This study calculates the level of subsidies in officially supported export credits that have been advanced to the government of Nicaragua. U.S.-Nicaraguan relations have deteriorated steadily since 1981. U.S. actions have included various forms of aid to antigovernment forces within Nicaragua, and economic sanctions, including a trade embargo. A number of West European countries, however, continue to provide assistance to Nicaragua. These governments feel that the Nicaraguan regime is not as threatening as the United States portrays it. This Note examines one form of economic assistance to Nicaragua in detail: export credit subsidies. Because Nicaragua receives credit on favorable terms from major industrialized nations, it is able to expand its military efforts beyond levels otherwise possible. These subsidies exceed the size of nonlethal aid that the United States is providing the anti-government forces within Nicaragua. If European governments are alerted to the costs of providing export credits to Nicaragua, they might reduce these flows.
This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/principles.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.