On May 5, 2026, the Inter-American Dialogue hosted a conversation on Nicaragua’s authoritarian state and the future of U.S. policy in the country. The panel was moderated by Rebecca Bill Chavez, president & CEO of the Inter-American Dialogue. It featured Kevin O’Reilly, who served as chief of mission at the U.S. Embassy in Managua until December 2025, Eddy Acevedo, vice president for policy and government relations at the National Endowment for Democracy, and Manuel Orozco, who directs the Dialogue’s Migration, Remittances, and Development program.
Panelists offered a view of day-to-day life in a police state, the Ortega-Murillo regime’s disregard for democracy and the rule of law, and the way the economy functions through three parallel systems that facilitate corruption. They also addressed the U.S. approach, current pressure on the regime, and the need to devote greater international attention to the country, given the extent of repression and the regime’s disregard for human rights. The speakers offered insight on the need for a unified Nicaraguan opposition, a coherent resistance strategy, and a more engaged U.S. policy.
Responding to a question about day-to-day life in Nicaragua, O’Reilly described the country as a personalistic dictatorship in which even ministers must check with El Carmen, referring to the Ortega family residence, on all decisions, demonstrating the concentration of power. He called the country “a failed revolution,” noting that Nicaragua was the second poorest country in the hemisphere when he began his career and remains so today. To illustrate the closure of civic space, he cited that the regime has closed over a thousand schools, affecting approximately 500,000 out of a population of seven million, and destroyed or subjugated to state control thirty institutions of higher education. He further emphasized that many educational centers were specifically targeted because they were considered hubs of the 2018 protests. O’Reilly characterized the state as a tightly held gerontocracy where people limit their conversations in public markets for fear of being overheard, and some refuse to leave the country for fear of being denied re-entry.
To the question of how the regime dismantled democratic institutions, Acevedo began with the failure of the Organization of American States (OAS) and others to call out fraudulent elections. It was not until 2016 that Washington signaled that the situation had become unacceptable, and not until 2017 that the United States sanctioned Roberto Rivas, head of Nicaragua’s electoral council. Beyond electoral capture, Acevedo identified fear and family rule, co-option of the private sector, and intensifying religious persecution as tools of repression. He illustrated how a paranoid regime moved to suppress religious expression as part of its broader effort to consolidate power, including the expulsion of nuns, the reported mistreatment of priests, and the removal of the Vatican’s representative.
To the question of how Nicaragua’s economy continues to function under current political conditions, Manuel Orozco, director of the Inter-American Dialogue’s Migration, Remittances, and Development program, described the economy as operating through three parallel systems. The first is a tightly controlled free-market enclave centered on free trade zones. The second is a popular economy sustained by remittances and the informal sector, with remittances alone accounting for six billion dollars in a twenty-one-billion-dollar economy. The third, he argued, is a system of kleptocratic state capture through which the Ortega-Murillo family extracts wealth via confiscation, extortion, Chinese import networks, and an expanding gold-mining sector. Orozco noted that while the economy continues to function, sustained censorship and repression have limited public scrutiny of the broader structural drivers of economic hardship.
Each panelist offered a distinct angle on U.S. leverage to orient the country towards liberal democracy. Orozco argued behavioral change is unrealistic and laid out a “nuclear option” package: designating Nicaragua as a financial risk and leveraging Nicaragua’s dependence on U.S. oil supply by constraining exports. Acevedo emphasized that Murillo is consolidating succession in real time and that democratic elections are not a realistic goal in the current context. He also discussed the NICA Act, which he helped draft in 2016, which elevated Nicaragua in Washington and compelled international financial institutions and the Central American Bank for Economic Integration (CABEI) to reassess lending. He also highlighted Section 301 tariffs, an existing executive order to prohibit Nicaraguan exports, and a possible USMCA accession clause modeled on the unused NAFTA clause as potential levers of influence. O’Reilly invoked Hemingway: “How did you go bankrupt? Gradually, and then all at once,” and stated that structural pressures will eventually break the regime. He cautioned, however, that cosmetic gestures like allowing the apostolic nuncio and some exiles to return could placate the international community without any meaningful progress toward democracy. O’Reilly also emphasized that cuts to U.S. support for civil society could imperil efforts to effect change in Nicaragua.
Panelists then fielded audience questions on developments inside Nicaragua. On Russia, Acevedo argued Washington underestimates the threat: the Russians operate a GLONASS satellite tracking station in Nicaragua, and legislation authorizes Russian military personnel, aircraft, and vessels to use Nicaragua as a launching point. Orozco added that 90 percent of Nicaraguan military imports come from Russia. On crime, Acevedo argued the regime is the cartel and that they run Nicaragua as if it were own their gang territory.
Chavez closed by calling for sustained attention and thanking panelists for elevating the conversation in Washington and internationally. She emphasized that Nicaragua’s democracy had been systematically hollowed out over nearly two decades, and that reversing that trajectory requires sustained attention rather than sporadic engagement.
