Last April, news of these measures led to protests and a government crackdown that led to hundreds of deaths and over fifty thousand leaving the country.

Nicaraguans revolted last April when the government announced it was raising payroll taxes and cutting retirement benefits to bolster a social security program hemorrhaging money.

The unrest led authorities to quickly withdraw the measure, but as the protests boiled for months and broadened into demands that President Daniel Ortega leave office, security forces responded with a harsh crackdown that killed over 300 people. Hundreds more were arrested and an estimated 50,000 fled into exile.

Now, with the dissident movement cowed, a new plan to cut pension payments by 30 to 40 percent and a raise in payroll taxes is taking effect. And economists and businesspeople are warning that it threatens to have even more severe effects for Nicaraguans and could plunge the country into deeper recession and unemployment.

“This measure is absolutely much more drastic since it’s not gradual but instead immediate, and it will affect the nearly 800,000 insured in the country,” said Mario Arana, who was minister for development, head of the Treasury and president of Nicaragua’s Central Bank during the 2001-2006 administration of Ortega’s predecessor.

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