Nicaragua struggles to expand export trade
The Sandinista government of Nicaragua is finding that economic independence was not won with the 1978 overthrow of Anastasio Somoza Debayle. The new leaders inherited a $1.3 billion foreign debt from the regime they ended. An even greater challenge is the country's narrow base of trade with other nations.Skip to next paragraph
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The Sandinistas are coping with the foreign debt by rescheduling payments on a large chunk of it over a 12-year period. And they are moving to diversify production and exports, and to expand beyond their few international trading partners.
Under Somoza, 60 percent of Nicaragua's exports involved just three products - coffee, cotton, and cattle -- and nearly 30 percent of the country's exports went to the United States.
The Sandinista government is considering marketing ginger, cocoa, peanuts, and plywood and is seeking new markets in Europe, the communist world, and elsewhere in Latin America.
Nicaraguan leaders are trying to encourage consumption of domestic products and to cut down foreign exchange expenditures on high-profit consumer goods that reduce the country's ability to pay for capital goods that are required for national reconstruction, says Robert Girling, a consultant to the Nicaraguan Ministry of Foreign Trade and professor of economics and management at Sonoma State University in California.
A network of fried fish shops has been opened to pupularize the consumption of fish over the higher-valued exportable beef. A news media campaign has been inaugurated to reduce per capita consumption of sugar; it warns Nicaraguans of health hazards in consuming large amounts of sugar and informs them that sugar is valuable to the economy as an export. Some essential items -- including rice , beans, beef, milk, sugar, and toilet paper -- are under price control to ensure availability at reasonable prices.
The fledgling government does not see self-sufficiency as attainable for another 20 years and remains heavily dependent on foreign loans, but it is pushing hard to come into its own.