The economic policies of Violeta Barrios de Chamorro (president, 1990- ) were a radical change from those of the previous administration. The president proposed to revitalize the economy by reactivating the private sector and stimulating the export of agricultural products (see fig. 9). However, the administration's political base was shaky. The president's political coalition, the National Opposition Union (Unión Nacional Opositora--UNO), was a group of fourteen parties ranging from the far right to the far left. Furthermore, 43 percent of the voting electorate had voted for the Sandinistas, reflecting support for the overall goals of the former administration although not necessarily the results.
The Chamorro government's initial economic package embraced a standard International Monetary Fund (IMF--see Glossary) and World Bank (see Glossary) set of policy prescriptions. The IMF demands included instituting measures aimed at halting spiraling inflation; lowering the fiscal deficit by downsizing the publicsector work force and the military, and reducing spending for social programs; stabilizing the national currency; attracting foreign investment; and encouraging exports. This course was an economic path mostly untraveled by Nicaragua, still heavily dependent on traditional agro-industrial exports, exploitation of natural resources, and continued foreign assistance.
Inspired by the IMF, Minister of Finance Francisco Mayoraga quickly put together an economic "Plan of 100 Days." This plan, also called the "Mayoraga Plan," cut the deficit and helped to lower inflation. Loss of jobs and higher prices under the plan, however, also resulted in crippling public- and private-sector strikes throughout the country. Mayoraga's tenure in office barely exceeded the 100 days of his economic plan. By the end of 1990, the government was forced to abandon most of its freemarket reforms.
A series of political problems and natural disasters continued to plague the economy in 1991 and 1992. The need to accommodate left- and right-wing views within its ruling coalition and attempts to work with the Sandinista opposition effectively prevented the implementation of unpopular economic measures. The government was unable to lower government expenditures or to hold the value of the newly introduced gold córdoba (C$0--for value, see Glossary) stable against the United States dollar. A severe drought in 1992 decimated the principal export crops. In September 1992, a tidal wave struck western Nicaragua, leaving thousands homeless. Furthermore, foreign aid and investment, on which the Nicaraguan economy had depended heavily for growth in the years preceding the Sandinista administration, never returned in significant amounts.
Data as of December 1993