After the invasion of Panama, before the election of Violeta Barrios de Chamorro in Nicaragua, a mid-level contact at the State Department assured me that U.S. policy was not based on military force: "We have to refocus the campaign onto economic issues."
Although diplomats are sometimes faulted for lacking street savvy, this time they had grasped a fundamental political principle: Given a free choice, people normally vote their pocketbooks. It was an adage as American as apple pie, and on Feb. 25 it was the devastated Nicaraguan economy that spelled the end of the Sandinistas' decade-long rule.
Voter after voter cited the economy as a principal reason for Chamorro's resounding victory. Daniel Ortega's slick television advertisements could not erase the memories of 35,000% hyper-inflation and a drastically declining standard of living. The Sandinistas may have adopted the campaign slogan that "everything will be better" but Chamorro, with her close ties to the United States, could guarantee an end to the tough trade embargo, access to U.S. and foreign capital and cessation of the Contra war. The Sandinistas could only hope.
Largely ignored in the mountains of postelection analysis was this new recognition among American policy-makers: If carefully designed and relentlessly enforced, U.S. economic presures can make a country "cry uncle," a goal President Ronald Reagan had set for Nicaragua years earlier. It was also proof that nearly two decades after the Central Intelligence Agency had succeeded in destabilizing Marxist President Salvador Allende by making the Chilean economy "scream," similar tactics could be employed against a leftist, Latin government while winning broad bipartisan support in Congress and in the U.S. press.
Economic sanctions also work outside the hemisphere. In South Africa, even halfhearted pressure contributed to the release of black nationalist leader Nelson Mandela and forced other political concessions from the white government. Despite South Africa's longtime insistence that anti-apartheid sanctions wouldn't work--a view shared by the Reagan Administration--one of President Frederik W. de Klerk's first acts after releasing Mandela was to ask the nations of the world to lift their trade embargoes.
And in Panama, before the application of military force, economic sanctions played a role in another U.S. policy success. In 1988, President Reagan froze Panamanian assets in the United States and cut off other payments to Panama's once-thriving financial district, leading to a widespread depression. Even with hundreds of Panamanian deaths in last December's invasion, the assault appeared to enjoy strong local backing because Panamanians then expected generous U.S. aid to revive their economy.
Economic sanctions were bypassed in China. There, President George Bush argued that they would only goad the communist Chinese leadership into a more severe crackdown: "I think I know China well enough to know that this isn't the way to do it." But even Bush recently acknowledged that his quiet coaxing had produced little progress.
To proponents of economic sanctions, the message from these disparate examples is clear: Well-designed economic pressures work. "The Nicaragua sanctions will serve as a positive and instructive example of the role that carefully crafted economic and financial sanctions can play in the 1990s and the 21st Century," said Roger W. Robinson, an architect of that program while a senior adviser on Reagan's National Security Council staff.
As the late CIA Director William J. Casey understood, Nicaragua's economic devastation was what would feed the popular discontent that would one day destroy the Sandinistas.
Many of the major Contra attacks hit directly at the country's fragile economic infrastructure. Striking from a "mother ship," the CIA sent specially trained commandos to sabotage Nicaraguan oil facilities in 1983 and mine its harbors in 1984. On the ground, the Contras attacked bridges, electrical towers, farm cooperatives and other economic targets. Responding to the CIA's "low-intensity conflict," the Sandinistas diverted more and more scarce capital to the army--and away from popular social programs such as literacy projects, land reform and expanded medical care. Further, the Sandinistas increased internal repression and worsened their lot through clumsy economic policies.
"We were convinced that a sharp downgrading of the economic situation would mirror the substantial reduction of political freedoms allowed by the Sandinistas," explained Robinson, now president of a Washington consulting firm. "Over time, that population would be convinced that the yoke of Sandinista leadership simply had to be lifted."
Robinson said the turning point in economic war against Nicaragua came in 1985 when Reagan even voided existing contracts between American firms and Nicaragua. Reagan's action required a finding that impoverished Nicaragua and its 3 million people were "an unusual and extraordinary threat" to U.S. security, a determination reissued every six months for the past four years.
Beyond direct U.S. action--CIA economic sabotage and the trade embargo--Reagan and Bush strategists lobbied against Nicargua aid requests to European nations and multilateral financial institutions.
A senior State Department official, briefing the U.S. press after the Feb. 25 election, said that in April, 1989, Secretary of State James A. Baker III had "burned up the telephone wires" trying to thwart Ortega's desperate requests for $250 million in aid from European nations, assistance that the Sandinistas considered vital to salvage their economy. Ortega raised only $20 million on the trip.
That meant the Sandinistas would head into election day with massive unemployment, cutbacks in services and high inflation. In Robinson's view, the United States had only given the Sandinistas a push toward demise. "These guys were screwing up anyway, but the economic decline was accelerated and deepened," he said.
Far from generating complaints from congressional Democrats about U.S. interference in another country's affairs, the economic warfare against Nicaragua was, in effect, a bipartisan compromise--a way to end the bickering over the Contra shooting war. After Chamorro's win, some Democrats embraced the economic-political strategy as their idea to begin with. "I think the sanctions did this," concluded Rep. Dave McCurdy (D-Okla.), chairman of the House intelligence oversight subcommittee. "I opposed military aid. I said we'd win it another way."
While liberal Democrats also applauded the Chamorro victory, not all U.S. public figures felt comfortable with a strategy that contributed to widespread hunger and reduced medical care in a poor country. Asked about Robinson's comments on economic warfare, former House Speaker Jim Wright said, "Isn't it amazing that a man would boast about forcing people into serfdom--by deliberately creating hardship and poverty."
While few of his old colleagues in Congress were willing to argue with success, Wright remains troubled. "I'm not sure," he said, "that you can say the United States can force a country into doing what it wants by starving it to death."