Nicaragua's pension protests reflect list of grievances

Nicaraguan President Daniel Ortega's now-cancelled decree to increase a payroll tax and make other changes to social security set off days of violent protests. But it also appears the protests included broader anti-government grievances.

Ortega's decree seems to have unleashed pent-up frustrations that have long been brewing

People demonstrate demanding Nicaraguan President Daniel Ortega and his wife, Vice-President Rosario Murillo, step down, in Managua on Monday. Some activists have vowed to keep up the pressure on the government, despite Oretega's decision to scrap reforms that would have increased pension plan contributions. (Rodrigo Arangua/AFP/Getty Images)

Nicaragua has been rocked by a week of protests in which over two dozen people have been killed.

The protests began last Wednesday in the capital Managua and quickly spread nationwide, with scenes of massive rock throwing, burning barricades, tear gas and some gunfire.

The dead included a journalist shot to death while transmitting live on social media. Dozens of shops were looted in the capital of the Central American nation of 6 million.

Here are some of the government decisions that led to several days of demonstrations and at least 27 deaths following clashes with troops and riot police.

The pension decree

The protest movement started when the Sandinista government of President Daniel Ortega issued a decree on April 16 increasing income and payroll taxes and changing pensions to try to shore up Nicaragua's troubled social security system.

Payroll contributions from workers for the pension scheme would have increased from 6.25 per cent to 7.25 per cent.

A demonstrator holds a poster reading 'Dictatorship No, Democracy Yes' during the 'Walk for Peace and Dialogue.' on Monday when many demanded the resignation of the president and his vice-president wife. (Inti Ocon/AFP/Getty Images)

Companies would have been hit harder, with employer payroll contributions increasing from 19 to 21 per cent, and subsequently to 22.5 per cent after 2022.

Retirees currently receiving pensions would have had to pay five per cent of their checks for medical care.

In a televised broadcast on Sunday evening, Ortega said he was cancelling the reforms. However, protests continued the next day in Managua to denounce police allegedly opening fire on demonstrators, using rubber-coated steel bullets.  

Older grievances

While the pension changes would have affected workers' paycheques, it also appears the demonstrations expanded to include broader anti-government grievances.

Ortega's decree seemed to unleash pent-up frustrations that have long been brewing in Nicaragua, where the government has acted with a heavy hand in pushing the Ortega family's agenda while quelling protests, often violently and sometimes in tandem with government supporters.

Nicaraguan opposition leaders and civil society groups also accuse Ortega of manipulating elections to stay in power and of wanting to create a family dynasty by making his wife, Rosario Murillo, his vice-president.

This store in Managua was looted after protests over reforms to Nicaragua's pension plans. (Jorge Cabrera/Reuters)

Protests also arose after the government fast-tracked legislation in 2013 granting Hong Kong-based HKND a 50-year concession, renewable for another 50, to build and operate a trans-oceanic canal across Nicaragua in return for a payment of $10 million a year once it's up and running.

The law lets HKND develop ancillary projects — ports, an airport, roads, a railway — even if the canal doesn't get built.

What now

On Sunday, as Ortega announced his government would withdraw the pension changes, he also called for negotiations on a new solution to the problem. But he rejected demands to free detained protesters, withdraw the police and lift some censorship.

But the protests, and police attacks on them, at least initially continued: One student was killed and four injured at a Managua university late Sunday.

Business groups called another protest for late Monday.