Unsurprisingly, Nicaragua's president Daniel Ortega secured a landslide victory and a fourth consecutive term in office after jailing his main political opponents. Observers have called the electoral process a sham, the international community continues to isolate the country and the US is preparing fresh sanctions on Nicaraguan officials for their role in the process.

The re-election of Ortega is bound to jeopardise Nicaragua’s economic recovery options. The regime’s brutal response to the 2018 protests resulted in multiple businesses leaving the country as the US and the EU increased sanctions on the government. Ortega has already affirmed that his government will not be deterred by international sanctions and he accused the US of trying to implement terrorism in the country, in a move similar to the financing of the right-wing Contra guerrillas in the 1980s.

"There will be increased poverty and a migrant crisis will follow," predicted a war correspondent who has covered Nicaragua for 10 years, "Not even Chinese investment will come to the rescue and the spaces of power will be taken over by criminal gangs under the rule of Mexican drug traffickers. Tourism and the economy will collapse and the only real currency will be that of Nicaraguan migrants. The outlook is bleak."

"There will be increased poverty and a migrant crisis will follow, Not even Chinese investment will come to the rescue."

War correspondent, Nicaragua.

US officials have confirmed that Nicaragua’s membership of the Central America Free Trade Agreement ("CAFTA"), will be reviewed after Ortega’s victory. With about half of Nicaragua’s exports going to the US, the move could further endanger Nicaragua’s economy, which in 2020 registered a 63% decrease in foreign direct investment ("FDI"). Between 2007 and 2019, FDI contributed USD 3.05 billion to the national economy.

A political analyst in Central America commented, "Washington won't push Nicaragua too far because the impact of a crisis will surely be a stampede of migrants heading towards them. Whatever happens to Nicaragua, it will be a lesson to other countries, especially El Salvador."

"Washington won't push Nicaragua too far because the impact of a crisis will surely be a stampede of migrants heading towards them."

Political analyst, Central America

Both political turmoil and economic hardship in Nicaragua can result in increased levels of migration towards the US-Mexico border while further inclining the country towards the influence of Russia. Notably, Chinese interests in Nicaragua cooled after the halted development of the Intercoastal Grand Canal in 2013. Instead, relations between Nicaragua and Russia are based on close military cooperation and the use of Nicaraguan ports to advance Russian interests in the region.

The political analyst wanted to see the international community stepping up, "The OAS, and also the UN, must step in to prevent violence. Mexico is on the Security Council and the Nicaraguan crisis may have more humanitarian losses and casualties than many other conflicts. For the first time since the liberation of the Somozas, Nicaragua is a red risk."