The presence of armed and hooded paramilitaries on the streets of Nicaragua has sparked calls for the army to intervene to end two months of unrest that has killed more than 200 people.

Human rights groups have consistently denounced the shady pro-government forces which are accused of being involved in the killing of scores of anti-government protesters.

"You cannot have two armies in this country. Under the constitution, the Nicaraguan army should disarm the paramilitaries," said a former ambassador to the US, Carlos Tunnerman, now a member of a civil society delegation in talks with the government to end the unrest.

The protests began in April as demonstrations against now-scrapped social security reforms, but a heavy-handed police reaction transformed them into demands for justice for those killed, and for the exit of President Daniel Ortega and his wife Vice President Rosario Murillo.

The military has publicly committed itself not to take part in repression of anti-government protests, and called for dialogue and an end to the violence.

But its attitude has been criticized as ambiguous. When Ortega appeared in public for the first time since the beginning of the protests, he was accompanied by the army chief, General Julio Cesar Aviles. And residents in flashpoint areas have reported the presence of soldiers or ex-soldiers siding with riot police during clashes.

- Economic interests -

"If the army is claiming to contribute to a peaceful solution through dialogue, it must disarm paramilitary groups," said Edmundo Jarquin, a former presidential candidate and member of a dissident wing of Ortega's leftist Sandinista party.

Several analysts told AFP that the army's main aim is to defend its own economic interests.

Through an offshoot financial arm, the military controls construction, real estate and financial companies, as well as a hospital, and has investments in the New York Stock Exchange, said military analyst Roberto Orozco.

"That could be one of the factors that could tip the balance. When your corporate interests are threatened or when you reach a situation of total ungovernability," he said.

Defense and security specialist Elvira Cuadra said "the position of the army with respect to the Ortega-Murillo government has been more of an alliance than of subordination."

"This is down to its institutional strength, the force of arms and the economic power it has acquired over several decades," she said.

The army has played a crucial role in the recent history of this poor Central American country, fighting two wars in the 1970s and 1980s and many believe that if it wanted to, it could intervene to stop the violence and politically pressure Ortega to resign.

The 13,000-strong force grew out of the former FSLN guerrilla movement that overthrew dictator Anastasio Somoza in 1979. According to a 2016 review by the Security and Defense Network of Latin America, it operates on an annual budget of $75 million.

- 'Passive complicity' -

Ortega has kept the relationship sweet over his years in power by changing the length of service and the retirement age to benefit the Sandinista old guard.

As a result, says Orozco, "the army is divided. The High Command is loyal to Ortega, not only for business reasons, but also because he kept them in their commands."

But the rank and file are "discontent" because the power rests with the old guard and promotions are frozen.

But for now the army is walking a fine line. If it gets directly involved with Ortega and directly suppresses protests, it will expose itself to sanctions, such as those Washington imposed on police chiefs involved in a deadly crackdown on protesters.

Former guerrilla commander Luis Carrion called on the army to abandon its "passive complicity" and disarm the paramilitaries.

But others have been more cautious.

"We must demythify the role of the army as something that would tip the balance. They can't become political actors to resolve the crisis," said Caudra.

"That is the responsibility of the government," she said.

If the army does intervene, it could be that, according to Orozco, "the cure is worse than the disease."

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