The Nicaraguan civil war between the Sandinistas and the contras, coupled with Sandinista economic policy, contributed greatly to economic decline in Nicaragua. The two sides signed a peace deal in 1987, and elections were held in 1990. The Bush Administration, which had gradually ended aid to the contras, gave financial support to the political opposition. Elections were held in 1990, and Violeta Chamorro, (Pedro Joaquín Chamorro’s widow) of the National Opposition Union (UNO), won the presidency. She attempted to reverse many policies of the Sandinista regime and was successful in introducing free-market reforms, human rights protections, and democratization. Animosity between former contras and Sandinistas was strong––and sometimes violent––through the mid-1990s; however, President Chamorro did make progress in national reconciliation.
In 1997, Arnoldo Aléman became president after winning elections the previous year. His administration was corrupt, however, and in 2001, Enrique Bolaños became president. He attempted to bolster Nicaragua’s economy, which today remains among the worst in Latin America, by introducing various reforms. In 2006, Daniel Ortega of the FSLN was reelected as president; however, he no longer espouses the Socialism of his past. Instead, his “government focused on the difficult task of stamping out official corruption and improving general economic conditions, particularly for poorer Nicaraguans.”
Today, relations between the United States and Nicaragua are normal. Both countries maintain embassies in the other. The United States continues to push for free-market reforms, democratization, and economic improvement. Indeed, Nicaragua is part of the Central America––Dominican Republic Free Trade Agreement, a free trade agreement that includes the United States, Nicaragua, the Dominican Republic, Costa Rica, Honduras, Guatemala, and El Salvador. The United States also seeks to better human rights in Nicaragua, including through judicial reform, and to assist Nicaragua in combating crime and terrorism.