Home | Business News | Browse by Publication | N | NotiCen: Central American & Caribbean Affairs

NICARAGUA WEIGHS OPTIONS AS IMF THREATENS CUTOFF.

Article Excerpt
International Monetary Fund (IMF) mission directors threatened the Asemblea Nacional with a withdrawal of financial aid on Jan. 16, declaring that the national budget passed by the legislature failed to comply with an agreement signed by the Nicaraguan Executive in December 2002. "Nicaragua is not within the program," they said. If Nicaragua does not comply with the signed program, the country will "remain excluded from the benefits of debt cancellation, in accordance with the provisions of the Initiative for Heavily Indebted Poor Countries (See NotiCen, 2001-01-11)."

The legislature passed the US$936.8 million 2003 national budget last December, a budget to which the IMF demands modifications. Deputies changed the original budget submitted by President Enrique Bolanos, cutting from it an interest payment of US$24.5 million on the US$1.69 billion internal debt. There were other changes as well. IMF mission chief Ken Yagi of Japan told a news conference that the changes were "extremely serious."

Nicaragua signed a three-year agreement on Dec. 4, 2002, with the IMF that would have brought US$ 1.2 billion to the country between 2003 and 2005. Yagi said that the flow of dollars was contingent on Nicaragua following the accord to the letter.

The cut that the deputies made, would "increase the indebtedness of Nicaragua, and this has been one of the elements that has most concerned the directors of the IMF, because it weakens even more the fiscal financial position of the country, and simply...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!