Nicaragua - Current economic position and prospects : Main report

RETURN TO DrECTDirTr I REPORTS DESKI IF VfIPV WITHIN a A WH135 ONE W Vol. 1 This report was prepared for use within the Bank and its affiliated organizations. Thpv dn not accent resoonsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. TXTiPMATrTnNAT. BANK FOR RECONSTRUCTION AND DEVELOPMENT TNT'RNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION AND PROSPECTS OF NICARAGUA April 24, 1964 Department of Operations Western Hemisphere U E TTE U LVWTC L-fTTTU A T SMQ U.S. $1.00 = Cordobas 7. 0 (C$) C$1 = 14 U. S. cents C$1 million = U. S. $142, 857 M.rAJM.TVJt 7 0A nA''TM.JAV±C! Page No,. S1D1ARI AD UUNULUSIUN 1 1. 18CUEI\i EUOIjUlLUG TM 1 Role of Government 1 Economic Developments 1960-o193 3 H,. AGIC1UL'URE 4 Promoting Agricultural Development 4 Trends and Outlook for Major Crops 6 III. INDUSTRY AND MINING 9 Mining 11 IV. INTERNAL FINANCES 12 A. Monetary Developments 12 B. Fiscal Developments 13 Revenues 14 Expenditures 15 V. TRADE AND PAYMNTS 17 Exports 17 Imports 18 VI. PUBLIC INVESTENT 18 Future Trends 22 VII. ECONOMIC PROSPECTS AND CREDITWORTHINESS 2t STATTSTTCAT, APPENDTX! Tables 1 - 21 Basic Data Area - 51,000 square miles Population 1963 - 1.5 million Average annual increase 1950-63: 2.87% Gross Domestic Product 1962 - US$398 million Per Capita G.D.P. 1962 - US$245 (about) Origin of G.D.P, 1962 Per Cent of G.D.P. Agriculture 38 Commerce and Transport 24 Manufacturing 14 Other 24 Balance of Payments (million dollars) 1961 1962 1963 Exports f.o.b. 9 100,4 OT Imports f.o.b. 58.7 79,1 9.8 Trade balance 11.2 11,3 11.7 Services and donations, net -17 -21.vO - 22-1 Capital movements, net 4.5 17.4 14.7 Errors and omissions, net O.2 403 1.6 Surplus 1.2 4.2 T7 esto Comnosition of Exnorts (million dollars 196 1962 1963 Total exports 199 90*4 c Coffee 174 it.& 19.0 Cotton 18.3 31.3 40.0 XTeat 4.1 6.0 6.5 Foreign Exchange Reserves (million dollars) 1961 1962 1963 Net reserves 77- TZ7 Tnf 'COY) L "Pv cc o2 Gross reserves of Central Bank 13.5 17.3 31.8 Government Finances (million cordobas) 1961/62 1962/63 Current revenues 266 311 End of Sept. Cost of Livjn ine t = 101 91 >ee -1- 95 -9 --9 External Debt as of December 5, 1963 Million Dollars tal outstanding 32.4 Of which undisbursed 2247 Debt service ratio 1963 as percentage of 1963 export earnings 5.6% INANI GA Ni CAA 00 I GA M4NAG> - OEPARrMNTALtBONNAADE c 4K R NICARAGUA ALL«.I TH" RO,1S05A~ DRY WEETHER ROEl! - - oEPARrMENTAL BODUNDEHIES C OS T A RI OUVLIifli H11i) Ui bU1 'J 1. After a period of relative stagnation from 1955 to 1960, the Alvuraguan economy nas been growing rapidly during the past three years, with the real gross domestic product increasing at an average rate of some d-9 per cent a year. The export sector has accounted for much of this growth, but industrial nroduction for the internal market has also made a significant contribution, Exports were not only higher than ever in 1963, but also more diversified. While cotton and cottonseed accounted for most of the extraordinary Increase in total exports, the growth in the production and sales of beef, soluble coffee, and sugar, as well as new exports such as bananas and shellfish were also important. 2, Monetary policy has for some time been a major instrument for influencing the pace and direction of Nicaraguats economic growth, In recent years, it has been a combination of overall restraint and selec- tive credit expansion for agriculture and industry. Tvtal credit expan- sion since 1960 has been in line with the growth in production and most of the increase has gone to the private sector, 3a Nicaragua is following a cautious policy in its development finan- cing and has struck a prudent balance between the countrys developmental needs and the restraints imposed by its relatively thin foreign exchange position. Government revenues have been rising faster than expenditures and the budget showed a surplus in 1962/63 after five years of deficits. Nearly all of the increase in Central Government expenditures in recent years has gone for education, health, and public works, 4. Public investment in recent years has been concentrated mainly on highways and electric power and has been financed in large part by the savings of the Central Government anr niitoniom agennies I the pas two years, net external borrowing exceeded the gap between public savings and investment and the unblic entor used a csb+st ntia pat or 4- savings to reduce its internal debt and accumulate cash. 5. The completion of projects now underway and the execution of new proiects for which PYtArnq1 loanq have alrandyr been ane-A AA u- t- sound public investment program for 1964-65 both in size and composition. Tf te ,rdisurse loas wich ~o,~~te to ome L2 . i.Lon at the end o 1963 /are spent by the end of 1965, as seems likely, public investment wvill risep fromn an annuaql rate of14- 4.102 millio duig h ps toy -- -- --~, 'w'- e~ ~ .J~ . ..L L LVL UJ I - L L1U LIU U p a aiCUC1 to be channelled to the private sector. The remaining $21.7 million _dded ao o. Wa folos:$.3 mllion 1rm the IBRD and AD for the Rio Tuma power project; $5.6 million from AID for highways; $1 million from A- for the managua airporU; 6U million from LB1U for the Rivas irrigation project; $2.8 million from IDA for water supply in Managua; and WuoJ million from AD for schools. - ii - to an estimated C$140 million in the next two years, !Xhile this is a large increase, it should be manageable both administratively and financially. 6. External credits already in hand together with the savings of the Central Govrrnment and autonomous agencies should be adequate to finance this higher level of investment. An expected 10 per cent annual growth in Government revenues would also allow for an annual growth of about 6 per cent in current expenditures. 7. A level of investment su.stantially above C$140 million would strain the administrat ive and financial capacity of the public sector. Moreover, there are no sizeable new public investment projects that would be ready to get underw.ay before the latter part of 196. The one large high priority project that will be ready is a beef and dairy cattle program which will require an estimated total outlay of $21 million. It will take three to four years to carry out and is designed to expand and improve the beef and dairy herds in order to double beef exports and provide the raw material for a powdered milk plant. In view of the increase in public investment contemplated for 1964-6E, it would be unwise for Nicaragua to start any major new infrastructure pro- jects before the latter part of 1965. Except for the roads which are an integral pLrt of the proposed dairy project, the public sector should con- centrate on finishing the projects and programs underTay and carrying out those just getting started. 9. With the expansion and improvement in transport and power facili- ties, greater emphasis is being given to the direct stimulation of agri- culture and industry through financial and technical assistance from the public sector. This trend is well justified and should be reinforced by intensive project and sector studies in irrigation, land settlement, and education, Moreover, in land settlement and education as well as health, there is a real danger that the increasing amounts of money that will almost certainly go to these sectors will be misspent if there are no suitable programs, Some work has already been done in the identification and study of irrigation projects, but practically nothing has been done to prepare programs in education, health, and land settlement. 10. Political and monetary stability and a reasonably adequate and improving infrastructure provide the basic conditions conducive to Nicn- raguals economic growth. The country's resource endowment, its public policies and the private sector's vigorous response to these policies, point to a. favorable economic outlook over the next few years, The growth of cotton production which has been the key element in the economy's rapid growth during the past three years will probably slow down because of the growing scarcity of suitable lands and the increasing desire of the growers to diversify their production. But other major commodity sectors - donestic food crops. livestock, and manufacturing - should do as well or perhaps bet- ter than they have in the recent past. The output of both private and public services can be expected to keep pace with the growth in the production of goods. Looking at the overall prospects, the gross domestic product should grow by some 6-7 per cent a year during the next few years, - iii - 11ie i Ivot sholA inres byT abouti pr cnt a P yea fro $17 irili1 in 1963 to some $143 million in 1968. The main assumptions underlying this t, J L** * kJJ O_rL4__ kA U~J .'JL~U.U. I IL VJUAJ.U UU41- ton market; the cattle program will result in a large increase in beef ex- V U 1, 1 ItL V C O _LxL_rDCU_UI plj uLo In-L W.L.L Lu~ t.WIIAJLui4UUU P.CI1u ailu Ltlau to higher banana exports; prices and quantities for coffee which will main- Van te value o offee exporus at approximaely tne 1963 level; and certain industrial projects now in process will help to increase exports to other Cenura Hic-Ullan countries. Ine projectea growth of exports together ,'ITn modest capital inflows on private and public account should be adequate to finance the imports needed to achieve and maintain a reasonably good rate of growth, and to satisfy the demand for consumer imports that will be generated by this growh. 12, Nicaragua's present external debt is $52 million, of which some $25 million is undisbursed, Service payments on existing debt amounted to $6.6 million in 1963 or 5.6 per cent of export earnings and are scheduled to fall to $3,7 million in 1968, less than 3 per cent of projected export receipts, 13. Nicaragua's requirements for new external loan commitments are relatively small during the next 12-18 months. At the present time, the only high priority projects in sight that would require substantial public external borrowing are the beef and dairy cattle program (about $10 million), road construction, and perhaps some $5 million for private industry. Addi- tional loans will be needed in 1965 and subsequent years as new project studies are completed. 14. Nicaragua's favorable growth prospects, its sound management of development financing and the low external debt service in relation to projected export earnings make it creditworthy for additional external loans on conventional terms to finance its probable external canital requirements over the next few years. T PTM~T WT)MOMT. TFTxInflq 1. From the 1920's to the late 1940ts, the trends in the Nicaraguan eooywere a comInation. ofl 'tanaio an de+n8A the end ofP World War II, the value of exports had fallen to half the level of the mid 1920's, asacnseqencef te deturoraton o the coffee plant ations and 1a.:n lumber and banana production. There were virtually no compensating move- ruents, e.Lit;Ir pri-_vate or- PUbLi.U to offse,-t:: theVOe doWnIwardL tIUInOt The; fkr- tile plains of the Pacific region were occupied mainly by subsistence farmers and tere was little investment in agIculture or inuuuryQ hUe puLic sector contributed almost nothing to economic growth as public expenditures were limited largely to administration and defense. 2, A series of budgetary deficits beginning in 194 led to a foreign exchange crisis that necessitated emergency measures in 1948-49 in the form of an adjustment in the exchange rate, import restrictions, and short term loans from abroad. These measures together with rising prices for coffee and cotton greatly improved the exchange position and marked the beginning of a period of rapid economic growth. While the expansion has been inter- rupted and slowed by falling export prices and bad harvests, especially from 1956 to 1960, the economy has shown an almost cmntinuous forward mo., mentum since 1950. 3. From 1949 to 1955, real gross domestic product increased 9-10 per cent a 7ear and per capita income rose from the equivalent of $170 to $245. The extraordinary increase in exports from $24 million in 1949 to $80 million in 1955 was the major source of this growth, and resulted mainly from higher prices for coffee and cotton and a spectacular increase in the production of cotton from 10,000 to over a million quintals. Higher incomes in the export sector raised the demand for consumer goods and brought about an expansion in the output of manufactures and food crops for the internal market, This rise in industrial and agricultural production fur internal use reinforced the growth trends set in motion by the export sector. 4. The sharp decline in coffee and cotton prices after 1956 greatly diminished the rate of economic expansion. Substantial increases in ex- ports other than cotton and coffee, and larger government outlays fell short of compensating for the drastic decline in cotton and coffee exports, and the gross domestic product rose only about two per cent a year from 1955 to 1960 and per capita output declined. Role of Government 5. The Nicaraguan Government played an important role in stimulating and sustaining the economin growth of the IQqntsR Ti. rPnnronded to the foreign exchange crisis of 1948-49 by devaluing the cordoba to stimulate AynnrtR andi curtail imnrtp. Thp Aynhnap ratep fo-r eorts-r went. from 5.27 to 6.60 cordobas per dollar and for imports from 5o37 to 7.05. As a furi imotrts, uch es er peon a ncultura agricultural and industrial products. - 2 - 6- Theqe mAmires wp.rin fn11nuYPA hv thiz te-ni:ttiAn of n bas ic high-n way network and an expansion of credit to stimulate agricultural production for exnort and internal cnonmtin The latter a done thrugh +.ho nih licly-owned Banco Nacional which performed the functions of a Central Bank at+ that+ tAinni .nd wanlso the- onlyr co-eria bak In- h:cunry o loans were made to finance up to 80 per cent of the cost of production and med1_-_r loan for - the -__" __4 financed by a $1,2 million IBRD loan and later by $1.8 million of additional 7xera Th rexpninr eCfct of inr-sn sakceiotearcl tural sector were largely offset by curtailing credit and investment in uter secuors through a comuination of fiscal and monetary poiCyo The growth in economic activity together with the newly-imposed export and im- port taxes produced a very sustantial rise in government revenues. At the same time, government expenditures were kept from rising by an equiva- lent amount, thus enabling the Government to accumulate surpluses averaging 16 per cent of total revenues from 1950-51 to 1953-54, The anti-inflationary impact of these fiscal developments was reinforced by restrictions on com- mercial credit and a provision in the exchange law requiring importers to deposit in cordobas with the Banco Nacional 100 per cent of the estimated value of their imports. 8. In addition to the monetary and fiscal policies aimed at strength- ening the balance of payments, the Government undertook a program of public investment and institutional reform to promote long-term economic develop- ment, Much of this program was based on the reccmmendations of an IBRD sur- vey mission that prepared a development program for the period 1952-57. By 1955, the Government had adopted the following important institutional re- forms recommended by the IBRD mission: creation of the National Development Institute (IWFONAC) to promote agricultural and industrial development; introduction of a general income tax and revision of the customs tariff; reorganization of the highway department and electric power industry; and creation of a Budget Bureau. Other recommendations such as the creation of a Central Bank were not adopted until the late fifties and early sixties. 91 In the field of investment, much of the emphasis in the early fifties was on getting quick economic returns by stimulating private in- vestment in agriculture. The expansion of agricultural production did not require large public outlays because the cultivation of export crops on land previously used for cattle or food crops required only working capital and some investment inawricultural machinery. The building of feeder roads also contributed to the growth in production. 10. The Government took a number of steps to cushion the effects of the sharn dron in coffee and cotton nricns after 19CA- Thp Pvhange rate for exports of coffee and cotton was raised from 6,6 to 7 cordobas per dollarc thh ex nn nnffA P rt.Q were remop,At an sAb sidm wrey r- ted to cottun producers on the 1958-59 crop. At the same time, efforts weremadetA 1~ +.-~ ~'~mys dpendence on. these two crp byQ _Yproot - 3 - - - - - wL 'A~ -"WUS11 1L_~~I * I .LVC%Ur_ LiVC;OL,1J1z;1U L11 industry was encouraged by the enactment of laws guaranteeing the repat- tain industries from taxes. 11. Heavy outlays were made in the 1950ts to enlarge and improve power and transport facilities to promote long-term growth. The network of paved roads rose from 150 to 550 kms; electric generating capacity for pulic use rose from 8 U' to 4o P.w and the transmission system was greatly extended; the capacity of the port of Corinto was doubled; and expenditures on education and health services increased five-folde Most of these in- vestments were financed out of public savings that were supplemented by loans irom the IBRD and Export-Import Bank and grants from the U.S. Govern- ment. The Bank lent a total of $23 million in Nicaragua from 1951 to 1956: 0 million for roads, $9.5 million for power, $3.2 million for port expan- sion, and $3.2 million for agriculture. 12. The public investments and institutional changes that were made in the 1950ts helped to lay the basis for the rapid economic growth of the early sixties. Most of this report deals with this period. Economic Developments 1960-1963 13. After a period of relative stagnation from 1955 to 1960, the economy has been growing rapidly during the past three years, with the gross domestic product increasing at an average rate of some 8-9 per cent a year. The export sector has accounted for much of this growth, but in- dustrial production for the internal market has also made a significant contribution. 14. Exports rose from $64 million in 1960 to $107 million in 1963 when they were not only higher than ever. but also more diversified- While cotton and cottonseed accounted for most of the increase in total exports, the growth in the production and sales of hef> nh1a rffe and sugar as well as new exports such as bananas and shellfish were also important. 15. The higher consumer demand generated by tlhp growth in exports has induced an expansion in the output of the traditional manufactured goods for internal consumption. Tn adition the protection Ond -ider -aret o- fered by the Central American Common Market have led to the establishment of a number of new factories that are produning a wiadn rne o nm -oods 16. Increased enonomic actmiiy nd better tax 4 ad,inistrato have pro- duced substantial increases in tax receipts. At the same time, Government expenditures have risen Ies than rvenes a +h- ugtr. posti improved considerably from a deficit to a surplus. Nearly all of the recent in _eas i nP~nt-rn1 rn, nrn-+ -end4tu e I_ __ _P _ _3__- - I, inceas in---------..o JAl Ul -l UUCUO11, health, and public works. Internal savings have financed most of the public invest- ment wIch--- h -h b- coneat manly on highways and electric power. However, the external credits obtained during the past year have been for -4 - TTr A r1')-rf1TTT nlTT7~ 17. Economic fluctuations since the 1950ts can be traced mostly to cngs in farmerst fortunes. Agriculture accounts for a bit less than 40 per cent of Nicaraguats gross domestic product and produces about 85 per cenu o. total exports. High prices for cotton and coffee, and an expansion in cotton production were the main factors that produced the rapid economic growth of the early fifties; the drop in prices and bad harvests produced the stagnation of the later fifties. More recently, tne economy has regained its strong forward momentum as a consequence of the large increase in cotton production and agricultural diversification. 18. Public policies have played a central role in the agricultural booms of the early fifties and sixties. In view of Nicaraguats abundant lands in relation to population, the high priority given to agriculture was eminently sound. According to the census of 1957-58, Nicaragua had 7.3 million acres of farmland, with two-thirds in crops and pasture, Climate and topography and soil conditions make these lands highly suitable for growing a wide variety of crops and for raising cattle. Promoting Agricultural Development 19. The credit and exchange rate policies which stimulated agricul- tural production and exports in the early fifties, were later reinforced. with technical assistance provided by INFONC. the Banco Nacionani and the Ministry of Agriculture; more recently, irrigation has been added to the collection of agricultural Drograms. INFONAC tends to cannnrate on de veloping new export crops as well as beef production, and leaves the tradi- tional export and domestic food crons to the Banco Nacional and Wnstry of Agriculture, though the latter also play an important role in cattle development., 20. The effetive use of credit as a aJor instrnt fpliyt stimulate agricultural exports began in the early fifties, More recently, increasing attention has been given to snall fwr h -11o p-4-c most. of the domestic food crops, some of the cotton, and much of the coffee. These farmers have had great difficulty in geatingenough credi- anh -ave paid exorbitant interest rates for the credit they did get. To correct this situation- the anon Naionl contey s-t-A a o u----- - e ____. -.tv '.)i .~±j I credit for small farmers with the help of a $2,5 million loan from the Tnter-Amprinnn 'Anni, of whniih 9,k5 milio -ill be used foP uahuig Under the terms of the IDB loan, the maximum credit per farmer is $1,500 nnci $1. 900 for hnising. 21. In 1963, 1,500 loans toing Cslh mion were made under the program. The interest rate was six per cent and the maturities ranged o one to _iwen y,ars. Many U Uese uloa displaced the high interest loans which had been virtually the only source of credit for small farmers. 1n tsO of the Creage covered, the program is giving major emphasis to the domestic food crops, though the total amount of loans for coffee and nottonn i.- much largepr bec -s ofthe heavnui e)ii+.1_qr a rriiyr +.n t rpn~lnno coffee trees and grov cotton. 22. To administer the program, the Banco Nacional has 40 offices extension agents from the Ministry of Agriculture. Many of the technicians of the Ministry of Agriculture. The College has a full-time, reasonably high academic standards keep the number of graduates down to about ten a year, 23. An important element of public policy in the field of agriculture is the price support program for corn, beans, and rice, Under this program which has been administered since 1960 by an autonomous agency caled INCEI (Instituto Nacional de Comercio Exterior e Interior), the producers can sell their output to NII at the minimum support prices if they are unable to get these prices on the market. The support prices which xe based on pro- duction costs are intended to protect the small farmers from the stronger market power of the large buyers. This protection is needed most during the harvest season when supply is at its peak and there is a downward pressure on prices. INCEI has storage facilities in Managua that were built with the help of an IBRD loan. Additional storage facilities totalling about 15,00o metric tons are being installed in the producing areas with the help of a $1.2 million loan from the Export-Import Bank, 24. INCEI also imports commodities when necessary and sells them in the wholesale and retail markets to protect the consumer against excessive prices, It finances its purchases and storage by short-term borrowing from the Central Bank, and covers its administrative costs from commissions and a small Government contribution. 25. In addition to handling domestic food crops, INCEI also exports sizeable quantities of coffee and cottonseed and a small amount of cotton which it buys from small producers. These transactions are designed to protect these producers against buyers who might persuade them to accept less than the world market prices, 26. Thus far, INCEI seems to have been successful in protecting producers against unduly low prices and consumers nqinst exessively high prices. Its support prices have been high enough to have a stimu- latine effect on nroduction and low enough tn Pnable TNrT. to diso n rP its purchases without accumulating large stocks. With the additional storage facilitiAs that are now nPlanneA TN.RT1,oen in"Q .ill be strengthened considerably. 27, The public purchase and settlement of unused and underused lands asen getting eomeattention tethority the ld reform aey- acted in 1.963, the Government has the authority to purchase privately-oimed --'a _u ..1- .1W UV A..V%.UOO .L'Y U UII 1 u ll- .ltL 11 V-LUW V.L -6- the large Government lind holdings- encially in the estnrn nnrt nf the country. The Government requested C15 million for fiscal 1963-64 to start a Innd settlement nrnoram, but. recived only l_2 9Emillion. T+. enPt to receive considerably more in fiscal 1964-65, though it has not yet ting underway. It will irrigate 9,000 hectares of land near the city of about 300 farmers and is now used mainly for grazing, The estimated total j 0 U111 F UJJIJ U LOa ~4P L I . .L 0±I@U1 -ilr' LvL--L L. Uo cw A UL to $2.6 million are being financed by an IBRD loan made in 1963, and $0.9 -L.L.L J.UI I 0±L ULL%- -LUa-L ;,-U U y 11i _LJD .LUatlloI II .LC J LU R., t,Ze Pt!LeU UV L1n- crease the net value of production by some C$ll million a year, Bananas, sugar, rice, corn, ad bearI alre expecteU Uo be the main crops 1v.unC has underway and is planning a number of irrigation studies for using both groundwater and surface water, These projects would be an important com- ponent of the crop diversification program, Trends and Outlook for Major Crops 29. Cotton has become the number one export crop. An expansion in acreage together with better yields resulting from favorable weather con- ditions and improved cultivation techniques produced a doubling of output during the two crop years 1961-63. The 1963-64 crop is expected to be about 350,000 bales, or 10 per cent above last year's. With good weather and a continuation of present market conditions, production should continue to increase at about this rate over the next few years. The main limita- tions on larger increases in production are the growing scarcity of suitable land and the reluctance of many producers to concentrate all their invest- ment in cotton. In the longer run, a labor shortage could lead to mechanized picking that would not only raise production costs, but would impair the quality and therefore the price of the cotton which is now hand-picked. 306 Yields are among the highest in the world and net profits from the production of seed cotton average about C$600 per manzana (1.7 acres). But despite the boom in cotton production, the living conditions of the pickers are extremely poor. This is particularly true of housing and health. While it is very difficult to provide adequate facilities for migrant workers in seasonal occupations. significant improvements can be made without much economic or political strain. Indeed, there are indications that a number of cotton producers would be favorably disposed towards a program to improve the living conditions of their workers. But such a program will reauire leadership and assistance from the public authorities. 31. Most of the nroduction of cotton is in the hands of large and medium-sized experienced operators. The cotton boom has attracted a si7phlp numher of vnins nonIA who hve rent.P_ +.hpir lnn. ni nre n T beginning to use their profits to buy them. Some are diversifying their invest in industry. -7- U-L- UJ'1I'J %luJL Lt .9 i Ulm Vuilu. JJ1CJU.L 1--2quvu UUUP, lai Uut"11 rising in recent years, as the trees planted in the early and middle fifties have started to prouuce. ExportU reaUUeU 41o,0 bagL (51,wu quintals of 101 1bs) in the coffee year 1962-63, including 80,000 bags in the form of soluUe cIVee. Nicaragua-s basic quota under the new International Coffee Agreement :is 419,000 bags for 1963-64,, As a result of the general increases in February u6 under t1e Agreement, Nicaragua received a quota of LLo6uuu bags. This is still 75,000 bags below exportable production. Thus, unless Ute quota can be furLer increased stocks will accumulate, 33a Tne other traditional export crops in addition to cotton and coffee, are sugar and sesame. The production of sugar has been increasing unuer tne stimulus or a higher U.S, quota and a sharp rise in price. Pro- duction for the crop year 1963-64 will total about 105,0CO short tons, of which 50,000 will be consumed in the internal market., This will leave 55,000 tons for export, or more than 50 per cent above the 1962 exports. Nicaraguats present quota in the U.S. is 25,000 tons; the remaining 30,000 tons will be sold on the world market unless Nicaraguats quota is increased under the impending new U.S. sugar legislation. 34. Sugar production is largely in the hands of two firms, About 80 per cent of the cane is grown on their own lands and the rest by small pro- ducers who have accounted for nearly all of the recent increase in produc- tion. Sugar production in Nicaragua requires both irrigation and fertilizer that result, in an average cost of production of about 5 cents U.S. per pound, In view of the market uncertainties and relatively high cost of production, the large producers are unlikely to make the heavy investments needed to expand their outnut sifstantialI v 35. The production of sesame has been declining steadily and ranidly as the lands have been increasingly used for growing cotton. The drop in production has been offset by a rising nrice so that the value of the crop has been pretty well maintained, Production is not likely to increase during the next few years. esnecially if the favorable market. onrc n continues. 36. One of the most encouraging recent trends in the agricultural sector is the development of new exnort -mn_ with TMn C pJLayin +he key role. The greatest success thus far has been achieved in growing bananas in the Chinandga reainn (Pacnpii canncs) TwAMf started this project in 1961 on an experimental basis and then provided technical and financial assistanne +n qnal and menms"m operars, r inn 93o thousand hectares were under cultivation and a million boxes zf bananas wo- abo- in r pduced and bought by the United ruit Company under a five-year contract for the purchase of a minimum of two thousand hetares of banaWna produCtion, Anoter thousand hectares will be under cultivation in 1964 and total production is expected to be around two ilo bewo milon. Bananas will also be planted on two thous- and hectares of the Rivas irrigation project. -8- -, -11C - L aL)J SILJ UA L U.Lii U IULUJ11Utype tobacco for which it has recently received a $400,000 loan from the I.D.B. Some 21r I-c 11~V U JJ. UeL dLU WliiL C_UV LiUctae w-'-"' beJ planted in 1964. Tobacco exports of about $1.5 million are expected in -n 4 r' -TMlfl,.T At L --- 1- -, 'I ~ f t^ I - - ---- - - --- -_ 1 - 7 _L IAWUNakU Hat a_U planted NO necuares o cocoa on ne Aiantic coast and is working on kenaf, and fruits and vegetables, 38. The main dimestic food crops are corn, beans, and rice; sorghum is also a sizeable crop and is used mainly as a livestock and poultry feed, and occasionally for human consumption as a substitute for corn- in the past, Nicaragua has been an exporter of food crops, but in recent years she has become an importer, especially of rice, as production has failed to keep up with the growth in demand. The expansion of agricul- tural credit, additional storage facilities, and the completion of the Rivas irrigation project should make Nicaragua self--sufficient in basic food crops within the next few years. In the longer run, more technical assistance, storage, and irrigation (especially for rice), should help to maintain this self-.sufficiency, and perhaps provide a surplus for export. 39. A study now underway of the natural sources of a portion of the Atlantic region could have important implications for the development of the whole region, which is sparsely populated and is the new frontier for many Nicaraguans. The survey which is sponsored jointly by the U.NC Special Fund and the Nicaraguan Government, will cover a representative 2,000 sq. kms. out of a total area of some 15,000 sq. kms. between Puerto Cabezas and Rio Coco. It is expected to take four years and will produce recom.- mendations for the development of agriculture. livestock. and forestry. 4O. One of the major economic success stories of recent years has been the rapid growth in the production and exports of beef. The cattle popu- lation rose from less than 1. million head in 1957-to 1.7 million head in 1962. Beef exports which started in 1958 reached $6 million in 1962 and nearly $7 million in 1963. At the same time natti ( ports have filnn from $3,7 million in 1959 to less than $1 million. 4l. INFONAC has been the prime mover in the rapid growth of beef pro- duction: loans from the Banco Nacional to cattle men- and technical asis- tance by the Ministry of Agriculture have also been important. INFONAC has helned to exnand and improve the cattle nonnltion hv innorting purn- bred stock and selling the animals to cattle men. Another successful technini has been to nlan the nattle on nrivately-wned ranches and pay for breeding and fattening by sharing the offspring with the ranch- ownerq on n fiftm-fiftvr hn.qJ.q Undepr thnis.q agmnt,IIOA also provides technical assistance to the ranchers. 42. INFONAC helped to establish and finance the first modern slaughter- ca tlmnt sR oeat+ive withech- -supplyin w-0 per cent f th equi, e cattlemen's cooperative,, with each supplying 40 per cent of the equity cap tal an-A th res Ile-IngE .SUyjJ,JetA 'k,, 4.1,_ - 4_4-..L.J144-Y _-P r1i14 d , MLini TAJi1 also made substantial loans to the slagnhterhonse and paking nlnt_ Before the slaughterhouse was built, only live animals had been exported, mostly to Peru and Costa Rica- The saahterhouse whi.h i ni ehr mostly for export, increased its volume from 27,000 animals in 1957 to 59.000 in 1962. Tt emnioys over 3nn popni .Tit an nn al payrol of C$2.1 million. Now that the packing plant is well established and run- ninLy 5mothil, ITMP)MAC. couldl eas-11-ir dJp-, of~ it Jnve-l-n 4- n Il plant. But by continuing its participation, it helps to preserve the high qualif.v nf haof~ nr~ tofnse anPA~.4,.~- market at a moderate price. 43. INFONAC has underway a four-year program to increase the cattle popuatin from Uo7 mCi-n o 2.1 million in LYU and to double beef exports to $15 million, It has recently received a $1 million loan fron u.X-11A I UIn _ 1t on 11portaton ol breedin stock and has re- quested additional external assistance for its cattle programc III, RMI)USiTTZ AHDt MIN ING 44. The output of the industrial sector which amounts to 14 per cent of gross domestic product has been expanding rapidly and quite steadily. According to the aggregative statistics, it doubled from 1950 to 1957, and rose by two-thirds between 1957 and 1962, with most of the increase taking place in the last two years, The strong upward trend continued in 1963. Cotton ginning and meat production which may be regarded as an integral part of agricultural output, have accounted for a substantial share of the recent expansion of the industrial sector. 1/ 45. Until recently, manufacturing in Nicaragua was made up of the traditional industries found in countries that are in the fairly early stages of economic development - processed foods, beverages, cigarettes, textiles, soap, and building materials. But under the stimulus of the protection and wider market provided by the Central American Common Mar- ket during the past few years, a number of factories have been estab- lished to manufacture a growing list of new products including furniture,, textiles, detergents, breakfast cereal, flour, machetes, and other metal products. M-lost of these factories are producing exclusively for the Nicaraguan market in their initial stages of operation. but they expect to serve the rest of the Central American market as their output grows. Several of them are joint ventures of Nicaraguan investors and foreign companies who provide the know-how and some of the capital, There are also a sizeable number of large new projects under active nnnsidertinn that would serve all of Central America, including plants to produce re- frigerators,, powdered milk. caustic soda and inqecticides and lt Nicaragua does not seem to offer any overwhelming economic-advantages 1/ Data on the output of the major *ro4ucts give a more revealing picture of the recent trends in manufactu7in- (r1jable A} )Uan ad the - t-v;- data on the value added by the indus'triaI 'ector'. - 10 - does have favorable conditions for expanding milk production and is the - F -A J W UJ. _"UAo _L11 VV1Ilu _L :1111U.L_LkCt LL,e re or±f C0JLU4.L LIU aggressive efforts of INFONAC and private Nicaraguan investors have been amajor factor in attr1actn fori4 copaie to _M=rgu~ I TtnC should be able to promote an increasing number of joint industrial ven- tures in collaborcatuion with local and foreign private investors, as well as external agencies such as the Central American Bank. 6, Through its promotional activities, technical assistance, loans, and investments, IivruNAG has played a central role in Nicaragua s recent industrial growth. It has been particularly active in promoting foreign investment in Nicaragua, and has recently opened an industrial promotion office in New York with the help of AID. Until recently, IIFONAC has been virtually the only institutional source of medium and long-term industrial credit, hile the Banco Nacional has had the authority to make term loans for industry, it has used it very sparingly. 47. INFONAC which was established in 1954 received an initial capital of c$6 million and a total of C$50 million to be provided by the Govern- ment in ten annual instalments. The final contribution is being paid in fiscal 1963-64. In mid-1963, INUFONACts resources totalled c$65 million, of which CSh5 million had been received from the Government, C$11 million from foreign loans, and C$9 million from bonds and savings deposits. Its loans and investments amounted to C$ million, of which C$31 million was in industry. Of the latter, C$14 million is tied up in the slaughter- house and meat storage plant, and two dairy plants which have also received an IBRD loan, The rest of INFONACts industrial portfolio was mostly loans averaging C$180,000 per project. The maturity of most of the loans varies from three to six years and the interest rate is 9 per cent. The renav.. ment record has been quite good, 48. To fill some of the gaps in industrial financing, a private finance company - Corporacion Nicaraquense de Inversiones (CNT) - has recent.yn bon established with an authorized capital of C$15 million. About two-thirds of the capital will be subscribed by Nicaraguan investors .. mostly nri'qt banks and INFONAC - and the rest by foreign financial institutions. In general. CNI is expected to make loan and Pnnity inv.tmrnt in -nIn'+ry and to concentrate on small projects, while INFONAC limits itself increas- inelv to large nroients- ,9. With tho nreation of' the nMhT nnr +i modAificationn in the nkn laws that enable commercial banks to make medium-term loans, Nicaragua has the finnnrial in,i-i±r.n 4 ochne cptl totheinst:a sector. As the CNI gains experience and shows that it can operate effi- cetr,it. shoul beale ton actx.^ a s4zakcr.un- of fud f'- rom both local and external sources. 50, Political and monetary stability, expanding domestic and Central American mar e, b gg e an d Uett r ran sp or t -A 'lAcl p or----e and growing sources of financing point to a favorable outlook for continued - 11 - recent expansion has been the emergence of a growing number of able young indus trial en&AureprA.en4 ewrs. an_-y - .---:-I-,- of them ave been edcated,y the U.S. and have acquired a strong preference for industry over com- merce ecaus of.d± Vis alle6-UU.LY r,. FZAksA u . LaJ.L~VLAU, -001-11v hve modea lt of money from cotton and want to diversify their investments; and some are distrioutors of foreign proutU woe markets are eUIatened by higher tariffs as well as the manufacture of these products in other Central American countrLes. Mining 5i. The mining of gold and silver has been an important activity in Nicaragua for many years, Gold was the largest single export in the 1940ss, but its output has remained stable at about 220,000 ounces in recent years. Because of rising costs of production and a fixed price, the small opera- tors have been squeezed out and there are now only two large gold mines and one small one. 52. Since the opening of a copper mine by a Canadian company in 1959, production has been rising rapidly from 1,000 tons of concentrates to 8,000 tons in 1962 and about 10,000 tons in 1963. Silver is a by-product of copper and its output has also been rising. The Canadian company which was mining gold discovered the copper deposits by chance, There are be- lieved to be more deposits of copper and other minerals, but the Govermient is not granting any new mining concessions until the Congress passes the new mining code which is before it and also until a U.N. minerals survey is completed. The survey which covers two areas of 5,000 sq kms. each in the northeastern part of the country will be finished in 1966, and could lead to very large investments for the production of copper and other minerals. - 12 - IV. INTERNAL FINANCES A. Monetary Developments 53. Monetary policy has for many years been a major instrument for influencing the nane and niirpn.t.inn nf nonomin arowth_ Tn recent warm it has been a combination of overall restraint and selective credit exrqnir f)rnalml-ir nrii-r1iQ.rv Tota.l crediit. Pnr inscznop. 1960 has been in line with the growth in national production, and most moeaz authoritie have 1- 4-4e tomeet th needs~ of a growing economy and at the same time to protect and strengthen the coun- J - 5L 1"16 I )%4O_L U..LUAA* ILAL_Lu AUO± _ _ ilcl~Vu U~k-v1L .liO-L11 Ig recent years, they are still considered to be inadequate in view of the mIare U unce -a J,1_L-Z L.L 11.LUCL1c1U Q%-0 1dCJU.L FriU±Ue fI s~~Uc1U_L_UY ctij.U prudent monetary management have strengthened Nicaragua's credit standing aULdi anU. enabldU tl-40 U-[efuil-[-L-- Ua1KSt bUcOVOW SUUbbitaliai WUGiOUUb U short and medium-term from U.S. banks, and thereby enlarged their lending capacity, This foreign borrowing has been an alternative to borrowing from the Central Bank and the foreign exchange reserves can be regarded. as the ultimate collateral for Tnese loansa 5. The monetary authorities have recently taken a selective rather than an aggregative approach to credit policy by trying to channel more credit into agriculture and industry rather than expanding total credit without regard to where it goes. A general credit expansion would chan- nel more funds into the commercial sector. This would be especially true of the private banks, despite the recent efforts of the Central Bank to influence their portfolios towards more lending for industry and agriculture rather than commerce, But except for the Banco Nacional, it is difficult for the Central Bank to keep the banks from lending more to commerce. This is because the private banks, which are both new and small, have been very cautious in their lending policies and also because lending to commercial borrowers tends to be more profitable and less risky than other types of lending. 56. The maximum and actual interest rate on bank loans is 7 per cent plus 1 per cent commission for every six months or fraction thereof. Com- mercial loans are often for less than six months and hence the annual rate received by the banks is higher on very short-term loans. Moreover, on loans for imports, the banks receive sizeable fees for handling the docu- ments connected with them. Another difficulty in controlling the port- folios of banks arises from the fact that in a small country like Nicaragua, bank borrowers often own a variety of businesses in commerce. industry. and agriculture, and hence may substitute bank loans for their own funds to finance their agricultural and industrial onerations, and use more of their own funds for their commercial transactions. In this way, they can frus- trate attempts to curtail commercial nredit, - 13 - channelling credit to agriculture and industry through the private banks, and have nthrefore relieu neavily on the Banco iacional and lDJivUNIAU. Both of these institutions have received substantial loans from public and private external agencies. inese loans are being supplemented by internal funds and being relent to private borrowers for the expansion v agriculture, ivestock, and industry. The lending of the private banks is limited mostly to commerce and export crops. In the industrial field, v-FuvA- concentrates on lending for machinery and equipment for new plants, while the Banco 1acional concentrates on loans for working capital and medium-term loans (up to five years) to help finance expansions of existing plants. 58. The existence of a sizeable non-institutional money market with interest rates of 12 - 15 per cent and more, suggests that the banks and IFONAC are not meeting all of the country's credit needs. This market deals mostly in commercial credit which the banks are unable or unwilling to handle, and in medium and long-term credit which the banks do not provide. Both INFON1AC and the Banco Nacional are trying to alleviate the shortage of medium and long-term credit by expanding their lending with the help of external loans. The newly-created C.N.I. may also make an important contribution through its mobilization of internal funds. In the past, individuals rather than financial institutions were the main source of medium and long-term financing in Nicaragua. But this is changing with the growth in the size and number of financial institutions. B. Fiscal Develonments 59. -',icara,,na Is fis cal positAnn h-as Jrnmprved connsidrablyn in rcn years. Revenues have risen faster than expenditures and the budget has gone from a deficit, of .26 million in fisci 10O90 to a surplus of C$4 million in 1962-63. Another surplus is expected in fiscal 1963-64. 60. The monetary impact of the Central Government's fiscal operations was non-inflationary in 1961-(i and ant.in-f1 +in s 4, 1040A4) T_ 1961-62, the C$10 million deficit vas offset by an almost equal amount of net foreign horrTwina_ Tn 19A9A, the PAL mi4d n upsg mented by C$8.5 million of net foreign borrowing. This sizeable internal suirplus- enabled the Govern.ment to reduce itos internl det, u to -lendi nearly C$3 million to public agencies, and to increase its cash holdings. 61. The Government's financial management has struck a prudent balace etwen he ounryo developmental nees and the restraints imposed by its relatively thin foreign exchange position, The Govern- ment's fiscal restraint has permituted a substantial expansion of banr credit to the private sector without undermining price and monetary sta- bil ity. - lbh - 60. CeIl CuVvernment reveues wOu11 nave amfounrea o ±u -i perI cent of GDP in recent, years have been rising since 1959/60. The growth in tax re-eis whio account -or about 90 per cent of total revenues was especially large in 1962/63 (19 per cent) and was the result of ex-- panuing economic activity, modest tax reforms, and substantial improve- ments in tax adinistration especially during the past year. Total revenues should continue to grow by some 10 per cent a year during the next few years, as a consequence of continued economic growth and further improvements in tax administration for which there is still considerable scope. 63. In 1961, the Government appointed a Fiscal Commission to make a comprehensive Study of the tax system and to recommend necessary changes. The Goverinent accepted the Commission's main recommendations which included higher income tax rates; replacement of the uniform tax on real estate and personal property with separate taxes on each; and retention of a portion of export proceeds to improve income tax collection. Except for the increase in income tax rates, all of the reforms were adopted and became effective in Oc'ober 1962. 64. Receipts from real estate and property taxes rose from C$9 mil- lion in 1961/62 to over C$14 million in 1962/63. and imiav reach C$20 mil- lion in 1963/64. Most of this increase is the result of better admin- istration. More realistic and hence higher pronerty anornisais qnl large increase in the number of contributor; rather than higher rates have raised the Yield from property taxes. and thorp iR q+.ill cr-in scope for further increases through better enforcement. 65. 'ith regard to the income tax, the only change that took place under the fiscal reforms of 1961/A2 6 the introduction nn i nonnua 106 of a 3 per cent retention on the export proceeds of cotton, cottonseed, cof'fp,p livestock, andl liirnlv w +n~ -ko creited+ 4 4-nco-ne * ities of the taxpayers. For 1961/62, these retentions totalled some C88 million., of Thich C5 million as refundd in 1962/63 by givin the taxpayers equivalent credits on their 1962/63 tax liabilities. Thus, thish Cc million wasn. eamllyi a shont-~term loan to the n- - Tn 1962/63, the Government collected C$12.5 million through the retention. If the 106(i2pater continues abo t-7 milio of .: thswil be refunded in 1963/6. 66. Income tax rates are the same for individuals and business fimn. They u .. .. c .oenon baxaut uincomes above beau,uuu a year. The marginal rate rises to 10 per cent on incomes from 100,000 - ,0 u, to CU percent on incomres from 500 to Up600,000, and a maximum of 30% on incomes above C$2 million. In fiscal 1961/62, 2,535 individ- Ual d r719y busines lirms paid income taxes. The introduction of the retention tax on exports together uith stricter enforcement of the tax regulatiois nave substantiaLly increased the number of taxpayers and the total income tax yield.. The Government is making a serious effort to - 15 - 67, eeipts rOm Import taxes 1ave risen during the past two years, but at a considerably slower rate than the rise in imports because a giw X-Opuruon of imports is exempt from taxes* These include raw materials and machinery for agriculture and industry, imports from other entral American countries, and import3 by public agencies. This pattern is expected to continue, and unless the rates on dutiable imports are raised, import taxes will account for a declining share of total revenues. With import tax receipts becoming less responsive to the growth in im- ports, the Government may have to rely more on higher consumption taxes and licence fees as well as income and property taxes if it is to meet its increasing revenue requirements. 68. Growing demands and selected increases in rates have raised receipts from consumer taxes from CQh3 million to C$62 million during the past two years. The cigarette tax which accounts for about 40 per cent. of total consumer taxes was raised from 36 per cent to 42 per cent of the retail price in 1961. The beer tax was also raised from C$0.11 to C$0.20 per 12-ounce bottle. Consumer tax receipts will increase ranidly during the next few years as a consequence of import substitution that is accordanied by the substitution of internal taxes for import dutips- But this will have virtually no fiscal significance because it will be a shift from import taxes. 1/ Expenditures 69. After five years of small uns nnd awns - (pn+.ral Gvernment ex penditures rose about 20 per cent during the past two years. Public works (mostly road construction and mintene) education, an heal accounted for about 80 per cent of this increase. Looking back on the seven-vpar nprinH frn lo<</6A to 1062/AQ ^-+6,- -.4--4-- --A health doubled and rose from 14 per cent to 22 per cent of total ex- nd-itumres- whil 1 l 21 :+~ +~-i ~ ~ -- only 15 per cent. 70, The present Government is giving high priority to education and healjh v .Turding hi +ha +4on+4- sco-- erro'---- progress has been made in recent years in increasing the quantity of clu Wtt; jJoJnIIy C eVI. Ihe increabe in primary school enrolment from 146,000 in 1958/59 to 182,000 in 1961/62, in contrast with the1 slow inceas inlte number of schools anud teacherso per cent anil -I T ., 10 7 1/A L - - . - - : -;9b,u6, gao-ine will yield about C$27 million in consumption taxes whereas before the establishment of the oil refinery in Nicara- gua, the uty UUcoprised virtually all of the tax on gasoline. Now, the internal tax is C$1.10 per gallon and the retail price is C$3,02. vUR examples of the substitution of equivalent internal taxes for duties are flour and detergents. The Government plans to continue this policy in order to minimize the adverse direct fiscal impact of import substitution. - 16 - 1 per cent respectively - suggests that there has not been a corresponding improvement in the quality of education and there may even have been some deterioration. Most of the recent increases in education outlays have gone for higher teacher salaries in the primary schools. A large in- crease in the salaries of secondary school teachers will be reflected in the 1963/64 and 1964/65 budgets. ihile the Government is putting in- creasing emphasis on school construction and teacher training, -here is no overall education program. In view of the deservedly high priority being s-iven to education as reflected in the large and rapidly growing outlays on it, there I:s an urgent need for a long-term program. WJithout such a program, substantial waste is more likely and substantial external assistance less likely. 71 Secondary and vocational education is receiving relatively less attention than primary education. Nevertheless, Nicaraguats vocational school is one of the bright spots in the education picture. It was established in 1952 with financial. and technical assistance from the U.S. Government and offers a four-year course that begins with a year of orientation in each of the trades, followed by three years of training in one of the following: carpentry, plumbing, motor vehicles, radio-TV, refrigeration and air-conditioning, machine shop, and construction. The course winds up with three months of apprenticeship after which the graduates are al- most invariably hired at good salaries. The school has averaged about 60 graduates a year. Its budget of C$900,000 a year is financed by the Nicaraguan Government and well run entirely by Nicaraguan personnel all of whom have been trained abroad. 72, In health as in education, the Government has been spending in- creasing amounts of money without a program. The Social Security Institute established in 1957 is also playing a large and grcwing role in the health field. In 1962/63, it collected CS33 million from employers, employees, and the Government, It paid out a total of C$21 million in benefits and expenses, and invested its surplus in hospitals and public agency bonds. The program covers only employees in the Managua area, but there are plans to extend it to other urban centers. Employers contribute 7-1/2 per cent, employees 3 per cent, and the Government 3 per cent of wages and salaries up to C$2,Lil8 per month. 73. Public health has become a big business in Nicaragua. The com- bined outlays of the Government and Social Security Institute exceeded C$4O million in 1962/63 (some of the SSI's outlays were for sick benefits and funeral expenses). These outlays are clearly large enough to warrant the study needed to formulate a program for making the most effective use of the increasing amount of money being spent on health. 74. Apart from highways which are dealt with in the Public Invest- ment section, the other public expenditure categories have grown rather slowly in recent years and are not expected to ipose a strain on the budget, with the possible exception of "Transfers to Autonomous Agencies". Much of the increase in this category arises from the need to complement external loans for agriculture, housing, electric power, and water supply. - 17 - -7 rLooking ahead over the next few years, the growth in revenues and moderate mounts of external assistance should enable the Government to continue expanding its outlays on education and health providing it continues to exercise the necessary restraint on administrative and defense expenditures. V. TRADE AID PAr.ENTS 70. In recent years, monetary policy has been the principal instrument for keeping the balance of payments under control. The success of this policy has done much to strengthen public confidence in the willingness and ability of the public authorities to maintain monetary stability. This confidence has had at least two important consequences for the balance of payments: a net inflow of funds held abroad by flicaraguans: and ready access to the U.S. and European money markets for substantial medium and short-term borrowing by Nicaraguan orivate and public banks. 77. Exports have been the most dynamic elemrnt in the re.ent. ri+.h of the -icaraguan economy. They accoanted for about 40 per cent of the increase in the gross domestic orodict from 1960 to 1 Q6,9 +hni"h they comprised less than 27 per cent of the GDP. Rising incomes associated with the rapid growth in eyoorts have stimulated imp rt 78. Despite thn shiarp ris,e in exooy .rtsiduring IOArOIA9 +I,---a a moderate increase in exchange reserves because imports and payments for invisibles rose almost as nuch as e-norts 1aial inlv1, bot publi- and private (much of which were directly tied to imports) helped increase reserves by $. to -\7 mll++e) 162---------------t --A Ie to $23 million at the end of 1963un Exports 79. Exports reached an all-time high of $90 million in 1962 compared En f.hp ~icwm1 C r 4 4- - l when cotton1 pricos were high. But exports were not only higher than ever in 1962, they were aqlso More diverPiie. PTne value of co"fee and oo-n exports (1ncluding cottonseed) in 1962 was 7 million less than 1955, but other exports such as suga and new OneS nutbly meat, copper, and bananas had grown rapid- ly. The strong upward trend in total exports continued in 1963 when they rahed .lu0 millno Whie cotton accounted for much of the increase, the smaller exports continued to expand. 80. The balance of payments effects of the individual exports varies _LUe_Y. Tue import content of cotton in the form of insecticides, fetilizer, and fuel is estimated at about 25 per cent of the export value, and practically nil in coffee. Among the smaller exports, the import content of gold and copper is very high largely because of depreciation and income transfers abroad, and quite low for meat, sugar, and bananas. - 18 - T hus, the net foreign exhngirlmI o Anlln-o r%-r J-1a nvn-.r. -n rl coffee is considerably higher than for cotton, and much higher than for implications for the strategy of export promotion and diversification, only criterion for deciding which exports to promote, it is an important one, (f.o.b.) in 1962 and continued to rise to $95 million in 1963. The rapid growh of economic activity and rising consumer demands raised tne Leve.L of imoorts over a wide range of items. Some of the increases were directly related to higher exports as in the case of fertilizer and insecticdes (chemical products) for cotton. Part of the higher imports of machinery and equipment and raw materials was tied to the substantial inflows or public and private capital. 82, The year-to-year changes in total imports are a reflection not only of underlying economic forces, but also of special factors such as inventory accumulation or liquidation and heavy disbursements of foreign loans. 3ut the overall trend of imports is unmistakably upward and their composition is gradually changing as import substitution is stepped up. Two important recent examples resulting from the establishment of an oil refinery and flour mill, respectively, are the substitution of imports of partially processed crude oil for gasoline and wheat for flour, This trend can be expected to continue in the future at an accelerated rate, though it will not keep total imports from rising. VI, PUBLIC INVEST1ENT 83. Public investment which has gone mostly into the expansion and improvement of transport and electric power facilities has played an im-- portant role in promoting economic growth during the past decade. The concentration on these two sectors was based on the view that their in- adequacy was seriously hampering the country's economic growth. While there have been sizeable year-to-year fluctuations in the level of public investment due to changes in tax receipts, the phasing of large projects, and the supply of external loans. the overall trend has been unward- I/ Du:ring the past two years, public investment averaged C$102 million a year (L per cent of GDP) divided about 60-hO between the rentrnl Govern- ment and autonomous agencies, respectively. 84. The savings of the Central Government and the autonomous agenc.es which h;vi qvPrqaPg 81 n ncnt of ntal public invcm+nn duing the and are being revised. - 19 - nast four vp.r. hnvp 'i npn-ri mr+.nf +ha niihli in-+mon+ i n x,ihIt rmore though not all of the savings have been channelled into public investment. Tn the. nn.qt +.wni~ ron-o net+ pyer,"n --- -A~ 4-b, r UUVU;lPL lic savings and investment, and the public sector was able to use C$27 mil- - '5- - - - ' -~ .W±U u J4' .L *J* v z,JL L ct%, IL.Lcl UU1U c, OIL highway network more than doubled between 1957 and 1962, and grew from // --6"* - P vou LQ -n L ;C QV uJ . r,110i0 11 L1U , a -L1 11"U1L U4 KE1o U 2,150 kms. of other all-weather highways. Judging by the growth in motor vehcl rstration an aULne consumption, the heavy emphasis on highway development seems to have been justified. iotor vehicle registration (not including moorcyces rose from 4,1u0 in ty< uo lh00 in 1962, and gaso- line consumption from 37 million to 89 million liters. When the projects now underway are finIShed, the main centers of production, consumption, and distribution will be connected by good roads. 86. I:n 1956, the IBRD lent $3.2 million to the new Port Authority of Corinto (the main port) to help finance the building of a new wharf and the installation of new cargo-handling equipment and transit sheds. With the completion of the project in 1962, the port should be able to handle the growth in traffic for some time. 87. Nearly all of the public investment in electric power during the past twenty years has taken place since 1956. The IBRD made its first power loan in Nicaragua in 1953 for h501,000 to help finance the installation of a 3,000 kilowatt diesel unit in Managua. In 1955, the Bank made a $7.1 million loan to ENALUF (an autonomous public agency) to finance the foreign exchange cost of a 30 MW steam plant in M4anagua. A $12.5 million IBRD loan made in 1960 is helping to finance the construction of a 50 MW hydro plant which is the first stage in the development of the power potential of the Rio Tuma. This project which will cost 020 million and double ENALUF's generating capacity is due to come on the line in 1965. 88. On the basis of the recent growth in the sales of electricity which have doubled in the last four years, additional 1enerating capacity will be needed by 1969-70. To meet the growing demand until the Rio Tuna project is completed, ENALUF has installed five generating units with a total capacity of 5,o000 K. 89. Outlays for social projects are beginning to assume a signifi, cant role in the public sector. This is esnecially trupm of housing fnr which a $5.2 million loan has been obtained from the Inter-American Bank. Under the Drogram carried out by the nublic homing aneny (TTIT) 2 nn houses have been built since the agency was established in 1959, and another 1.300 will be built in 196h1 TITT Q+.n-r+d with a capia+l o C$30 million that was taken over from a mortgage bank (Banco Hipotecario). In addition to the 2__2 million loan from the Tn3_ it hs rece-ived an annual contribution of C$3 million from the Central Government* - 20 - GPr PTTLT TMNPLI-TNEN ATD PT F TMANCTA 10O IAAr o n/401 (million cordobas) Fiscal Years 1959/60 1960/61 1961/62 1962/63 Public Investment Central Government 43.6 40. 59.7 56.5 Autonomous Agencies and Municipalities 13,8 22.8 3207 53,0 TOTAL 58.4 66.3 94.4 10.5 Composition Road Construction 30,0 23.6 26.4 28.9 Road Maintenance 12.0 12.7 14,9 1it6 Port of Corinto Authority 9.4 6.3 3,0 0'1 ENALUF (Power) 3.0 10.7 23o1 36.5 INFONAC (Agriculture and Industry) 1.0 3.0 2.0 4,0 INVI (Public Housing) 10 10 10 31o Other 1/ 2.0 9,0 2hC2/ 10.9 TOTAL 58.4 66.3 94A l090,5 Sources of Financing Central Government Saving 9O 42 54 63,8 Savings of Autonomous Agencies and Mnnicipalities 12. 16.A7 190 2&7f Net Internal Borrowing 130 ,5 - 8,7 -187 Net External Borrowing Wi1 2.8 28,2 38.,7 1/ Includes hospital construction, water works, school construction, municipal works and various other investmentse Q/ This increase is in part due to the construction of the General hospital. See ite 6 of explanations. 1TATTTD. * WhTATTTi' n- Tron *- .- - i'A , t1 'r- Inn Lr Ena1ur . TTI AI T u and 11n end-use material fur 19-59100, Roads, Port of Corinto and INVI: Central Bank, !NFONAC: Estimate based on balaunce hets, and 1962 annual report. Other: Staff estimates. - 21 - 1NUILo: 1. Investment of Autonomous Agencies and Municialities: Except for ENALU, drawings on foreign loans and budgetary contributions re- ceived by INVI, the Port Authority, the General Hospital and Huni- cipalities. A very rough estimate for INFONAC is included although no data were available on INFONACfs gross investments (as opposed to loans) on a yearly basis, 2. Central Government Saving: This is based on Central Bank data on current expenditures and revenues. The latter excludes export tax retentions which were returned in 1961/62 (5.1 million) and 1962/63 (estimated at 7.5 million). 3. Savings of Autonomous Agencies and Municipalities: This includes the savings of ENALUF and the Social Security Institute, The amounts are: 1959/60 1960/61 1961/62 1962/63 (million cordobas) ENALUF 2.9 6.2 7-9 19J, Social. Security Institute estimate 9. 10q 116 13 i.Net Internal Borrowing! This~ iR hnlnnnina if.emn bhiit is inl -i-ne with data on internal borrowing by the public sector. 5. Net External Borrowing: There is a discrepancy, however, for 1961/62 and 19627I%74rnf nhroiit.G$ millIion betw, -- - - --- -een this serics and that shown in Table 12. (The Financing of Budget Deficits.) 6. General: The data shown here are for payments made, and therefore increase shovm in Central Government investment for 1961/62 is due in part to the reduction wo the flting debt in ousls tractors were paid for work done previously. - 22 - C$12,000 - C$28,000 (including lots and services) and are built by INVI, The others are built by private cnactos from Central Am"ri ndrl competitive bidding, The 10 per cent down payment is made by the buyers in the form of construction labor. The rest is paiu ovr aprid o 20-30 years at 4-7 per cent interest, depending on the income of the buyer which must be between CO'50 and O'l,"Ou a month, wh n the annual contribution from the Government and the interest and amortization pay- ments on its mortgages, INVI will be able to Ou-ld severaL unured VuOe a year. It also hopes to get additional funds by tapping private savings. Future Trends 91. Nicaragua does not have a national development plan or public investment program. The National Planning Office which was established in early 1962 has been absorbed entirely in the preparation of an overall diagnosis of the economy for the period 1945-60. They expect to finish this task by mid-1964 and turn to the preparation of a four or five-year development program. 92. The completion of projects in process and the execution of new projects for which external loans have already been obtained add up to a sound public investment program for 1964-65 both in size and composi- tion. If the ,undisbursed loans which amounted to $24.6 million at the end of 1963 / are spent by the end of 1965, as seems likely, public in- vestment will rise from an annual rate of C 102 million during the past two years to an estimated C$140 million in the next two years. While this is a large increase. it should be manageable both administratively and financially. 93. External credits already in hand together with the savings of thA CRntrnl Government and autonomous aEencies should be adecuate to finance the higher level of public investment. An expected annual in- crease of 10 YPr nnt in Central Government revenues would also allow for an annual growth of about 6 per cent in current expenditures. 9h. A level of investment substantially above C$140 million would strain the admntrative ancl financial canacity of the Oublic sector. Moreover, there are no sizeable new public investment projects that woud be rand +, to+ 1indn.Tan hefre t.- ltter nnrt of 196K. The one large high priority project that will be ready is the beef and dairy cate+1- pg h w11 "nji-re an esti-ted tot. nutla of .21 million- U VLL- P2i.~ r ' 's ---L -- -i - . - -- to be channelled to the private sector. The remaining $21.7 million is3- divided as P-11- 673 milio from then TPT) and A-r for then Rio Tuma power project; $5.6 million from AID for highways; $1 million -----------.PUAL --- 1 -1 X ----4rw b irrigation project; $2.8 million from IDA for water supply in H4anagua; and $0.3 million from AID for schools. - 23 - It will take threp to four years to carry out and in dpnipntd to erpand and improve the beef and dairy herds in order to double beef exports and nrovidn thp raw material for qnmwtupri milk nlant. The dnirv nrmarnm will require about $5 million of farm-to-market roads. Most of the $16 millinn fnr livoe-k unild Ae channelled to +he avirn+n V%ir T'iNiTA. and the Banco Nacional. On the basis of the expected level of public will have to be financed from abroad. PIRUMETIM U3LIC rVEST T M1- -170" (Calendar Years) (millions of cordobas) Highways 100 Electric Power In Housing 24 Rivas irrigation Project 32 Managua Water Supply 42 Other 12 TOTAL 280 Financing Central Government Saving 1/ 110 Savings of Autonomous Agencies 7O Not External Borrowing 10c 2dO 1/ Total Central Government savings are estimated at C$150 million, assuming tax receipts rise by 10 per cent a year and that half the increase is absorbed by current expenditures., This would leavs C$40 million to finance additional current outlays, or public or private investment such as the livestock project, or to retire debt or accumulate cash. Source: IBRD Staff. 95. In view of the high level of public investment contemplated for 1964-65, it would be unwise for Nicaragua to start any major new infra- structure projects before the latter part of 1965. Excent for the roads which are an integral part of the dairy project, the public sector should concentrate on finishing the nroients and nroprams underwav and carryine1 out those just getting started. 96. With the expansion and improvement in transport and power faci- lities, arpntpr emnhasis is heing given to the direct. stimulation of agriculture and industry through financial and technical assistance to the nihliv rojcT dhis trd is sr.Tesll iiigandion,ld settemo1e by intensive project and sector studies in irrigation, land settlement, health, there is a real danger that the increasing amounts of money that no suitable programs. Some work has already been done in the identifica- U-Lon a UU LA V_ L I_±.L_L. U.LUII J±J.L tA.UO., VJLLL P.LCIUV_UC.LL. IluIL116~ lidto ut u done to prepare programs in education, health, and land settlement, 97. Looking ahead to the late 1960?s, the minerals survey now being made may lead to sizeable publc outlays on transportation as an integral part of a major private investment to expand the production of copper and other minerals. The resources survey of a part of the Caribbean coast that is underway could also result in substantial transport investments. VII. ECONOIC PROSPECTS AND CHEDITWORTHINESS 98. Political and monetary stability and a reasonably adequate and improving infrastructure provide the basic conditions conducive to Nica- ragua's growth, The country's resource endowment, its public policies and the private sector's vigorous response to these policies, point to a favorable economic outlook over the next few years. 991. The growth of cotton production which has been the key element in the eccnomyts rapid growth during the past three years will probably slow down because of the growing scarcity of suitable lands and the increasing desire of the growers to diversify their production. But other major com- modity sectors - domestic food crops, livestock and manufacturing - should do as well or perhaps better than they have in the recent past. The output of both private and public services can be expected to keep pace with the growth in the production of goods. Looking at the overall prospects, the gross domestic product should grow by some 6-7 per cent a year during the next few years. 100 Exports should increase by about 6 per cent a year from an estimated $108 million in 1963 to some $1h3 million in 1968. The main assumptions underlying this projection are the following: no significant deterioration in the world cotton market: the cattle nrogram will result in a large incease in beef exports; the Rivas irrigation project will be completed as planned qni l.nd to 'highe.r bamnn exportsq; nreP nnr quant.it.ies fo-r cofnfeePP whiicfh will maintain the value of coffee exports at approximately the 1963 level; aqndl (P.rt.n!n in(i iq.rinI nrnpt1.q nm(T innnnq will1 holn -F.n in-Pnq %rsf to other Central American countries. The projected growth of exports to- tgetTherT.7i+I arvl m Ac+. nrnTV+.!31 -i flTqc fV, n"Ar 'knk ~r -~~, .- I.- - - - v-- -_ 1-- -_ 11.S JASL.. adequate to finance the imports needed to achieve and maintain a reasonably will be generated by this growth. - 25 - =r)_TW'TTr%T rV VYDADOXC 104-0 TO4A (millions of dollars) 1963 1968 Cotton 40,0 5'.0 CottonseedO Timber 2.7 1.5 4ae ..1 Ue> 010 Gold 7.3 70 Seam 2.0 2.0 Sugar 4.54. Soluble Coffee 4.5 4.5 Copper Ore 4.U 6,0 Others 9,h 200 1o6.5 143,0 I_ Mai nly vananas,shellishn, ndne atqe goods. l01ILJ LiOrgu' pVesen externalVI debt isic $some $25 million is undisbursed. Service payments on existing debt amount to $6tA1 milliojnn 196 orA --6 per cen ofP exor, ari_sad_r4shdue to fall to $3.7 million in 1968, less than 3 per cent of projected export 1-2 Nniaragua "equirements for new external loan commitments are relatively small during the next 12-18 months. At the present time, the only high priority projects in sight that would require substantial public external borrowing are the cattle program (about $10 million), road con- straction, and perhaps some P'_5 million for private industry. Additional loans will be needed in 1965 and subsequent years as new project studies are comi-pleteu, J_U_ Niar* gasf u1. iicaragua*s favorable growth prospects, its sound management of development financing and the low external debt service in relation to projected export earnings make it creditworthy for additional external loans on conventional terms to finance its probable external capital requirements over the next few years, STATISTTCAL APPENDIX: TAPT,-S l - 21 LIST OF TABLES Table No. External Public Debt 1. Summary of External Public Debt 2. Service on External Public Debt, 1963-1977 Population, National Income, Production and Education 3. Population. 1950 and 1963 4. Gross Domestic Product by Major Sectors, 1950-1962 5. Area- Prodlntion and Yieldn of Principal Crnops, lo?/C OA9/ A 6. Industrial Production, 1952-1962 7. Powe.r andi Transport Statistics, 92l6 8. Trends in Public Education, 1950/51-1961/62 Prices 10. Summary Accounts of the Banking System, 1959-1963 11. DistribUtionW of lit .11on ton-v4 12. Central Government Operation5 1959/60-1962/63 13. Central Government Current n.evenues, * 14& Central Government Expenditures, 1956/57-1962/63 . . Cief oUrceUs of investmenu Funds of Autonomous Agencies, 1959/6o.1962/63 16. .ibursements on Principal Development Loans, LYo1-1Yoj Foreign Trade and Payments 17. Balance of Payments, 1953-1963 18. International Reserves 19. Composition of Exports, 1952-1963 20. Composition of Imports, 1955-19b2 21. Terms of Trade, 1950, 1953-1962 TABLE 1 NICARAGUA: EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED A L r' TTT 7n? Jn -i r. TjTnTT 1 TA T ov TrononmLn Tnn TTnmo .no Vr U Uid u, J-ZV_) VJ, . L 1 ou- iU iL o I1LJn.Ll LIVO. JULY 1 - DECEMBER 5, 1963 Debt Repayable in Foreign Currencies (thousands of U.S. dollar equivalents) Debt outstanding Major reported T+am June 30, 1963 additions Net of including July 1 - uandisbursed undisbursed Dec. 5, 1963 TOTAL EXTERNAL PUBLIC DEBT 29,669 q0.123 2.2 0 P-iv .lL-) mpr i l- 9 Ah A Ahn ~2ZZZ2 1T+ -Ans - DevelopmentL Bank Loans 894 2, 000 IDA Credit -3,000 -0 U.S. Government loans 11,.450 15.841 2 20 xprt -umpuru Dank UPi?> 11,0UU AID 691 4,775 1,000 Source: IBRD - Economic Staff. TABLE 2 NICARAGUA: ESTIMATED CONTRACTUAL SERVICE PAYMNTS ON EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF JUNE_0 1563 WITH REPORTED ADDITIONS JULY l - DECEMBER L 16I T Debt Repayable in Foreign Currencies (thousands of U.S. dollar equivalents) Debt out- standing Payments during year United States Government 'Yt,ar plus un- Amo-rti n Export'- disbursed zation terest Total Privately- IBRD IDA IADB Imporb January 1 Placed Debt Loans Gredit Loans Total Bank AID 1963 47,623 2/ 4,523 1,557 6,080 333 2,176 255 3,316 3,245 71 196 18,752 3,636 1,663 5.299 13 1719 2 284 2,751 2:675 76 1965 65,856 3,721 1L754 5,475 415 2,097 2 273 2,688 2,583 10) 1966 42s87 sl23 1,678 5,801 329 2,35 It 263 2,650 2,740 110 1967 39,502 3,092 1,5D9 4,601 2s4l4 5 253 1,929 1,811 118 1968 36,410 2,328 1,372 3,700 2,383 8 212 1P067 943 124 ;L969 3,82 1,992 1,261 3,253 231 632 502 130 1970 32,090 2,063 1;163 3,226 2,388 10 231 607 73 130 1971 30,027 1,761 1,064 2,82e 2,332 10 211 302 161 11 1972 2,13266 1,890 982 2,872 2227 12 200 453 154 299 1973 26,376 2,19 895 2,209 12 288 615 154 268 9192;209 C4 188 615 18 1467 1974 214,217 2,072 803 2,875 2,208 44 623 142 481 L975 22,1145 1,814 73.1 2,525 1,886 44 595 3,35 460 1976 20,331 :1,499 641 2,1ho 1,553 46 541 120 421 1977 183,83:2 1,169 582 1s51 1,286 46 L1? 419 2,/ Includes service on all debts listed. in Table 1 except the fellowing lzans for which the arrortizati.rn terms are not available: a. $1,010,000 Grace National Bank rf Njo to Banco Nacinal de Nicaragua b. $1,500,000 Dank of America U.S,A, to Empresa Nacional de Luz y Fuerza 2/ Outstanding as of June 30, 1963; payments are for the entire year. Source: IBID Eccnomic Staff. TABLE 3 NICARAGUA: POPFULATION 1950 and 1963 (number of inhabitants) May 1950 Census: 1,057,023 May 1963 Census: 1,524,027 Average Annual Rate of Increase 1950-1963: 2.87% % of Urban Population 1963: 41.1% * The estimates of population growth made for the 1950's and early 1960ts on the basis of the 1950 census were proved to be high by the 1963 census, and are therefore not included here - Source: Direccion General de Estadisticn v Cnso Ce-os 1963 Cifras Provisionales. TABLE h NICARAGUA: GROSS DOIESTIC PRODUCT BY iAJOR SECTORS, 1950-1962 (million cnrdobas at, 1958 prices) 1950 1955 1956 1957 1958 1959 1960 1961 1962 Agriculture, Forestry and Fisheries 682 887 794 907 503 914 863 921 1,oJ44 Mining 3 34 32 30 .33 31 39 6 Industry 11 241 234 261 286 287 282 350 397 Construction 33 70 8j 714 73 9; 82 76 82 Electricity and Water Supply a) 12 13 15 19 30 34 36 L14 Transport 48 79 77 82 75 67 64 70 78 Commerce 260 485 h9 478 4L I L 479 522 583 Banking, Insurance and Real Estate a) 44 43 44 48 38 41 45 .50 Ownership of Dwellings a) 96 ICh 111 121 13 140 151 16 Government 52 101 119 121 137 117 131 1-32 1.37 Services 216 129 127 141 15 145 138 151 163 Total 1,4 3 2,180 2,D74 2,267 2,311 2,291 2,295 2,99 2,785 a) Included under services for 1950. Source: United Nations, Yearbook of National Account Statistics 1962, for 1955-60, and Banco Central, for 1961 and 1962, according toI173 revisions, TABLE 5 NICARAGUA: AREA PRODUCTION AND YIELDS OF PRINCIPAL CROPS 1952/53 - 1962/63 (area and production in thousands) 1 Crops 1952/53 1953/54 1954/55 1955/96 1956/57 1957/58 1958/59 1959/60 1960/61 1961/62 1962/63 Cotton Area 43 61 124 123 105 126 106 95 87 110 135 Production 268 421 1031 814 967 1150 1060 602 722 1239 1610 Yield 6,2 6,9 8.3 66 9,2 91l 10.0 6.4 83 11,2 12.0 Sesame Area 38 30 24 23 12 18 25 23 20 15 9 Production 337 251 189 179 92 146 201 182 177 135 56 Yield 8.8 8.4 7.8 7.7 8,P 8.0 8.0 7.9 8.9 8.8 6.1 Coffee 2 Production in quintals of 101 lbs, 578 529 490 490 L70 479 634 565 601 in bags of 132 lbs. (60 kg.) 443 405 375 375 360 367 485 432 461 Corn Area 174 19) 170 226 256 211 189 184 187 207 201 Production 2667 3015 2083 31i0 310 2291 2348 2150 2588 2678 2725 Yield 15.3 15.2 123 13.9 11.7 10,9 12,4 11.7 13,8 124,9 13.6 Sorghnt Area 54 63 69 74 60 74 60 69 72 78 80 Production 1165 1318 155 1107 1067 530 827 853 847 1086 1067 Yicld 2144. 21,0 15.54 1.U9 13,4 125 13.8 12.3 11,8 23:9 13o4 cantinued Page 2 Crops 1952/53 1953/54 954/55 1955/56 1956/57 1957/58 1958/59 1959/6o 196c/61 1961/62 1962/63 Beans ~rea 49 55? 74 102 38 53 56 54 66 61 Production 61:l 6182 683 778 1530 258 423 479 484 696 627 Yield 13.h 12.3 1L2 '10. 4 101 6.9 7.9 8.5 8,9 10.6 10.3 rRice Area 35 48 26 27 36 34 33 30 31 34 32 Production 485 760 358 311 bli 451 454 442 462 525 Sol Yield 14.0 15.7 13.8 11.3 11.4 133, 13.9 14.8 15,1 15.5 15.5 Sugar Cane Area 27 23 25 21 26 28 31 28 :, 31 32 Production 500 754 806 743 951 1002 1126 1038 1138 1421 1195 Yield 33.3 33,0 33,2 35.4 36.9 36,3 36.6 36.9 3609 36.3 36,8 1/ Areas are shown in nanzanas (I manzana - 1.7 acres) and production in Spanish quintals af 1G1 lbs., except fcr Sugar Cane for which production is given in short tons. 2/ Data on area and yields are incomplete and not reliable. Source: Direccion General de Estadistica y Censos; for coffee, IBRD and direct informatizn for 1962/63. TABLE 6 NICARAGUA: INDUSTRIAL PRODUCTION 1952-1962 IN DUSTRY UNIT 1952 1953 1954 1955 1956 1,57 1958 1959 1269 1961 1962 (millions)---------------------------------- Vegetable oils 1bs, 2,3 3' Si 7.7 8.7 15.8 15.8 15.3 12.1 13.1 Sugar quintals o.7 0.7 0o8 i' ,-9 1.2 1.1 1c3 144 107 Ii7 Beer litres 2.6 3,0 3, 4 13 4..7 4oo 4.7 4.2 4o1 4.2 5.7 RuI litres 5.3 4.8 14.7 5.1 4,3 5.7 5.6 5.3 4.0 6,0 7.7 Cigarettes number n.a. 654 724 778 790 767 777 789 819 809 825 Matches 15,4 19.4 180 196 203 16.3 19,6 21.1 21o7 21,6 24.5 Scap lbs, 8,3 8,o 8.9 9.6 9,5 8.6 9.5 9o6 9,5 j.4 14.8 Soluble coffee 1bs - - - - - - - nca, 2,0 3.5 Cotton cloth yds, 356 4.0 63 7,2 5.5 6.3 7.2 1000 103 9v3 9.3 Shoes pairs c 4.4 0.5 05 C,5 0.5 0.5 c.6 0.5 0.4 Cement bags 1/ 0.5 0,5 0.5 o,6 1.O 1.0 0,9 0,8 0.7 Co9 11 Sawills board feet 48.2 52,8 55.7 62.1 58.3 59.5 61.6 78.2 51.6 55.9 61,4 n.a* = not avail.able, l/ Bags of 94 lbs, Source: Direcciz-n General de Estadistica y Censos; Banco Central. TABLE 7 N-ICARAýGUA:: POWER AilD TRANSPORT STATISTIGS19292 1952 1953 19s54 1955 1956 1957 1958 1959 1960 1961 1962 Electri_ Pcwer Generating capacity (W) 26 33 38 40 42 43 76 77 77 77 78 Power generated (millions cf KWH) 90 96 105 .10 119 128 143 166 184 195 212 Highways Ave~d highways (kilometers) 195 213 250 280 300 362 515 548 669 747 761 other all-weatherihighways 420 470 560 77 787 91 1,164 1,L70 1,368 2,151 2,151 MCtOr Vehie (kilometers),6 ,7 78 <,'4 1,14 1,7015 2.:1 Motor Vehicles Total 2/ 4,363 5,113 7,.146 8,670 13,514 14,839 16,288 1.5,655 16,5-c 16,059 17,252 Automobiles 24,84 2,776 4,209 5,2.43 7,022 7,836 9,296 8,455 8,650 8.309 8,064 Trucks 1,358 1,738 2,216 2,453 4,728 5,'82 4,970 4,200 5,'00 c 4,784 5,1426 Buses 239 271 301 369 532 634 592 650 500 674 843 Railway Transport Passenger-kilmeters (millions) 113 118 123 135 125 1114 101 ::0 65/ 565 Ton-kilometers (illions) 21 21 31 35 31 32 30 37 23.li 23 25 Port Traffic (1000 tons) Import trffic .3 171 186 211 263 261 294 281 280 331 367 U21 Cor.to 121 129 141 162 167 169 162 170 157 231 237 Experb traf'fic 3/144 189 177 233 183 222 260 271 229 213 315 Corinto 78 81 83 85 72 96 -.154 154 136 131 236 TUTAL 315 375 388 496 1444 516 541 551 56c 580 736 i/ Data suppnLied by the Pacific Railway. Including motorcycles and tractors. IncludLng traffic through Corinte. Source: Direccion General de Estadistica y Censos and Controller cf Custcoms. TABLE 8 NICARAGUA: TRENDS IN PUBLIC EDUCATION 19510/51-1961/62 Schocl Year Beginning 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 Primary Educ;,-atio.,nI. Number of schools 1,368 1,614 1,825 2,293 2,357 2,244 2,321 2,249 2,085 2, 82 2,122 2,160 Number of' teacher 3,030 3,579 3,559 4,102 ,438 4,693 4,895 41h,63 4,,912 h,7"4 4,451 4,947 Number of pupils (thousands) 92 96 1,05 119 133 131 145 137 146 153 165 182 Approx. population 6-12 years old 2f2 (thousards) ~10 n.a. n.a, n.a. n.a. n,a. n.a. 22D 22 24, 250 263 Secndary Education Nuimber of' schools n.a. 42 41 39 42 36 39 38 42 42 44 51 Number of' teachers 623 h74 1460 492 425 403 363 374 451 4414 1494 650 Number of pupils (thousands) 3.7 3.9 5.2 3.9 4.6 4.3 .h 4.7 5.5 5.9 6.9 7.8 Approx* population 12-18 years old 2/ (thousands) 145 n.a. n.a. n.a. n.a. n.a. n.a. 180 185 iso 195 2Z0 1 Prinary educat-ion consists of six grades, roughly between the ages if 6 and 12. 2/ Rough staff interpolations, derived fr--,m U.N. Demographic Yearbcok 1960 and 1962. Source: Direccion General de Estadistica, NICARAGUA: CONSUER PRICE INDEX 1/ (1955 average - 100) Total Monthly Averages Index Food Housing Clothing Other 1955 1000 100.0 100,0 100.0 100.0 1956 92.4 8747 1038 10h.6 97.1 1957 89.5 82.3 10.8 106.4 98,8 1958 938 88.5 103.5 106.5 1017 1959 91A 83.9 10,6 106.4 102.3 1960 89.3 80.9 105.4 106.7 102.1 1961 89.6 81.1 106.1 106.8 1027 1962 89.2 80,3 1o6.o lo6,9 103.3 June 1963 88.9 79.6 106.0 106.9 104.2 1/ Wage-earners in the city of Managua. Source: Pan American Union, Consumer Price (Cost-of-living) Indexes of the American Nations. TABLE l NICARAGUA: SUTE4RY ACCOUNTS OF THE BANKING SYSTEM 1959-1963Y/ Sept. Sept £IAnu wL VUiu_ 17U LyUU i.L1 iyOe 17io Lioj A. Foreign Assets (net) 78.7 81,1 94.9 128.0 162.9 187,6 Net international Reserves TO,z 7003 00.j 117.3 15215 17210 Other International Assets (net) 0.5 2.8 6.6 10.7 10.4 15.6 B, Domestic Credit Outstanding 453.8 486.3 507.1 605.3 553.0 607.9 To Government 33.2 0.9 43. b5.3a/ 5.4 3,9 To Official Entities 12.1 33.7 38.0 37.1 37.1 29.6 To Private Sector 360.7 361.3 376.3 L12,9 377.1 414.8 Unclassified Assets and Float 47.8 50.4 49.0 70O 53.4 79.6 A and B Total 532.5 567.4 602.0 733.3 715.9 795.5 C. Liabilities to the Private Sector 246.7 259,,4 274.3 344.7 313.9 376,4 Currency in Circulation 130.6 1349 131.2 167.5 17.7 19.9 Sight Deposits 109.3 114.9 129.6 164.1 150.7 190.4 Time and Savings Deposits 6.3 9.3 13.1 13,5 15.1 25.2 Deposits in Foreign Currency and Other 0.5 0.3 0.4 o.6 0.4 0.9 D. Other Liabilities 285.8 308.0 327.7 388.6 4020 b19.1 Government Deposits 23.3 5.9 8.8 120 -1.6 3o.0 Deposits of Official Entities 25.6 28.0 20.8 30.0 30,7 39.1 Advance Import Deposits 36.6 32.2 30.8 2h1G 38.0 27-i Long- and Medium-term Foreign Liabilities - 28.0 56.0 50.h 50.h h6.1 Other Liabilities 34.1 42.2 40.5 47.7 46.3 43.9 Capital Accounts and Other 3/ 166.2 171.8 170.8 22h.0 221-0 232.6 0 and D Total 532.5 567.h 602.0 711-1 714.Q 7Q04 ine series prior to 1959 is at present being revised in the Central Bank. This reflects the following operation undertaken in 1962: the National Bank was relieved of its liability to the Central Bank for W$75 million of overdue agri- cultural loans which had been discounted with the Central Banks, The Government assumed this C$75 million obligation: C32 million was paid by the use of accummulated Central Bank profits, and C43 million by a 30-year loan from the Central Bank to the Government, which is the magnitude reflected here. / Includes unclassified liabilities of the Central Bank which cannot be separated from the capital accounts in several of the years covered. Source: International Monetary Fund, TABLE 11 NICARAGUA: DISTRIBUTION OF COMMERCIAL BANK LOANS TO PRIVATE SECTOR (millions of cordobas) End of Period Sept. Sept. 1959 190u 19o 1962 1V62 1963 Cotton 9o9 51.0 53.1 56.4 4o8 46.6 Coffee 45.9 31.6 33.0 30b 24.6 25.9 Cattle raising 24.4 33.4 40.7 47.7 47.2 52.8 Frozen portfolio 5.2 57.3 65.5 55.5 58.0 47.5 Other agricultural credit 62.0 48.9 42.4 570 51.1 60.8 Total agricultural credit 228,4 222.2 234.7 247.2 221.7 233,6 Comrerce 65.8 52.1 53.8 52.7 52.9 68.9 Industry and mining 65.7 57.5 62.8 94.5 84.7 98.1 Other 16.1 295 24.9 18.5 17.8 17.2 Total 336.0 361.3 376.3 412.9 377.1 h14.8 Extended by the National Bank 2502 263.6 269.1 290.7 261.5 286.8 Extended by the private banks 85,8 97.7 107.3 122.2 115.6 128,0 Source: Central Bank, TABLE 12 NICARAGUA: CENTRAL GOVERNIENT OPERATIONS 1959/60-1962/63* (millions of cordobas) 1959/60 1960/61 1961/62 1962/63* Expenditures 262,6 253.4 275.3 307.2 Current (208;,0) (203.1) (20,.1) (2411.1) Investment 5 %L7) ( 50.3) ( 70.2) ( 67.2 Revenues 236.9 2 5.5 2656 311.3 Deficit - 21.7 7.9 9-7 1 Financine Public debt (decrease-) 26.9 - 6.3 16.7 1.8 Net foreign borrowina - h.9 - 1- 90 n.5 Net Central Bank loans 31.3 - 0.3 7.0 - 1.5 Other internal debt net - n01 n 7 2. Treasury funds (increase-) 6.o 2.4 - 0.2 -5. TrPPqiirv claims (incease.) 7.2 AA 1 0 * 7 Floating debt - 5.0 - 4.2 - 0.8 Total 25.7 7.9 9.7 4.1 ij I nk.L.L 111A J.U _ b.L -11 .Ly U-L.LIVUI alb _L data on Tablesl3and.4, because of adjustment for state monopolies and interest on the puli, detU. Amorti aton of the public U ebt is excluded from tnrs table and from table 14,. / iMost recent global data, not yet available in detailed classification, as u h.own i u r nau n y. Source:~.~ _L1t:VL ULVR. b± I I l'UL : VUIILUq TABLE 13 NICARAGUA: CENTRAL GOVERNMENT CtRRENT REENUES 1956/57-1962/63 (millions of cordobas) 1956/57 1957/58 1958/59 1959/60 1960/61 1961/62 1962/63* Direct Taxes Income 2.7.3 2.7.9 18.5 23.4 19.9 19.9 24.9 capitali M.9 ol7 6.7 7.6 7.7 8.9 iI.h Inheritances 2.7 0.9 1,1 1.3 1.6 1.6 1.2 Indirect Taxes Imports 100.3 108.2 111.h 108.7 113.8 120,1 139.0 Consular dues 214.3 13.9 1.7.0 1.9.8 20.8 18.8 21.7 Exports 22,3 23.2 6.2 5.2 7.5 6.0 6.6 Exchange profits 13.0 13.0 2.6 - - - - ConSumptiaon 37.0 39.0 41.0 38.h 543.1 3.6 61,6 Various 7.S 8,6 8.7 9.0 12,3 8.1 13.5 Total Tax Receipts 219.4 230.4 213.2 213.4 226.7 237.0 282.9 Other Revenues State services 61 8.0 7.3 7.2 11.0 12.6 16.4 State monopolies 1/ 3.9 4.4 4.3 4.h 4.6 5.4 5.6 Denations 3.5 4.3 4,1 3.6 2.3 071 0.7 Various 12.3 10,8 10,6 7 3,oj 38 14.1J 13.1 Total Current Revenues 245.3 257.9 239.5 238.9 248.3 269,3 315.0 * Prelixinary. Gross revenues. / Including special export retention tax revenue of 3$9.h millicn. SurUCe; Revista del Banco Central de Nicaragua, thirA quarter - 1963. TABLE ) NICARAGUA: CENTRAL GOVERNIENT EXPENDITURES 19567-.1962/63* (millions of cordobas) Budget 1956/57 1957/58 1958/59 1959/60 1960/61 1961/62 1962/631/ 1963/64 Legislature 2o9 2.7 3.1 3.2 3,3 304 3,7 Eecutive Departments 228,9 232.3 228,4 233.6 223,2 247.9 251,.6 279.5 Presidency 10,7 93 ~~~I. Goverrnment 21.6 22.3 22,5 22.5 21 1 21,5 21,6 24.6 Foreign Affairs 11.5 11,2 10.6 10,2 9.8 10.1 1o,6 10.8 Economy 4,8 5.1 5.1 5.l 4,3 L 5,7 6.9 Finance 32.5 29.4 27.9 37.5 33.2 37.5 39.9 3109 Educatirn 27,8 31.7 34.3 35.1 36.3 39.4 4847 58.5 Public Works 45.7 53.6 51,o 46.2 4.00 57.8 41.6 61,8 Agriculture 9.7 9.6 8.,7 9.7 9.4 93 908 10.5 Health 12,4 12,8 12,2 13c9 14,1 13.1 15,6 13.9 Labor 1.13 1.2 1.3 1.h 1.5 1.5 2,3 2,6 Defense 53.0 45.9 46,o 47.C b8.3 48.9 49e3 53,4 Judiciary L4.7 5.0 5,2 5.1 5,1 5,2 9c1 7,2 Transfers to Autonomous Agencies 2f 3,8 20,2 23,9 18,2 139 15.4 19,5 26o2 Expenditures on State Mon,poDlies 2.5 2,2 2.8 2-. 2.9 3<7 300 3,' Interest on the Public Debt <- - - - 27 9, 6.5 TOTAL 25.3.9 262,4 263,5 262.4 251.1 280,4 296,>o.0 :329.7 * The fiscal year runs from July 1 to June 30. l Preliminary. Mainly fcr electric power, ports, housing, and the state develcpment bank's agriculture and livestock progrmso Before 1960/61, interest on the public debt was aparently included under expenditures by departments. Excludes about C$]1 million of year-end expenditures, not yet available by categories. ýource: Revista del Banco Central de Nicaragua, third quarter, 1963, NICARAGUA: CHIEF SOUFC1S OF IVESTMENT FUNDS OF AUTONOMOUS AGENCIES 1959/60-1962/63* (millions of cordobas) 1959'60 J.901 1961/62 2962/03 ENA LUF Internal Savings 2,9 6.2 7.9 12.4 Government Contribution 29 5.6 3.5 2.5 Net Exter"al Borrowing 309 - 0.9 8,2 19.0 9.7 10.9 190 33.9 SOCIAL SECURITY INSTITUTE est, Internal Savings 9.5 10.5 11.6 13.3 INFONAC Budget Government Contribution 5.0 - 4.0 3.3 External Borrowing l/ - - 1.8 . 5o- 5.8 7.8 PORT AUTHORITY Government Contribution 3.5 2.3 003 - External Borrowing 5,9 4.0 2.7 0.1 90 7.3 3.0 0.1 INVI (Housing) Government Contribution hO 1V0 ho 0 External Borrowing - - - 10.5 110 1.0 1.0 ITT * Municipalities and General Hospital are excluded because of lack of data on 1/ Used for lending to private industry. Source: Central Bank and individual agencies. TABLE 16 NICARAGUA: DISBURSETENTS ON PRINCIPAL DEVELOPMENT LOANS 1961-1963 ($ millions) Lending Disbursed Undisbursed as of Original Amount Agency 1961 1962 !965 Deco 31, 1963 Power 12.5 IBRD 0.5 1.5 4.0 6,3 2.5 AID-DIF 001 0.7 0.7 1.0 Agriculture and Irrigation 2.5 IDB - 0.3 2.2 8.0 EXIM 4.0 - 2.6 IBRD - - - 2,6 Roads and Ports 3.2 IBRD 0.5 0.3 - 2.0 EXIM - 1.8 0.2 - 3.7 AID-DIF - - - 3 7 .3 AID-DLF - 1.0 1.4 1Q9 1.0 AID - - - In Social (Education. Health. Housing, Water) 1.3 EXTM 0 0 no 0.6 AID-DIF 0.3 0,1 0. ATn 01 01 5.2 IDB - 03 2.8 2.1 3.0 TnA - n 2n Industry 2.0 IDB 0,2 o0. 0.6 07 TOTAL 5.9 7.1 10.3 24.6 TABLE 17 NICARAUGUA: BALANCE OF PAYMENTS 1953-1963 (million U.S. dollars) 1953 1954 1955 1956 :1957 1958 1959 1960 1961 1962 19631 Ecport, fo.b. . 62.5 79,9 65.5 70.6 704 75.0 63.9 69.9 9i.4 106. .mports, f.o.b. -'3.3 -8.1 -590 -76 ·68.4 -65,3 -52.7 -56,4 -58.7 -78.7 -948 Trade balance _1=2 ¯_~IL ¯ 7,9 2. 22.3 7.5 11.2 11.7 11.7 Tnvestment income, net - 6o7 - 5.6 - 8.0 - o - lh - 4.o - 2.h 1.9 - 3.1 - 21.4) Other services, net - 8,2 -11,1 - 5,9 -12.6 -1.7 -14.5 -15.3 .1660 -15.4 -22.6) -25,1 Donations, net _.9 _1 _22 2 2-2 2_8 __,l _32 2,5- 3,8 _ 3.5 3,0 Balances on geods, services and donations - 2,8 -11,3 h.8 - 6,9 - 8,1 - 9.3 7.8 - 75 - 3.5 - 9.8 --1D.4 Foreign direct investment 2.i 2.0 2.1 2c1 2.9 2.4 1,2 1.7 6.o 5.4 3.2 Drawings on fereign loans 2/ 3/ 7,4 5.8 2.7 4.o 105 6,6 3.9 6,2 6.9 1,O 15.1 Airortization 2/ - 2a3 - 2o2 · 3.6 - 3.7 - 4.1 - 3.2 - 4.3 - 2,7 - 3.7 - 6.2 -- 7.0 Private short-term capital 2,6 7.0 c,5 - 2.1 4,2 - o.6 2,2 3.5 - 4.2 7.6 3.-4 Subscriptions to international institutions (excluding cordo.ba subscriptions) - - - - - - - - 0.3 - 0.5 -.4 - Net errors and orissions - 5.5 - 4.2 -5.7 - C.8 - 1.8 11 -7o0 - 0,7 -2 -14.3 1,6 Surplus or deficit 1.4 --2.9 ~0. 7.4 ~,6 ~~3~0 ~1 / Preliminary. Excluding drawings and repayments on loans to commercial banks. / Including drawings of $4 million in 196Q and $4 million in 1961 on an $8 million Export-Import Bank medium-term lCan. S:urce: International Monetary Fund, and its Balance of Payments Yearboks, TABLE 1'9 NICARAGTJA: INTERNATIONAL RESERVES (millio-ns of U.S. dollars) C E N T R A L B A N K 0 T H E R ]B A N K S ~ ~--Banking Gold and System Foreign Net I14F Liabilities Net Foreign Exchange Net Net Years Exchange Position Others Reserves Assets Liabilities Reserves Reserves 1955 13.9 0.5 -14.4 1.2 1.2 15.6 1956 7.0 -0.3 6.7 1.5 1.5 8.3 1957 11.3 -1.9 - 9.4 2.h - 2.4 11.8 1958 7.6 - - 7.6 o.6 - o.6 8.2 1959 9.1 2.8 - 11.9 0.8 -1.6 o.8 11.1 1960 8.9 2.8 - 11.7 1.0 -1.5 -0.5 11,2 .1961 13.5 -1.7 -0.2 11.7 0.9 - 0.9 12.5 1962 March 24.4 -1.7 -0.1 22.6 h.8 -0.1 4.7 27.3 June 29.1 -1.7 -0.2 27.2 3.9 -0.1 3.8 31.0 Septo 22.1 -1.7 -0.2 20.2 1.7 -0.1 1.6 21,.9 Deco 17.3 -1.7 -0.3 15.3 1.5 -0.1 1.5 16.8 1963 March 33.6 -1.7 -o.h 31.5 h.h -0.6 4.2 35.7 June 35.8 -2.7 -o.h 32.7 3.0 -0.6 2.11 35.1 Sept. 30.1 -5.7 -0.5 2h.0 2.2 -1.9 0.3 :2.3 Dec. 3:1.8 -7.7 -0.5 23.6 1.8 -3.0 -1.1 22.5 Source: International Monetary Fund. TABLE 1, NICARAGUA: COMFSITION OF EXPORTS 1952-1963 (million U.S. dollars) Est. 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 :1962 1963 Coffee 21.7 21c3 25.1 27.9 23.2 28.5 22.2 13.9 19.2 17.4 15.4 19.0 Volume- 2/ 4l1 08 371 1495 368 479 498 -355 473 456 447 550 Unit price- 52,8 52.2 68.2 56.3 62.9 59.5 48.6 39.1 41.6 38.1 .34.5 34.5 Cotton 6,8 8,4 16.8 31.0 236 21.8 24..9 29.3 14,.7 18.3 .313 LoM0 VoluIme- 2/ 207 276 504 956 790 783 928 13,341 595 797 1.210 1,550 Unit price- 32.9 30.0 33.3 32.4 29,8 27.8 26.8 21.9 24.7 25.9 25.9 25.7 Cotton seed 0,6 0.9 1.5 3.3 3.4 3.5 3.9 4.1 2,2 2.6 4.6 6.3 Timber 2.8 3.9 2.9 3.5 3.3 3.4 3.0 3.7 3.6 2.9 2.7 2.7 Cattle 1.3 1.5 11 1.3 f,7 1,8 1.5 3.7 1.7 1.6 0.9 0.9 Gold 8,9 8.8 8.1 8.1 7.3 6,9 7.3 7.2 6,9 7.7 7.3 7,3 Sesame ~ 1,7 1.4 1.6 2.2 2.3 2,5 2.14 2. : 2,0 Sugar ) 0.9 c,h 110 1,6 2.1 3.4 2.8 4,5 4.5 Meat ) - - - - 1.5 3.1 h. 6.0 65 Soluble coffee) 9,2 9.7 7.3 - - - - - 0.2 2.2 3.7 4.5 Coppe 're ) - ~ ~ 0,2 0.6 139 2.9 3.7 4.0 Othe _) 2.2 2.2 2,. 1.6 6.6 4.5 5.0 8.3 8,3 Total 51c3 5h.5 62.8 79.9 65.5 70.,6 70.4 75.0 63,9 69.9 90.4 1C6,5 -/ Thousands of quintals of 101 lbs. U.S. Dollars per quintal. Includes bananas and shrimp, other minor exports, and a small balance of payments adjustment. Source: Central Bank. TABLE 20 NICARAGUA: COCFITION OF IPORTS n9T0X1oA.'' (million U.S. dollars) 1955 1956 1957 1958 1959 1960 1961 1962 Chemical products 9.0 9.3 11.0 12.2 10.2 11.4 11.0 16.5 Machinery and equipment 110 110h 15.0 13.1 1105 12.2 11.6 15.0 Metal manufactures 5.5 5.5 7.4 5.9 5.o 5.9 6.1 9.2 Fuels and lubricants 5.5 5.8 6.9 7.2 6.0 6.6 6.7 7.3 Vehicles and parts 9.9 6,6 70 6.5 ho9 4.7 5.7 9.1 Other manufactures 9.2 8.5 10.1 10.7 9.2 11.0 11.1 l.1 Foodstuffs 5.8 5.8 5.5 6.3 5.3 5.1 5.9 8.0 Others 13,8 15.9 18.0 16.0 14.6 14.8 16,3 19.0 Total imports, c.i.f. 69,6 68,8 80.9 77.9 66.8 71.7 74.4 98.2 Balance of payments adjustment -10,2 -11.2 -12,5 -12.6 -14.1 -15.3 -15.7 -19.5 Total imports, f.o.b. 59.4 57.6 68.4 65.3 52.7 56.h 58.7 79.2 * Prior to 1955, values of individual commodity imports were given f.o.b. and have therefore not been shown here, See report WH-118a, Table 10. Source: Central Bank. NICARAGUA: TERMS OF TRADE, 1950, 1953-1962 (Indices of Prices in U.S. Dollars; 1958=100) Export Prices Import Terms of All Exports Coffee Cotton Prices Trade 1950 83 84 100 86 97 1953 109 120 115 94 115 1954 137 157 122 93 147 1955 117 129 115 94 124 1956 124 142 106 97 146 1957 116 125 101 100 125 1958 100 100 100 100 100 1959 89 83 86 100 89 1960 91 82 9), 101 n 1961 88 77 99 103 M5 1962 AA 7), 07 10N. A / U.S. index of export prices. Source: International Financial Statistics.