Nicaraguan Leader Defends Economic Reforms

President Daniel Ortega on Saturday defended economic reforms enacted by his government last week, saying that the measures were necessary to strengthen the leftist revolution.

Facing a sometimes hostile audience of about 1,000 people in an open meeting, Ortega insisted that the reforms--including the devaluation of the national currency, the cordoba, and a general pay raise of 30%--were based in “an economy of a socialist nature.”

Ortega had said last week that the government would lift wage and price controls in hopes of stimulating productivity.

But at the meeting, several people complained that the pay raise failed to make up for rising food costs prompted by the reforms.

On Friday, a dollar was worth 80 cordobas at the official rate instead of 13. On the black market, a dollar bought 250 cordobas--90 more than the market offered before devaluation.

The free-market measures have created disarray in some sectors.

Two unions controlled by the opposition Socialist Party have demanded 600% wage hikes to keep up with inflation and the guild for primary school teachers said it also will pursue a salary increase.

An increase in gasoline prices has prompted some taxi drivers in the capital to quadruple their fares for a short ride.

The government retained subsidies on some basic foods. But in markets where goods sell outside the rationing system, the price of meat rose from 50 to 100 cordobas a pound and a dozen eggs went from 50 to 80 cordobas.

Explaining the new measures to the crowd at the meeting, Ortega said “the greatest problem is provoked by Yankee aggression.”

The United States has maintained a three-year-old economic embargo against Nicaragua and supported a rebel insurgency against the leftist Sandinista regime.

” . . . We are going to surmount this historical moment and will have better conditions to attend to all of the demands of Nicaraguan workers,” Ortega said.