Nicaragua is officially a dictatorship — and US money paved the way

At a rally last week marking the anniversary of the Sandinista revolution’s victory over the Somoza dictatorship, Daniel Ortega — who first came to power as leader of the 1979 Sandinista revolution and governed until he lost an election in 1990 — announced that Nicaragua will never hold elections again.
Nicaragua’s elections have been meaningless since 2021, when the regime jailed every viable opposition candidate ahead of that year’s presidential elections.
But the announcement deserves attention, because over the last 20 years, Ortega and his wife and co-president Rosario Murillo have extinguished political freedom in Nicaragua more thoroughly than any country in the Western Hemisphere.
Cuba and Venezuela are brutal regimes in their own right. But in some respects, the Ortega-Murillo regime has gone further than either of them.
Since 2018, it has shuttered thousands of NGOs, universities and charities — roughly 80% of all civil-society organizations in the country.
It has gutted the Catholic Church, exiling over 200 clergy and nuns and banning ordinations in four dioceses.
Nicaragua has aggressively deployed a tool no other regime in the hemisphere has used: manufactured statelessness.
At least 452 Nicaraguans have been arbitrarily stripped of their nationality by court order, their assets seized, their legal identities erased.
Exiled critics face surveillance and harassment abroad, and at least one — a former Sandinista military officer turned regime critic — was killed at his home in Costa Rica last year.
Ortega didn’t seize this power in one dramatic coup. He built it the boring way — patiently and systematically taking over state institutions and changing the rules.
It started in 1999, when Ortega — then out of power — cut a deal with his right-wing rival to divide control of the Supreme Court and other key institutions between their two parties, freezing out other political parties.
After Ortega returned to power in 2006, winning an election thanks in part to a divided democratic opposition, the institutional capture accelerated: reelection was allowed in 2011, term limits abolished in 2014 and finally a new constitution in 2025 handed the Ortega-Murillo family absolute, hereditary power.
Outside enablers also assisted in this process. For years, Venezuela provided cheap oil, giving the regime off-budget revenue.
And since restoring ties with Beijing in 2021, Nicaragua has become China’s model client in the hemisphere — Chinese firms run the gold mines, build the digital backbone and develop physical infrastructure, including the port of Corinto, a potential dual-use asset.
But China isn’t propping up this regime nearly as much as we are through trade and remittance flows.
Remittances to Nicaragua reached a record $6.2 billion last year, with 80% coming from the United States.
The US remains Nicaragua’s largest trading partner by a mile, buying almost 40% of its exports.
Through the CAFTA-DR trade agreement, in effect since around the time Ortega returned to power, Nicaraguan apparel and textiles enter the US duty-free.
The Trump administration has imposed tariffs on Nicaraguan goods not covered by CAFTA-DR, but deliberately left the trade agreement itself, and the duty-free access that matters most, untouched.
Access to the US market and remittances is especially critical to the regime’s survival given that Nicaragua is the second-poorest country in the hemisphere, with per capita annual income around $2,600.
Remittances are equivalent to 29% of GDP, making Nicaragua one of the more remittance-dependent economies in Latin America.
Growing US purchases under CAFTA-DR are one of the few bright spots in the Nicaraguan economy.
The trade and remittance flows insulate the Ortega-Murillo family from the effects of their misrule, providing just enough macroeconomic stability to avoid the kind of crisis that might actually force change.
Washington has sanctioned dozens of regime officials, restricted visas and sanctioned Nicaraguan companies — measures that are warranted but have done nothing to change the regime’s behavior.
Meanwhile, the economic lifelines that actually sustain the Ortega-Murillo regime remain intact.
The Trump administration’s light touch with Nicaragua is especially puzzling when considered next to its pressure campaign on Cuba, where it has choked off tourism revenue and blocked oil imports, paralyzing large sectors of the economy in the hopes of forcing the regime to negotiations.
If the administration believes overwhelming economic pressure will bring a regime to its knees, why use it so inconsistently, especially when it has so much leverage with Nicaragua?
Ortega’s election announcement showed he has no fear of any meaningful consequence from the United States.
For now, at least, he is justified in his audacity.
Daniel Batlle, an adjunct fellow at Hudson Institute, served at the Department of State and the US Agency for International Development during the George W. Bush administration.