The Inter-American Development Bank approved loans and grants to Nicaragua this week bringing to $172 million the total of assistance from the bank since the ouster of Anastasio Somoza in July.
To underline the unusually prompt response by the international lending agency, based in Washington, to a revolutionary government in economic crisis, bank President Antonio Ortiz Mena is to attend formal signing ceremonies in Managua today.
Most of the loans resulted from applications made by the ousted Somoza government but they have been redesigned or speeded to assist in some measure the Sandinista-appointed junta's most immediate crisis: a shortage of foreign exchange.
With virtually no reserves, the new government faces foreign debt payments of about $500 million this year. An earlier $21 million emergency loan from the International Monetary Fund is regarded as a catalyst for private banks, an indication of creditworthiness that can result in rescheduling of the private debt.
The United States is a major contributor to the bank and has virtual veto power over the special fund from which several of the new loans are drawn. This aid package also includes $25 million from the Venzeuelan Trust Fund, administered by bank directors but subject to final approval by Venezuelans -- who set up the fund with oil earnings.
According to a press release from the bank, $20 million of the Venezuelan funds will be used to cover the local costs of other major loan projects of the Inter-American and World banks.
The major projects to be financed with the new bank loans include a 73-mile highway in eastern Nicaragua and agricultural and industrial reconstruction.
In addition to opening credit facilities to the new government in Managua, the Inter-American Bank made a concrete contribution of personnel. The new Central Bank president there, Arturo Cruz, resigned after several years at the institution in Washington to take his new position.
In Nicaragua, Reuther reported, leaders of the new government and Vietnamese Prime Minister Pham Van Dong exchanged promises of "eternal combative solidarity." About 100,000 people attended a parade of Sandinista soldiers in Revolution Plaza in honor of the visiting Vietnamese leader.