Nicaraguan President Daniel Ortega has cancelled an unpopular package of measures to overhaul the country’s social security system, seeking to contain rising unrest.
After five days of violent street protests that left as many as 26 people dead, Ortega revoked legislation to increase payroll taxes and cut pension benefits in order to shore up the country’s threadbare social security fund. A new solution to the social security system will now have to be hammered out in negotiations with workers and employers, he said.
According to the Wall Street Journal, opponents say the Ortega government has mismanaged the social security system for years, using it as a piggy bank to finance housing projects and medical clinics developed by Ortega’s allies. The International Monetary Fund, meanwhile, has warned that it could run out of cash by 2019.
Ortega, a former Marxist guerrilla who was re-elected by a landslide to a third term in government in 2016, has traditionally enjoyed friendly relations with the country’s private sector. Helped by cheap oil supplies from Venezuela, he has been able to deliver high economic growth to Nicaragua, one of the poorest countries in the southern hemisphere.
But critics claim Ortega has become increasingly authoritarian and subverted the country’s institutions and fledgling democracy in an attempt to establish a dynastic dictatorship.
"No one suspected the rage was there," said one prominent businessman who asked not to be named. "On Friday, bank workers and employees of large companies who are normally very cautious took to the streets to protest."
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
Nicaraguan President Daniel Ortega has cancelled an unpopular package of measures to overhaul the country’s social security system, seeking to contain rising unrest.
After five days of violent street protests that left as many as 26 people dead, Ortega revoked legislation to increase payroll taxes and cut pension benefits in order to shore up the country’s threadbare social security fund. A new solution to the social security system will now have to be hammered out in negotiations with workers and employers, he said.
According to the Wall Street Journal, opponents say the Ortega government has mismanaged the social security system for years, using it as a piggy bank to finance housing projects and medical clinics developed by Ortega’s allies. The International Monetary Fund, meanwhile, has warned that it could run out of cash by 2019.
Ortega, a former Marxist guerrilla who was re-elected by a landslide to a third term in government in 2016, has traditionally enjoyed friendly relations with the country’s private sector. Helped by cheap oil supplies from Venezuela, he has been able to deliver high economic growth to Nicaragua, one of the poorest countries in the southern hemisphere.
But critics claim Ortega has become increasingly authoritarian and subverted the country’s institutions and fledgling democracy in an attempt to establish a dynastic dictatorship.
"No one suspected the rage was there," said one prominent businessman who asked not to be named. "On Friday, bank workers and employees of large companies who are normally very cautious took to the streets to protest."
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
