Debt and Development Coalition Ireland - Resources - The Millennium Development Goals

Debt and Development Coalition Ireland - Resources - The Millennium Development Goals

Nicaragua won't meet MDGs under International Monetary Fund (IMF) programmes

One hand gives while the other takes:
Nicaragua under IMF conditions

The "Millennium Declaration" was unanimously adopted by the 189 member countries of the United Nations at the conclusion of the Millennium Summit held in New York in September 2000. In the declaration, all signatory states undertook to spare no efforts to "free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty".

The importance of achieving the MDGs for a country like Nicaragua is quite evident. Nicaragua is among the poorest countries in Latin America, after Haiti, Bolivia and Honduras (UNDP2005). Eighty per cent of Nicaragua's' population lives on less than $2 (€1.60) a day and 46 per cent on less than $1 (€0.80) a day.
**Compare this to Ireland where per capita is €84. a day

Child poverty is high in Nicaragua. Education should be a priority. In comparison to neighbouring Honduras and Bolivia which spent approximately 7 per cent of GDP on public education. Nicaraguan spending in this area was the lowest, at 4.3 per cent of GDP.

The principle obstacle to Nicaragua increasing its spending levels on human capital to the level required by the MDGs is the surrender of fiscal sovereignty to IMF policies. The most stringent IMF macroeconomic condition is the requirement:

to make payment of domestic debt an absolute priority;
to increase foreign exchange reserves to $800 million;
to maintain ceilings on the government's primary spending and fiscal deficit;

For a country where government spending totals $1.2 billion, sustaining international currency reserves of $800 million is a serious burden. The IMF conditions also means that the Nicaragua government payroll will also have to remain frozen. This implies that it will be impossible to accomplish the goal set in the Nicaraguan National Development Plan of overcoming the enormous salary shortfall in education and health, and hire the new teachers and medical personnel necessary to meet the domestic goals regarding education and health.

It is ironic that northern donors who provide budget support to Nicaragua demand that on the one hand Nicaragua achieves the goals required to meet the MDGs, whilst on the other insisting that it comply with IMF programmes with such conditions attached.

The most logical step would be to demand that the main purpose of IMF programmes be to contribute to achievement of the MDGs.

For Nicaragua and the MDGs also see: http://www.ccer.org.ni/english.htm