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History, Nicaragua in the 1990s

FSLN, peaceful transfer of power, Sandinista, Nicaraguans, civilian control

Chamorro was inaugurated in April 1990 and immediately ended the draft. Restarting the economy proved more difficult. The Sandinistas held the largest bloc of seats in the National Assembly, controlled the military and police, and dominated most labor unions. Leading Sandinistas had used the period between the election and the inauguration to appropriate homes and other property for themselves, a situation that became a major source of future controversy. The UNO coalition broke up, in part over a dispute about how to deal with the Sandinistas; the Chamorro administration tried to work with them, while Vice President Virgilio Godoy and the majority of the UNO deputies opposed making concessions to the Sandinistas to gain cooperation.

The new government did manage to reform Nicaragua’s currency, bringing inflation under 10 percent. But economic recovery was blocked by a number of problems: disputes over property rights, legislative paralysis caused by the breakup of the UNO coalition, Sandinista-backed strikes, and lack of some expected international aid. By the end of 1993 Nicaragua’s GDP was slightly below the 1990 level. Most of the contras had put down their arms under UN supervision in 1990, but the lack of jobs, the government’s failure to provide promised assistance, and easily available weapons led to rising crime in the cities and renewed violence in rural areas by former contras and soldiers.

With their country on the verge of disaster, Nicaraguans began to find ways to work together. The assembly passed a series of constitutional amendments that expanded the power of the legislature, reduced that of the president, and made some provision for dealing with property disputes. A new military code was also adopted, strengthening civilian control over the military and limiting the terms of the commander. After some resistance, Sandinista general Humberto Ortega agreed to step down as military commander. Modest economic growth was achieved in 1994 and 1995.

Peaceful elections were held in 1996, with 23 presidential candidates and 32 parties participating. The campaign was often angry, with both major candidates, Managua mayor Arnoldo Aleman of the right-wing Liberal Alliance and former president Ortega of the FSLN, denouncing each other and attacking the Chamorro administration. The election was closely monitored by international observers, who pronounced the voting fair and honest, despite some technical problems. Aleman was elected, and although Ortega and the FSLN challenged the results, they were unable to reverse them. In January 1997 Aleman was inaugurated as president, marking the first time in Nicaraguan history that two consecutive elections had produced a peaceful transfer of power between rival parties.

In October 1998 Hurricane Mitch killed between 3,000 and 4,000 people in Nicaragua and caused extensive property damage. Heavy rains formed a lake in the crater of Casitas volcano, causing a landslide that covered 80 sq km (30 sq mi), wiping out several villages and killing more than 1,500 people. Repairs needed for roads and other infrastructure were estimated to cost billions of dollars. Some observers said that the country had been set back decades by the storm. The international community aided Nicaragua in recuperating from its losses. Many European nations cancelled Nicaragua’s debts. The U.S. government offered two forms of help: It issued a moratorium on expelling Nicaraguan citizens who were in the United States without legal status, and it suspended the schedule of Nicaragua’s payments of debts. In addition to economic struggles, the country’s political tensions have risen steadily in the wake of Hurricane Mitch, with charges of government corruption and student riots demanding an increase in the budget for universities.

In November 1999 Nicaragua’s relations with Honduras and Colombia became strained after the Honduran Congress approved an agreement with Colombia regarding some disputed territory. The pact affirmed Colombia’s ownership of the territory, located in the Caribbean not far from the Nicaraguan coast. Nicaragua claimed the territory, which included valuable fishing grounds.

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