Policy Statement Prepared in the Department of State



a. objectives

Our objectives in Nicaragua are:

To maintain and develop Nicaraguan support for United States foreign policies and for measures taken for the security of the United States and of the hemisphere;1
To seek more effective and continuing support by cultivating among the Nicaraguan people a genuine understanding of our policies and of the community of interests of Nicaragua and the United States;
To encourage in Nicaragua a spirit of self-reliance and self-help for the achievement of orderly democratic growth and of economic advancement;
To foster and protect legitimate United States interests in Nicaragua.

Background Information

By virtue of his position as Chief of the National Guard, and through his two terms in the presidency, General Anastasio Somoza has authoritatively ruled Nicaragua since 1936. During this period he has been able to render ineffectual all significant opposition and has treated the national domain as if it were his private estate. His régime has been characterized by consistent cooperation with the United States and support for our policies except those, in general, which, if put into practice in Nicaragua, might weaken his hold on the country. President Somoza, and Nicaraguans generally, have also demonstrated a proclivity to look to the United States for leadership in the solution of their social, economic, and political problems. This attitude of dependency seems to result in part from the past United States military [Page 1515] occupation of Nicaragua, our past supervision of elections and the customs administration there, and from Nicaragua’s geographic proximity to and economic dependence on the United States.

b. policies

1. To maintain and further develop Nicaragua’s support and friendship, it is our policy faithfully to respect the sovereignty of Nicaragua, to observe strictly our agreements with that country and to avoid intervention, direct or implied, into its purely domestic affairs. We consult with Nicaraguan officials when appropriate in the formulation and implementation of policies affecting the interests of both countries, and give full consideration to Nicaragua’s legitimate interests in our day-to-day relations. We endeavor to develop Nicaraguan interest in the broader aspects of world and hemispheric affairs as well as a sense of international responsibility by encouraging her full participation in the United Nations and in the Organization of American States.

2. Effective and continued support of our policies by Nicaragua, however, will not be insured by the fact that the present incumbent, President Somoza, recognizes the community of interests which exists between our two countries. If we are to assure the cooperation of succeeding Nicaraguan regimes, the people of Nicaragua must come to understand what our policy objectives are and that their interests, as well as our own, may be best secured by Nicaraguan cooperation and support. It is our policy to seek this popular understanding through a program of information, education, and cultural exchange. To this end, we maintain a large library and a cultural institute in Nicaragua. Also, an information program is carried out by the Embassy’s Public Affairs Section and a project for the exchange of students is sponsored.

3. A solid basis for continued satisfactory relations with Nicaragua, depending on a broad and popular understanding of and support for our policies, however, cannot be obtained so long as the country remains in a relatively primitive state of development with but a few people participating actively and fruitfully in the political and economic life of the country. There must, then, be political and social advancement through a democratic evolution suitable to the background and environmental conditions in Nicaragua as well as an economic program which will bring steady improvement in the standard of living of the majority of the people.

While many Nicaraguans profess a desire to see democracy practiced in their country, few have shown a genuine willingness to make personal efforts or sacrifices to bring this about. It is necessary, as a condition to democratic and economic achievement, to encourage in Nicaragua the development of a spirit of self-reliance on the part of the people who must be brought to recognize that the problems involved [Page 1516] are their own and that progress cannot be imposed upon them from the outside, but must be achieved through their own efforts.

While it is our policy to provide incentives, encouragement and assistance for political and economic progress in Nicaragua, we endeavor to do so without prejudice to the development there of an attitude of self-help. On every appropriate occasion we seek, while avoiding intervention into internal affairs, to make clear to Nicaragua that the United States not only practices representative government, but also preaches it. We, therefore, encourage Nicaragua to form and to give participation in government to opposition parties as well as to permit a free expression of opinion and to make a genuine effort to effect agreement on points at issue by democratic processes. Our policies with respect to the dissemination of information, the propagation of education and the promotion of cultural understanding are designed to be effective also in the execution of our policy and the promotion of democratic progress. Because of restrictions in Nicaragua on the freedom of access to information and because of the special need for education, these programs are of particular importance. The lending library which is supported in Nicaragua by the United States is used by a great number of people and is the only institution of its kind in the country.

Nicaragua’s economy is basically agricultural and its chief exports are coffee (about 45%), gold (about 25%), cotton (about 8%), and forest products (about 4%). Approximately 75% of all exports are sold in the United States. Since agriculture offers the best hope of an immediate improvement in the low living standards of the people, it is our policy to give special encouragement to the further development and diversification of agriculture. The Nicaraguan Government has recently signed a General Technical Assistance Agreement2 and technical experts are now operating in the country on a cooperative basis in a wide number of related fields.

The lack of adequate transportation facilities is an impediment to Nicaragua’s economic growth. We have given financial and technical aid in construction work on the Rama Road in accordance with a commitment3 made by President Roosevelt. We have helped in the construction of the Nicaraguan section of the Inter-American Highway. Subject to the necessary appropriations by Congress, our policy is to continue our assistance on these projects.

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It is our policy to encourage the utilization of private United States capital on a non-discriminatory basis in the financing of development projects. Requests for financial assistance will be considered by United States agencies according to the criteria of economic justification and the availability of private capital.

Another impediment to Nicaragua’s economic development is the lack of a more efficient and honest administration of national affairs. Nicaragua has a foreign debt in excess of $6,000,000 and an internal debt in excess of $8,000,000. It is sometimes tardy in servicing its debts. Nicaragua has also been confronted with an adverse balance of payments which has resulted in a shortage of dollar exchange and, consequently, in a backlog of pending dollar remittances to pay for imports. The country has attempted to meet this situation by adopting the exchange rate measures recommended by a mission of the International Monetary Fund in late 1950. The Government appears to be making an effort to administer the exchange rate measures fairly and effectively. It is our policy to encourage a sound approach to these problems and to support, in appropriate ways, Nicaraguan efforts to achieve administrative and financial stability.

Nicaragua is one of seven American Republics which have acceded to the General Agreement on Tariffs and Trade.4 We encourage the government to observe the provisions of that instrument in the conduct of its foreign commercial relations.

4. In order to foster and protect legitimate United States interests in Nicaragua, it is our policy to encourage the maintenance there of an atmosphere conducive to the investment of foreign capital on mutually advantageous terms. To this end, we have, in addition to offering protection in appropriate instances, initiated discussions looking toward the negotiation with Nicaragua of an interim Customs Agreement,5 a Consular Convention, and a Treaty of Friendship, Commerce and Economic Development.

c. relations with other countries

Due principally to propaganda attacks on General Somoza by the left-wing Guatemalan Government of ex-President Arevalo,6 and Nicaragua’s distrust of Guatemala’s intentions, no diplomatic relations exist between these two countries. Nicaragua has to a lesser degree the same mistrust for the Cuban Government. Similar tension with the [Page 1518] Costa Rican Government has been dissipated to some extent as the result of Ulate’s7 replacement of Figueres8 as head of the Costa Rican state, although the Costa Rican Government and its people still distrust Somoza. Should Figueres or some other individual of similar political views return to power in Costa Rica during the rule of Somoza, there would almost certainly be a deterioration of Nicaragua’s relations with its southern neighbor.

Although General Somoza mistrusts Honduras’ current Government and Panama’s President Arias,9 Nicaragua maintains friendly relations with these two countries, as well as with El Salvador. There has been some evidence of Nicaragua’s desire to arrange a close political cooperation with the latter country.

It is our policy to promote friendly relations between Nicaragua and her neighbors in Middle America by counselling strict observance of all commitments undertaken by Nicaragua in connection with her membership in the Organization of American States and the United Nations. Furthermore, we endeavor to keep ourselves currently advised of developments so that, when necessary, we may bring our influence as well as that of the international organizations, to bear in time to prevent disturbances. It is also our policy with respect to the sale of arms to Nicaragua to discourage excessive purchases. By doing so, we hope to minimize economic problems resulting from the maintenance of excessive military establishments by small states as well as to preserve a political balance of power in the area and to discourage any spirit of aggression.

While Nicaragua recognized the U.S.S.R., it has never exchanged diplomatic representatives with that country and there is no immediate problem of local communism in Nicaragua.

Nicaragua and other Central American countries maintain separate national governments, separate military establishments, and separate tariff structures. As a result, the over-all cost to all governments is increased and funds needed for economic development are dissipated in this duplication. Accordingly it is our policy not to impede efforts to arrive at a satisfactory formula for Central American political or economic union, but to recognize that union can come only by agreement of the interested states, and that, like democracy, it cannot be imposed from without.

d. policy evaluation

We have achieved our immediate objective of enlisting and keeping the support of the Somoza régime for our foreign, economic, and [Page 1519] political policies. The Nicaraguan Government has cooperated consistently in all efforts leading to hemispheric defense and few Latin American states are more inclined to our views, particularly in respect to issues in the United Nations, the Organization of American States and other International Organizations. Nicaragua has effectively supported the free world’s resistance to aggression in Korea and has solidly aligned itself with the United States in demonstrating an awareness of the threat of international Communism and the necessity to resist it both internally and internationally.

Little progress has been made toward creating among the people of Nicaragua a genuine understanding of our policies or of achieving noteworthy advancement in the institution there of democratic practices or in the betterment of living standards. These are essentially long-term objectives, however, since they depend upon progress in education, the acquisition of technical skills, the formation of adequate capital, the improvement of health and sanitation, the development of initiative, the overcoming of venality by officeholders, and so forth. A good beginning has been made in the institution of our cooperative programs in the fields of health, agriculture, education and so forth, and the Nicaraguan Government has responded enthusiastically with monetary and material support. At this stage, the most that can be said is that the initial efforts have been made, and we have received evidences of small but measurable good work. Aside from these programs which should serve to provide a more satisfactory basis for democratic political development there is little of a positive nature which the United States can do toward hastening such development. In fact, it is necessary to guard against wishful endeavors too rapidly to emplant democracy where the ground is not yet fertile or to seek model institutions there after our own pattern. We have, however, and with some success, due to the prestige and moral stature of the United States, employed our influence in opposition to practices in Nicaragua which were repugnant to the concepts of human and individual dignity.

Problems with respect to United States investments in Nicaragua are rare, and our protection policies, when it has been necessary for us to express ourselves in matters affecting United States interests, have been successful. Nicaragua welcomes United States capital and provides favorable conditions for investment.

  1. For documentation concerning United States policy with respect to hemisphere defense and related matters, see pp. 985 ff.
  2. For text of the Point IV General Agreement for Technical Cooperation between the United States and Nicaragua, signed at Managua, December 23, 1950, and entered into force on the same date, see Department of State Treaties and Other International Acts Series (TIAS) No. 2168, or United States Treaties and Other International Agreements (UST), vol. 1, p. 906.
  3. The commitment was embodied in an exchange of notes at Washington dated April 8 and 18, 1942, which entered into force on the latter date; for text, see TIAS No. 2229, or 2 UST 722. For documentation on the United States commitment, see Foreign Relations, 1942, vol. vi, pp. 568576, passim.
  4. For text of the General Agreement on Tariffs and Trade (GATT), concluded at Geneva, October 30, 1947, and entered into force for the United States, January 1, 1948, see TIAS No. 1700, or 61 Stat. (pts. 5 and 6).
  5. By an exchange of notes at Washington dated December 3, 1951, and October 9, 1952, which entered into force on the latter date, the United States and Nicaragua concluded an Interim Agreement relating to customs exemptions of diplomatic and consular officials; for text, see TIAS No. 2708, or 3 UST (pt. 4) 5154.
  6. Juan José Arévalo Bermejo, President of Guatemala, 1945–1951.
  7. Otilio Ulate Blanco, President of Costa Rica.
  8. José Figueres Ferrer.
  9. Arnulfo Arias Madrid.