After the Sandinista revolution, first under the provisional junta and later under President Ortega, Nicaragua moved from a historically high dependence on financing from Western nations to high financial dependence on the Soviet Union and Eastern Europe. By 1990 and the election of President Chamorro, Nicaragua was the most indebted country in Central America, owing close to US$4 billion to the Soviet Union and another US$6 billion to US$8 billion to Western nations and international lending institutions.
As the result of a de facto moratorium on Somoza-contracted debt by the Sandinista government, Nicaragua faced US$350 million in debt arrears in 1990. This debt was owed mostly to international financial institutions, including the World Bank, the IMF, and the IDB. New borrowing was precluded by the old debt and accumulated arrears.
The need to overcome the burden of a growing foreign debt, estimated at US$10.6 billion, drove the Chamorro government's economic program in the 1990s. The Nicaraguan debt, which was owed mostly to governments and the multilateral lending institutions, was still the highest per capita debt in the region. Despite some debt forgiveness since the inauguration of President Chamorro, significant additional debt relief remained an absolute necessity for economic recovery.
Data as of December 1993