WASHINGTON'S WAR threats against revolutionary Nicaragua have continued unabated. Nicaragua's president, Daniel Ortega, seized the diplomatic initiative by military advisers to leave the country and declaring an indefinite moratorium on the purchase of new weapons systems. These measures are in line with the provisons of the 'Contadora' peace initiative — blown up by the US on a flimsy pretext.
was hysterically hostile. Nonetheless underline to the world the peaceful intentions of the Nicaraguan government and people. What they need is a breathing space to rebuild their economy.
Below, we Managua by JOSE G PEREZ on a major government message on the economy in which the FSLN outlines measures to meet problems caused by war. The article is an edited version of one which recently appeared in the US socialist paper, Militant. MANAGUA, The top leadership of the Sandinista National Liberation Front (FSLN), which heads the workers' tarmers government here. issued a major statement economic policy, February.
The message was read Revolution Daniel Ortha, Commander President of Nicaragua, at an assembly of top leaders ol ine Nicaraguan government, armed forces, nass organisations. Ortega is one of the nine members the FSLN National Directorate. which signed he ape al.
begin con-ting the greatest diffim.ues or inese live years ol evolutionary struggle and under the weight of the US military :wer. the message began.
The statement went over the many efforts made by the Nicaraguan governduring the last Sevelal ycals Locall peaceful, negotiated agreement with Washington, all of which have been answered by escalating US government aggression.
'In recent weeks, statement continued, 'that government has proceeded to blockade, suspend, OI. withdraw all the peace-keeping processes that exist in the region.
"They boast official document of having "effectively" blockaded Contadora; they have indefinitely suspended the Manzan|0 1aks nev ave withdrawn from the World Court at The Hague.
The US government, the statement reported, is also making great efforts prevent 'the continuation of the dialogue between government and the Misurasata organwhich (Washingsauon.
ton) has managed to split.
Misurasata 1o a rival Miskito Indians, led by Brooklyn Rivera, that has been part or lne ciA war against Nicaragua.
Des government my government FSLN plans lo continue the Contadora peace well pursuing other avenues of negotiation with the United States.
'These peace efforts on' the international terrain, the Sandinista leaders said, are nothing more than the complement of the battle for peace that we are also waging in our homeland the toreign aggressor.' Recently unilaterally asking 100 Cuban Washington's initial reaction to these proposals such steps publish an article written direct from Washington's Since the US military threats and provocation. around supposed Nicaragua last November, thousands more Nicaraguans have joined defence preparations here. Civil lefence plans and instal ations have been refurb ished and updated; many thousands of new militia members nave been cruited, trained and armed.
• UnC Patriotic Military Service, Nicaragua's draft, Ilas been strengthened.
the main part of the message by the FSLN National Directorate focussed on the economic situation. It explained the general principles behind, and reasons for, a package of new economic measures designed to strengthen the revolutoR better defend the living standards of the nation's workers and peasants.
outline of the measures was announced president oI the central bank and the ministers of finances, This internal announcement immediately preceded the message from the Sandinista leadership. Both that news conference and the FLN statement were broadcast live over radio and lelevision, broadcast that evening, and published as a special supplement in the Sandinista daily, Barricada the following day In explaining the deepening probiems of short ages, speculation, hoarding the FSLN Nd to De to ate po oaggression, which has, in four years, caused losse totalling more than $1 01O1 In addition, Nicaragua, together with the rest of the semi-colonial being subjected ever-growing exploitation by the imperialist countries through unequal exchange rapacious lending praclices.
Since 1977 the chasing power of ragua's exports the world market has beer cut in half. The FSLN leadership. cited one dramatic example in its 1973 a 100whereas in a 100 pound bag of sugar could uy as much as 10 barrels of oi todav that same bag of sugar can buy only oneof one barrel of oil.
One indication of the acuteness of Nicaragua's economic problems is that Youngsters defend the Nicaraguan revolution its foreign debt has grown of which fully one-fifth -$872 million interest payments that have become part of the deb The low prices that we receive for our export products, the financial obligations that our creditors impose on us, and the economic damage caused by the aggression manifest themselves in a lack hard currency, which, :Luma transales to mit Draw materials, aricululal ill puts, spare parts, machinery, medicine, food, and basic goods all basic resources for subsistence and production in the life of the people.
The statement then went over the advances made since Nicaraguan workers and peasants seized political power five and a half years ago.
Even as the US war of dession has steadily escalated over the past four the revolutionary government has carried ent to more than US S lent to more than billion.
'In sum, if we had to point some economic error as the basic one, it is lal we cu to cover Lou much at the same time. In reality, we have done more than we were able to do with our limited materia resources. all this despite the enormous degree of destruction we inherited from the Somoza the actatorsnip, anu destruction that foreign Preparation for a US invasion: women factory workers in Managua learn how to use a rifle aggression continues to cost us.' "Today,' the statement continued, 'the quantity of that wal demands ever growing. Forty percent of the national budget destined for defence.
"These tremendous expenditures,' the statement continued, large degree explain the problems of shortages price rises, inflation, and specuwe are con fronting and that we are going to combat.
Calling merchants who take of the situation to make profits through speculation 'a parasites', the they have 'stolen thousands of millions of córdobas from the people. Speculators sometimes manage to create shortages that temgodly double triple or quadruple the price goods overnight.
One of the main aims of the economic measures announced by the government is to 'regulate demand'. • way Inis Is being done is by • holding COW the coveranci budget and reducing the budget deficit. Another way, combined with the first, is to increase taxes, targetting especially the informal commerce sector where billions upon billions of córdobas being luxury taxes, income-tax reform, and capital-gains tax are expected to increase revenues DV 2.5 billon córdobas, largely out of this sector.
Government subsidies of basic consumer goods like rice, beans, and cook ing oil will be eliminated The official prices of such goods beef, chicken, La certain degree these increases in official prices merely reflect ones that have already taken place. Beef, for example, was already selling for more thar double its official price in many place. before the recen increase. But the price increases are also aimed al transferring money the commercial toward the productive sector, both public and private The aim of the new pricing eliminate the gap between the government-determined prices and the free market price. It is this gap that has allowed peculator specially the 're-sellers' -to make millions córdobas at the expense of working people.
Instead of going to speculators, the income from the higher prices will now go to the government, the producers, and hones! merchants thạt is, those who play a necessary socia role y distributing good to the population, who are not simply parasitic intermediaries or 're-sellers' The official córdoba exchange rate which was 10 to 28 córdobas to the US dollar - will rise to 28 to 50 córdobas to the US dollar. Prices goods involved in the government-controlled importexport trade will rise. addition, hidden subsidies implicit the rules governing tales nave oech cummilaice with the measures to regulate demand, measures that In crease the supply of food and basic goods by stimulating production necessary. the National Directorate's message explained. These measures include higher prices to agricultural producers and factory owners; a more favourable credit policy, and ensuring that foreign currency allocated to buy spare parts, machinery agricultural inputs, industrial raw materials is in fact available. In add ition a system of bonuses paid to workers who meet or surpass production quotas will be implemented.
'For workers there will be periodic readjustments of their wages so that they can buy those products at the . prices. guaranteed supply of such products at official prices through secure channels.?
The purpose of this is not only protect working families against innanon. our diso lo sulli ulate the return productive labour of workers who have become small merchants because this is more lucrative The FSLN message emphasised that top priortv for getting wage increases and scarce goods manual workers productive • LAOSC creatories and ealds who create wealth society. Already an initial wage increase has been put through under this policy compensating non-agricul tural workers for inflatior during 1984. The increase at the bottom of the scale for wage levels of manual workers nearly 50 per cent, but at the top the scale managers adminis trators are only receiving 13 per cent increases.
'On this we are clear and we do not make false promises nor feed expectations, the National Direct orate declared 'When re adjustment of wages posed. unis aoes not nical that a worker will be able to buy more goods than he presently gets, but rather that his salary is being protected against the inflationary process that affects our economy.' The FSLN leaders ex plain that neither this nor any other set of economic measures can conurc awa Nicaragua's economic crisis.
will succeed overcoming the crisis in the medium and long-term to the degree that we defeat imperialist military aggression and we increase the country's total production.
Socialist Action 8 March 1985