APRIL, 1985 - VOLUME 6 - NUMBER 4
Waging Economic War
Over the past four years the Reagan administration's encouragement of military adventurism has escalated. The administration approved the mining of Nicaragua's harbors, allowed an aerial attack on Managua's airport, placed U.S. warships off Nicaragua's coastline, conducted military drills and maneuvers on the country's borders and supported the Contra's in their rural war against the Sandinistas. Most recently, President Reagan has joined the effort to raise private funds for the Contras. On April 15, Reagan spoke at a 5500-a-plate dinner, in order to raise money for "Nicaraguan refugees."
But there is a further, perhaps more economically destructive side, to the Reagan administration's behavior in Central America. Indeed, the Reagan administration has waged economic war against the Nicaraguan government. The United States has sought to compound Nicaragua's financial problems by pressuring international lending institutions that once freely loaned money to Nicaragua. This policy of monied diplomacy has paralyzed Nicaragua's economy, reducing its exports and promoting vast shortages of goods.
Specifically, the Reagan administration has terminated all bilateral assistance to Nicaragua: reduced U.S. imports of Nicaraguan goods; interfered and halted loans from international funding institutions such as the World Bank and the Inter-American Development Bank (IDB): and lobbied against investments by private U.S. corporations and banks to Nicaragua.
What follows is a chronology of actions the Reagan administration has taken to restrict international lending and multilateral aid to Nicaragua.
July - The Republican National Convention in Detroit adopts a party platform opposing all financial aid to the "Marxist" regime in Nicaragua.
January - Two days after becoming president, Ronald Reagan suspends the remaining $15 million of $75 million in foreign aid credit authorized by the Carter administration for Nicaragua.
March - The United States opposes a $9.6 million Agency for International Development (AID) "Food For Peace" credit loan for Nicaragua to purchase wheat.
April - The Reagan administration finally cancels the remaining $15 million Carter economic aid package.
November The United States opposes a $30.4 million Inter-American Development Bank (IDB) credit to replace Nicaragua's fishing boats fleet, primarily in the private sector. This was the first of three efforts to kill the loan.
January - The World Bank approves a $16 million grant for municipal development in Nicaragua. The United States casts the only "no" vote, but does not have veto power and the loan is approved.
- The United States halts a soft-window loan for $500,000 from the IDB's Social Development Fund for purchasing livestock and tractors. The United States has veto power.
- The United States opposes a $2.2 million IDB loan, the last portion of an S 18 million package begun by Somoza in 1978, to complete its road system. The loan was rejected.
December - The U.S. Department of State holds talks with the Bank of America to discuss the provisions of a S30 million commodities credit loan to Nicaragua for seeding and harvesting cotton. The loan does not go through.
May - The United States suspends 90 percent of Nicaragua's sugar quota to the U. S. In announcing its decision, the Reagan administration says it hopes to reduce the resources available for the future financing of Nicaragua's military support of guerrillas in Central America.
June - U.S. opposition to multilateral loans for Nicaragua officially announced.
- The United States closes down six Nicaraguan consulates in the U.S., hindering the Sandinistas ability to grant export licenses to businesses and visas to U.S. citizens.
-The United States again vetoes the $2.2 mil-lion IDB loan to complete the road-building project. The 42 other IDB members vote to approve the loan.
August - The Economic Summit in Yorktown, Virginia culminated in an effort by the United States to halt a S16 million military shipment from France to Nicaragua. The shipment was delayed for one year.
September - The United States forestalled a $30.4 million IDB loan for the fishing industry for two years. The loan finally won approval. It was the last one that Nicaragua received from the IUB. The United States argued against the loan on the grounds that Nicaragua didn't have enough fuel for the boats. One month later, CIA-assisted Contras sabotaged fuel storage facilities.
No IDB loans are given to Nicaragua in 1984, it is the only country in Latin America to apply and not receive such loans.
October Secretary of State George Schultz requests that the European foreign ministers of the European Common Market not provide economic assistance to Nicaragua through their Economic Assistance program. They do not.
January - U.S. threatens to curtail IDB appropriations if it considers a $58 million agricultural loan application from Nicaragua.