U.S., Iran and Venezuelan battling for influence in Ortega’s new Nicaragua
Traci Carl, Associated Press

The U.S. is again battling leftists in Daniel Ortega's Nicaragua. This time, the fight is being waged not with guns and guerrilla warfare, but with free tractors, health clinics and donated electrical plants.

The U.S. government is up against Venezuela and Iran as it tries to make an ally out of the poor, energy-starved Central American nation. While the U.S. has a head start as one of Nicaragua's main investment partners, Iran and Venezuela are rapidly winning over the country's poor with promises of low-interest loans and energy aid.

Sandwiched between Costa Rica and Honduras, Nicaragua has been left behind in the global scramble for power. It has no key oil reserves, and the country is the second-poorest in the Western Hemisphere, behind only Haiti. But the nation — a stunning collection of jagged mountains, active volcanos, virgin jungle, breathtaking beaches and one of the world's largest freshwater lakes — has become immensely popular as a second home for U.S. retirees.

Additionally, as a new member of the Central American Free Trade Agreement with the U.S., it is on the verge of receiving substantial international investment, mostly in the form of textile factories. Ortega's return to power has given Iran and Venezuela, always seeking allies in their fight against U.S. domination, a chance to add Nicaragua to a list that already includes Bolivia, Cuba and Ecuador.

Venezuelan leader Hugo Chavez has called President Bush "the devil," while Bush accuses Iran of backing insurgents in Iraq and using its nuclear program to try to build a bomb.

Enter Ortega, a former Marxist who spent the 1980s fighting off the U.S.-backed Contra rebel insurgency. Ortega led Nicaragua throughout the 1980s after his Sandinista rebel movement pushed out dictator Anastasio Somoza.

Following his 1990 electoral loss, he ran for president three consecutive times, losing twice before finally triumphing in November. Now he's promising to eradicate poverty and solve rolling blackouts that sometimes force airplanes to circle over the capital until light is restored to the darkened airport.

With few resources of his own, he has to walk a fine line as he seeks help from both Washington and its foes. The U.S. government so despised Ortega during the 1980s that Oliver North and other aides to then-President Reagan secretly sold arms to Iran's radical Islamic government to finance clandestine aid for the Contra rebels in a bid to overthrow him. North showed up again during Ortega's latest presidential campaign, predicting dire consequences if he returned to power.

The U.S. has expressed guarded support since Ortega's election, and Ortega has promised to maintain ties to Washington. If those ties are severed, some fear the superpower could pull investment and $48 million in annual aid that includes promises to build a regional training center for health workers.

Ortega has avoided openly criticizing Washington, but his focus so far has been strengthening ties with Chavez and Iranian President Mahmoud Ahmadinejad, both of whom have agreed to spend billions of dollars around the globe on projects to counterbalance U.S. influence, especially in Latin America and Africa.

Chavez shipped cheap oil to Nicaragua last year, boosting his friend's campaign. On Ortega's first day in office, Chavez showed up with promises of 100,000 barrels of oil under preferential terms, the building of a refinery, low interest loans and health aid.

On Sunday, Iran's president toured Managua and told Ortega he would construct dams and homes, establish factories for everything from buses to bicycles, and improve Nicaragua's drinking water, ports and fishing industry.

The promises impressed many Nicaraguans, even though Venezuela and Iran have yet to deliver much of it. In the steep, cloud-covered mountains where more than 200 farmers have formed a coffee-growing cooperative, Olga Miriam Almendarez, a 44-year-old single mother of five, already has the keys to a new tractor. Chavez gave her the keys himself at a Managua rally in which he also promised poor farmers low-interest loans. Up until now, the San Jose cooperative has relied on machetes and two dilapidated trucks to plant and harvest its coffee beans.

Almendarez, who weighs neighbourhood children every 15 days to identify the most severely malnourished, says they have to survive on scant amounts of rice, beans and banana. "Many have swollen bellies," she said, pointing at children playing in raw sewage and mud. "We are going to keep asking God to have President Chavez help us."

She's not worried that Ortega's close ties with Venezuela and Iran could jeopardize U.S. relations. "The U.S. doesn't give us anything," she said. "And I don't think they are going to oppose someone who is helping people like me who are so poor."