White House Fact Sheet on Economic Assistance for Nicaragua

The President has proposed the following economic assistance program for Nicaragua:

Immediate Actions

The President has determined that the February 25, 1990, democratic election in Nicaragua has ended the unusual and extraordinary threat to the national security and foreign policy of the United States previously posed by the actions and policies of the Sandinista government. Accordingly, the President has terminated the national emergency with respect to Nicaragua and lifted all economic sanctions, including the trade embargo.

Twenty-one million dollars of existing funds will be used to provide emergency assistance, including food through PL 480, to support the democratic transition and aid in the repatriation and reintegration of the resistance and refugees.

We have begun to take steps necessary to restore Nicaragua's sugar quota and to assist the Government of Nicaragua to become eligible for preferential treatment under the Generalized System of Preferences and the Caribbean Basin Initiative, as well as the facilities offered by the Export-Import Bank and the Overseas Private Investment Corporation.

Request to Congress for FY 90

The President has requested that Congress approve a FY 90 supplemental appropriation of $300 million for economic assistance to Nicaragua. The objective of these funds are to support the Chamorro government in its efforts to democratize, demobilize, and develop, and for the private sector to restore the productive capacity of Nicaragua's economy. The funds will be used to:

Restore productivity by providing critical agricultural supplies (seeds, fertilizer, equipment), petroleum, and health inputs (approximately $60 million);

Fund emergency employment programs (approximately $10 million);

Provide for the repatriation and resettlement of the resistance and refugees (approximately $45 million);

Provide technical assistance in restructuring the economy (approximately $1 million);

Help clear arrears of $234 million to the international financial institutions (approximately $50 million). These funds would be disbursed as part of multilateral efforts to clear the arrears and would be linked to a sound economic policy framework supported by the IMF [International Monetary Fund];

Provide balance of payments support to restructure the economy (approximately $75 million); and

Help fund development projects (approximately $60 million). Activities would include support for democratic institutions, repair and maintenance of basic infrastructure, education, and health.

Request to Congress for FY 91

The President intends to submit to Congress a separate request for approximately $200 million in economic assistance to Nicaragua in FY 91. Details of this assistance will be announced later.

Source of Funds

The FY 90 supplemental request to Nicaragua will be offset from the Department of Defense budget. The President is requesting Congress approve the FY 90 funds for Nicaragua, along with his January 25 request of $570 million for Panama and refugees, by April 5, 1990.