The war has stopped. Nicaragua is at peace and is promoting peace in the region. The size of our army and officer corps has been reduced by 60 percent, from 86,000 to 27,000. And recently we arrested seven Nicaraguans for their role in illegally transferring arms to the Salvadoran rebels.
After 50 years of being ruled by the Somoza family and 11 years under the Sandinistas, there is no longer any censorship in Nicaragua. There is freedom of the press and freedom of travel for Nicaraguans. Amnesty has helped heal the wounds of war and foster reconciliation. These accomplishments of my first year in office provide, I believe, the basis for taking on the immense task of reconstruction that now faces us.Nicaragua still is one of the world's poorest nations. Additionally, my government has inherited billions of dollars in debt from the Sandinista administration. Our disgrace is that their mismanagement has made us a bankrupt nation.
I have accepted these debts because I believe there is no other way to reconstruct Nicaragua economically. Who will invest here or lend to us unless we get rid of these debts? And how will we have enough economic strength to guarantee our democracy without such loans and investments?
In foreign policy, this means we want to work with any friendly countries that support the reconstruction of Nicaragua. The most pressing issue now is the $365 million in arrears we owe to the World Bank and the International Development Bank. This is crucial because we cannot obtain any further loans until those overdue payments are cleared.
Everything else depends on this first step. That is why I was happy with my visit to Washington last week. Not only did President Bush pledge a sizable contribution toward making those loan payments - probably around $75 million - but he also agreed to use his influence with the Japanese and others to garner more assistance. And just this week, Spain, knowing the difficulties of transition to democracy, pledged $70 million to help us.
U.S. support, in particular, will be critical for us at a special meeting of World Bank and IDB donors in Paris May 15-17. I've placed all my hopes on that meeting, after which we may expect to see new lending - not just to the Nicaraguan government, but to private enterprise as well.
For now, we have no money. Without new loans, we can do nothing. As we say in Nicaragua, which has a drenched winter and a baking hot summer, without the rains you can't plow the land.
My government has proved its economic responsibility to potential lenders. Our economic stabilization program, one of the harshest in Latin America, already has eliminated hyperinflation since it was initiated on March 3. We devalued the cordoba by 400 percent, prohibited the Central Bank from printing new money and committed ourselves to filling the fiscal gap in our budget with external support. Inflation has dropped from 50 percent in March to 6 percent at the end of April.
Beyond the immediate debt and stabilization issues, our approach to reconstruction is characterized by different attitudes and orientations compared to previous governments. With respect to aid donations, I insist on accountability - both to the Nicaraguan people and to the donor.
In the past, money flowed into Nicaragua from the U.S. or from Europe, but the people wondered where it went. Or, if they received some benefit, they didn't know who it came from.
Now, for instance, AID (Agency for International Development) has given us a donation for the specific purpose of revamping school textbooks, from preschool to high school. Not only will the aid go for the purpose it was given, but I have let people know: "Thanks to AID, we've been able to change our school books."
The privatization of the Nicaraguan economy and the return of confiscated property are also high on my agenda. During the Sandinista government, about 50 percent of the economy became state-owned - including the large coffee, cattle and cotton industries, such as Agromax. Our intention is to return these firms to private hands.
In the next few weeks, I will introduce legislation in the National Assembly authorizing privatization. However, we agree that land given to the peasants under land reform, and which they now occupy, will remain theirs.
Finally, while we don't want to abandon the idea of the nation, or national culture, we must accept the fact that small Central American countries are not economically viable units on their own. Their internal markets are too small.
That is why we have taken the lead in reviving the Central American Common Market and are seeking trade agreements with Mexico and Venezuela. Within the Central American Common Market, we are hoping to eliminate tariffs altogether and to reduce tariffs on imports to the region to 20 percent by next year.
Like all of Central America, Nicaragua must orient its economy toward exports, especially as the new North American free trade zone takes shape. Once we rehabilitate our traditional exports, such as coffee, cotton and cattle, then we will need to diversify, including the development of industries that can process our traditional products here in Nicaragua.
During my first year as president, we have tried to erase the errors of the previous government so that we can begin shaping a true democracy. We have been serious and responsible in this endeavor, and I think the world recognizes we have changed.
My visit to Washington last week shows that we now have good relations with the United States. King Juan Carlos of Spain just visited Managua last week. My tour of Europe last month convinced me that Europeans, too, see a new Nicaragua. With that kind of support, and with the new atmosphere of peace at home, I am confident we will be able to "plow the land" once again in my country.
1991 New Perspectives Quarterly
Distributed by Los Angeles Times Syndicate