Nicaragua Economy

When Dagoberto Perez landed a job sketching performance charts for the new Sandinista government's Construction Ministry in 1980, most of the lines he drew pointed upward. Soon came the Contra war and the hard times, but on his $200-a-month salary, Perez still managed to buy a truck while supporting his growing family in a squatter shack.

Dangerously shifting rapids and a shore lined with eerily shaped boulders led Patuca River folk to call this narrow canyon the Gates of Hell, even before the deluge from tropical storm Mitch swelled the river and crushed their cabins like matchsticks. Within a couple of weeks, by mid-November, the river had settled back into its channel, but the power of the flood waters left a landscape so altered that even people who grew up here say they get lost now.

The Sandinistas left $3 million in Nicaragua's Central Bank last week, the same meager sum they had inherited in 1979 from the defeated Somoza dictatorship, Nicaragua's new government reported Monday. President Violeta Barrios de Chamorro and her Central Bank chief, Francisco Mayorga, said they have taken over an economy in chaos and warned of an inflationary explosion in the coming weeks.

Even as relief workers struggle to feed people stranded by the most destructive tropical storm in two centuries, Central American farmers are scrambling to save damaged crops for the longer term and focusing on new farming regions and methods. From corn and bean farmers, whose small plots feed their countries, to banana, coffee and sugar cane plantations, whose exports will pay off loans needed to rebuild roads and bridges, Central Americans are plotting recovery.

President Daniel Ortega announced new austerity measures to keep Nicaragua's economy from sinking deeper into debt and blamed the problem on five years of war against U.S.-backed contras . The package includes higher prices for fuel and public transportation, tighter gasoline rationing and the elimination of 5,000 government jobs, mainly through attrition. Ortega said the measures were "made necessary by the wear and tear Nicaragua's economy has suffered because of the war of aggression."

The United States and more than 30 other donors pledged $300 million in aid to breathe new life into Nicaragua's economy, which has been exhausted by war and sanctions. Speaking at the end of a conference in Rome, President Francisco Mayorga of the Nicaraguan Central Bank said, "This is far more than we had even hoped for." The conference was called to pledge funds for an emergency package requested by the new U.S.-backed government of President Violeta Barrios de Chamorro.

The government said it will lay off 10,000 soldiers and 15,000 state workers as part of an austerity program to reduce the budget deficit and save Nicaragua's failing economy. Economy Minister Silvio de Franco said in Managua that Nicaragua is "on the edge of collapse like no other country in the world and there are no magical answers or fairy godmothers that can save the economic situation."

The Sandinista government is planning to postpone until 1990 municipal elections that were expected next year because it cannot afford to hold them amid a crushing economic crisis, Luis Carrion, the minister for economic affairs, said in an interview. Carrion is one of the nine top comandantes of the Sandinista National Liberation Front, the government party. They are the final decision makers in Nicaragua.

The Bush Administration today is expected to unveil a $300-million aid package for Nicaragua to help that nation's new democratically elected government resuscitate an economy devastated by years of U.S. sanctions and Sandinista rule. The package, hammered out in principle over the weekend by top Administration policy-makers, also would restore several hundred million dollars' worth of trade benefits that the United States cut off when it imposed an embargo on Nicaragua in 1985. U.S.

The Bush Administration's efforts to nurse Nicaragua's sanctions-strangled economy back to health are likely to be more modest--and decidedly more difficult--than the U.S. rebuilding of Panama, government and private analysts said Monday. Not only have the U.S. trade restrictions on Nicaragua been broader and more effective than those that Washington imposed on Panama, but Nicaragua had only a rudimentary economy before the United States clamped on its embargo.

Struggling to regroup after two resounding rejections by voters that left them with shrinking influence in the country they once ruled, the leftists of the Sandinista National Liberation Front this weekend clung to their top leaders while trying to make their party less threatening to Nicaragua's emerging entrepreneurs.

Nicaraguans driving along their capital's main boulevard in recent months have passed a novel sight: For the first time in the quarter-century since a killer earthquake shattered this city's lakefront downtown, new construction is underway.

In President Violeta Barrios de Chamorro's Nicaragua, everything has changed and nothing has changed. Or does it just seem that way? Toyotas outnumber Russian-made Ladas now, but they still have to steer around horse-drawn carts--about 70% of Nicaraguans live in poverty. The mayor of Managua has put up road signs to the country club and airport. But many streets remain nameless, and Managuans' memories are still dotted with landmarks that no longer exist. Nicaragua remains a polarized country.

A little more than two years after Nicaragua finally entered a period of democracy with the electoral defeat of the Marxist-Leninist Sandinista movement, the hopes for a just, stable society here are being swallowed by a lack of political and social will, a failure of leadership and some very bad luck.

Nicaraguan President Violeta Barrios de Chamorro, elected just over a year ago on the heels of a debilitating civil war, on Thursday asked U.S. companies to consider doing business with Nicaragua. She assured potential investors that she knows "it is absolutely necessary that peace and democracy exist" before businesses would be willing to take a chance on her country.

Nicaraguan President Violeta Barrios de Chamorro declared her country free of "the delirium of a totalitarian ideology" Tuesday but pleaded with Congress for at least 10 years of financial aid to save the nation from economic disaster after a long and bloody civil war.

President Daniel Ortega said Wednesday that U.S.-backed rebels killed 1,019 Sandinista soldiers in 1986 but suffered far higher losses in casualties and desertions from their own ranks. In a year-end address, Ortega said his army's advantage over the rebels helped the economy rebound from a 1985 slump, but he warned that the fighting will mean continued hardship for Nicaraguans.

President Bush and members of Congress gleefully hailed Violeta Barrios de Chamorro's surprise victory in Nicaragua's presidential election Monday and promised that the United States will supply aid to rebuild her country's economy, crippled by a decade of guerrilla war. But U.S.

President Violeta Barrios de Chamorro of Nicaragua said Monday she is cautiously optimistic that a group of friendly nations will help her war-torn country with a series of loans and grants. She made the remarks after a meeting with Secretary of State James A. Baker III on the first day of a three-day Washington visit aimed at seeking financial support for Nicaragua and cementing ties with the United States.

When Dagoberto Perez landed a job sketching performance charts for the new Sandinista government's Construction Ministry in 1980, most of the lines he drew pointed upward. Soon came the Contra war and the hard times, but on his $200-a-month salary, Perez still managed to buy a truck while supporting his growing family in a squatter shack.