Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

817.00/6–652

Memorandum by the Officer in Charge of Central America and Panama Affairs (Siracusa) to the Assistant Secretary of State for Inter-American Affairs (Miller)

confidential

[Washington,] June 6, 1952.

You may be interested in the following information on the IBRD program being developed by Nicaragua.

The IBRD mission in its report¹ stated that “few underdeveloped countries have the sheer physical potentials for growth possessed by Nicaragua” and that “the country, in relation to population, has almost unlimited land for development, land which can grow almost every tropical crop and a number of crops not typically tropical”.

After commenting on the fact that the country’s fiscal, administrative and monetary systems are inferior to the country’s physical potentialities, the report states that with the greatly improved political stability in recent years and a favorable world outlook, the stage is set for a period of growth and development unparalleled in the country’s history.

The report presents both a minimum and an optimum program, the first calling for total expenditure in five years of over $57 million and the latter of over $74 million.

The stated aims of the program are:

a) Increase the level of real per capita income in five years by 15 percent, allowing in this estimate for natural population growth; and,

b) Increase the physical volume of agricultural and industrial production by 25 percent.

The IBRD mission believes such a program to be well within Nicaragua’s capacity to finance. It recognizes, however, that it is asking Nicaragua to do as much in five years as she probably has accomplished in the last 50 years.

Our Embassy, in commenting on the report, states that it is in general agreement with the stated objectives although it feels that the report tends to gloss over and minimize the very real and serious obstacles which will be encountered in attempting to implement the recommendations therein. Principally, the Embassy feels that, because the capacity to finance is largely dependent upon external circumstances (world market prices, etc.) which are beyond the ability of Nicaragua to control, it may be too optimistic to project these accomplishments upon present expectations. It also makes other technical criticisms related to the incidence of taxation in the country, etc.

It is my opinion that, if Somoza keeps his health and remains in control, Nicaragua has grounds for real optimism in the next few years. Somoza has gone through a necessary period in establishing stability in the country and is giving increasing evidence of a forward-looking determination to do something for the lasting and general good of the country. Happily, the physical capacity exists in Nicaragua and this, coupled with the proper intent and resourcefulness, should produce solid results.

1. Later published as The Economic Development of Nicaragua (Baltimore, Johns Hopkins Press, 1952, 108 pp., 1953, 424 pp.). The quotations which follow are taken from the first paragraph of Chapter 1, “The Basis for Development.”