NICARAGUA: ECONOMIC UPDATE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T00759R000100150027-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: May 13, 2010
• Sequence Number: 27
• Publication Date: December 4, 1985
• Content Type: MISC

Sanitized Copy Approved for Release 2010/05/13: CIA-RDP87T00759R000100150027-2
Acting NIO/Economics
4 December 1985
NICARAGUA: Economic Update
The Nicaraguan economy continues to deteriorate as 1985 draws to a
close. Assessments flect the ongoing
economic decline under Ortega.
-- Agricultural export earnings in 1985 will be only $250 million,
50 percent less than when the Sandanistas came to power.
-- Industrial output during the first six months of 1985 fell
12 percent short of last year's rate.
-- A 50 percent decline in industrial exports will pace another
substantial drop in foreign sales this year.
In our judgment, only massive injections of Soviet aid have prevented
economic catastrophe.
-- About one-quarter of Nicaraguan GDP is now accounted for by
Soviet economic and military aid, including oil, food, and hard
currency.
-- Indeed, 1985 will be seen as the year that Nicaragua became
almost.totally dependent on the USSR to keep its economy afloat.
For 1986, Nicaraguan officials claim to have asked for and received a
$600 million line of credit in hard currency from the USSR and Eastern
Europe. Other Communist countries also have made commitments.
-- North Korea has extended $20 million in credit lines and
technical assistance.
SECRET
Sanitized Copy Approved for Release 2010/05/13: CIA-RDP87T00759R000100150027-2
 Sanitized Copy Approved for Release 2010/05/13: CIA-RDP87T00759R000100150027-2
-- Cuba and Nicaragua have agreed to extend a $50 million barter
arrangement whereby Cuba provides medicine, chemicals, and
trucks in exchange for cotton, coffee, and liquor.
Although the Soviets are willing to extend hard currency loans to
Nicaragua, they are being less generous on oil deliveries.
-- At the recent CEMA meeting, Moscow offered 300,000 tons of oil
annually for 1986 and 1987, while Nicaragua requested 700,000
tons.
-- The Soviets are encouraging Nicaragua to make up the difference
from other suppliers, particularly Mexico, so as not to be
totally dependent on the USSR.
-- Mexico, however, has backed down from earlier promises to
maintain oil shipments.
Moscow seems more willing to provide hard currency loans to Nicaragua
than to boost oil deliveries. Nicaragua's demand for petroleum,
particularly diesel fuel, is growing, probably reflecting use of new
military vehicles obtained from the Soviets. If the Mexicans prove to be
an unwilling supplier, Managua will have little choice but to press the
Soviets for additional oil shipments.
SECRET
Sanitized Copy Approved for Release 2010/05/13: CIA-RDP87T00759R000100150027-2