The Americas

Nicaragua's capital is 'a ghost town in a ghost country' as protests paralyze economy

Some of the 6,000 international cargo trucks trapped along the Pan-American Highway in central Nicaragua. The trucks are trapped by makeshift roadblocks built by Nicaraguans demanding the resignation of President Daniel Ortega, and their inability to move is battering the Nicaraguan economy.
Some of the 6,000 international cargo trucks trapped along the Pan-American Highway in central Nicaragua. The trucks are trapped by makeshift roadblocks built by Nicaraguans demanding the resignation of President Daniel Ortega, and their inability to move is battering the Nicaraguan economy. Courtesy

Trying to add momentum to widespread public demands for the ouster of President Daniel Ortega, Nicaragua's main business association has called a one-day national strike for Thursday, with every company in Nicaragua shutting its doors for the day. For a lot of Nicaraguans, that raises the question: How will we tell?

"I don't know what difference a strike will make," said 20-year-old Fernando Sanchez, one of the leaders of the student organizations that have led the protests against Ortega. "Everything is already closed. Bars and restaurants are dark. Supermarkets are running out of stock. The economy is a wreck."

Two months of bloody clashes between police and anti-Ortega protesters have killed more than 150 people. But the most significant casualty may be the country's economy, which is grinding to a halt. Streets — not just in the capital but most of Nicaragua's major cities — look half-empty by day and deserted after sundown.

A medical student visiting Miami to raise awareness of the ongoing student-led street battles occurring in his native Nicaragua recalls putting his education to test as violence escalates in Managua.

The goods on supermarket shelves seem paltry and picked-over, and many of the kiosks in the usually bustling Huembes open-air market in Managua are empty of everyone but their glum owners. "We're only coming so that thieves don’t come,” said María Aguiluz, 60, a vendor standing in front of her deserted shoe stall.

One product that's still hot at Huembes: suitcases. Nicaraguans anxious to escape from what feels to them like a tightening noose have created a booming market in anything related to travel. Customers "are going to Costa Rica, to Panama, to rest a little bit" and wait out the crisis, said vendor María González, 70, who now hawks luggage in front of the stall where she used to dish up food. “We’re all selling suitcases.”

The travel, however, is mostly outward-bound. Tourists have abandoned Nicaragua, and foreign businesses nearly so. The general manager of one international hotel confided to a U.S. businessman last week that on the previous day, his combined receipts from rooms, two restaurants and four bars amounted to only about $1,000.

Many airliners arrive in the capital less than half full — American Airlines has suspended one of its three daily flights between Managua and Miami — but the outgoing flights are crowded. So is the government office that dispenses Nicaraguan passports.

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A virtually empty Delta flight arrives in Managua earlier this month. Violent demonstrations against President Daniel Ortega's government have virtually ended both tourism and business travel to Nicaragua -- but outbound planes, filled with Nicaraguans fleeing the trouble, are usually crowded. Francisco Aguirre Courtesy

Nicaragua's economy has been one of the hottest in Central America, expected to grow 4.5 percent this year. But one think tank, the Nicaraguan Foundation for Economic and Social Development (FUNIDES), reported earlier this week that the political violence has already halved that growth. If unrest continues throughout the year, the foundation predicted, the economy might actually shrink 2 percent in 2018.

For the hemisphere's poorest country after Haiti, that kind of economic contraction would be disastrous. But financial analysts say the FUNIDES report is smiley-faced optimism.

"I've spent a lot of time watching the economies of developing countries over the years, and I can tell you the losses will be at least double that," said Francisco Aguirre, a retired World Bank economist and former Nicaraguan foreign minister. "The damage to the economy is already devastating."

The major engine of economic destruction is not the demonstrations themselves but one of their side effects: the hundreds of tranques — makeshift roadblocks — that protesters have thrown up not only on city streets but on the country's major highways. They make commerce nearly impossible.

The tranques — built from tree trunks, stacks of paving stones and burning tires, as well as a hodgepodge of barbed wire, broken glass and improvised spike strips made from nails — have virtually paralyzed transit through the country.

Each barricade is controlled by a group of independently organized neighbors. Some allow ambulances and trucks carrying food to pass through, while others have restricted access to foot traffic. Getting past a barricade, even on foot, requires a good deal of negotiating and an ID card.

"The purpose of the tranques is self-defense," said Felix Maradiaga, executive director of Nicaragua's Institute of Strategic Studies and Public Policies and a leader of the opposition to Ortega. (Maradiaga, charged with murder by the government while he was in Washington last week pleading for help from the Organization of American States, is in Miami but planning to return to Nicaragua next week.)

"The point is to keep Ortega's mobs and un-uniformed police from infiltrating neighborhoods by having local people control entry. But it's having an unintended consequence on commerce."

It's the tranques out on the highways, though, that are having the most ruinous economic effects. They've trapped an estimated 6,000 trucks carrying international cargo in traffic jams that sometimes move only a few feet a day and often not at all. The consequences of the highway tranques have reverberated throughout Central America, but nowhere so ominously as Nicaragua, where the vast majority of both imports and exports are trucked to ports in Honduras and Panama.

The most serious impact has been on Nicaragua's free-trade zones, in which about 140 factories churn out everything from underwear to seat belts for foreign companies, mostly in Asia. About half of the factories have already laid off significant numbers of workers or even shut down altogether.

"I had coffee this morning with a friend who owns a factory in the Managua free zone, and he just left to go fire 100 workers," a businessman who didn't want to be identified told the Miami Herald this week. "He doesn't want to, but he really doesn't have any choice. He has big stacks of cargo containers full of shirts and pants waiting to go out, and until they do, no money to pay anyone is coming in. Everybody's losing money."

The free-trade zones are among the biggest employers in Nicaragua, with about 130,000 direct employees and perhaps thee times that number whose jobs — supply, maintenance, working in medical clinics and restaurants inside the zones — depend on the zones. "It will be a disaster if we don't get them working at full capacity again very soon," said one businessman whose company works closely with the Managua free zone.

The free-trade zone employees are not the only Nicaraguans enduring grim economic fallout from the trucking gridlock. Gas stations are getting low on fuel supplies. Small-town banks are closing down because their armored cars can't get their cash to secure company vaults in Managua. That makes it difficult for businesses to make their payrolls, which leaves their employees without money to buy anything.

Ortega's government was tight-lipped long before the disturbances began and has made almost no public statements since then. But he did warn at the beginning that the protests would have grave economic consequences.

"They’re destroying the image of Nicaragua, with all that it cost us to construct that image," he said in a televised speech in April. "The image of Nicaragua was an image of war. War. Death. How much tourism and investment and jobs will this cost us?"

It's a question that, many of his countrymen say, has already been answered. "This is a ghost town," said one Managua businessman, "in a ghost country."

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