The dust has settled, the votes have been counted and it is official, Daniel Ortega is President Elect after winning 38% of the national vote on the back of a campaign focused on the twin themes of “Peace and Reconciliation.” The result has generated a flurry of international reaction – some of it at odds with the reality that we are experiencing here on the ground. It has been an interesting week and in some ways there has been a feeling of relief – we will now finally be able to address the elephant lurking in the corner when we discuss investment in Nicaragua – what will happen if the Sandinistas return to power?

Early reactions to the result were cautious with much of the regional and international press adopting a ‘wait and see’ attitude. For the tourism and real estate sectors in particular, Ortegas’ approach to CAFTA, inward investment and the protection of property rights were key issues.

Ortega has been quick to address these issues by adopting a pro-active approach in his first few days as President Elect. His first key meeting was with representatives of the foreign investment community at the Crowne Plaza Hotel in Managua. We attended the meeting and heard first hand as Ortega stressed his commitment to foreign investment, recognizing it as one of the keys to continued growth and future prosperity for the country. He made clear his intention to support the DR-CAFTA and stated publicly that property rights would be protected. He continued the momentum this past week with meetings with COSEP (the Nicaraguan Chamber of Commerce) and key members of the banking and finance community. If we are to judge Ortega by his actions and not his rhetoric then so far he has been doing, as well as saying, the right things.

"We need to eradicate poverty, but you don't do that by getting rid of investment and those who have resources."
President Elect Daniel Ortega at a meeting with the foreign investment community earlier this week
None of this is really very surprising. On a global level, the geopolitical scenery has changed significantly since the Sandinistas were last in power and this is well understood by the Sandinista leadership. Secondly, on a more local level, the current Sandinista party is very different to the Sandinista party of old. The members, by their own admission, have matured and mellowed. Many of them have substantial financial and business interests in the country and so have a very personal stake in the future economic success of Nicaragua.

In addition, the Sandinistas have been very involved in the governance of the country at all levels over the last 16 years. Having Sandinistas in government is not something new. Interestingly, two of the biggest growth areas for tourism and foreign investment, the towns of Granada and San del Sur (along with the capital Managua), have had Sandinista local governments for a number of years now, presiding over rapidly growing and highly successful foreign tourism and investment markets.

“San Juan welcomes all foreigners and foreign investment with open arms.”
Sandinista Mayor of San Juan del Sur, Eduardo Holmann, commenting post election. Click here for the Mayor's open letter to investors.

Another factor to note is that although Ortega has won the Presidential seat, he has not secured a controlling number of seats in the National Assembly – the Liberal and Conservative parties (ALN and PLC) have a larger representation. This is an important factor in the new political landscape as the Assembly is equivalent to the US Congress and is the body responsible for passing laws, altering rules and establishing task groups. This means that there will need to be debate and discussion on key issues and the parties will need to work co-operatively in order to move the country forward with no one political party having a clear advantage in voting processes.

“We want to offer security to the private sector and to investors."
Ortega in at a meeting with ex US President Jimmy Carter on 8th November (pictured above)

If we look toward the long term, a Sandinista victory may well emerge as a positive factor in Nicaragua’s history, sweeping away once and for all the old concerns rooted in memories of the revolution that have hung over the country for over 15 years. In the short term we may experience some price stability as investors watch what Ortega does in his first weeks in power. But after this period, as uncertainty over Ortega falls away, the property market is likely to come back stronger.

The future for Nicaragua looks positive from where we stand at the moment. We will continue to monitor the situation and keep you updated over the next weeks and months. And we are ready to support Ortega in keeping his promises to move the country forward in a positive direction which will be of benefit to all of us.

Best wishes

Claudia and Sara