December 2, 2022

US escalates sanctions on Ortega’s Nicaragua

The Biden Administration ratcheted up sanctions on Nicaragua as the country’s strong growth undergirds what the US calls the Ortega regime’s “authoritarian and destabilizing activities.” The new round of sanctions targets the country’s lucrative mining and gold sectors and enables the administration to block US investment or Nicaraguan imports more broadly, the WSJ’s José de Córdoba reports. 

New restrictions pose a substantial challenge to the $13 billion economy, which saw 10.3% growth in 2021 on the back of elevated remittances and higher gold and coffee exports. The loss of the US export market for commodities makes a sharp slowdown likely as the country relies on gold for around $900 million, 80% of which is imported by the US, according to the central bank.

Nicaragua produces and exports some $900 million of gold, most of it to the US. Photo: Inti Ocon/Getty Images

Ortega has ruled Nicaragua for the past 15 years after four consecutive election wins, which have been increasingly questionable according to international observers. Ortega has effectively dismantled all opposition across politics, business, religion, and the press—as FMN reported last week. 

The new restrictions will punish the regime, but lessons from CubaVenezuelaIran, and Myanmarhighlight how US sanctions create space for opportunistic countries such as TurkeyRussia and China. With Chinese economic growth in retreat and Moscow domestically focused, a more isolated Nicaragua could pose an interesting test of such powers’ appetite to prop up Washington’s enemies. 

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