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FY 1997 Development Assistance: $27,940,000
FY 1997 P.L. 480 Title II: $2,319,000
Introduction.
U.S. interests in Nicaragua lie in seeing its difficult transition to a free and open democracy and economy succeed. Success will bring stability and prosperity to Central America's poorest country, and will facilitate expanded trade between the United States and Nicaragua. Failure could again mean conflict and worsening poverty. To succeed, Nicaragua must strengthen democratic institutions, establish the rule of law, protect human rights, continue its course of economic reform, expand exports and production, reactivate the agricultural sector, promote investment, and resolve confiscated property disputes. Nicaragua must also improve its primary education system, expand primary health care, and reduce high population growth.
The Development Challenge.
Nicaragua is five years into a historic transition, from war to peace, from dictatorship to democracy, and from a statist economy to an export-led economy based on private initiative and enterprise. The decade of the 1980's -- characterized by civil war, a socialist economy, expropriation of private property, and a decapitalized productive sector -- precipitated a 40% decline in per capiita gross national product and led to hyperinflation. Although the decade brought about land reform and wider access to health and education services, much remains to be done to consolidate these gains.
Since 1990, the government has increased political stability significantly and has stabilized the economy. It has reconciled a polarized society, liberalized trade by removing tariffs and other impediments to free trade, attracted private investment, largely privatized the financial system, reduced the size of the public sector, trimmed the external debt burden, and harnessed inflation.
Nevertheless, Nicaragua remains one of the poorest countries in the region, poorer than any other country -- with the exception of Haiti. Gross Domestic Product per capita is estimated at $450, and the World Bank estimates that 50% of the population live in poverty with 19% in extreme poverty. Unemployment estimates also range as high as 50%, with rural areas particularly hard hit. To achieve sustainable economic growth, Nicaragua must stay the course of economic reform, increase its competitiveness, expand its exports, conclude key privatizations, reactivate agriculture, reduce external debt, arrest rapid evironmental destruction, create jobs for a rapidly growing labor force, and assure broad participation in the benefits of economic growth.
On the social front, Nicaragua must reduce widespread poverty, provide a relevant education to the next generation, stabilize high population growth, expand primary health care, and address malnutrition problems.
To consolidate the transition to democracy, Nicaragua must reduce polarization, carry out free, fair and transparent elections, establish the rule of law, protect human rights and private property rights, build a strong and well informed civil society, and improve government performance through leaner and better public administration.
Other Donors.
USAID and others in the donor community have provided almost $3.8 billion to Nicaragua since the 1990 elections. Initially, the United States and the international financial institutions (IFIs), such as the World Bank (IBRD) and the International Monetary Fund (IMF), provided primarily balance-of-paymentsassistance. The donor community has now broadened considerably. Bilateral donors such as the European Union, Sweden, Netherlands, Germany and, Japan have become major donors with a broad array of projects in agriculture, credit, land titling and registry, health, education, and safety net programs for the rural poor. Today U.S. assistance represents about 5% of official development assistance to Nicaragua.
FY 1997 Pr ogram
In response to changing country conditions, refocused priorities, and reduced budgets, USAID followed a participatory process to formulate a new strategy which has broad ownership and support among our Private Voluntary Organization (PVO), Government, and donor partners. The strategy supports consolidation of the democratic and economic transitions through three strategic objectives:
(1) More political participation, compromise and transparency through programs directed at: greater protection of human rights; efficient and transparent election mechanisms; strengthtened civil society; and more accountable and responsive government;
(2) Sustainable growth in employment and income through programs directed at helping small farmers market more and diverse products; making markets work better; and expanding micro-enterprise and off-farm employment. Another key facet of this objective is ensuring the sustainable and rational use of Nicaragua's natural resources; and
(3) Better educated, healthier, and smaller families through programs to ensure that children receive a higher-quality primary education in fewer years; mothers and children are better nourished and receive preventative health care; and couples can use modern family planning methods of their choice.
The LAC Regional Program request includes $6 million in ESF tht will support democracy and economic growth programs in Nicaragua.
Agency Goal: Building Democracy
Open, participatory and free elections in 1996, with broadly accepted results, are essential for a stable democracy in Nicaragua. USAID provides technical assistance and support to the Supreme Electoral Council to prepare for the upcoming elections, and support to several U.S. private organizations to observe the elections.
A government that can protect basic human rights is necessary to sustain this democracy. USAID works with international and local human rights organizations to increase the protection of human rights. USAID programs also provide civic education to thousands of young Nicaraguans to ensure widespread knowledge of individual rights and responsibilities as citizens.
Key governmental institutions, such as the legislature, the judiciary, and local governments, must function more effectively, thus becoming more responsive and accountable to the public. USAID supports programs to decentralize and strengthen local governments while promoting improved management of public finances.
Accomplishments to date include a national assembly that is now functioning as a representatitve body and emerging as a key institution on major democracy issues. The Organization of American States (OAS) Commission of Support and Verification (CIAV) human rights monitoring has helped identify human rights violations and the need to resolve outstanding cases. The Judicial School of the Surpreme Court has trained 149 local judges, 49 district judges and 72 prosecuters. A civic education curriculum has been established in the secondary school system with 1100 teachers trained.
Increasing employment and income directly supports the transition to an open, free-enterprise, export-oriented economy. Markets must function without impediments; financial markets must be responsive. The continued growth of private investment and of exports are essential to this economic transformation -- as is the rapid resolution of property ownership issues, appropriate fiscal and monetary policies, and a stronger, more responsive financial system. The privatization of the Telelphone Corporation (TELCOR) received legislative approval; the sale of 40% of the equity of the company will occur in 1996, representing the largest private investment ever made in Nicaragua. The proceeds of the sale will be used to provide a guarantee mechanism to back compensation bonds paid to expropriated property claimants, many of whom are U.S. citizens.
Small farmers must produce more and higher-valued crops. This requires increased access to productive technology, to inputs and to financial services. If rural markets function more efficiently, then small producers can sell their products profitably. USAID activities are contributing measurably to this process. The value of USAID-supported non-traditional agricultural exports increased by 23 %, from $10.7 million in 1994 to $13.2 million in 1995. The Animal Plant Health Inspection Service (APHIS) approved five new products for admission to the United States and applications have been filed for eighteen other products. This has led to creation of 2,500 new jobs, many held by women. Microenterprise activities have benefited more than 6,000 poor men and women.
Sound environmental policies, laws, regulations and enforcement leading to the sustainable use of natural resources also is essential. USAID is developing management use plans for key protected areas and strengthening the Environmental Ministry to more effectively carry out its role to manage and conserve Nicaragua's natural resources.
USAID activities improve the quality and efficiency of primary education which will reduce repetition and dropout rates and help more Nicaraguan children complete at least a primary education. Higher educational levels yield benefits for child survival, maternal health, reduced population growth and greater acceptance of democratic values. Educational level is also the single most important factor in the adoption of democratic values.
In the area of health, USAID activities encourage the use of preventative health measures and better-nourished women and children through both PVOs and the Ministry of Health. USAID also supports the ministry's innovative, integrated maternal and child health services delivery model, immunization programs, and feeding and nutrition supplement activities. Immunization coverage increased from 75% in 1992 to 88% in 1994. PVOs have reached more than 300,000 mothers and children with health, nutrition, education and expanded primary health care services.
USAID works to expand the range and access of family planning services throughout Nicaragua. The number of couples voluntarily using contraceptives provided through the Ministry of Health, and Profamilia, a local PVO, rose from 185,000 in 1994 to over 214,000 in 1995.
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Economic Growth |
and Protecting Human Health |
the Environment |
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Providing Humanitarian Assistance |
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| USAID Strategic Objectives | ||||||
|
1. More Political Participation, Compromise and Transparency Dev. Assistance ESF* |
$2,000,000 |
$4,000,000 |
$6,000,000 |
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|
2. Sustainable Growth in Employment and Income Dev. Assistance ESF* |
$6,940,000 |
$3,500,000 |
$10,440,000 |
|||
|
3. Better Educated, Healthier and Smaller Families Dev. Assistance PL 480 Title II |
$3,100,000 |
$8,400,000 |
$2,319,000 |
$11,500,000 $2,319,000 |
||
|
Total Dev. Assistance PL 480 Title II |
$12,040,000 |
$8,400,000 |
$3,500,000 |
4,000,000 |
$2,319,000 |
$27,940,000 $2,319,000 |
USAID Mission Director: George Carner
PROGRAM: NICARAGUA
STRATEGIC OBJECTIVE TITLE AND NUMBER: More Political Participation, Compromise and Transparency, 524-SO01
STATUS: Ongoing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY1997: $6,000,000 DA
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2002
Purpose: To support the consolidation of democracy through credible elections, knowledge about democracy, better functioning key government institutions, and creation of a strong civic culture.
Background: A government that can protect basic human rights is necessary to sustain this democracy. USAID works with international and local human rights organizations to increase the protection of human rights. USAID programs provide civic education to thousands of young Nicaraguans to ensure widespread knowledge of individual rights and responsibilities as citizens. Key governmental institutions, such as the legislature, the judiciary, and local governments must function more effectively, thus becoming responsive and accountable to the public. USAID supports programs to decentralize and strengthen local governments while promoting improved management of public finances. Prior to the national election on October 20, 1996, the Supreme Electoral Council (CSE) should have an ambitious system for voter registration, education and mobilization -- along with campaign and procedural safeguards to ensure the greatest possible participation and credibility of the elections. Broad and informed political participation will counter the tendency in Nicaragua to concentrate power in the hands of a few and lead to an effective, representative government. Women are among the most active and organized groups in civil society and constitute an important force for depolarization.
USAID Role and Achievements to Date: Accomplishments to date include a national assemply that is now functioning as a representatitve body and emerging as a key institution on major democracy issues. The Organization of American States (OAS) Commission of Support and Verification (CIAV) human rights monitoring has helped identify human rights violations and the need to resolve outstanding cases. Nicaraguan and other human rights organizations, with USAID assistance, are forming municipal-based human rights committees to provide human rights education and to encourage reporting of human rights violations. Local and international civil rights organizations, through press reports, have raised public awareness of reported human rights abuses by the police. The number of new human rights violations reported has decreased since the initiation of USAID human rights activities in 1991. At the national level, USAID assists the national assembly in functioning more efficiently and transparently, and in improving its oversight capability and its constituent relationships. USAID helped establish a multi-donor program to reform governmental financial management systems to reduce fraud, waste, abuse and corruption.The Judicial School of the Surpreme Court has trained 149 local judges, 49 district judges, and 72 prosecuters. A civic education curriculum has been established in the secondary school system with 1,100 teachers trained. USAID, working through the primary and secondary school systems, news media, and labor unions, assists in fostering a greater public understanding of democratic principles among the youth.
Description: During 1996, USAID will allocate $6 million for elections support. The Election Promotion and Assessment Center (CAPEL) will provide tedhnical assistance and training to improve the information management system of the Supreme Electoral Council (CSE). This will improve the registration process and produce a permanent voters' list for future elections. Civic education programs to encourage participation in the elections also will be impelemented. In addition, USAID will assist the government to reform key legal codes, to strengthen the Attorney General's office to improve and facilitate prosecution of cases, to institute administrative reforms to reduce judicial delayand ensure due process, to establish a human rights ombudsman's office approved by the National Assembly in December 1995 and, to create a public defender's office..
Host Country and Other Donors: Spain, Sweden and Norway are supporting the Supreme Electoral Council. The donor community has pledged approximately $110 million toward reforming the state, including approximately $32 million toward the establishment of an integrated financial management system and a comprehensive audit system.
Beneficiaries: All citizens of Nicaragua, particularly those of voting age.
Principal Contractors, Grantees, or Agencies: National Endowment for Democracy (NED), National Democratic Institute (NDI), International Republican Institute (IRI), Consortium for Legislative Development (CLD), Florida International University (FIU), CAPEL, Institute for the Promotion of Municipalities (INIFOM), Academy for Educational Development (AED), Casals and Associates, and the Pan American Development Corporation (PADCO).
Major Results Indicators:
Baseline Target
Free, fair and transparent elections
(yes/no) -- yes (national) (1996)
Human rights violations decline TBD (1995) TBD(1999)
Human rights Ombudsman's office
established (yes/no) -- yes (1996)
Number of cases handled by public
defenders office TBD(1995) TBD(1999)
Integrated financial management
systems established 0 (1995) 3 (1997)
in ministries
PROGRAM: NICARAGUA
STRATEGIC OBJECTIVE TITLE AND NUMBER: Sustainable Growth in Employment and Income, 524-SO02
STATUS: Ongoing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997; $10,440,000 DA
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2002
Purpose: To foster increased employment and income by encouraging the transition to an open, free-enterprise, export-oriented economy and the inclusion of small producers in the expanding economy.
Background: Jobs remain the major concern of the average Nicaraguan. Unemployment in the major urban areas is over 20%. Including low-wage underemployment, largely in agriculture, over 50% of the labor force needs more or higher-paying work. Productive jobs are the result of investments -- primarily private -- in human and financial capital, technology and marketing. Although Nicaragua has made substantial progress in re-creating an environment that encourages private investment, impediments remain, and the poorer members of society are just beginning to see economic improvements. The government must continue to encourage private investment, export expansion, and job creation. This will require a rapid resolution of property claims, clearer and simpler export regulations, appropriate fiscal and monetary policies, reduction of the external debt burden, continuing privatization of state enterprises, increasing the competitiveness of Nicaraguan products, a stronger and a, more responsive financial system.
Encouraging small farmers to produce more, and higher valued crops will improve the rural economy. Doing so will require increased access to more productive technology and to credit. Rural markets must function efficiently so small producers can sell their products profitably. Agribusiness should expand so on-farm and off-farm employment will increase. In the interim, microenterprise and temporary employment programs can provide opportunities to the poor.
Sound environmental policies, laws, regulations and enforcement are also essential for the rational and sustained use of natural resources.
USAID Role and Achievements to Date: The Mission is supporting policy reform, including tax incentives for exports as well as supporting rural community credit unions in mobilizing savings to provide funds for productive investments. Preliminary GON estimates indicate that Nicaragua's real GDP grew by four per cent in 1995, up from 3.3% in 1994 -- and the best performance since 1983. Exports (up 45%) fueled most of the expansion. Continued growth of about 5% appears within reach for 1996. Recent GON employment surveys indicate that the total number of persons employed climbed 10.5% from 1993 to 1994, and an additional 12.3% from 1994 to 1995.
The Mission is working through private producer associations to provide services to small farmers. In the last six months, 2,840 small cattlemen used improved technologies for genetic improvement, animal health and feeding and nutrition for their livestock. Yields of nine non-traditional export crops (including onions, melons and ginger) increased by almost 25 per cent over 1994, due to increased technical assistance provided to producers by USAID. The number of jobs fully attributable to the export program with the Nicaraguan Association of Producers and Exporters of Non-Traditional Products (APENN) rose from 1,950 in 1994 to 2,500 in 1995.
The Mission is supporting microenterprise activities lending through local organizations and communities. Over 6,000 new clients (90% women) received loans under USAID-supported microenterprise programs. The number of beneficiaries under targeted emergency employmentprograms increased by 60 per cent over the last seven months, with about two-thirds concentrated in the poorest municipalities.
Finally, USAID is supporting the sustainable use of natural resources through activities with the relevant GON ministries, PVO-implemented activities in poor communities within four protected areas, and directly with agricultural producers.
Description: USAID will continue to support small farmers by increasing access to technology and credit, and by improving the economic policy environment encouraging the growth of exports.In the short term, the Mission will continue to provide a social safety net by supporting temporary employment programs which will generate over 60,000 person months of employment, and work in the poorest regions of the country. Over half of the benefits accrue to women.
Host Country and Other Donors Other major donors include the IDB, which provides credit for rural areas, funds for agricultural and livestock strengthening, a large property resolution program, and technical assistance to the government on privatization and the Superintendency of Banks. The Netherlands, Sweden, and Norway provide credit for microenterprises and small producers.
Beneficiaries: Small farmers, landless rural poor, small savers and micro entrepreneurs are the primary immediate beneficiaries.
Principal Contractors, Grantees, or Agencies: Development Associates, The Nature Conservancy (TCN), Tropical Research and Development (TR&D), National Cooperative Business Association (NCBA), Nicaraguan Association of Producers & Exporters on Non-traditional Products (APENN), Nicaraguan Union of Agricultural Producers (UPANIC), National Union of Farmers and Cattle Owners (UNAG), Cooperative League of the United States of America (CLUSA), International Executive Services Corp. (IESC), Academy for Educational Development (AED), and Developing Economies Group (DEG).
Major Results Indicators:
Baseline Target
Number of persons employed in urban private
formal sector 95,000 (1993) 167,000 (1999)
Non-traditiional agricultural exports $13,000,000 (1995) $30,000,000(1999)
Number of loans to microentrepreneurs 6,000 (1995) 55,000 (1998)
Number of Hectares under effective resource 500,000 (1995) 785,000 (1998)
Farmers trained in environmentally sound 1,000 (1995) 6,000 (1997)
pesticide management
PROGRAM: NICARAGUA
STRATEGIC OBJECTIVE TITLE AND NUMBER: Better Educated, Healthier, and Smaller Families, 524-SO03
STATUS: Ongoing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $11,500,000 DA; $2,319,000 PL 480 Title II
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2002
Purpose: To develop human capital through basic education, health, and family planning.
Background: Education is key to informed citizens and productive workers. Primary health is critical to mothers' and children's survival and full realization of their potential. Family planning is an important ingredient in improving maternal health and child survival. Reduced population growth is also an important factor in sustainable economic development, environmental preservation, and poverty reduction.
USAID Role and Achievements to Date: USAID plays a major role in support of basic eduacation, health and family planning. Immunization coverage rates attained relatively high levels of close to 90%. In the five project health districts, Couple Years of Protection (CYP) provided by the Ministry of Health increased from 27,129 to 29,397 during the past six months. CYPs nationwide grew from 89,139 to 104,600. CYPs provided by Profamilia increased from 96,023 to 110,238. Community distribution posts increased from 730 to 848. Profamilia inaugurated new clinics in Masaya, Boaco, and Jinotega.
Description: Of the total funding requested for this strategic objective , $4,170,000 is planned for population activities and $4,230,000 is requested for health activities while $3,000,000 is planned for basic education activities. In FY 1997 USAID will continue its current maternal and child health and family planning activities, as well as its activities to improve primary education. We will continue to support curriculum reform, training in teaching methods; and increased community participation in the school system. In health, we support an expanded program of immunizations; conduct community health education through private voluntary organizations; provide essential medicines and technical assistance for decentralized health centers and supplies; training and commodities for AIDS control programs. USAID provides micronutrient supplements to women and children under five years of age; food supplements through PVO Title II programs in geographic areas where malnutrition is most severe; and supports UNICEF's Baby Friendly Hospital and Health Center Initiative. We are financing the expansion of Profamilia, a local private voluntary organization, clinics and community distribution post network; training MINSA and Profamilia personnel in contraceptive technology and patient counseling techniques; and supporting local NGOs and US PVOs active in family planning and reproductive health services.
Host Country and Other Donors: Other bilateral donors and IFIs are active in the social sector. The Germans, Dutch, and Swedes also provide crucial support to the Ministries of Education and Health.
Beneficiaries: In the health sector, the primary beneficiaries are mothers and children under age 5. In education, the critical customer group is the primary school student population.
Principal Contractors, Grantees, or Agencies: Management Sciences for Health (MCH), Ministry of Health (MINSA), Academy for Educational Development (AED), Ministry of Education (MED), Family Promotion (PROFAMILIA), and Development Associates.
Major Results Indicators:
Baseline Target
Total fertility rate 4.6% (1995) 3.8% (2000)
Infant mortality rate (per thousand) 58 (1993) 55 (2000)
Maternal mortality rate (per 100,000) 150 (1995) 125 (2000)
Women breastfeeding exclusively for four months 11.5% (1993) 20% (2000)
Immunization coverage for children under
1 year of age 65% (1994) 80% (1999)
Primary school repetition rates
(average of grades 1 through 4) 20% (1995) 10% (2000)