The Reagan administration, seeking to avoid blame for civilian hardship in Nicaragua after imposition next week of a U.S. trade embargo, yesterday attributed Nicaragua's crumbling economic situation to five years of mismanagement under tight controls by the leftist Sandinista government.
"Unless significant changes occur, the next five years look as bleak as the first five years of Sandinista rule," the administration's report said.
State Department spokesman Edward Djerejian said information in the report "clearly demonstrates that the responsibility for the current economic plight rests squarely on the shoulders of the Sandinistas . . . . We are not to blame."
The study said price controls on manufactured goods and low payments to farmers have depressed production and fueled inflation of more than 200 percent per year, while high taxes and political repression have forced the private sector into a marginal role.
Nicaragua repeatedly has blamed its economic problems on wartime conditions made necessary by the U.S.-backed rebels it is fighting along its northern and southern borders.
In a competing report on Nicaragua's economy issued this week by the liberal Multinational Monitor organization, which is critical of U.S. corporations' activities abroad, damage from rebel attacks is blamed for loss of $300 million in production and a 40 percent drop in exports since 1983.
The Reagan administration report denies that interpretation. "Depressed economic conditions in Nicaragua were, of course, due to disastrous economic policies adopted by the Sandinistas, and not to any actions by the United States . . . . The embargo will not be the primary cause of expected further economic deterioration, but rather the economic and political policies of control and repression that the Sandinistas continue to follow," it said.
The administration's report said the Sandinistas have "received very favorable treatment from the international community" and have obtained "virtually all their oil imports . . . and Nicaragua's entire wheat supply" almost free through donations since taking power in 1979. Donor nations are now demanding payment, however, the report said.
Nicaragua also has received "the most generous debt-rescheduling terms given to any Third World debtor," but has failed to make payments on its $4 billion foreign debt since June 1983, the report said.
The Monitor group's report said that U.S. pressure has cut off Nicaragua's access to international loan markets and that the 30 or so U.S. corporations operating in or trading with Nicaragua from neighboring countries continue to make a profit there. Just before the trade embargo was announced this week, Nicaragua was drafting a "modern, flexible and liberal" law on foreign investment aimed at attracting U.S. firms, the study said.
The administration report said U.S. actions against the Nicaraguan economy "have not been arbitrary or sweeping" but were imposed in response "to almost six years of Sandinista actions threatening to us and our friends in Central America." The U.S. government is "prepared to reexamine the sanctions" any time the Sandinistas "take concrete steps toward a dialogue" with the rebels "and other measures leading to genuine reconciliation, freedom and peace in Nicaragua and the region as a whole," the report concluded.