For such a small country, Nicaragua has played a disproportionate role in modern history. In the midst of cold-war tensions, the young Sandinista revolutionaries' reforms captured the attention of the most powerful governments on earth and unleashed scandals in the corridors of power. But when the bullets stopped flying, the world lost interest, leaving the clean-up, reconstruction and return to power of the Sandinistas like a captivating sequel that never made it to the big screen. Until now.

Indigenous Nicaragua

Pre-Hispanic Nicaragua was home to several indigenous groups, including the ancestors of today’s Rama, who live on the Caribbean coast, and the Chorotegas and Nicaraos, on the Pacific side. The latter spoke a form of Náhuatl, the language of the Aztecs. Many Nicaraguan places retain their Náhuatl names.

By 1500 BC Nicaragua was broadly settled, and though much of this history has been lost, at least one ancient treaty between the Nicarao capital of Jinotepe and its rival Chorotegan neighbor, Diriamba, is still celebrated as the Toro Guaco.

European Arrival

Although Columbus stopped briefly on the Caribbean coast in 1502, it was Gil González de Ávila, sailing north from Panama in 1522, who would really make his mark here. He found a chieftain, Cacique Nicarao, governing the southern shores of Lago de Nicaragua and the tribe of the same name. The Spaniards thus named the region Nicaragua.

Nicarao subjected González to hours of inquiry about science, technology and history. González famously gave Nicarao an ultimatum: convert to Christianity, or else. Nicarao’s people complied, a move that in the end only delayed their massacre at the hands of the Spanish; other native groups were thus warned.

Six months later González made Cacique Diriangén the same offer; Diriangén went with ‘or else.’ His troops were outgunned and eventually destroyed but inspired further resistance. After conquering four Pacific tribes – 700,000 Chorotega, Nicarao, Maribios and Chontal were reduced to 35,000 in 25 years – the nations of the central highlands halted Spanish expansion at the mountains, with grim losses.

Colonial Settlement

The main Spanish colonizing force arrived in 1524, founding the cities of León and Granada. Both were established near indigenous settlements, whose inhabitants were put to work.

The gold that had attracted the Spaniards soon gave out, but Granada and León remained. Granada became a comparatively rich colonial city, with wealth due to surrounding agriculture and its importance as a trading center. It was also a center for the Conservative Party, favoring traditional values of monarchy and ecclesiastical authority. Originally founded on Lago de Managua, León was destroyed by volcanic eruptions in 1610 and a new city established some 30km northwest. León in time became the center for radical clerics and intellectuals, who formed the Liberal Party and supported the unification of Central America and reforms based on the French and American Revolutions.

The difference in wealth between the two cities, and the political supremacy of León, led to conflicts that raged into the 1850s, at times erupting into civil war. The animosity stopped only when the capital was moved to the neutral location of Managua.

Feature: William Walker: Scoundrel, Vagabond, President

In a country long accustomed to land grabs, none has managed to shine quite like Tennessee-born William Walker, an infamous figure in Nicaragua.

A quiet, poetry-reading youth who had mastered several languages and earned various degrees by early adulthood, Walker first worked as a newspaper editor, publishing outspoken pieces condemning slavery and the interventionist policies of the US at the time.

A different type of opportunity presented itself in 1848 when the Treaty of Guadalupe was signed, ceding half of Mexico to the US and leaving the other half dangling temptingly. Walker quickly jettisoned his liberal ideals, got a posse of thugs together, and embarked on a career in filibustering.

Taken from a Dutch word meaning pirate, filibustering came to mean invading a country as a private citizen with unofficial aid from your home government.

Walker’s foray into Mexico was as successful (he managed to take the Mexicans completely by surprise, raise his flag and name himself president before getting chased back over the border) as it was short-lived.

Word of Walker’s derring-do spread, though, and it wasn’t long before the city of León offered him the job of taking care of their pesky rivals in Granada.

With another rag-tag group of mercenaries at his command, Walker arrived in San Juan del Sur in September of 1855 and, aided by the element of surprise and the latest in US weaponry, easily took Granada.

Walker’s Liberal Leónese employers must have felt a bit put out when he decided not to hand over Granada after all, but instead stayed around, got himself elected president, reinstituted slavery, confiscated huge tracts of land and led an ill-fated invasion attempt on Costa Rica.

These audacious actions, supported by then US president Franklin Pierce, inspired something that has been sadly lacking ever since – Central American unity. But even getting chased back to the US by every Central American army in existence didn’t dampen Walker’s imperial ambitions. He returned to Nicaragua once more (and was sent briskly packing) before trying his luck in Honduras, where the locals put him before a firing squad in September 1860.

Enter the USA

In 1893 a Liberal general named José Santos Zelaya deposed the Conservative president and became dictator. Zelaya soon antagonized the US by seeking a canal deal with Germany and Japan. Encouraged by Washington, which sought to monopolize a transisthmian canal in Panama, the Conservatives rebelled in 1909.

After Zelaya ordered the execution of two US mercenaries accused of aiding the Conservatives, the American government forced his resignation, sending marines as a coercive measure. Thus began a period of two decades of US political intervention in Nicaragua. In 1925 a new cycle of violence began with a Conservative coup.

The Conservative regime was opposed by a group of Liberal rebels including Augusto C Sandino, who recruited local peasants in the north of the country and eventually became leader of a long-term rebel campaign resisting US involvement.

Somoza Era

When the US marines headed home in 1933, the enemy became the new US-trained Guardia Nacional, whose aim was to put down resistance by Sandino’s guerrillas, as is documented in Richard Millett’s comprehensive study Guardians of the Dynasty: A History of the US-Created Guardia Nacional de Nicaragua and the Somoza Family. This military force was led by Anastasio Somoza García.

Somoza engineered the assassination of Sandino after the rebel leader was invited to Managua for a peace conference. National guardsmen gunned Sandino down on his way home. Somoza, with his main enemy out of the way, set his sights on supreme power.

Overthrowing Liberal president Sacasa a couple of years later, he established himself as president, founding a family dynasty that would rule for four decades.

After creating a new constitution to grant himself more power, Somoza García ruled Nicaragua for the next 20 years, sometimes as president, at other times as a puppet president, amassing huge personal wealth in the process (the Somoza landholdings attained were the size of El Salvador).

After his assassination in León, Somoza was succeeded by his elder son, Luis Somoza Debayle. In 1967 Luis died, and his younger brother, Anastasio Somoza Debayle, assumed control, following in his father's footsteps by expanding economic interests throughout Nicaragua.

Rising Opposition

In 1961 Carlos Fonseca Amador, a prominent figure in the student movement that had opposed the Somoza regime in the 1950s, joined forces with Colonel Santos López (an old fighting partner of Sandino) and other activists to form the Frente Sandinista de Liberación Nacional (Sandinista National Liberation Front; FSLN). The FSLN’s early guerrilla efforts against Somoza’s forces ended in disaster for the fledgling group, but over the years it gained support and experience, turning it into a formidable opponent.

On December 23, 1972, at around midnight, an earthquake devastated Managua, leveling more than 250 city blocks. The Guardian newspaper reported that, as international aid poured in, the money was diverted to Anastasio Somoza and his associates, while the people who needed it suffered and died. This dramatically increased opposition to Somoza among all classes of society.

By 1974 opposition was widespread. Two groups were widely recognized – the FSLN (Sandinistas) and the Unión Democrática de Liberación, led by Pedro Joaquín Chamorro, popular owner and editor of the Managua newspaper La Prensa, which had long printed articles critical of the Somozas.

In December 1974, the FSLN kidnapped several leading members of the Somoza regime. The government responded with a brutal crackdown in which Carlos Fonseca was killed in 1976.

Revolution & the FSLN

For a Nicaraguan public tired of constant violence, the last straw was the assassination of Chamorro. As street violence erupted and a general strike was called, business interests and moderate factions in the Frente Amplio Opositor (Broad Opposition Front; FAO) unsuccessfully attempted to negotiate an end to the Somoza dictatorship.

By mid-1978 many major towns were rising up against government forces. The Guardia Nacional’s violent reprisals garnered further support for the Sandinistas.

The FAO threw in its lot with the Sandinistas, whom they now perceived as the only viable means with which to oust the dictatorship. This broad alliance formed a revolutionary government provisionally based in San José, Costa Rica, which gained recognition and arms from some Latin American and European governments.

Thus the FSLN was well prepared to launch its final offensive in June 1979. The revolutionary forces took city after city, supported by thousands of civilians. On July 17, as the Sandinistas were preparing to enter Managua, Somoza fled the country. He was assassinated by Sandinista agents a year later in Asunción, Paraguay. The Sandinistas marched victorious into Managua on July 19, 1979.

They inherited a shambles. Poverty, homelessness, illiteracy and inadequate health care were just some of the problems. An estimated 50,000 people had been killed in the revolutionary struggle, and perhaps 150,000 more were left homeless.

Trying to salvage what it could of its influence over the country, the USA (under President Jimmy Carter) authorized US$75 million in emergency aid to the Sandinista-led government.

However, by late 1980 it was becoming concerned about the increasing numbers of Soviet and Cuban advisers in Nicaragua and allegations that the Sandinistas were supplying arms to leftist rebels in El Salvador.

Contra War

After Ronald Reagan became US president in January 1981, relations between Nicaragua and the US began to sour. Reagan suspended all aid to Nicaragua and, according to the Report of the Congressional Committees Investigating the Iran-Contra Affair, by the end of the year had begun funding the counterrevolutionary military groups known as Contras, operating out of Honduras and Costa Rica, despite the US maintaining formal diplomatic relations with Managua.

Most of the original Contras were ex-soldiers of Somoza’s Guardia Nacional, but as time passed, their ranks filled with disaffected local people. Honduras was heavily militarized, with large-scale US-Honduran maneuvers threatening an invasion of Nicaragua. The Sandinistas responded by instituting conscription and building an army that eventually numbered 95,000. Soviet and Cuban military and economic aid poured in, reaching US$700 million in 1987.

A CIA scheme to mine Nicaragua’s harbors in 1984 resulted in a judgment against the US by the International Court of Justice. The court found that the US was in breach of its obligation under customary international law not to use force against another State and ordered it to pay repatriations to the Nicaraguan government; the Reagan administration rejected the findings and no payments were ever made.

Shortly afterward, the New York Times and Washington Post reported the existence of a CIA-drafted Contra training manual promoting the assassination of Nicaraguan officials and other strategies illegal under US law, causing further embarrassment for the Reagan administration.

Nicaraguan elections in November 1984 were boycotted by leading non-Sandinistas, who complained of sweeping FSLN control of the nation’s media. The Sandinistas rejected the claims, announcing that the media was being manipulated by Contra supporters (La Prensa eventually acknowledged receiving CIA funding for publishing anti-Sandinista views). Daniel Ortega was elected president with 63% of the vote, and the FSLN controlled the National Assembly by a similar margin.

In May 1985 the USA initiated a trade embargo of Nicaragua and pressured other countries to do the same. The embargo lasted for five years, helping to strangle Nicaragua’s economy.

With public opinion in the US growing wary of the war, the US Congress rejected further military aid for the Contras in 1985. According to the congressional report into the affair, the Reagan administration responded by continuing to fund the war through a scheme in which the CIA illegally sold weapons to Iran and diverted the proceeds to the Contras. When the details were leaked, the infamous Iran-Contra affair blew up.

After many failed peace initiatives, the Costa Rican president, Oscar Arías Sánchez, finally came up with an accord aimed at ending the war. It was signed in Guatemala City in August 1987 by the leaders of Costa Rica, El Salvador, Nicaragua, Guatemala and Honduras. Less than a year later, the first ceasefire of the war was signed by representatives of the Contras and the Nicaraguan government at Sapoa, near the Costa Rican border.

Polls & Peace

By the late 1980s the Nicaraguan economy was again desperate. Civil war, the US trade embargo and the inefficiencies of a centralized economy had produced hyperinflation, falling production and rising unemployment. As it became clear that the US Congress was preparing to grant the Contras further aid, Daniel Ortega called elections that he expected would give the Sandinistas a popular mandate to govern.

The FSLN, however, underestimated the disillusionment and fatigue of the Nicaraguan people. Economic problems had eclipsed the dramatic accomplishments of the Sandinistas’ early years: redistributing Somoza lands to small farming cooperatives, reducing illiteracy from 50% to 13%, eliminating polio through a massive immunization program and reducing the rate of infant mortality by a third.

The Unión Nacional Opositora (UNO), a broad coalition of 14 political parties opposing the Sandinistas, was formed in 1989. UNO presidential candidate Violeta Barrios de Chamorro had the backing and financing of the USA, which had promised to lift the embargo and give hundreds of millions of dollars in economic aid to Nicaragua if UNO won. The UNO took the elections of February 25, 1990, gaining 55% of the presidential votes and 51 of the 110 seats in the National Assembly, compared with the FSLN’s 39. Ortega had plenty of grounds for complaint, but in the end he went quietly, avoiding further conflict.

Politics in the 1990s

Chamorro took office in April 1990. The Contras called a heavily publicized ceasefire at the end of June. The US trade embargo was lifted, and foreign aid began to pour in.

Chamorro faced a tricky balancing act in trying to reunify the country and satisfy all interests. Economic recovery was slow; growth was sluggish and unemployment remained stubbornly high. Nevertheless, in 1996, when Nicaragua went to the polls again, the people rejected the FSLN’s Ortega and opted for former Managua mayor Arnoldo Alemán of the PLC, a center-right liberal alliance.

Alemán invested heavily in infrastructure and reduced the size of the army by a factor of 10, but his administration was plagued by scandal, as corruption soared and Alemán amassed a personal fortune from the state’s coffers, earning himself a place on Transparency International’s list of the top 10 corrupt public officials of all time. Meanwhile, however, the Sandinistas had their own image problems, as the ever-present Ortega was accused by his stepdaughter of sexual abuse. In a gesture of mutual self-preservation, Ortega and Alemán struck a sordid little deal, popularly known as el pacto (the pact), which Time magazine reported was designed to nullify the threat of the opposition, pull the teeth of anti-corruption watchdogs and guarantee Alemán immunity from further investigation.

Sandinista diehards felt betrayed by Ortega’s underhanded dealings, but many still believed in their party, and Ortega remained an important figure.

Sandinista 2.0

After losing three successive elections, FSLN leader Ortega returned to power in the November 2006 elections, capitalizing on disillusionment with neoliberal policies that had failed to jump-start the country's economy and an el pacto–sponsored law that lowered the threshold for a first-round victory to 35% of the votes (Ortega received 38%).

Taking office in January 2007, Ortega proclaimed a new era of leftist Latin American unity, leaving the USA and some international investors a little jumpy. The early days of Ortega’s presidency were a flurry of activity, with Nicaragua’s energy crisis seemingly solved via a deal with Venezuela’s Hugo Chávez, and Ortega pledging to maintain good relations with the USA while at the same time courting closer ties with US archrival Iran.

But as the Ortega government found its feet, there was no sign of radical land reforms or wave of nationalizations that the business sector had dreaded and some die-hard FSLN supporters had hoped for. Ortega for the most part followed the economic course set by the previous government and continued to honor Nicaragua's international financial obligations.

The first test for Nicaraguan democracy under the new Ortega government surfaced in 2008, with countrywide municipal elections. The FSLN claimed victory in over 70% of municipalities, when it had come to power with only 38% of the vote. Opposition forces claimed widespread voter fraud and La Prensa labeled the election 'the most fraudulent elections in Nicaraguan history.'

Nevertheless Ortega weathered the storm and by the end of his return term was able to point to solid economic growth alongside the reintroduction of free health care and education among the achievements of his government.