If the U.S. government accepts the recommendations made by international experts and Nicaraguan activists during a forum on the deterioration of religious freedom in Nicaragua, the Central America-United States Free Trade Agreement, known as DR-CAFTA, could become a tool to pressure the dictatorship of Daniel Ortega and Rosario Murillo, who are relentless in their policy of repression against the church.
The U.S. Commission on International Religious Freedom (USCIRF) convened international experts and Nicaraguan activists to testify on the latest in the repressive campaign that the Ortega-Murillo regime has unleashed against the Catholic Church since 2018 and against Protestant churches more recently.
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Since 2018 the Ortega Murillo regime has expelled from Nicaragua, as of the date of publication of this article, 150 priests, which is equivalent to approximately 25 percent of the total number of presbyters in the Ecclesiastical Province of Nicaragua, which according to research by LA PRENSA, as of 2021 had 611 priests.
Of the nine dioceses and one archdiocese that make up the Province, the hardest hit has been Matagalpa, which currently has no bishop or vicars and only 20 clergy remaining, when in 2021 it had 51 diocesan priests.
Expert: “The regime is descending into totalitarianism”
Cristopher Hernández-Roy, deputy director of the Center for Strategic and International Studies (CSIS), stated that the situation of religious freedom in Nicaragua has been deteriorating “as the regime descends into totalitarianism”.
The most vicious repression has been against the Catholic Church which the regime “sees as a political actor that opposed its policies in the 1980s, contributed to its electoral defeat in 1990 and criticized it for its repression of protests in 2018.”
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“Ortega intends to dismantle the Church and other religious organizations as part of his relentless persecution to consolidate a dynastic dictatorship, the very thing he fought against as a young Sandinista rebel when he was trying to defeat the Somoza dictatorship,” said Hernández-Roy.
The expert added that the United States and countries that share its values need a strategy for change that “effectively strikes at the tools the regime uses to repress its own people”.
“The Nicaraguan Army retirement fund is a good example of something that should be under a microscope and prohibited from investing and receiving profits in U.S. financial markets,” Hernandez-Roy said.
For the suspension of DR-Cafta, the impact on migration must be considered
The other issue suggested is the suspension of Nicaragua from the U.S.-Central America-Dominican Republic Free Trade Agreement (DR-Cafta). However, the expert acknowledged that before taking such measures, the possible immigration repercussions for the United States should be carefully evaluated, since higher unemployment in Nicaragua would encourage illegal migration northward.
Ortega is using migration as a weapon against the U.S.
Hernández-Roy pointed out that the Ortega-Murillo regime is already using immigration as a weapon against the United States, using the country as a springboard for planes carrying thousands of Cubans, Venezuelans, Asians, Arabs and Africans to Nicaragua, who continue their journey by land to the U.S. southern border.
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“Already the U.S. government announced sanctions against travel operators that were doing this type of flights of people going to Nicaragua with no intention of staying in the country.” Hernandez Roy said in an interview with LA PRENSA.
The big obstacle is that when DR-CAFTA was created, no clause was incorporated for the suspension or expulsion of some of the member states. Therefore, there is no mechanism to remove Nicaragua from the treaty.
Tighten the screws on sectors favored by DR-CAFTA that benefit the regime
“Mercosur has a mechanism. The only thing they could see is to convince the countries to scrap DR-CAFTA and negotiate a new one, which nobody wants to do because it means opening a new negotiation,” Hernandez-Roy explained. “It is possible, but very difficult. Something better is to progressively target different sectors of the economy, especially those that benefit the regime. Find the products that generate money for the government without using a lot of labor that is affected.”
For his part, academic and exiled activist, Felix Maradiaga, pointed to the recent closure of Radio Maria and the confiscation of all its assets, as the latest move by the dictatorship in its quest to silence and disappear the Catholic Church.
Maradiaga also advocated for the suspension of DR-CAFTA privileges, calling it “unbelievable” that six years after the 2018 massacre, access to the treaty is still allowed.
“It is crucial to evaluate the fact that the U.S. has a Free Trade Agreement with Nicaragua. How can such advantages be granted to a regime that violates every principle of human rights?” added Maradiaga. “In addition, the United States must work with its allies to impose more sanctions and pressure, including expanding the list of sanctioned individuals and institutions, such as the case of the Nicaraguan military.”
IPSM’s investments on the New York Stock Exchange
The Instituto de Previsión Social Militar (IPSM) was created in 1994 during the government of Violeta Barrios de Chamorro with a seed fund from the sale, more than 30 years ago, of Soviet helicopters to Peru.
According to an investigation published by Confidential news site in August 2019, IPSM’s investments in the U.S. Stock Exchange are estimated at about $30 million and are managed through several specialized firms, including Russell Investments, Reverence Capital Partners and TA Associates.
The management of this fund has been done in total secrecy and without a single audit by the Comptroller General’s Office, which is empowered to do so.
To give an idea of the growth rate of this investment, the only report published to date on the Institute’s investments reported that between 1995 and 1996, IPSM’s investments would have generated US$5 million.
In 2012, a Confidencial news site report -based on an audit by the firm Deloitte & Touche- revealed that the IPSM, in total, had in 2002 a capital of US$29.5 million, which by 2009 had increased to US$72.3 million. Sources of the military entity stated, at that time, that the IPSM funds could be between 90 and 100 million dollars, of which at least 35 per cent were invested in bonds in the United States, hence the estimate of approximately US$30 million in the New York Stock Exchange.
Are Army funds still listed on the New York Stock Exchange?
However, these calculations date back to 2012, since when much water has flowed under the bridge, particularly since the violent repression unleashed by the regime of Daniel Ortega and Rosario Murillo against Nicaraguans.
It has not been possible to confirm whether the U.S. firms continue to manage the investments for IPSM, which due to the political situation in Nicaragua is considered a politically sensitive entity; especially since there have been constant calls from Nicaraguan human rights groups for these funds to be frozen.
Would freezing IPSM funds bring the military closer to Ortega or alienate it?
There is no consensus on whether the freezing of the military’s investment fund would contribute to the military withdrawing its support for Ortega and backing a return to democracy.
“I have heard some Nicaraguans, (U.S.) citizens and some ex-military, say that those military are going to be with Ortega no matter what. They have no other source of retirement than Ortega,” said Hernández Roy. However, the expert believes that “the freeze would be an incentive for better behavior. I believe that increasing the pressure on the Army is sanctioning an institution that is supporting the regime, and the population would not feel it”.