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Nicaragua Foreign Aid
Having won the 1990 elections and made significant
steps
toward peace, the new Chamorro government expected that
Western
nations and financial institutions would rally to its
support.
The United States, however, made resumption of economic
assistance conditional on steadfast adherence to
privatization of
government-controlled resources, cuts in the military, and
cancellation of Nicaragua's 1985 damage suit against the
United
States in the International Court of Justice (ICJ).
Additional
requirements for trade and tariff liberalization would
quickly
follow the more general conditions that the United States
placed
on resumption of foreign assistance.
To enable Nicaragua to meet eligibility requirements
for
borrowing from international financial institutions, the
United
States government promised Nicaragua approximately US$300
million
in 1990. These funds were designated primarily for debt
repayment
and petroleum imports (the country's petroleum bill in
1989 was
US$90 million). A smaller portion was earmarked for
employment
generation. However, these promised funds would prove slow
to
come. Two hundred days after the inauguration of President
Chamorro, only US$160 million of the US$300 million
pledged by
the United States had been delivered.
Conditions for new loans were also placed by
international
banking organizations. In 1991 the IMF approved a US$55.7
million
standby credit over an eighteen-month period to support
President
Chamorro's economic program. Requirements for the money,
however,
were similar to those of the United States government and
included accelerated privatization.
In July 1991, President Chamorro signed a US$420
million loan
with the World Bank and the IDB. Beginning in 1992, US$220
million was disbursed for investment in coffee, cotton,
and
cattle and for improvement of damaged and worn
infrastructure.
The remainder was to be used to pay off a bridge loan from
Colombia, Spain, Venezuela, and Mexico, money those
countries had
loaned Nicaragua to pay a US$360 million debt to the World
Bank
and the IDB. Arrears payments to the international
financial
institutions were a standard condition for eligibility for
new
loans. Nicaragua also received additional aid from
seventeen
other countries to pay off arrears.
Data as of December 1993
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