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Economic Development of Central America Econ. 4200 - Spring 2004 – Dr. Taylor - page 136 / 153





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Former president Arnoldo Aleman was charged with fraud and embezzlement in Aug. 2002, and jailed a year later pending his trial. Prosecutors allege that he stole $100 million in state funds during his presidency.

Nicaragua remains one of the poorest countries in the Western Hemisphere. Property is often caught in a three-way battle between those who owned it before the Sandinistas came to power; cooperatives set up by the Sandinistas; and former Contras who claim they were promised land for joining the anti-Sandinista forces.

Still, there are some promising signs. FDI is up and Managua is undergoing a mini-building boom… overall economic activity is up.

Late last year the World Bank’s International Development Association (IDA) and the International Monetary Fund (IMF) agreed that Nicaragua had taken the steps necessary to reach its completion point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Debt relief under the enhanced HIPC Initiative from all of Nicaragua’s creditors will amount to approximately US$4.5 billion over time… bringing total external debt below the US$2 billion mark.

This will give the government more latitude to tap international credit markets to help finance economic reconstruction as well as new social development initiatives.

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