US Sanctions on Venezuela Recalls 1980s Embargo on Nicaragua

Economic sanctions against Venezuela and the warning of another potential economic embargo on Nicaragua revive the sinister ghost of the 1980s.

By José Adán Silva  (La Prensa)    

HAVANA TIMES – The US economic sanctions against the Venezuelan regime and the warnings from US National Security Advisor John Bolton about a potential economic blockade on the Nicaraguan dictatorship have revived the phantoms of scarcity and extreme poverty that ravaged the country during the decade of the 1980s, during the first dictatorship of Daniel Ortega and the Sandinista National Liberation Front.

“It worked in Panama. It worked in Nicaragua one time, and it’s going to work there, again. And it will work in Venezuela and Cuba,” Bolton said last week in Lima during the Lima Group’s International Conference for Democracy in Venezuela.

When did the US economic blockade start, what was it like, why did it happen and what were the consequences for the country?

Officially, the total embargo on Nicaragua was enacted on May 1, 1985. US President Ronald Reagan made the announcement in Bonn, on the eve of the Group of Seven (G7) summit, using this argument to explain his decision to declare economic sanctions against Nicaragua: “the actions and policies of the Nicaraguan government represent an extraordinary threat to the national security and foreign policy of the United States.”

[Editor’s note: When Reagan was making that announcement, his government had been already financing the Contras for several years in the prelude to the Iran-Contra scandal over financing for the Contra forces with funds from arms sales to Iran.] 

What was the context for the embargo?

Diverse democratic countries, with the US in the lead, had been denouncing with greater insistence since 1980, a public policy of repression, persecution, execution, as well as the confiscation of land from campesinos, the expropriation of assets from business owners, media censorship, and the imprisonment, killing and attacks against any citizen considered as to be an “opponent” of the young communist dictatorship.

That year Washington gave the Sandinista regime a 60-day deadline to begin dialogue with the opposition and to hold early free, transparent and supervised elections to restore democracy. Emboldened by the economic and military support from the Soviet Union, the regime reacted by rejecting the call to start a dialogue and by doubling down on military and political repression.

OAS and UN insist on dialogue

Diplomatic forums like the Organization of American States (OAS) and the United Nations, armed with reports documenting the regime’s crimes and abuses, pressured for a peaceful solution to the crisis. This crisis was brought on by the civil war that the Sandinista Army and its intelligence bodies waged against campesinos, who received financial, military and logistical support from the US.

Meanwhile in cities and urban areas, agents of the Ministry of the Interior, the Sandinista Police, the Sandinista Defense Committees on every block, and Sandinista gangs in the streets, crushed any sign of opposition.

Then UN Secretary General Javier Pérez de Cuellar, proposed a national dialogue between the Sandinista regime and the opposition led by the private sector. But Ortega and his commanders denounced internationally that “they are trying to force us to surrender and overthrow the government to impose a puppet regime of the United States.”

“The United States has reiterated its conviction that a political dialogue between the Nicaraguan government and all sectors of the opposition, in the terms proposed by the unified opposition in Nicaragua on March 1, 1985, is the first essential step in the process of national reconciliation in Nicaragua,” warned the White House in 1985. Ortega and his commanders rejected this statement.

What did the embargo actually do?

The United States’ embargo decree, officially baptized by pro-government propagandists as an “economic blockade,” prohibited the import of Nicaraguan products into the United States and the export of all manufactured products from the United States and allied countries to Nicaragua.

The embargo went even further. Nicaraguan commercial aircraft could not land on US national territory, ships could not dock at US ports, and viceversa.

On April 21, 1987, President Ronald Reagan renewed the May, 1985 economic embargo for six more months. He also requested additional military assistance for the Contras, the campesino guerrilla groups fighting the Sandinista armed forces in the mountains.

Catastrophic Impact of Embargo

The economic embargo in Nicaragua had an immediate and devastating impact. Just seven months later, in December of 1985, 90% of the country’s productive infrastructure ground to a halt because of the cutoff of raw materials.

The distribution difficulties, caused not just by the economic blockade but also by the lack of foreign exchange in the Nicaraguan economy and the war that scared off distributors, led to the collapse of equipment and industrial machinery and a reduction of 20% of total production.

The lack of foreign exchange, combined with the commercial blockade, led to the drop in production in the four main branches of Nicaragua’s small businesses sector: textiles, leather, footwear and foodstuffs.

Stores selling household appliances, clothes, toys and office supplies also collapsed, along with pharmacies, gas stations, distributors, mechanics, eateries, restaurants, recreational centers and an innumerable number of small, medium and large businesses.

Micoin, rationing, scarcity and suffering

The regime immediately created a state apparatus to control foodstuffs and a type of special “Gestapo” called the Ministry of Interior Commerce (Micoin), that confiscated any foodstuffs or goods sold outside of state channels.

Then the local Enabas (National Enterprise for Basic Grains) stations appeared, providing a rations card to each family and limiting their access to food.

Those who did not have a rations card had to go to the Nicaraguan supermarket chain, which had been confiscated and baptized as The People’s Supermarkets. Before 1985, Nicaraguans could still buy powdered milk and some other controlled goods like soap and toilet paper at these markets.

Once the embargo started, all dairy products, canned goods, meats and sausages in these supermarkets ran out, and the majority of the shelves were empty. This contrasted with the exclusive stores just for the privileged Sandinista elite, where you could buy any product just as if you were in a supermarket in another country.

End of embargo in 1990

In February of 1990, with the electoral triumph of the National Opposition Union (UNO), with the country destroyed by the war and the economy in bankruptcy, the administration of George W. Bush announced the end of the 1985 embargo and restored the flow of imports and exports between the two countries. The Bush administration also reopened air and sea traffic between the United States and Nicaragua after the inauguration of President Violeta Barrios de Chamorro in April of 1990.