Now that the voting's over, observers wonder if Nicaragua's new President will stick to his

moderate, pro-business promises

More than a quarter-century after the Sandinista guerrillas burst onto the scene and overthrew Nicaraguan dictator
Anastasio Somoza, their former leader has been democratically elected as the country's President on a promise to
respect private investment and reduce poverty in the hemisphere's second-poorest nation.

Daniel Ortega, the mustachioed 60-year-old former Marxist revolutionary, whose rule from 1985 to 1990 was marked by
land confiscations and a bloody war against U.S.-backed Contra rebels, has mellowed over the years. "I am not
contemplating dramatic, radical changes in the economy," Ortega said Wednesday, a day after election returns showed
he had won with 38% of the vote, nine points more than his nearest rival. He pledged to fight poverty, create jobs, and
welcome private investment.

Ortega's election, on his third attempt, represents a remarkable turnaround for a politician whose five-year rule in the
1980s featured close ties with Cuba and the Soviet Union in the final years of the Cold War. Although he is an ally of
Venezuelan leftist President Hugo Chávez—who has sent cheap fuel and fertilizer to regions of Nicaragua ruled by
members of Ortega's party, the Sandinista National Liberation Front—Ortega knows it's important to get along with
Washington this time around.

"He would be committing suicide if he cut himself off completely from the U.S.," says Michael Shifter, a Latin America
expert at the Inter-American Dialogue, a Washington think tank. "Being a client state dependent on Hugo Chávez is not a
viable option for him."

The Bush Administration, which had warned in recent months that radical change in Nicaragua could jeopardize U.S. aid
and might interrupt billions in remittances sent home by Nicaraguans in the U.S., said that if the Ortega government
"reaches out in a respectful way to the United States, that the United States would reciprocate and deal with his
government," according to State Department spokesman Sean McCormick.

Ortega sounded fairly combative, though, at a victory rally Wednesday, calling Cuban leader Fidel Castro, and
Venezuela's Chávez as "beloved brothers" and urging the U.S. to withdraw from Iraq quickly. He commented that
Republicans had lost at the polls because the Bush Administration had insisted on "sticking to a war that is rejected by
the whole world."

Nicaragua's congress in April ratified CAFTA, a free trade agreement with the U.S. and five other Central American and
Caribbean nations. Although Ortega didn't support the pact, he has said he will do his part to make it work. "Ortega
understands that CAFTA, and the investment it can bring, will be good for the country, but at the same time he can tell
his constituents that he really doesn't support the idea of free trade," says Shifter.

Ortega must certainly attract foreign investment to his country, where nearly half the population live in poverty and the
average per capita income is just $817. Nicaragua is heavily dependent on foreign donor financing, which the World
Bank says accounts for more than one-third of the government's budget.

In recent years, former President Enrique Bolaños had tried to buff Nicaragua's image to attract foreign direct investment,
touting the country as an inexpensive place for multinational companies to outsource call centers and back-office
operations.

Juan Carlos Pereira, the Harvard-educated director of Pro Nicaragua, a public-private foundation that works to attract
foreign investment, says Ortega understands the need to work closely with business. During the campaign, Ortega
signed a 10-point program pledging to respect private property, free enterprise, and the nation's laws.

So far this year, Nicaragua has won around $200 million in foreign investment, and another $350 million to $400 million is
"in the pipeline," waiting to see if Ortega follows his promises of moderation, Pereira says. "We're pretty optimistic—the
Sandinistas have changed and a lot of them are businessmen now. The world is different. The Cold War is over. These
people have learned that they made a lot of mistakes in the past," Pereira says.

On Wednesday, the president-elect, who takes office Jan. 10, invited several hundred businesspeople and investors to a
meeting to reassure them that he wanted to work with them. "We believe he is serious about his commitment to promote
foreign investment and tourism," says Michael K. Cobb, president of Gran Pacifica Resorts, which is building a real estate
development on the Nicaraguan coast aimed at U.S. retirees and baby-boomers.

It's too early to know just how much Ortega has mellowed from his days as a fatigues-wearing revolutionary leader. On
the campaign trail, he frequently spoke of God and said the country would benefit from a spiritual revolution. His theme
song was John Lennon's Give Peace a Chance. Now, Nicaraguans are just going to have to give Ortega a chance to rule
a country that has come a long way since the war-torn 1980s.