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Nicaragua External Debt
After the Sandinista revolution, first under the
provisional
junta and later under President Ortega, Nicaragua moved
from a
historically high dependence on financing from Western
nations to
high financial dependence on the Soviet Union and Eastern
Europe.
By 1990 and the election of President Chamorro, Nicaragua
was the
most indebted country in Central America, owing close to
US$4
billion to the Soviet Union and another US$6 billion to
US$8
billion to Western nations and international lending
institutions.
As the result of a de facto moratorium on
Somoza-contracted
debt by the Sandinista government, Nicaragua faced US$350
million
in debt arrears in 1990. This debt was owed mostly to
international financial institutions, including the World
Bank,
the IMF, and the IDB. New borrowing was precluded by the
old debt
and accumulated arrears.
The need to overcome the burden of a growing
foreign
debt, estimated at US$10.6 billion, drove the Chamorro
government's economic program in the 1990s. The Nicaraguan
debt,
which was owed mostly to governments and the multilateral
lending
institutions, was still the highest per capita debt in the
region. Despite some debt forgiveness since the
inauguration of
President Chamorro, significant additional debt relief
remained
an absolute necessity for economic recovery.
Data as of December 1993
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