¡Viva el Capitalismo!

By Álvaro Vargas Llosa, the author of “Liberty for Latin America,” is the director of the Center on Global Prosperity at the Independent Institute in Washington (THE NEW YORK TIMES, 13/11/06):

THE irony could not be more poignant. Twenty years ago today, Ronald Reagan went on national television and admitted his government’s involvement in an arms deal with Iran, the proceeds of which, we later found out, were diverted to the contra rebels fighting a Marxist regime in Central America. Now Daniel Ortega, the man those funds were aimed against, has just been elected president of Nicaragua.

And the irony does not stop there. A few days before last week’s elections, Oliver North, the face of the Iran-contra scandal, landed in Managua and asked Nicaraguans to vote for the right-wing Liberal Constitutionalist Party, which is made up in part of old contra sympathizers, and to stop Mr. Ortega.

Whatever else he might have been doing all these years, Mr. North has not been following Nicaraguan politics: for the last seven years, the Liberal Constitutionalists have been allied with Mr. Ortega’s Sandinistas, and they paved the way for Mr. Ortega’s victory by lowering the electoral bar for a first-round victory and by helping split the anti-Sandinista vote. The Gipper must be turning in his grave.

Some will be tempted to conclude that Mr. Ortega’s return amounts to a revival of the cold war dynamic in the Western Hemisphere and, in particular, to a retrospective impugning of Reagan’s policy in Central America. Some might also be inclined to see the vote as a confirmation that the radical left is sweeping Latin America and that the Venezuelan leader Hugo Chávez, who supported Mr. Ortega and provides municipalities under Sandinista governments with fertilizer and oil, has scored a strategic victory.

That would be giving too much credit to Nicaragua, which is today a political and economic pygmy in the region; to left-wing radicalism, which had little to do with Mr. Ortega’s comeback; and to Mr. Chávez, whose favored candidates were recently repudiated in Peru and in Mexico, the two countries where he concentrated most of his efforts.

Daniel Ortega’s comeback is the result of two factors. One is the power-sharing pact that the former President Arnoldo Alemán sealed with the Sandinistas in 1999, with a view to protecting himself and his Liberal Constitutionalist cronies from charges of corruption after leaving office. (It didn’t work out well for Mr. Alemán, who in 2003 was given a 20-year sentence.) The deal they came up with gave Mr. Ortega, who was politically moribund at the time, the kiss of life and gave the Sandinistas seats on the Supreme Court and control of some key institutions, including the election authority.

The other factor was Mr. Ortega’s betrayal of his own creed. The Sandinista leader shed his Marxist rhetoric and, conscious of the need to seduce a profoundly Catholic nation, mended fences with the Roman Catholic Church he had once persecuted. His old nemesis, Cardinal Miguel Obando, presided over the religious (should I say bourgeois?) ceremony in which Mr. Ortega married his longtime partner last year.

The man responsible for the infamous “piñata” — a series of laws put in place just before he lost power in 1990 that allowed the Sandinista leaders to take for themselves confiscated property worth hundreds of millions of dollars — is now talking about his respect for private property and foreign investment.

He has tossed the olive green fatigues and the red and black flag; his campaign colors were pink and turquoise, and his theme song a Spanish version of John Lennon’s “Give Peace a Chance.” He apologized for the massacre of the indigenous Miskito people that took place in the north of the country during his first regime and, finally, he instructed his legislators to vote for a bill banning abortion even in cases of a threat to the woman’s life.

What this farcical saga tells us is that Daniel Ortega was much more interested in being president than in being principled and, more important, that anyone who wants to lead today’s Nicaragua needs to persuade voters that he will respect the rule of law and private property, will try to lure investment and will be sensitive to the nation’s religious heritage. The fact that Mr. Ortega’s past conduct casts a shadow over the proclamation that he is a reformed character does not detract from the fact that Nicaragua has not voted for radical leftist policies.

What about the broader claims — that Mr. Ortega’s victory is a confirmation that radical left-wing politics are back in Latin America? True, in addition to Mr. Chávez, leftists have taken power in Brazil, Chile, Panama, and Uruguay. (Mr. Chávez’s efforts have apparently led the Bush administration to quietly lift a ban on the training of military personnel from 11 Latin American countries in the United States.) But these other Latin American socialists belong to the “vegetarian left” rather than the “carnivorous left.” Other than the occasional Castro-like rhetorical flourish, the new leaders are avoiding the mistakes of the old left, including confrontation with the United States and Europe, fiscal profligacy and nationalization of industry.

Hugo Chávez has been unable to reproduce his regime in any other country except in Bolivia, where President Evo Morales is now increasingly unpopular and has been forced to backtrack on some of his revolutionary announcements. Mr. Morales, for example, campaigned on a promise to force the nationalization of Bolivia’s natural gas fields, but last month came to a deal in which two major Brazilian companies agreed to share revenues and operate as service providers to the state energy company. He even sent his vice president to Washington in July to appeal to the White House for renewed trade preferences.

And in the week since his victory, Mr. Ortega has been sending the signal that he thinks joining the “vegetarians” will bring him more credit than being a clone of Hugo Chávez without the oil. “No one is going to allow the seizure of property big or small,” he told a group of Nicaraguan businessmen after his victory. “We need to eradicate poverty, but you don’t do that by getting rid of investment and those who have resources.”

Now, whether the moderate left will continue to enjoy the support of the masses is an entirely different question. Since many of these new leaders are not engaging in systematic reform, it is likely that voters will hold them to account should their economies — now buoyed by the forces of globalization, through rising exports and foreign investment — start to sag. But for the moment, it’s their show, and the carnivores are outside looking in.

In a sense, these moderate left-wing leaders, perhaps now including Mr. Ortega, are a lot more in sync with what Ronald Reagan and his men were aiming for in Central America in the 1980s than Oliver North would care to admit. As they fall over themselves pandering to the church, the business community and conservative voters, there’s little time left over for creating a New Man.