Like him or loathe him, until recently it was argued that President Daniel Ortega's reelection in 2011 delivered something that Nicaragua had lacked for a long time: a sense of stability. After years of devastation from civil war, the country's infrastructure was slowly rebuilding. Gone were the transport strikes, debilitating power rationing and unpredictable rallies. But as of April 2018, Nicaragua has been descending into chaos, Ortega making it clear that he's prepared to unleash deadly violence against unarmed protesters.

2018 Descent Into Chaos

Traditionally, Nicaraguan presidents have only been permitted to serve two five-year terms. But 2014 saw the decision to abolish term limits. The implications for Daniel Ortega were significant – in November 2016, he won the presidential election, securing a third term, and his wife, Rosario Murillo, was made vice-president.

Ortega has been busy dismantling Nicaragua's institutional democracy by assuming full control of the military, the police, and all branches of government. Opposition parties have been hobbled and rumors abounded that Ortega expected his wife to succeed him as president.

Ortega's hostile takeover of Nicaragua's political system was made possible by an alliance between the government and COSEP, Nicaragua's council of business chambers. However, matters came to a head on April 18, 2018, when Ortega decided to overhaul the social security system without consulting either COSEP or the workers due to be adversely affected.

On April 12, hundreds of university students took to the streets to protest the government's slow response in tackling a massive wildfire that destroyed 50 sq km of forest in Nicaragua's top biodiversity hotspot, Indio Maíz Biological Reserve. On April 18, students joined thousands of other protesters who pushed back against Ortega’s attempt to increase social security taxes and reduce pension benefits for the elderly.

Police used live bullets against the crowd and Nicaragua has been descending into chaos ever since. At the time of writing, over 120 people had been killed and over 1000 injured by riot police and government-funded Sandinista paramilitaries. There has been looting of businesses, and Ortega has blamed everything on foreign agitators and organized crime.

Violent clashes have been taking place in Masaya, Managua, Granada and León, among other places, with citizens digging up their streets, setting up road blocks, barricading their neighborhoods against the riot police and fending them off with rocks and homemade mortars. On May 30, police and snipers opened fire on a peaceful Mother's Day demonstration, leaving 16 people dead and 88 people injured.

Even though Ortega has reversed his unpopular social security reform, Nicaragua seems to be sliding into chaos. Growing numbers of protestors want a return to democracy and for the government to be held accountable for the killings. Talks between the government, COSEP, student representatives and the Catholic Church have broken down and rumors flew that the Central American alliance of truck drivers will shut Nicaragua's borders. The military has stayed out of the conflict so far, but this may change. Violence is ongoing with over 300 people killed by mid-2018 (mostly unarmed protestors by the police) and Ortega shows no signs of backing down.

The Economy

Since the Frente Sandinista de Liberación Nacional's (Sandinista National Liberation Front; FSLN) return to power in 2006, the government's economic and social programs had been bankrolled through aid, loans and subsidized fuel from its partner in the Alianza Bolivariano por Las Americas (ALBA), Venezuela.

And while the hunger eradication programs, new houses and other initiatives have been well received by FSLN supporters, the lack of transparency of their funding has caused controversy.

Furthermore, since the death of Venezuelan president Hugo Chavez in 2013, Venezuela's economy has descended into chaos due to falling oil prices. Consequently, aid to Nicaragua has dried up, which has been one of the main catalysts for the anti-government protests and deadly violence that has gripped Nicaragua since April 2018.

At the time of writing, there's was a great deal of uncertainty about the economy, with tourists fleeing the country, businesses shutting down, people withdrawing their savings, and a 24-hour national strike looming, following the negotiations breakdown between Ortega and the Catholic Church.

The Nicaragua Canal

It's not the first time that an interoceanic canal through Nicaragua has been proposed, but it's the first time that the project has seemed halfway feasible. The Hong Kong Nicaragua Development (HKND) Group, in agreement with Nicaraguan president Daniel Ortega, put up the original investment for the 286km canal. The proposed waterway would be significantly wider than the Panama Canal, allowing the passage of larger boats. But initial excitement, mostly about job creation and an expected uptick in the economy, has been tempered by practical concerns.

There's the environmental impact – conservationists point to the inevitable harm to Lago de Nicaragua, and to the violation of protected indigenous territories – and then there's the financing. Though work on the canal commenced in late 2014, progress has faltered and even halted several times, hinging on the fluctuating fortunes of HKND frontman, the Chinese billionaire Wang Jing. At the time of writing, construction had stalled altogether, partly because the project is projected to cost US$50 billion and the money has dried up, and party because there is strong opposition to the project on the part of the campesino (farmer) movement which, incidentally, has been very active since April 2018 in putting up road blocks to deter police and government forces.