MANAGUA – The International Monetary Fund (IMF) this week ratified its support for President Daniel Ortega’s government and its economic program which, as the president says, has a “preferential option for the poor.”
Murilo Portugal, deputy managing director of the IMF, traveled to Managua this week and said that Nicaragua’s program with the IMF remains on track, despite inflation numbers that have exceeded goals for the year.
Ortega, despite earlier promises to rid Nicaragua of the IMF within five years, said his government and the lending institution have reached an “understanding” about where the Sandinista administration stands on issues such as poverty relief, social investment, solving the energy crisis and reactivating the productive sector.
The president also said that his country’s rising inflation rate, which could finish the year as high as 16%, is due to uncontrollable external factors such as oil prices, and internal factors such as natural disasters.
He said that next year Nicaragua would stick to the IMF program with the goal of reducing inflation back down to single digits, as was the plan this year.
Ortega also took advantage of the meeting to say that he has long been a critic of the IMF, and will continue to be, despite his government’s program with the institution.
Portugal and his IMF team listened to Ortega’s criticisms of “neoliberalism and savage capitalism,” and thanked him for his honesty.
Portugal said that his team “normally hears support” from other governments, and that it was a “novelty” to hear criticism of the fund from a participating government. He said that at the end of the day the IMF is an institution that is dedicated to poverty relief and that it belongs to all governments, so the criticism was welcome.
Portugal also lauded Nicaragua’s “great advances over the past years to consolidate macroeconomic stability” while “maintaining growth and improvement in social indicators.”
He said that the new government’s economic program was an “important opportunity” to consolidate the economy while making even greater efforts to reduce poverty and increase investment in key sectors such as energy, water, education and health.
Although Nicaragua received a positive report card from the IMF this week, Portugal said that a delegation would be returning to Managua next February to evaluate how things are progressing in the reconstruction efforts following Hurricane Felix.
“I am confident in the ability to keep working in a continuous and productive way with the Nicaraguan authorities in their efforts to implement their economic program,” Portugal said.
The IMF approved its program to support the Ortega government last October, after 10 months of negotiations.