WHEN THE Sandinistas swept back to power in Nicaragua in late 2006 after more than 15 years on the sidelines, their campaign slogan, which still adorns a giant billboard in the centre of the capital Managua, read: "Rise the poor of the world!" The optimism with which the party led by Daniel Ortega retook the podium swept across the Central American country, with most citizens viewing the switch as a harbinger of change.

But as the International Monetary Fund (IMF) arrived in town last week for a two-week inspection of the economy, linked to a $112 million loan agreement, old wounds which were reopened almost as soon as Ortega won power began to seep still more.

Ortega was a revolutionary during the toppling of the US-backed Somoza dictatorship in 1979. He assumed the presidency of the Sandinista government in the 1980s as it fought the US-sponsored Contra rebellion, eventually ceding power in 1991 as the country suffered the effects of the brutal conflict.

His current term of office has similarly been marked by war with the US, only this time his weapon of choice has been his tongue. The IMF, too, has been on the receiving end of strong words.

Yet while firing broadsides from such places as the pulpit of the United Nations in New York and standing in solidarity marches with Venezuela's Hugo Chavez, in the background Ortega has co-operated with the US, giving a lie to the public shows of defiance.

In one deal under the US-Central American free-trade agreement, he was said to have maintained good relations with an American textile firm building a multi-million dollar plant in the country.

But then, as the meeting with the IMF got underway, more than 1000 workers marched in protest outside the Central Bank venue over supposed IMF pressure on the government to resist salary rises. It typifies the Jekyll and Hyde persona Ortega appears to have assumed.

While the machinations continue, however, the streets of Nicaragua continue to be riddled with poverty and, for many, hope has all but evaporated.

Ortega promised "zero unemployment" and "zero hunger" but critics say little progress has been made. Hostel worker Angela Lopez claimed nothing has changed. "The talk about free education and free health this was good," she said. "But there are still so many kids who can't get to school and access to free university education is bad.

"Thousands of children are sleeping on the streets. They're addicted to drugs and drinking alcohol, but there's nowhere for them to go to get help." Jose Luis, 16, is one. He spends his days helping tourists find a place to stay, earning $1 from small hotel owners for each one he finds. Stumbling and smelling strongly of alcohol, his eyes glazed over, he said: "I can get you anything, marijuana, cocaine ..." He is part of a stark statistic. An estimated 80% of Nicaraguans live on $2 per day or less and the country continues to be the second poorest in Latin American, behind Haiti.

The financial picture is bleak. The IMF will inspect an economy that last year posted an inflation rate of nearly 17%, the highest in Central America and some 7% more than in 2006, according to preliminary figures. Similarly, economic growth in 2007 was just 3.4%, down from 4.2% the previous year.

Economist Nestor Avendano said that in order for the country to see a real reduction in poverty, growth must hit 8-10%. But current predictions for 2008 are around half that.

During its stay, the IMF also plans to evaluate the Ortega government's compliance with the economic package that includes the $112m loan. One of the key issues for discussion is that of aid from Venezuela. Ortega has come under attack for failing to disclose the amount Chavez has pledged the country.

Much of his hopes seem pinned on Venezuelan aid and oil. Shortly after he took power, Nicaragua joined Venezuela and Cuba in the left-leaning Alba bloc of countries designed to offset US influence. One plan would see a $4 billion oil refinery built in Nicaragua with cash from the South American country.

One incident last August saw Ortega at loggerheads with US-owned Esso, which owns Nicaragua's only existing refinery. Reeling from an energy crisis blackouts plagued the nation last year and an inability to get his hands on oil promised by Chavez, Ortega briefly took control of the refinery site under the guise that Esso owed almost $3m in back taxes in order to offload some of the Venezuelan oil.

Despite such incidents, Paul Trivelli, US ambassador to Nicaragua, has said it is clear that Ortega wants to court both sides. "Our relationship is a reasonable working relationship," he told local media. "So in that sense he continues to sort of walk that line." As the political games continue, the poor of Nicaragua are still waiting to see the campaign promises materialise.

Billboards such as the one rousing the poor of the world litter the city.

But Saray, from Rio Blanco, a northern rural town, says the poor are likely to rise against Ortega. "He has changed nothing. People are leaving on all sides. To Guatemala, El Salvador, Costa Rica or even the United States if they can."