Nicaraguan President Arnoldo Alemán, Organization of American States Secretary General César Gaviria and Inter-American Development Bank President Enrique V. Iglesias today opened a meeting of the Consultative Group for the Reconstruction and Transformation of Nicaragua.
This international initiative, launched after Hurricane Mitch hit Central America late in 1998, supports Nicaragua’s efforts to recover from the damage caused by the natural disaster and modernize its economy and its public institutions.
"For the first time in many decades, Nicaragua has managed to advance simultaneously towards political democracy, economic growth and social justice. These mutually dependent goals are essential to maintaining social peace," Iglesias said in his speech. "Progress has been achieved…but efforts must continue and there is still much to be done. It is at this stage when international cooperation will be needed the most."
During the two-day meeting of the consultative group, held at the IDB’s headquarters in Washington, D.C., delegates from donor countries, multilateral agencies, the Nicaraguan government and civil society groups will review the execution of the national reconstruction and transformation program launched in 1999.
Participants will also hear presentations on Nicaragua’s macroeconomic performance, foreign debt, policies to make its public sector more transparent, accountable and efficient, decentralization and municipal development program, and plans to prevent and mitigate natural disasters.
They will also hear a report on the Nicaraguan program prepared by a follow-up group formed by donor nations and multilateral institutions.
Meeting’s background
Nicaragua was one of the worst hit countries when Hurricane Mitch swept through Central America in October 1998. The floods and mudslides triggered by the hurricane killed over 3.000 Nicaraguans and affected nearly 20 percent of the nation’s population. Damages to its infrastructure and economic losses were estimated at around $1 billion.
Prompted by the Central American disaster, the IDB organized a series of consultative group meetings. At a conference held in May 1999 in Stockholm, the international community pledged to provide over $9 billion in humanitarian aid, long-term financing and debt relief to the nations hit by Mitch. For Nicaragua’s plan, the donors offered some $2.6 billion.
In Stockholm, donors and beneficiaries issued a statement in which they agreed that Central America would be transformed on the basis of democracy, sustainable development and poverty reduction and guided by principles such as the following:
- The strengthening of the democratic system, the rule of law and respect for human rights, particularly those of vulnerable social groups.
- The expansion of citizen participation through decentralization of state responsibilities and resources to the municipal level.
- State modernization and transparency in the administration of public funds.
- The reduction of environmental and social vulnerabilities through the establishment of early warning systems against natural disasters and emergency response programs.
The IDB and Nicaragua
Since the hurricane, the IDB has approved nearly $228 million in financing for Nicaragua. The lending has supported programs to reduce poverty, improve public health services, repair the Pan-American highway, modernize water, sanitation and electricity systems, reform the educational system, strengthen social programs and streamline state revenue agencies.
The Bank is currently working on several projects in Nicaragua that would help improve its state procurement system and modernize its justice system, as well as on programs for community development, housing, rural roads, natural resources management, technical education, protection of vulnerable social groups, and social service agencies.