US faces alliance of the left as Ortega sworn in

Daniel Ortega, the former Sandinista revolutionary who held power in Nicaragua through the 1980s and became a Cold War foe of the United States, completed his political comeback yesterday as he prepared to be sworn in as his country's new president after winning an election last November.

Among several world leaders expected to attend the inauguration in the capital, Managua, was Hugo Chavez, who was himself sworn in for a new term as President of Venezuela yesterday after his decisive electoral win there last month.

The Ortega ceremony was to be an uncomfortable reminder to the US of the recent return of leftist leaders to several Latin nations south of its borders, many of whom are likely to prove important allies of Mr Chavez, who has nurtured his popularity in part through anti-US rhetoric.

Also in Managua was Evo Morales, the President of Bolivia, who has aligned himself with Mr Chavez and the regime of Cuba's ailing Fidel Castro. In a recent chilly gesture towards Washington, he ordered that all US citizens would henceforth need visas to enter Bolivia.

Mr Chavez, meanwhile, used his swearing-in to declare he was committing his "entire life to the construction of Venezuelan socialism". Earlier this week, he rattled financial markets across Latin America with a pledge to nationalise key segments of his country's economy, including its electric and telecommunication's industries. He also asked the National Assembly to give him power to rule by decree.

The Venezuelan leader has pledged to use its oil resources to help Mr Ortega fulfil his campaign promises to ease poverty in Nicaragua, ranked the second poorest country in South America, with 80 per cent of its population living on about £1 a day.

Mr Ortega's Sandinista revolution seized power in 1979 and he ruled Nicaragua until losing elections in 1990. He presided over a gradually crumbling economy and fought a civil war against Contra rebels. Hoping to see Mr Ortega toppled, the Reagan administration funnelled cash to the Contras raised by the clandestine sale of arms to Iran - an illegal scheme that caused a domestic scandal in Washington.

Mr Reagan's successor, George Bush Snr, described Mr Ortega as "this little man" while attending a central American summit in 1989 as well as an "unwanted animal at a garden party".

Both sides seem to be at pains, however, to put the past behind them and stress there are constructive links between Washington and Managua. Nor is there much sign, meanwhile, that Mr Ortega will be inclined to follow Mr Chavez down a radically socialist path. Rather, he has vowed to respect private property rights in Nicaragua and take a cautious approach to economic policy.

The US Health Secretary, Michael Leavitt, was to attend last night's inauguration. In an earlier meeting with Mr Ortega he said: "I want to make it very clear that our desire is to work with you". Officials added that Mr Ortega and Mr Bush had spoken with each other by telephone on Monday.

Jaime Morales, a former Contra leader who reconciled with Mr Ortega and will serve as his vice-president, has also sought to allay fears about the new leader's intentions. "We will totally respect private property, entrepreneurial liberty and the market economy," he said.

A member of the main opposition party appeared less confident, however. "May God light the path of the new president and his government... so they don't fall victim to totalitarian temptations or even think of setting back our democracy even a centimetre," warned Wilfredo Navarro.

President Mahmoud Ahmadinejad of Iran was originally expected at the Ortega inauguration but officials said yesterday that, although he would not be present at the ceremony, he was expected to arrive on Saturday and become the first world leader to pay Mr Ortega an official visit.