Daniel Ortega's victory in Nicaragua's presidential elections last Sunday, with more than 70% of votes cast in his favor, has brought the former guerrilla leader one step closer to installing a dynastic regime.

With his wife, Rosario Murillo, installed as the new vice president, the Ortegas have accumulated so much power that evident unease is starting to spread among the ruling Sandinista movement.

But there is a caveat: the risk of losing vital economic support from the embattled leftist regime in Venezuela could spell trouble for the Ortega clan.

After steamrolling over potential opponents with the connivance of Parliament, the Supreme Court and a discredited Supreme Electoral Council, Ortega has set about modifying laws to allow indefinite presidential reelections while gradually grinding the parliamentary opposition into oblivion.

He has forged a single-party system in spite of the presence of various political parties and movements that pose no actual threat to the Ortega regime — so sure of their power, the government even finances some of its opponents.

This all goes a long way to explaining the government's flat-out refusal to allow foreign observers to monitor the elections. Neither the Organization of American States (OAS), nor the European Union or Carter Center, which expressed deep reservations about the election process, were invited to observe.

Cronyism and crime fighting

Overly generous financial backing from Venezuela, another socialist state and longtime Ortega ally, has allowed him to hasten the implementation of highly popular social programs. The Bolivarian regime has paid Nicaragua some $4 billion over the past eight years, helping create a welfare system and ample opportunities for corruption. Cronyism has flourished, as a good deal of big-scale state businesses like gasoline distribution, media and the Interoceanic Canal, are handled by the "Eternally Loyal Comrade" Rosario Murillo and one of the seven children she has had with Commander Ortega.

The private sector has acted much like it did under the Somozas, the ruling family the Sandinistas toppled in the late 1970s, burying its head in business and ignoring politics. Improved public security, thanks in part to crackdowns on drug trafficking and the most dangerous of Central American gangs, the maras, have helped ensure an increasingly attractive investment environment in the country. Yet the harm is spreading deep inside.

Ortega and Murillo in 1985 — Photo: Mark Reinstein via ZUMA

OAS Secretary-General Luis Almagro is expected to present a report on the situation in Nicaragua, following the model used for Venezuela. Unlike Venezuela's Nicolas Maduro, Ortego has found himself forced to engage in direct dialogue with the OAS, which should yield results in three months.

If the regime accepts making fundamental changes, this will provide a decisive direction for governance in the immediate future, but also lay out a constructive path of democratic collaboration between the OAS and a member state. Otherwise, Nicaragua will simply join the list of states violating the Inter-American Democratic Charter.

It is not for nothing that the respected former vice-president and Sandinista writer, Sergio Ramírez, says that "the Nicaraguan democratic system is today completely crushed. Nothing is left but submission to a personal and family project." He says Ortega has "been accumulating power through corruption, bribery, imposition and even fear."

Since Ortega defines himself as a "Christian, caring and socialist," he should show the international community that such fears are unfounded. The U.S. Congress has before it the Nicaragua Investment Conditionality Act or NICA Act, which creates a mechanism able to block loans and funding from the World Bank or Inter-American Development Bank. This would currently affect a sum of $250 million waiting to be paid out, and crucial to infrastructures. The ball is in Ortega's court.