The deal could be one of the most important real-world applications to date of the Bolivarian Alternative for the Americas (ALBA), a Latin American integration initiative started a year ago by Cuba and Venezuela to counter US efforts to promote hemispheric free-trade integration. ALBA promotes the principles of social and economic justice, but so far is known more for its symbolism than concrete action.
Yet the pact is gaining steam, with newly elected Bolivian President Evo Morales signing on to ALBA in Havana this past weekend to much fanfare. On Monday, Mr. Morales also sent shockwaves throughout the energy sector when he announced that he would nationalize Bolivia's gas reserves, the second largest in the region.
When in Venezuela last week, Ortega vowed to join ALBA if elected this November. But critics say the agreement between Chávez and Ortega, signed during Ortega's visit, effectively means Ortega has joined ALBA early, undermining the legitimacy of the current Nicaraguan government, and using Venezuelan oil money to boost his campaign bid.
"This is just a sophisticated mechanism for Ortega to launder Venezuelan money for his campaign," charged congressman Wilfredo Navarro, vice president of the incumbent Liberal Constitutional Party (PLC). "Forty percent credit is the same as 40 percent of the money that will disappear and end up in Ortega's campaign."
The Sandinistas, however, claim the pact with Venezuela is an example of how they offer solutions to problems that the pro-business government has been unable to resolve - a form of "governing from below," which Ortega promised he would do when his revolutionary government was voted out of office in 1990.