reporting from Managua IF YOU heard someone talking about the crisis in America, you would probably think of the military situation - the civil war in El Salvador and threats to peace in the rest of the region.
But there is also a deep economic crisis wracking the region. last few weeks, this has forced several Central ding to take emergency measures.
Like most non-oil underdeveloped balance-or payments da ticiss one balance-of-payments deficits. price of what they sell has always been less than the price of what they buy. This gap is growing.
The prices of the agricultural products these countries export unstable and in manv cases have beer falling. Meanwhile, the cost of imported oil and manufactured goods has been rising sharply.
Moratorium In order to survive, tries borrow monev. "The foreign debt of the Central American countries went up 63 cent trom 1980. Costa Rica, for example, owes $2.4bn to 129 foreign banks.
On September, Rodrigo Carazo announced a moratorium on the payment of Costa Rica's foreign debt. Carazo admitted that even with $300m in loans coming Fund (IMF), the country simply could not make any payments on tne principal of its staggering debt.
He said $60m more was needed immediately for debt service another $60m to bring in the coffee and rice crops.
At a meeting of Central American foreign ministry officials a week later, Carazo frankly suminauscu IMF's recommendation for improving Costa Rica's Economic stardue hold off on building schools, roads, and hospitals, tighten credit, and raise the level of unemployment.
The government of nearby Honduras sees no way out of its economic crisis except to beg desperately for Central over lie producing the Ila are IMF assistance.
General Policarpo head oI ine these coun Other cutbacks were coming.
1978 c President total government has declared illegal.
structural Monetary more brutally and carlnquake economic damage during the tral American Said.
weakened the economy.
The say notillng Guatemala. A major literacy campaign is underway in Nicaragua Un September Paz Garcia, the Honduran military regime, announced a $30m cut in the public budget and warned that furThe economic crisis in Honduras is aggravated by the fact that Texaco, which has a monopoly on oil refining. is refusing to deliver any petrol until it gets millions of dollars of retroactive payment for price increases that the Nicaragua faces many of the same problems other Central American countries. If anything, it has historically been even underdeveloped and Ortega, over-exploited than its neighbours.
short Nicaragua suttered a devastatin and severe war 1978-79. Nicaragua alone of the Cenabrupt cutort or ex countries has process of decapitalisation bv businessmen opposed to the revolution has further tivities Nicaraguan government has responded to the crisis quite differently from Costa Rica or Honduras — to Salvador This wife, Working people farmers here have to some extent been cushioned from the full effect of the international economic crisis by the social benefits won since the revolution: a massive literacy campaign, new schools, and clinics. signitican rent cuts, food subsidies loans for farmers, improved working better wages, and more job security.
But Nicaragua's poverty, lack of infrastructure low level of industrialisation, and economic dependency are not problems that can be solved easily or quickly. In early July. mander the Revolution, told trade-union delegates could fall $100m of foreign exchange projections. Speculation On 10 September, the Government of National Reconstruction invoked a 'state of economic and social emergency', during which various acsuch speculation and hoarding, the pubication of false information designed generate economic panic, sabotage of production, illegal strikes and factory takeover, and land ocU.C.V.
small cupations outside the framework of the agrarian reform law were announced including a 5 per cent cut in the current budget, a freeze or hiring in the state agencies, and a 10 per cent cur in certain subsidies condi Not affected are subsidies for milk (which costs 4.2p a pint), public transport 5.7p food stuff because price support. Nor will gas, water, or electricity rates be allowed to rise.
Inree new laws are designed to tighten control over the economy and Daniel imposes stiff various types of business fraud - tax evasion, double bookkeeping, ruption. The second raises taxes on several categories of luxury goods manufactured outside Central America. third decree closed the so-called parallel market that is, the buying and selling of US dollars on the street at more than the official rate of exchange. The parallel market will be allowed to reopen in few weeks, but only in authorised ofthe Geran bander tight trollo ted parallel market has contributed to streets this summer, for the black and Asian communities fighting to defend themselves from fascist attacks, they know about the Tole or ne police and the courts.
Anyone of us can end up the From Intercontinental Press POR T' Jornada Latinoamericana del 20 al 23 de Marzo Organizan: F.C.U. y C.E.S austenily measures a ride or any of the basic of government ing.
exchange here are penalities for corBut temporarily uncontrolled society. decapitalisation, or capital flight, b giving the rich a way to obtain dollar they can stash in foreign bank ac The approach of capitalist govern ments is always to try to make work ing people and the poor bear th an economic crisis. Such governments use violence and repres sion when necessary to keep worker from defending their standard of liv El Salvador is an extreme exam ple of this, but the general approach i not peculiar to Central America.
Nicaragua is different. Worker not exempted emergency measures and will in some cases be asked to work harder anc postpone wage increases or other im Vicaraguan wUrKers anc peasants have never known anything but austerity and sacrifice will not find their lives greatly chang ed by the new laws.
The most striking thing about the emergency decrees just adopted here is that they represent a clear attempt to find measures that can actually ameliorate the critical economic situa tion without jeopardising the stan dard of living of the poorer sectors of