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Nicaragua The Chamorro Era, 1990-
The economic policies of Violeta Barrios de Chamorro
(president, 1990- ) were a radical change from those of
the
previous administration. The president proposed to
revitalize the
economy by reactivating the private sector and stimulating
the
export of agricultural products
(see
fig. 9). However, the
administration's political base was shaky. The president's
political coalition, the National Opposition Union (Unión
Nacional Opositora--UNO), was a group of fourteen parties
ranging
from the far right to the far left. Furthermore, 43
percent of
the voting electorate had voted for the Sandinistas,
reflecting
support for the overall goals of the former administration
although not necessarily the results.
The Chamorro government's initial economic package
embraced a
standard International Monetary Fund
(IMF--see Glossary)
and
World Bank (see Glossary)
set of policy prescriptions. The
IMF
demands included instituting measures aimed at halting
spiraling
inflation; lowering the fiscal deficit by downsizing the
publicsector work force and the military, and reducing spending
for
social programs; stabilizing the national currency;
attracting
foreign investment; and encouraging exports. This course
was an
economic path mostly untraveled by Nicaragua, still
heavily
dependent on traditional agro-industrial exports,
exploitation of
natural resources, and continued foreign assistance.
Inspired by the IMF, Minister of Finance Francisco
Mayoraga
quickly put together an economic "Plan of 100 Days." This
plan,
also called the "Mayoraga Plan," cut the deficit and
helped to
lower inflation. Loss of jobs and higher prices under the
plan,
however, also resulted in crippling public- and
private-sector
strikes throughout the country. Mayoraga's tenure in
office
barely exceeded the 100 days of his economic plan. By the
end of
1990, the government was forced to abandon most of its
freemarket reforms.
A series of political problems and natural disasters
continued to plague the economy in 1991 and 1992. The need
to
accommodate left- and right-wing views within its ruling
coalition and attempts to work with the Sandinista
opposition
effectively prevented the implementation of unpopular
economic
measures. The government was unable to lower government
expenditures or to hold the value of the newly introduced
gold córdoba
(C$0--for value, see Glossary)
stable against the
United
States dollar. A severe drought in 1992 decimated the
principal
export crops. In September 1992, a tidal wave struck
western
Nicaragua, leaving thousands homeless. Furthermore,
foreign aid
and investment, on which the Nicaraguan economy had
depended
heavily for growth in the years preceding the Sandinista
administration, never returned in significant amounts.
Data as of December 1993
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