At a dinner in Managua in the mid-1980s, I sat next to a British businesswoman who had lived comfortably in Nicaragua for decades. Heading for retirement in England, she took a last potshot at what she considered the immature idealism of the Sandinistas, who were then in power. “Haven’t they read the Bible?” she asked archly. “Don’t they know the poor will always be with us?”

I lived in Nicaragua for six years of the Sandinistas’ embattled rule (1979-90) and recently returned for the first time. Of hundreds of comments I’d heard in Nicaragua, that was the one that echoed in my mind as I headed back. I had met many people during my years there–teachers, doctors, agronomists and others–who believed quite the opposite: that widespread poverty was not a foregone conclusion, and they had fought to reduce it.

The individuals who are now in power were not among them. What I found, after Nicaragua’s eleven years as a free-market economy and on the eve of national elections, was a depth of poverty that had never existed during the Sandinista years. Shortages and rationing, which were endemic in the 1980s, have been replaced by relative wealth for some households and out-and-out hunger in many others. The failed populism of the Sandinistas, which was an economic disaster but did include a safety net, has given way to more commerce and some construction of infrastructure, but also flagrant corruption, massive unemployment and indifference toward the indigent.

The United States, which found Nicaragua unsettling in the 1980s because of socialism, now supports a government that’s giving capitalism a bad name–to the point where the Sandinistas may be voted back into office. “You walk into houses, put your hand on the mud ovens and know that the families haven’t lighted a fire all day because there is simply nothing to cook,” says Carlos Fernando Chamorro, a former Sandinista newspaper editor who now operates the most respected muckraking operation in the country. Even my friend Jaime Bengochea, a businessman who always opposed the Sandinistas and supports their opponents today, shook his head ruefully. “Yes, I’ll admit that to a degree there has been a loss of humanity these past years,” he said. “It is a sad thing.”

On November 4, Nicaraguans will choose between former President Daniel Ortega of the National Convergence, an alliance of political organizations headed by the Sandinista Front, and Enrique Bolaños, a crusty businessman chosen to lead the ticket of the ruling Liberal Constitutionalist Party (PLC). One of them will succeed outgoing President Arnoldo Alemán of the PLC. The latest polls say the race is too close to call, and there is fear that if balloting is close, violence could erupt.

The political system is already a shambles. Not only has humanity been lost, but also any semblance of honest or sane government. Last year, the two major parties arrived at a notorious agreement under which positions in key institutions–the Supreme Court and other levels of the judiciary, the commission overseeing elections and another that supposedly investigates corruption–were divided between the two parties. “If you’re a Sandinista you go to a Sandinista judge with your case, and if you’re a Liberal you pick a Liberal judge,” says Ana Quiroz, director of a group of nongovernmental organizations, funded by foreign aid, that has criticized the pact. “It works the same with the officials who oversee banks. Each party is allowed to cut its deals.”

By tinkering with electoral laws, the two parties eliminated all but one other party from national elections, after some two dozen participated just five years ago. In addition, members of the National Assembly awarded themselves immunity from prosecution in both civil and criminal cases unless a two-thirds majority evicts a member–which is highly unlikely. Says one Nicaraguan political journalist, rolling her eyes, “It would be Machiavellian, except the laws are so obvious you can see the hatchet marks of the hatchet men.”

Given that level of corruption and the country’s dire economic situation, there is little hope that the election will improve life for the average Nicaraguan. Bolaños, an agricultural millionaire, headed anti-Sandinista business organizations during the 1980s. That was his only political experience before becoming Liberal campaign chairman in 1996, the year he was elected vice president on the ticket with Alemán. The main message of his current campaign is that he will work hard as long as Nicaraguans also work hard. But some 60 percent of the population of 5 million is either unemployed or underemployed. There are no jobs to work hard at. “Even today, when he speaks to people he sounds like the owner of the plantation talking to the workers,” says Quiroz.

The administration in which Bolaños has served has been an economic disaster for many Nicaraguans. Real average wages are about $1,200 per year, according to the country’s Central Bank. For agricultural workers the pay is closer to $900, and the minimum wage in rural areas is about $420 per year, a little more than $1 per day. Those numbers are for the Nicaraguans who are lucky enough to have full-time salaried work, which is less than 50 percent of the work force.

Nicaragua’s gross national product of about $2.5 billion is less than half that of any other Central American country. According to the United Nations, the richest 10 percent of Nicaraguans hold more of the country’s wealth than the bottom 55 percent. At the end of the Sandinista era 75 percent of children reaching school age actually enrolled in schools, despite the devastation of the contra war. That figure has not improved under the past two governments, according to the UN. There has been no increase in the number of health workers since the Sandinista era either, despite $5 billion in foreign aid in the past ten years–reportedly more per capita than any other country in the world.

At times, Bolaños blames the Sandinista regime of the 1980s for gutting the country’s economic and financial institutions, making a quick recovery impossible. At other times he admits the corruption and failures of the Alemán regime. “The suffering has become too great. Democracy has not been able to improve their standard of living,” Bolaños says in response to my questions during a stop in Miami. “People have lost patience.”

But there are more worrisome aspects of his candidacy. As vice president, Bolaños was in charge of the Commission on Integrity, which has failed to investigate blatant corruption. Eight banks have collapsed in the past several years, largely because of crooked loans, which in many cases benefited cronies of President Alemán. Among the swindles is the construction of a ten-mile highway that connects Alemán’s main residence outside Managua to three of his ranches. Salaries for government officials often top $10,000 a month. The man in charge of designing the government’s failed antipoverty programs is making a salary of some $230,000 per year.

But Bolaños, who once enjoyed a reputation for honesty, remained largely silent in regard to specific acts of corruption. “Friends of Alemán’s went into public life specifically to sack the government,” says Carlos Fernando Chamorro. “Bolaños spoke about corruption as if he were going to go around with a machete cutting off heads, and then he didn’t do anything.”

But Ortega’s bona fides are, if anything, worse than those of Bolaños. Already voted out of office once, in 1990, he lost to Alemán in 1996. Since then, credible charges of child abuse have been filed against him by his stepdaughter, who claims Ortega had sex with her from the time she was 11 years old. As a member of the Assembly, he has immunity from prosecution even for that crime (although the Inter-American Commission on Human Rights recently agreed to hear the case). Ortega also has a history of corruption. He and other top Sandinista officials expropriated government-owned businesses and homes after their election loss in 1990. Former Sandinistas also accuse him of corrupt, undemocratic maneuvers to retain control of the party. One Nicaraguan journalist compares Ortega to El Cid, the legendary Spanish warrior who had his corpse tied to a horse that galloped into battle. “Daniel is dead politically,” says the journalist. “In fact, he started to stink a long time ago, but he’s still tied to the horse.”

In order to make himself a viable candidate in today’s world, Ortega has gone through a political makeover. Once an awkward, reticent campaigner, he has become a consummate glad-hander and baby-kisser. His wife, Rosario Murillo, who has embraced New Age philosophy in recent years, has made fuchsia and bright yellow the colors of the Sandinista campaign, to go along with the traditional red and blacks flags of the Sandinista Front. Ortega’s rhetoric has also taken on new colors. He spends much of his time assuring bankers and other businessmen that he will stick to austerity measures dictated by the World Bank and International Monetary Fund. “And if he does that, there will be no way he will be able to respond to the needs of the poor,” says Gioconda Belli, a poet, novelist and former Sandinista who, along with other leading writers, is advising Nicaraguans to abstain from voting because the major parties have corrupted the electoral process.

Many of Ortega’s old colleagues have abandoned him, including his former vice president, Sergio Ramirez. Ortega “always separated tactics from strategy and principle and did what he had to do to gain power,” says Ramirez. “But at least he had principles then. Now, he is all tactics. There is no more principle. He is simply hungry for power.” Earlier this year, Ortega even proposed an alliance with family members of former dictator Anastasio Somoza, whom he helped overthrow. “That shows you just how desperate he is,” says Ramirez.

Ortega’s strong showing to date has the White House worried–again. From 1982 to 1989, the administrations of Ronald Reagan and George H.W. Bush waged war against the Sandinista regime by funding the contra army. The Sandinistas had angered many Nicaraguans with their economic policies–including confiscation of property–and the United States found willing counterrevolutionary warriors. The conflict killed more than 20,000. It also led many Nicaraguans to leave the country and drove agricultural workers out of rural areas, crippling all-important coffee cultivation in particular.

The United States is also flexing its muscles this year. In a speech in June to a business group in Managua, Lino Gutierrez, deputy chief of the State Department’s Western Hemisphere bureau, attacked Ortega’s friendships with Fidel Castro and Muammar Qaddafi and questioned Ortega’s commitment to democratic government. In early October, State Department spokesman Richard Boucher and acting Deputy Assistant Secretary for Western Hemisphere Affairs John Keane publicly expressed worries about a possible Sandinista victory, linking the Sandinistas to terrorism because of their alliances with Cuba and Libya, for example. The Bolaños campaign amplified those statements in television commercials that showed the World Trade Center explosions, then photos of Ortega with Qaddafi, Castro and Yasir Arafat, and then a stark warning that if Ortega is elected, the US war against terrorism “could come here.”

The Liberals have also spread the word that the economy could collapse completely if Ortega is elected. Ortega’s backers emphasize, however, that the free-market economic system in place in Nicaragua was adopted with the support of Sandinista members of the National Assembly. In a brief interview, Ortega reiterated that he would not tamper with Nicaragua’s commitments to worldwide lending institutions and called Bolaños’s campaign claims “desperate.” He said his government poses no threat to the United States.

Manuel Ignacio Lacayo, a leading Managua businessman who turned against the Alemán government because of its corruption, echoed those thoughts. “The United States wants Bolaños to win, which I think is a mistake,” says Lacayo. “I don’t think we have be afraid of Ortega. I’m more afraid of Bolaños, because if he’s elected he won’t rule, Alemán will. And Alemán is the most hazardous person in the country.”

Ortega and his supporters say they will pay more attention to the poor than the current administration. This is probably true, although it is also true that Ortega’s election might cause investors to pull back, which could cause more damage to the poor.

The left is still strong in Nicaragua. In midterm elections the Sandinistas won the mayoralties of several major cities, including Managua. But Ortega is a different matter. My impression is that more people are frightened by the legacy of Ortega than they are by the corruption of the Alemán-Bolaños administration, and that in the end the Liberals will eke out a victory. But either way, the near future looks bleak. Increasingly, there is talk of a national plan to set long-range goals for health, education, economic development and the creation of a civil service. (At the moment, after each election the entire government turns over, a pork-barrel system that breeds corruption.) Nongovernmental organizations are collaborating with local leaders at the township level and hope that by working from both the bottom and the top of the political system they can someday induce change. “In Nicaragua we always have our illusions,” says Sergio Ramirez. “In this country, Utopia is only something that won’t happen today.”

Meanwhile, the situation for some Nicaraguans is desperate. On a trip to the city of Matagalpa, I visited a barrio where coffee workers have taken refuge after being dismissed by plantation owners in the northern mountains. The price that can be had for a 100-kilo sack of coffee has dropped from $120 to $50 in the past two years, and drought has also hit the area. According to local officials, at least 1,800 families have come out of the mountains begging for food. Doribel Blandon, 30, said she was born on a plantation and had worked her whole life there until recently. “They threw us out three weeks ago,” she said. “The government hasn’t given us any idea what we might do. In fact, they haven’t come to speak to us.”

She and other internal refugees led me to a house where a local family had given shelter to a young woman from a coffee-picking family who had given birth two days before. Miglia Zamora, 20, lay in a dark room, only a blanket between her and the concrete floor, her infant daughter lying next to her. “I don’t know what will happen,” she said. “We don’t know where food or clothing will come from.”

One local pro-Bolaños voter, Carolina Escorcia, 20, tells me she has been advised by her party that the above scenes are staged by the Sandinistas to make the government look bad. But as I’m speaking to the former coffee workers, word arrives that food is being distributed nearby. With plastic plates in hand, many of the people bolt and go sprinting up the dusty street out of sight. They don’t appear to be acting. They’re hungry.