceptable single-digit level, and obtaining relief of much of the country’s $10 billion foreign debt, as well as achieving stable economic growth of around 4% from 1994 to 1996.
Politically, Chamorro’s situation was tenuous. With the Sandinistas still in control of the military, Chamorro had a difficult time achieving a reduction in force. Sandinista organizations and syndicates remained, often striking against the Chamorro government. Meanwhile, the resettlement and repatriation of the contras moved slowly. Some former contras took to the field again, resuming their previous attacks on civilian installations. Chamorro’s own coalition, UNO, proved shaky, withdrawing support from her government in 1993 after she attempted to call for new elections. The beleaguered government persisted, but by 1994 the outlook for further progress in unifying the country and implementing democratic and free-market reforms was bleak.
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