In Nicaragua, following the arrest of four presidential pre-candidates and the detention of business leader Jose Adan Aguerri, the productive sector demands the release of political prisoners and advocates for the government to commit itself to grant all democratic guarantees.
Following the arrest of Cristiana Chamorro, Arturo Cruz, Felix Maradiaga Blandon and Juan Sebastian Chamorro, there are now four presidential pre-candidates who have been imprisoned by Nicaraguan authorities.
After the arrest of presidential pre-candidates Cristiana Chamorro and Arturo Cruz in Nicaragua, the business sector questions the "democratic viability of a free, fair, competitive and transparent electoral process".
After motorized paramilitaries attacked a group of businessmen with firearms on September 7, the productive sector asks the government to clarify the facts "in an objective and truthful manner.”
The violent aggression was directed at the Cosep delegation and the Civic Alliance, made up of José Adán Aguerri, Michael Healy and Álvaro Vargas, who accompanied journalists Jaime Arellano and Aníbal Toruño on a visit to the city of León, reported the Superior Council of Private Enterprise (Cosep).
If the country does not provide an early solution to the socio-political crisis it has been going through since April 2018, it is projected that the economy could decline between 7% and 11% during 2019.
The Nicaraguan Foundation for Economic and Social Development (Funides), presented the "Informe de Coyuntura" (Situation Report), which explains that if the socio-political crisis continues this year there will be a greater fall in the economy compared to the 4% reported in 2018.
In April, deposits in the Nicaraguan financial system totaled $5.414 billion, registering a 9% increase with respect to the same month in 2017, but below the rate of 11% reported in March of this year.
The Central Bank of Nicaragua reported that in the fourth month of the year "... deposits in the national financial system amounted to 167,560.8 million córdobas ($5.414 billion), which represented year-on-year growth of 8.7 percent (11.4 percent in Mar-18), representing a deceleration with respect to the month of March 2018."
In the view of Fitch Ratings, continued political unrest could undermine investment conditions and economic growth, as well as raise the risks of confidence shocks to the financial system and macroeconomic stability.
From a statement issued by from Fitch Ratings:
Fitch Ratings-New York/San Salvador-17 May 2018: Continuing protests and resulting political violence in Nicaragua heighten risks to political stability and governability, says Fitch Ratings. Continued political unrest could undermine investment conditions and economic growth as well as elevate risks of confidence shocks to the financial system and macro stability.
An ICEFI study concludes that corruption in Guatemala, El Salvador and Honduras covers "virtually all sectors" and in Guatemala alone, the losses generated are estimated at $550 million per year.
The book "Corruption: Its Paths and Impact on Society and an Agenda to Confront it in the Central American North Triangle", "... studies the relationship between corruption and democracy, highlighting that corruption in the C.A.N.T -El Salvador, Guatemala and Honduras - has special characteristics derived from historical aspects, such as the construction of weak states, periods of authoritarianism, civil war and counterinsurgency systems, and the impairment of judicial independence."
Growing institutional weakness in several countries of the isthmus brings to the forefront the responsibility of the business sector to keep the economy of this region moving forward.
EDITORIAL
Currently, the governments of several Central American countries are showing signs of weaknesses which - to different degrees- point to a sharp decline in institutional quality.
The dismantling of a network of corruption at the highest level in the Superintendency of Tax Administration has forced an analysis of the stability of the government of Otto Perez Molina.
Calderon raises three possible scenarios:
"...First scenario: precarious balance, which means continuing the current pace of deterioration in the political system and levels of governance, and at the same time assuming an increased fragmentation of the government bloc.
The convulsions in Venezuela should not be seen as merely a political issue, but also from the point of view of the economic insecurity it creates in the region.
The effects of the crisis in Venezuela are not only reflected in the economy but spread quickly to the rest of the continent, particularly in countries with the most trade and economic ties.