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Ortega Leads Nicaraguan Vote as Rivals Warn of Rising Power

Nov. 7 (Bloomberg) -- Nicaraguan President Daniel Ortega is heading for a second consecutive term, according to early election results, after a campaign marked by vows to cut poverty and attract investors his government alienated in the 1980s.

The 65-year-old leader of the Sandinista National Liberation Front, which toppled dictator Anastasio Somoza in 1979, leads with 63 percent support compared with 32 percent for radio show host Fabio Gadea, electoral council chief Roberto Rivas told reporters in Managua today. About 86 percent of the vote has been counted, he said.

Ortega is likely to return as president with an economy on course to expand 4 percent in 2011, the second fastest in Central America. Voting shows the former Marxist leader now appeals to business as well as his traditional base amongst the poor, said Philip Brenner, a professor of foreign policy at American University in Washington.

“Ortega’s a new man, he’s transformed himself,” Brenner said in phone interview today. “And people believe him.”

Relations with business leaders have improved since Ortega’s first years of rule from 1979 to 1990, when the economy crumbled amid nationalizations and a war against U.S.-funded Contra rebels, John Booth, a professor in the Department of Political Science at the University of North Texas in Denton, said in an interview.

“Ortega has reassured the business community that he is no longer a socialist threat,” Booth said yesterday.

Congressional Majority

Nicaragua overtook Brazil this year in ease of doing business, according to the World Bank, moving up four places to 118 in the bank’s annual study of competitiveness after making three times as many improvements to its business climate than Latin America’s largest economy.

Ortega, who returned to power in a 2006 vote, is also set to gain a majority in Congress, the last government branch that is not dominated by his party. The Sandinista party has 63 percent of votes for Congress, while Gadea’s has 30 percent, with 26 percent of votes counted, the election council said.

Ortega supporters poured into the capital city’s streets to celebrate the vote and Venezuelan President Hugo Chavez praised the “triumph of the Nicaragua people,” according to comments broadcast on state television.

‘Not Fair’

Roberto Courtney, director of Transparency International’s office in Nicaragua, told reporters in Managua yesterday that the elections were “not fair, honest and credible” after the government blocked the group from observing polls and kept 250,000 people from casting votes, in some cases by denying voter cards.

Observers from the Organization of American States were also barred from monitoring about 20 percent of 52 voting centers, Dante Caputo, head of the OAS electoral mission, said in an interview in Managua.

“We’ve had an electoral process corrupted since its beginning,” Gadea told reporters in Managua today. “In the context of irregularities and abuses, we cannot in this moment accept the results presented by the electoral council because they do not reflect the will of the people.”

The Sandinista-led Congress may enable Ortega to alter constitutional limits on consecutive terms in office, said Edmundo Jarquin, Gadea’s vice presidential running mate.

‘Institutional Dictatorship’

“We’re on an unstoppable march toward an institutional dictatorship,” Jarquin said today in interview in Managua.

Ortega became eligible to seek re-election after Supreme Court judges aligned with the Sandinista party exempted him in 2009 from a constitutional ban against consecutive terms. The U.S. State Department had questioned the court decision and the failure to accredit domestic organizations to monitor yesterday’s voting.

Ortega defended his re-election bid, saying Costa Rican President Oscar Arias and Colombian President Alvaro Uribe made similar changes to seek consecutive terms.

“It’s the same mechanism that’s been used by other Latin American presidents,” Ortega said in comments broadcast by state television after he cast his vote in Managua. “At the end of the day, it’s up for the people to decide.”

In the 1980s, Ortega nationalized thousands of homes and farms while asserting state control over large parts of the economy.

‘Little Dictator’

Then-U.S. President Ronald Reagan, who called Ortega “the little dictator,” ordered a trade blockade of Nicaragua and funded the Contras rebel group to overthrow him. Gross domestic product per capita fell by more than a third and the economy was wracked by inflation that peaked at 33,548 percent in 1988, according to the central bank.

Ortega campaigned this year on the slogan “Christian, Socialist and Solidarity” and won support from Catholic Church leaders by outlawing abortion. He vows to increase spending on schools and provide subsidized food for the poor.

After contracting about 1.5 percent in 2009, Nicaragua’s $6.6 billion economy expanded 4.5 percent in 2010 and is projected to grow 4 percent this year, the most in Central America after Panama, the International Monetary Fund said in an Oct. 5 report.

The Washington-based lender last month approved the final installment of a $114 million credit program to assist poverty-reduction efforts, citing “broad based growth” and public spending restraint.

To contact the reporters on this story: Eric Sabo in Washington at; Blake Schmidt in Bogota at

To contact the editor responsible for this story: Joshua Goodman at

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