By Rod Chapman, Geneva

The meeting, which was co-hosted by the IDB and the Swiss government, was attended by more than 100 delegates representing 40 countries and international organizations. The financial commitments are for the period from 1998 to 2000.

Donors commended the government on its accomplishments during the first 15 months of the administration of President Arnoldo Alem·n, in particular its steps to integrate the country more closely into the global economy. They noted that Nicaragua last year achieved the highest economic growth rate in Central America.

The donors also pointed to major remaining challenges: achieving sustainable public finances; combating poverty; completing the transition to a market economy; improving governance, particularly through building a professional civil service; and working in partnership with civil society.

The meeting, which was chaired by Miguel E. MartĚnez, IDB regional operations manager, included presentations by many of the country's most senior government leaders. These included Vice-President Enrique BolaŇos and Iv·n Escobar Fornos, president of the National Assembly; Guillermo Vargas Sandino, president of the Supreme Court; Rosa Marina Zelaya, president of the Supreme Electoral Council; and Noel RamĚrez, president of the Central Bank.

The Nicaraguan delegation presented strategy papers for addressing social problems, modernizing the rural sector, and promoting good governance.

Half of Nicaragua's population and three-quarters of its rural population is classified as very poor, so the government is making the fight against poverty the keystone of its strategy. It plans to give high priority to investing in rural infrastructure and providing new forms of credit for small farmers, while expanding and improving social services.

The government's fiscal program aims at increasing public savings and improving the efficiency of the public sector by modernizing state institutions and privatizing selected government services. A good beginning was made with the passage of a tax reform package last year that broadens the tax base and increases the system's transparency by eliminating a large number of exemptions and increasing collections. A financial sector reform program that includes the closing of state banks is expected to improve public finances. The government also plans to privatize public utilities including electricity and telecommunications. A number of steps have been taken to stimulate private investment in other sectors as well.

A Property Rights Law passed in December 1997 was seen as a major step in solving property disputes, which have been a serious impediment to new private investment.

The Nicaraguan delegation expressed appreciation for the generous external assistance received to date. Members stressed the need for continued support from the international donor community to help implement programs for accelerated growth and poverty reduction as well as to cover the fiscal and balance of payments gaps during the 1998-2000 period.

The donors urged steps to improve the country's civil service and implement reforms, including a law to guarantee professionalism and continuity. They pointed to the strategic role of the Comptroller General's Office and the need to enable this position to fulfill its mandate. They also called for a coherent decentralization strategy that will ensure that local mandates are fulfilled.