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Nicaragua’s Sandinista government, in power since January, is scaring away U.S. investors by seizing land and buildings and punishing opponents with fines, the president of the country’s largest foreign business group said.

Since August, Daniel Ortega’s government has seized an Exxon oil facility, scrapped government contracts with a business owned by a leader of an opposition party and fined Nicaragua’s largest newspaper for failing to pay back taxes. Critics say the actions were politically motivated.

“There is no trust of the government,” Cesar Zamora, the president of the American Chamber of Commerce of Nicaragua, said in an interview in Managua. “The companies that are already here fear they’re going to owe the government `favors.”’

Foreign investors, lured by inexpensive beachfront property, are transforming parts of Central America’s poorest country into gated communities, and textile makers such as Cone Denim have set up plants to take advantage of low labor costs. Investments by foreigners, which rose 18 percent last year to $282 million, may be threatened by Ortega’s policies.

Zamora said that U.S. investment, Nicaragua’s largest foreign source, has dropped since Ortega returned to power, without providing specific figures. It may fall further if the administration seizes more property and assets, he said.

“There are practical people in the government and others who are more radical,” said Zamora, whose group promotes U.S. business opportunities in Nicaragua. “The radical side is winning at the moment.”

1979 Revolution

Ortega, whose revolutionary Sandinista party imposed a state-run economy and nationalized thousands of properties after seizing power in 1979, has said that he welcomes outside investment as a way to eradicate poverty.

“Foreign investment will help reduce our unemployment problem,” he told investors gathered at his Managua home on Oct. 5, a month before he was elected president.

Ortega’s previous stint as president ended in 1990 after a decade-long civil war that devastated the economy. He ran last year on a platform of reconciliation and fighting poverty.

Vice-president Jaime Morales has repeatedly said that the administration respects private property and welcomes foreign investment from all countries. Still, he told reporters on Aug. 28 that “no private interest can be put ahead of the national interest.”

Tourism Industry

Foreign investors spent $282 million in Nicaragua last year, compared with $238 million in 2005. The growing interest is mainly tied to the burgeoning tourism industry, with hotel construction and other tourist-related services attracting the majority of capital, according to Nicaragua’s Ministry of Industry, Commerce and Promotion.

Nicaragua’s Central Bank said on Aug. 10 that foreign investment has slowed during the first six months of 2007, with an estimated growth of 2.5 to 3.4 percent.

Tourist spending rose 31 percent to $240 million in 2006, exceeding coffee sales, the country’s traditional top income earner, according to Nicaragua’s Institute for Tourism. The prime Pacific coast area, where 120 luxury housing developments are either completed or under construction, is poised to lure about $495 million in foreign investment, according to Calvet & Associates, a Managua-based consultant.

Yet even as construction begins, disputes are escalating over land ownership, an issue clouded by shoddy records, local demands and shifting government policies.

At least three battles in which local residents lay claim to developers’ land have boiled over on the Pacific coast in recent months, causing one $88 million project near the Costa Rican border to temporarily shut down.

`Getting Slammed’

Armel Gonzalez said that his development is in danger of being halted permanently after a judge on Sept. 28 confiscated homes and construction equipment on his property for failing to pay members of a cooperative who have long challenged its sale.

“We’re getting slammed,” said Gonzalez, a native of Nicaragua who fled to the U.S. after the 1979 revolution and is now considering moving to Panama to build resorts there. “This is political payback.”

Foreign developers are lobbying against a bill proposed by lawmaker Gerardo Miranda that would put new restrictions on coastal development and turn over all islands to the government.

“We can’t help this country grow if people are scared to buy,” said Kirk Hankla, a Coldwell Banker real estate agent and former California resident who offers properties on Nicaragua’s coast.

Raul Calvet, the president of Calvet & Associates, says that property sales have dropped by 50 percent and home sales are down 25 percent this year due in part to the “Ortega effect.”

“The government doesn’t want to harm investment,” said Calvet. “It would be suicide for them if they did.”

“Don’t touch those tennis shoes!” is the command said directly or otherwise implied. By this command, Fourth World peoples are directed to stay as their ancestors were and not live as modern human beings. This has been the way of the settler descendants to keep indigenous peoples from claiming their powers and rights.

Descendants of settler populations control the economic and political power in the modern state; and the peoples on top of whom the state was formed–the indigenous people–are supposed to be content with being social artifacts–powerless and satisfied with settler castoffs. The original peoples of lands the world over are stratified into the lowest level of social identity in the modern state.

In South Africa, the original peoples of that land remain, despite the African National Congress rise to power in the last ten years, socially, politically and economically at the bottom of the social pile. They suffer the greatest health and economic problems and lack the power to change the circumstances.

In Chile, the Mapuche have been assigned the lowest rank in Chilean and Argentine society and they suffer constant threats and attacks for lack of social and political power.

The Sammi of Norway, Sweden and Finland also suffer from this social stratification that will deny the more than 60,000 indigenous peoples of Scandinavia political power.

In much of the western hemisphere the language of powerlessness is used by state authorities, academics, politicians, business people and the every day settler descendant to eliminate or otherwise obscure the distinctive identity of specific indigenous peoples. With the expectation of perfecting a “homogeneous state” the descendants of settler populations who largely rule and control the state power structures in Spanish occupied states have used the word mestizo to suggest that an individual has a social standing above a “mere Indian”–that category being of lower social status. Mestizo is accepted by many individuals who are Indígena in an effort to avoid being assigned a lower social status in the state. As Guillermo Bonfil Batalla observes in his México profundo (edited by Philip A. Dennis) the process of “de-indianization” of rural Mexican populations has been underway since before the formation of the Mexican state. Its goal? The elimination of the original peoples of the land.

Clearly the effort to eliminate the Indian population over time has failed, for as noted in Bonfil’s work: Their lives and ways of understanding the world continue to be rooted in Mesoamerican civilization–pre-Spanish societies. Perhaps 70% of Mexico’s population are in fact people rooted in the ancient civilizations. Despite this reality, social and institutional pressures heavily emphasize mestizo as an identity rather than indígena or the original identity people know themselves by.

States throughout the hemisphere and indeed throughout the world repeat this pattern. And it is the case that indigenous peoples the world over remain rooted in their ancient cultures. The indigenous population is often much larger than state records document. The concern seems to be that when indigenous peoples are recognized to be of greater numbers they will band together and compete for power with setter descendants.

That seems to be the worry among settler descendants in Bolivia where the state population of Indígena is the majority population (60% of 9.3 million). Despite this fact, the settler descendants who oppose the rise of power among the original peoples want to promote the view that this majority population is Bolivian, “mestizo” or of otherwise mixed-race heritage. By virtue of this view, it is argued, the indigenous population is considered smaller.

Indigenous peoples want to take the United Nations Declaration on the Rights of Indigenous Peoples seriously. In particular Article 26 of the Declaration commands considerable attention. It is here that the UN Declaration states: Indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired. This principle seems to directly threaten the settler descendant population since they basically stole most of the land on which they live. They are clearly concerned in Bolivia that those who are Indígena will no longer want to be called Mestizo and wish to claim their right to lands and self-government.

Because of the UN Declaration Indígena now means power and the choice to reclaim lands and resources for the benefit of original peoples.

For millions of peoples in the world, reclaiming land on which to grow food, build society and families has got a shot in the arm. There is great opposition to this idea by those who claim the lands and resources originally used and owned by Indígena. The struggle for one’s identity may be less difficult than the struggle to take back the lands, the resources and the power taken by those who came to occupy and replace lands and the people. In Bolivia the struggle has been raging and now will take on a new level of importance.

The war in Nicaragua between the Miskito, Sumo and Rama and the government of Nicaragua between 1981 and 1990 demonstrated that indigenous peoples will defend their lands and their way of life with success. The Zapatistas demonstrated a resurgent power in Mexico as have the Mixe in Oaxaca simply by taking the initiative and acting. The Salish peoples demonstrated their resurgent claims to the right of self-government in Canada and the United States and have begun to force a shift in political power. Fourth World nations throughout the hemisphere, and indeed throughout the world, may now reclaim their lands, resources and power to decide their own social, economic, political, economic and cultural future. In the western hemisphere, the may come that it is no longer mestizo, but Indígena that identifies the majority populations in many states.