Sandinista economy still in the starting blocks
Managua, Nicaragua — ''Invest money right now?'' asked the Nicaraguan businessman. ''The Sandinistas are naive if they think I would put money into this economy.''
Sitting in his well-appointed but far from lavish air-conditioned office, the businessman complained that Nicaragua's Sandinista leadership has ''yet to define the rules of the game.
''They say they want a mixed economy,'' he went on, ''but they sure as anything do not provide the guarantees for such an economy. We go from day to day uncertain what their next moves will be.''
That concern, expressed by a Nicaraguan whose industry was established by his father 30 years ago, is typical of business attitudes here.
Many businessmen interviewed by the Monitor fought alongside Sandinista guerrillas against former dictator Anastasio Somoza Debayle, but none of them would allow his name to be used for fear of reprisals against himself, his company -- or against his home and family.
Arrests and jailings of three prominent businessmen last year (who were later released) put a block in the path of economic cooperation between the government and the business community.
Businessmen here are wary of the Sandinista commanders who control Nicaragua. The majority of them continue to operate their businesses more or less as they did before the fall of General Somoza in July 1979. But most are not reinvesting in new equipment or expansion. And they are not starting new businesses. They see too much uncertainty about the future to take on new ventures.
This factor, perhaps more than anything else, is at the root of Nicaragua's current economic troubles. From these troubles flow shortages of consumer goods, industrial plant breakdowns and slowdowns, and forecasts of even greater economic privation for the year ahead.
One pleasant break in this economically bleak picture came last year when an exceptionally good cotton harvest contributed to economic growth of 10 percent. The growth was not enough to push the economy up to the level enjoyed before the civil war, however, and few observers expect any good economic showing in the immediate future.
This year may see more economic slippage -- lower international prices for coffee, sugar, and gold, and perhaps a decline in cotton and coffee production. And these exports are the basis of the nation's economy.
Sandinista economic planners say they will need some $700 million in earnings from exports to finance imports and debt service. Export earnings may not reach that total.
Nicaragua cloudy economic outlook is relieved somewhat by three factors: a continuing flow of credits from international lending organizations like the World Bank and the Inter-American Development Bank; the austerity economic planning of Alfredo Cesar Aguirre, who has emerged as the nation's economic czar; and the willingness on the part of Nicaraguans in general to work hard.
Mr. Cesar has apparently won out in a bitter struggle with other members of the government who urged the Sandinista leadership to prime the economy by printing paper money and massive spending.
Cesar's policy is exactly the opposite. He favors cooling down the economy. He has slammed the brakes on government spending, cutting inflation substantially. But his actions have also fueled shortages of consumer goods.
Because of Cesar's policies businessmen say that a firm hand is on the economic tiller, at least for the moment. But they remain worried about the future and therefore are reluctant to invest. Mr. Cesar understands this. He says it will take a year or more to win over business confidence.
Whether Cesar gets that year remains to be seen. Top Sandinista leaders do not fully appreciate Business reluctance. The leadership would like an immediate turnaround in the economy. Cesar tells them this will not be possible, that improvement will not come until 1983 at the earliest.
Much depends on cotton and coffee harvests. Nicaragua also needs a couple of years to rebuild its once-important cattle industry, which was badly shattered in fighting between General Somoza's National Guard and the Sandinista guerrillas.
Underlying all economic analysis, however, is the unresolved issue of Nicaragua's eventual course. The Sandinistas' early promise of a mixed economy -- in which traditional capitalism remains a key factor but shares the spotlight with a Marxist-style socialist apparatus -- is still their goal.
But some analysts say it is a goal out of reach. The country's economic future, they reason, depends as much on the nation's political direction as it does on economic planning. And Nicaragua's political and social environment is in bad shape. The nation seems to be drifting inevitably toward a Marxist single-party state.