Ortega would grant bank independence By Andrew Bounds in Managua Published: June 18 2001 17:44GMT | Last Updated: June 19 2001 03:22GMT
The former revolutionaries of the Sandinista National Liberation Front (FSLN) are prepared to grant independence to Nicaragua's central bank in an attempt to assuage market fears about their possible return to power.
The move, which would echo that of the British Labour party, whose socialist roots were distrusted by the markets in 1997, is outlined in a FSLN manifesto for the November elections obtained by the Financial Times. The manifesto, yet to be approved by the movement's high command, contains many departures from the Sandinistas' policies in power from 1979 to 1990.
After toppling dictator Anastasio Somoza, the Front, then a coalition of Marxists, nationalists and clergy, nationalised industries, confiscated property and established collective farms.
With Daniel Ortega, Front candidate and ex-president, leading in the polls, the manifesto, entitled Nicaragua United - The Promised Land, proposes to transform Latin America's poorest country by increasing production in the public and private sectors and restricting the state's role as facilitator and regulator.
"The FSLN recognises the role of workers and private businessmen in the task of constructing a viable and self-sufficient nation," the manifesto reads. "To support this objective we will give full autonomy to the Nicaraguan central bank so its decisions have no political interference."
The ruling Constitutional Liberal party (PLC), with Sandinista support, reformed the central bank law in October 1999 to put political appointees on the board. Of the five directors one is the finance minister, one should come from the principal opposition party and the rest are appointed by the president. Noel Ramírez, the bank president, is a high-ranking PLC official.
Although the bank cannot finance the government, it has been criticised for using more than $100m in scarce reserves to bail out troubled banks under government pressure.
The Sandinista manifesto makes no mention of privatisation. International lending institutions have made relief of Nicaragua's $6.3bn debt conditional on the sell-off of the state telecommunications company and power stations. Both have been postponed for lack of interest or low bids.
An International Monetary Fund delegation in Nicaragua this week is expected to replace a comprehensive agreement with a temporary programme to last until the new government is sworn in on January 10.
The Front's new-found respect for private property has a caveat: it would also respect the rights of those "beneficiaries of the revolution" who received property confiscated from the Somoza family and other landowners, who are "prostrated by a exclusive and archaic system". This will infuriate the US, whose citizens lost property in the revolution and are trying to reclaim it. The manifesto says those treated unfairly would get their assets back.
The manifesto also proposes decentralisation and sweeping constitutional change, calling for a referendum on whether to switch from a presidential to a parliamentary system.