Nicaragua Progress Report National Development Plan 2006

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NICARAGUA PROGRESS REPORT NATIONAL DEVELOPMENT PLAN 2006

August 2007

CONTENTS

I. Introduction...... 1 II. Governance and Citizen Security...... 3 1. General Aspects...... 3 2. The Fight Against Corruption...... 3 3. Strengthening the Justice System...... 5 4. Citizen Security ...... 6 5. Structural Reforms in Governance...... 7 III. Evolution of Poverty...... 8 1. General Aspects...... 8 2. Evolution of Poverty...... 9 IV. Development of Human Capital and Social Protection...... 12 1. General Aspects...... 12 2. Social Policy and Structural Reforms ...... 13 Education...... 13 Health ...... Error! Bookmark not defined. Social protection...... 17 Social security ...... 19 Labor sector ...... 21 Water and sanitation ...... 23 Policy of subsidies for the poorest population...... 23 V. Evolution of Targets and Indicators ...... 26 1. General Aspects...... 26 2. Intermediate Targets and Indicators...... 27 Reduction of extreme poverty ...... 27 Education...... 27 Health ...... Error! Bookmark not defined. Drinking water ...... 31 Social protection...... 33 3. Matrix of NDP Targets and Indicators ...... 34

VI. Economic Program and Poverty Reduction Strategy ...... 39 1. General Aspects...... 39 2. National and International Setting ...... 41 3. Macroeconomic Policies and Structural Reforms ...... 42 Fiscal policy ...... 42 Public investment policy ...... 44 Monetary policy...... 45 Exchange rate policy ...... 46 Trade policy ...... 47 Structural reforms ...... 48 4. Production Policy ...... 51 Overall aspects ...... 51 Policy actions in support of production ...... 52 Progress in the development of the clusters...... 54 5. Performance of the Economy 2002-2006 ...... 57 Economic growth and inflation...... 57 Employment and salaries...... 61 Balance of payments...... 62 Foreign trade ...... 64 Evolution of Foreign Cooperation...... 65 Performance of the non-financial public sector...... 67 Monetary program and financial development...... 72 6. Tendency of Poverty Spending ...... 77 General aspects ...... 77 Poverty spending, priorities, and funding...... 78 Current and capital poverty spending ...... 80 Funding ...... 81 Foreign debt relief ...... 82 Factors for change in poverty spending...... 84 VII. Medium-Term Perspectives 2007-2012 ...... 87 1. General Aspects...... 87

2. Tendency of International Markets...... 88 3. Perspectives for the Nicaraguan Economy...... 88 4. International Cooperation...... 95 VIII. Mechanisms for Evaluation and Follow-up ...... 96

Figures 1. Evolution of general poverty and extreme poverty …….…………….. 9 2. Evolution of general urban and rural poverty ……..…………………. 10 3. Evolution of extreme urban and rural poverty………………………… 10 4. Economic growth 1997-2006 ………………………..……………………. 58 5. Average annual inflation …………………………………………………… 60 6. Growth rates ……………………………………………….…………………. 61 7. Main taxes …………………………………………………………………….. 69 8. Poverty spending adjusted for municipal transfers and subsidies .. 80 9. Increase in poverty spending ………………………………………………. 81

Tables 1. Evolution of poverty ………………………………….……………………… 10 2. Distribution of consumption ……………………………………………… 11 3. Subsidies for services and transfers to municipalities …………….. 26 4. Millennium development goals ………………………………..………….. 33 5. Matrix of NDP intermediate targets and indicators …….…………….. 34 6. Real growth of the economy ……………………………..………………… 59 7. Incidence of inflation ……………………………………..…………………. 60 8. Balance of payments……………………………………….………………… 63 9. International trade 2002-2006 ………………………..………………….. 65 10. Evolution of foreign cooperation …………………..……………………… 67 11. Fulfillment of fiscal program ……………………….……………………… 68 12. Non-financial public sector revenues …………………………………….. 70 13. Non-financial public sector spending ……………………………………. 72 14. Monetary program ……………………………………………………………. 74 15. Indicators of monetary consistency ………..…………………………….. 75

16. Indicators for the financial system ……………………………………….. 76 17. Priorities and funding of poverty spending ……………………………… 82 18. Sources of HIPC relief …………………………….………………………… 84 19. Changes in poverty spending ……………………………………………… 86 20. Perspectives of international markets ……………………………………. 90 21. Medium-term projections …………………………….……………………. 95 22. International cooperation for the NFPS …………………………………. 96

Annexes 1. Social indicators …………………………………………………..………….. 101 2. Economic indicators ………………………………………………………….. 102 3. Taxation reforms 2002-2006 ……………………………………………….. 103 4. Poverty spending non-financial public sector (US$) ………….………. 104 5. Poverty spending non-financial public sector (% GDP) ……..……….. 105 6. Poverty spending non-financial public sector by project……………… 106 7. Balance and poverty spending of the NFPS …….………………………. 120 8. Sources of HIPC relief ………………………………………………………… 121 9. Allocation of HIPC relief by program ……………..………………………. 122 10. Allocation of HIPC relief by programs and projects ………..…………. 123 11. New projects for the public investment program ……….……………… 129 12. Increase of the public investment program 2007 ……………………… 130

Acronyms……………………………………………………………………………….. 131

I. Introduction

1. Late 2006 saw the end of another stage in the political life of the country, the end of an economic program agreed on in 2002 with the International Monetary Fund (IMF), and the end of a style of conducting public policy that, in the end, made major progress in the macroeconomic field, but not so in the microeconomic, social, and environmental fields. The challenges facing the Government of Reconciliation and National Unity are many. Besides establishing a more effective strategy for poverty reduction, it will have to deal with the difficulties created by the energy crisis it inherited.

2. The purpose of this report is to identify those factors warranting continuation and the factors for change that must be introduced into the National Development Plan (NDP) so that it is congruent with the vision, objectives, and priorities of the Government of Reconciliation and National Unity. It will be presented to the World Bank and the IMF and it will serve as the basis for the cooperation strategy of the World Bank for the 2008-2012 period.

3. The 2006 NDP Progress Report, as one of the instruments for follow- up of the poverty reduction strategy, presents the main policy actions carried out over the year, the development of the programs, the budgetary execution of the resources allocated for social spending, and the main reforms made through laws approved over the course of the year. This report is accompanied by a document that sets the priorities for the Government of Reconciliation and National Unity and its strategic approach for effectively reducing poverty.

4. The report is structured in such a way that there is more critical analysis of the final result of three five-year periods of economic policies in the frame of the agreements with the IMF and the World Bank in order to speed up the transition towards a new strategic vision of the government that would give better results than those achieved so far towards the objective of economic growth and poverty reduction. Some of the considerations laid out here have already been incorporated into the 2007- 2010 Economic and Financial Strategy agreed on with the IMF.

5. The results from 2006 reflected the continuation of an economic slowdown that began in 2004 with relatively high levels of inflation because of the rise in fuel prices, with a higher level of poverty than was expected, and, in general, with social demands that could not be met over those 15 years. Furthermore, the country also entered into an unprecedented energy crisis that threatens social and economic development. Nevertheless, democracy was strengthened with the good success of the electoral process; fiscal, monetary, and exchange rate discipline was maintained; international

1 trade was strengthened; and, international cooperation showed its decided support for the country with the forgiving of foreign debt and flows of resources to finance the public investment program.

6. The report has incorporated the results from the latest Living Standards Measurement Survey (LSMS 2005), the employment surveys, and other quantitative results from specialized studies, as well as a set of legislative initiatives approved by the National Assembly in the frame of the structural reforms for the country. It also talks of the levels of the foreign debt relief received during the last five-year period and its allocation by sector in the context of poverty spending, a summary of which is also included in the 2006 report.

7. Lastly, the report includes a review of the revised macroeconomic perspectives because of the new agreement with the IMF, but mainly because of the objectives and priorities of the Government of Reconciliation and National Unity, because of the profile of the international markets that affect Nicaragua, and because of the expectations the government has for foreign cooperation and private investment. Thereby, the 2006 progress report complies with the technical requisites for this type of report at the international level.

8. It should be made clear that the separate document titled “Strengthening the Poverty Reduction Strategy: Priorities of the Government of Reconciliation and National Unity” does not pretend to be an exhaustive review of the National Development Plan. It only includes strategic elements that the government has defined and that therefore establish a critical route in order to update it. The Government of Reconciliation and National Unity has stated that it will continue with the NDP in the factors with which it coincides, but above all with factors for change that would lead the country from a strictly neoliberal and exclusive system to one that is socially inclusive with an emphasis on giving more potential to the poor so that they can overcome their level of poverty. It is possible that some themes that are omitted or only covered partially are still under development for the final review of the NDP.

2 II. Governance and Citizen Security

1. General Aspects

9. Governance is a fundamental pivotal point in the process of consolidating the democratic system and its strengthening is intimately linked to the quality of the institutions responsible for attending to the demands from the population in the economic and social spheres. Access to justice, the fight against corruption, and citizen security are key elements for economic development and for guaranteeing the effective exercise of citizen rights.

10. In 2006, the Nicaraguan democratic system made progress with the institutionalization of the system with the holding of national elections in November, which made evident the commitment and the decided efforts of the nation for the sake of consolidating the Rule of Law. Thanks to the political agreement reached in 20051, the electoral process was carried out with few problems, thereby allowing for a governmental transition in accordance with the laws in effect and in clear respect of the Political Constitution. This is a major advance in matters of governance if one takes into account the political crisis that resulted in tense relations between the Executive Branch and the Legislative Branch in 2005 that threatened to unbalance the harmony between the institutions of the Nicaraguan State. The Nicaraguan electoral process can move forward if the external factors that have intervened intensively in the electoral dynamics end for once and for all in order to have a process that just has to do with the Nicaraguans.

11. During this period, the actions carried out in the area of governance reflect major progress, particularly with the creation of conditions for greater access to justice by vulnerable groups and the successful experience of the Supreme Court getting the work of justice facilitators underway in rural areas with support from the CIAV-OAS. There was also progress made in the fight against corruption. The Table/Forum for Governance contributed to having better inter-institutional coordination in this, going beyond the sphere of the Executive Branch, promoting and motivating the participation of other branches of the State.

2. The Fight Against Corruption

12. In 2006, the actions begun in 2005 were furthered in order to strengthen the struggle against corruption at the institutional level. There was discussion of the Anti-Corruption Strategy at the Table/Forum on Governance in order to broaden the sense and scope of its application, promoting consensus among the institutions that have to do with the theme

1 Frame Law for Stability and Governance of the Country, Law No. 55; La Gaceta No. 203, October 20, 2005

3 – the Office of the Controllers-General of the Republic (CGR), the Supreme Court of Justice (CSJ), the National Assembly, the National Council for Economic and Social Planning (CONPES), the Office of the Procurator- General of the Republic, the Office for Public Ethics of the Presidency (OEP), and the Public Ministry.

13. It should be noted that the fight against corruption focused more on the actions of the government before the last one than on the government in office. The fight against corruption did not begin or end the fight against the corruption of the government that preceded it. The problems with some concessions in the energy sector, the problems detected in the National Lottery and the Nicaraguan Port Authority (EPN), the problems with the bidding processes and execution of some highway projects and with many consultancies, and the preliminary problematic situation detected by the CGR about the CENIs related to the bank breakings are only some examples of problems to do with transparency and probity in the previous government.

14. The National Assembly made its contribution with the approval of the Law for Access to Public Information2 in 2006 that will allow for the exercise of better citizen control in the performance of the public administration.

15. One important result in 2006 was the first Audit of the execution of the General Budget of the Republic (2005) made by the CGR. At the level of public administration, this will allow for starting actions that assure its continuation and the follow-up to the recommendations proposed by the controllers’ office in order to improve the internal control of the use of resources by public sector institutions. The CGR also certified 19 of 59 institutions that had applied for certification because of the introduction of new norms for internal control for having complied with the requirements established for this.

16. In order to improve efficiency and transparency of use of public funds at the municipal level, the National Assembly approved the Law for Municipal Contracts, which has the purpose of establishing the norms and procedures for regulating procurements and contracts for work, goods and services, leasing, consultancies, and construction of public works that the local governments make in exercising their competence. It also establishes the norms and procedures that should be followed during the making of contracts.

17. In 2006, the Office of the Procurator-General of the Republic continued with its priority of defending State interests in the areas of competence of the institution, prioritizing the most forceful action in the investigations of cases of corruption. Staff training continued, particularly in

2 Approved by the National Assembly on May 16, 2007 and published in La Gaceta, No. 118, June 22, 2007.

4 relation to crimes that are linked to the theme of corruption like money laundering, fraud, and others. However, it did not act with exemplary forcefulness in cases of public domain like the situation with some bidding processes for highway projects and their execution or costly consultancies, or problems in some publicly owned enterprises.

18. Progress was made in accumulating experience in handling oral trials, thanks to the implementation of the New Code for Penal Proceedings (CPP) by the procurators and the officials that have to do with the administration of justice. This will allow for greater speed and more effectiveness in pursuing these cases. Draft reforms to Law 411, the Law for the Organization of the Office of the Procurator-General of the Republic, are currently under review. These would facilitate and give more force to the actions of the procurators.

19. At the inter-institutional level, the mechanisms for coordination and work with the Bureau for Economic Investigations of the National Police and the Public Ministry were strengthened with the formation of a team to fight against corruption that will be formalized once there is consensus around an agreement of understanding between the two institutions.

3. Strengthening the Justice System

20. The main progress in the justice sector was as follows: In 2006, the process of preparing the Justice Plan 2008-2010 was finished as part of the work of the Table/Forum on Governance. That body also drew up a proposal for strategic guidelines for sector reform in the medium term.

21. There was also continued implementation of a set of actions aimed at strengthening the justice system, like training for judges in implementing the Law for the Judicial Career, the implementation of the single registry of judicial officials, the appointment of judicial officials for the family courts as a piloting, and the forming of examination boards/tribunals for future judges.

22. There was an expansion of coverage of access to justice – particularly for vulnerable groups – in 35 municipalities of the country, and in the case of itinerant defenders, there was coverage in 72 municipalities. There was also a major increase in the number of judicial facilitators and in 2006, there were 899 in 73 municipalities, going up to 1,220 in 144 municipalities throughout the country as of July 2007. The number of public defenders also rose to 102 by December 2006 and to 146 in July 2007, plus 6 supervisors, one director, and one sub-director. The management systems in the judicial dispatches were also reinforced. With support from the Inter- American Development Bank (IDB), there was piloting of the new model for

5 Management of Judicial Dispatches in the Managua Appeals Court and soon this will be done in the Nejapa Judicial Complex.

23. Regarding coverage of services for the protection of human rights, the Itinerant Defender Program executed nine processes of campaigns for defense work in the municipalities of Mulukukú in the North Atlantic Autonomous Region (RAAN), Somoto, San Rafael del Sur, Río Blanco, El Rama, Rosita, Waspán, Juigalpa, and Estelí. As part of the process, there was oversight/supervision of the following institutions: National Police, delegations of the Ministry of Education, Sports, and Culture (MECD), delegations of the Ministry of the Family (MIFAMILIA), hospitals and health centers of the Ministry of Health (MINSA), the Nicaraguan Water and Sewage Company (ENACAL), and the Judicial Branch.

24. In other actions, authorities made progress in giving specialized attention to the victims of domestic violence, increasing the number of specialized defenders in the City of Matagalpa and modernizing the statistical, filing, and registry systems, actions that began in 2005. Actions were also taken to expand the coverage of the Office of the Public Defender and civil jurisdiction around the theme of family in Managua, Masaya, and Matagalpa, creating specialized courts for children and adolescents in the departmental seats. In 2006, it covered 14 courts and as of July 2007, 17.

25. The justice system was strengthened with the setting up of four District Courts specialized in Family Law: the First and Second in Managua and one each in Chinandega and Matagalpa. Their judicial career staff is appointed according to the principles of merit and capacity recognized in the Law for the Judicial Career.

4. Citizen Security

26. The fight against organized crime and particularly drug trafficking had very important results in 2006. The increase in the number of arrests of groups linked to international drug running is the result of a greater degree of professionalisation of the National Police and the National Army and of greater coordination of institutional actions inside and outside the country. This has resulted in national and international recognition for both institutions, which contributes decisively to improving the image of the country, fostering a secure environment for private investment, which results in better conditions for the creation of quality employment and economic growth.

27. As part of the institutional strengthening, the program for partial funding of the project for expansion and equipping for the rural and municipal coverage of the National Police in order to strengthen police services and citizen security was approved in 2006.

28. The execution of the Program for Citizen Security had no significant results. In the reforms to Law 290 about the Organization and Competence of the Executive Branch, the Government of Reconciliation and National Unity included the transfer of that program to the National Police so that with it, the policy of Police-Community could be strengthened and better attention could be paid to the reentry into society of teen gang members, all because of a substantial improvement in citizen security.

29. Domestic violence against women was taken up with actions to give training to groups of women from some municipalities of the country and the Women’s Commissariat of the National Police continued its work to hear and investigate accusations of domestic violence.

5. Structural Reforms in Governance

30. In previous governments, the structural reforms were part of the conditions from both the IMF and the Budget Support Group. The previous government reports that some laws were approved in 2006 that contributed to strengthening the legal frame for the legislative body. The promulgation of the Organizational Law for the Legislative Branch; the promulgation of the Law to Regulate the Constitutional Attributions of the National Assembly and to request reports, appearances, and interpellations of pubic officials; the proceeding related to the control held by the Executive Branch, which shares responsibility with other powers of the State to see to it that there this honesty, transparency, efficacy, and efficiency in the public administration.

31. In August 2006, the Presidential Decree for the National Decentralization Policy (Executive Decree No. 45) was promulgated. This was more of a commitment to the cooperation community than the political will of the government to push for a real decentralization. Instead, policies for the mere decentralization of functions were adopted and in other cases, policies that neutralized municipal transfers.

32. The traditional way of taking up governance leaves out central elements of it like economic, social, environmental, ethnic, and cultural inclusion. The nil degree of decision-making power of the people that goes beyond a vote in elections and the lack of democratization of opportunities and access to resources (central themes for humanitarian governance) reflect the problems of governance over the last 16 years, while now, there will be direct democracy.

7 III. Evolution of Poverty

1. General Aspects

33. Poverty manifests itself in Nicaragua in different ways, but essentially by the failure to meet basic needs, by the degree of malnutrition among children, by high mortality rates, by the subsistence level of most jobs and consumption, by the percentage of illiteracy, by the high rates of children not attending school and of repetition and desertion, by the low rate of technical formation, and by the low propensity for savings by the country’s population, just to mention a few indicators. From whatever angle it is looked at, poverty constitutes the principal problem in Nicaragua hindering economic development and, at the same time, human development.

34. Since the country adopted mechanisms and methods for evaluating the behavior of poverty (1993), there is so far no clear evidence that the governmental policies applied for more than 15 years have created a sustainable trend towards poverty reduction. To the contrary, the living conditions of the population worsened over the last five-year period, as shown in the latest studies, despite having a policy to reduce poverty underway since 2001 with support from the international community.

35. It has been recognized recently that there has never been a direct relation between economic policies and the targets for poverty reduction, nor the political will to destine the necessary resources in favor of the poor. This incongruence is not by chance, because on the one hand, macroeconomic stability is sought after in order to give an incentive to the growth of the economy, believing that this is sufficient to have an effect on poverty; and on the other hand, resources are given out in doses for social spending, complying with the budgetary constraints of the program, looking for some spot effect that would alleviate the poor in the short term. This has made it so that the strategic plans incorporated into the official documents are only statements of good intentions.

36. Given these conditions, the Government of Reconciliation and National Unity has stated clearly that the issue of poverty is the central pivotal point and the razón d’être of public administration; that the poor must be capitalized in order to be part of the solution; and that the private sector and all Nicaraguan society must participate together in the efforts made by the government to reduce poverty throughout the national territory. Along this line, it has made a call to the international community so that is flexible and adopts the necessary changes in order to focus resources on those priorities indicated by the government.3

3 See document attached to this report, titled, “Strengthening the Poverty Reduction Strategy: Priorities of the Government of Reconciliation and National Unity.”

2. Evolution of Poverty

37. This NDP progress report for 2006 will take the results of the latest LSMS (2005) into account. It should be mentioned that with this survey, the idea was to improve the quality of information and maintain comparability of data over time. These two problems led to an updating of the extreme poverty line, using the most recent prices and changing the requirements for minimum calories, basing itself in turn on the results of the 2005 Population Census.

38. Preliminary figures showed that the variation of prices, specifically for coffee – which is the one that has the most influence – contributed less than one (1.0) percentage point to poverty at the national level. On the other hand, the changes in the minimum amount of calories required because of the variation of the number of persons and because of the composition of the population in Nicaragua are significant in terms of the variation of the poverty line and, therefore, the number of poor. The estimate showed that the variation of average minimum kilocalories estimated based on the 2005 Census was 2,241, 3.2% more than what was observed in 2001, while the result from the LSMS 2005 was 0.8%.

39. The overall results from the Figure 1 LSMS 2005 show that general Evolution of General Povert y and Ext reme Poverty poverty represents 48.3% of the 60 population, which did not have an 50 50.3 47.8 48.3 45.8 appropriate level of consumption in 40 order to overcome its poverty, and 30 17.2% are in conditions of extreme 20 poverty. Compared to 2001, this 19. 4 17. 3 17. 2 meant an increase of 2.5 percentage 10 15. 1 points. 0 General Ext rema 1993 1998 2001 2005

40. Poverty continued to be FIgur e 2 eminently rural and not only Evolution of General Poverty, Urban and Rural increased in relation to 2001, 80 but also in relation to what it 70 76.1 i 68.5 67.8 70.3 was 1998. The survey showed 60 that 70.3% of the rural 50

40 population is poor, 2.5

30 percentage points higher than 31.9 30.5 30.1 30.9 20

% of% the populat it was in 2001. On the other 10 hand, in urban zones it has 0 remained practically the same Urbana Rural as in 1993, around 31.0%. 1993 19 9 8 2001 2005 This means that two of every three persons in rural areas are poor, compared to one in three in urban zones.

41. This is explained because small farmers not only suffered the worst of the aggression during the country’s armed conflicts, but also the impact of the closing of State banks, the problem with coffee prices, and the lack of

Gráfico 3 going further with social policies. Evolución de la P obreza Extrema Urbana y Rural On the other hand, in urban 40 zones, the informal sector, family 35 36.3 remittances, and a concentration 30 30.5 28.9 of social policies has resulted in 25 27.4 20 maintaining poverty levels in 15 those areas. 10 % población de la 5 7.6 7.3 6.2 6.7 42. In terms of the population 0 Urbana Rural in extreme poverty, the survey

1993 1998 2001 2005 showed increases in both urban and rural zones, with a greater concentration in the latter. The level of extreme poverty in 2005 was 30.5% in rural zones, that is 3.1 percentage points greater than in 2001, while in urban zones, it was 6.7%, slightly higher than the before.

Table 1: Nicaragua: Evolution of Poverty 43. It is important to Poverty Extreeme Poverty Geogrpahic Change Change note that in the central Zone 1993 1998 2001 2005 2005-93 2005-01 1993 1998 2001 2005 2005-93 2005-01 and Atlantic zones, In Percentage of the Population poverty is stronger, National 50.3 47.9 45.8 48.3 -2.0 2.5 19.4 17.3 15.1 17.2 -2.2 2.1 despite the economic Urban 31.9 30.5 30.1 30.9 -1.0 0.8 7.3 7.6 6.2 6.7 -0.6 0.5 Rural 76.1 68.5 67.8 70.3 -5.8 2.5 36.3 28.9 27.4 30.5 -5.8 3.1 potential of those regions. Managua 29.9 18.5 20.2 21.2 -8.7 1.0 5.1 3.1 2.5 3.6 -1.5 1.1 62.5% of the population Pacific 45.8 52.9 46.1 47.8 2.0 1.7 16.9 16.8 10.6 12.5 -4.4 1.9 in the central zone is Central 71.5 62.4 59.9 62.5 -9.0 2.6 35.6 25.9 27.4 27.9 -7.7 0.5 poor, while the figure is Atlantic 60.6 62.2 61.3 64.5 3.9 3.2 19.6 29.4 20.6 26.6 7.0 6.0 Fuente: INIDE/EMNV 1993, 1998, 2001 y 2005 even higher in the

10 Atlantic zone. The indicators reveal that only three of every ten persons are not poor.

44. From the perspective of the Table 2: Nicaragua: Distribution of Consumption distribution of consumption, Área Q1 Q2 Q3 Q4 Q5 Nicaragua has a high degree of social In % of total consumption aggregate inequality, like most Latin American National 6.2 10.3 14.6 21.7 47.2 countries and those classed as HIPC. Urban 6.7 10.9 15.3 21.7 45.3 Nicaragua is in the highest quartile of Rural 8.0 12.0 16.1 22.1 42.0 countries in the world that have the Consumption ratio betw een quintiles Q2/Q1 Q3/Q2 Q4/Q3 Q5/Q4 Q5/Q1 greatest disparity of consumption. The National 1.7 1.4 1.5 2.2 7.6 LSMS 2005 shows that the Gini Urban 1.6 1.4 1.4 2.1 6.7 coefficient for Nicaragua, measured by Rural 1.5 1.3 1.4 1.9 5.3 income, is 40.0%, showing a reduction of 3.0 percentage points compared to 2001. This indicates that the richest 20.0% consumes 47.2% of the total consumption of the country, while the poorest 20.0% only consumes 6.2%. In urban areas, the richest 20.0% has a consumption level that is seven times higher than the poorest 20.0%. This difference drops to five times in rural areas.

45. It should be mentioned that the use just one method to measure poverty has a scope that is limited technically, above all in countries where there are strong migratory flows and a changing economy from a territorial perspective. It has recently been recommended at the international level to establish a system of mechanisms that can measure poverty from different angles, but above all establish a thread that runs through the assessment of the policies that aim to reduce poverty.

46. Making decisions to align a poverty reduction strategy must be based on a broader base of analytical instruments, because this has a significant cost that can only be measured over the medium term. Along this line, the Government of Reconciliation and National Unity – basing itself on several indicators, analyses, specialized studies, and in situ knowledge of poverty – is orienting its strategy and social policy with a more direct focus on the poor, as it will do with its follow-up that can provide information in the short and medium term.

IV. Development of Human Capital and Social Protection

1. General Aspects

47. The social sector constitutes the negative side of the programs applied previously. Despite the country having formalized a poverty reduction strategy (2001) with the international community and despite good macroeconomic performance, Nicaragua continues to be the second poorest country in the continent, after Haiti. Three-quarters of the population live with an income of less than two dollars, close to half do not consume enough kilocalories, and more than a fifth of the population under five years of age suffers from chronic malnutrition. In education, 25.5% of the school age population does not access the educative system and the maternal and infant mortality rates are among the highest in the area. This situation of poverty has created a strong migratory flow to other countries in search of better opportunities for living as a practical response to a model that has not worked for Nicaraguans.

48. The above shows a lack of integration between the objectives of the macroeconomic policy and those that aim to reduce poverty, a lack of articulation of international cooperation with the Millennium Development Goals and with the structural problems of the economy, and a lack of medium- and long-term policies. It also reflects a model that has given preference to the accumulation of wealth for a business sector with fiscal protection but socially out of touch. The corruption that there has been in previous governments is also a cause of the poor social performance of the country, as is the degree of improvisation of social policies and the poor allocation of resources.

49. It should be pointed out that the program of structural reforms, especially the content of privatization, had negative results on the social sector. In education, coverage was affected by a model of school autonomy that exchanged budgetary transfers for enrollments that were not real, and it created a system of monetary contributions that could not be borne by the parents. In health, coverage of services for the poorest was not favored by the specialized attention given to the private sector. The drinking water sector, in the process of privatization, was decapitalised and so service cannot now be provided to the poorest. The energy sector faces the worst crisis in history, affecting the poorest in the hospitals and health centers, and the transport sector is subsidized by the government in order to protect the workers and the population at large that uses this means.

50. One of the strategic elements for reducing poverty is the development of human capital in its broadest sense. In Nicaragua, the human resources

12 in education and health were limited, they face major technical shortfalls, they are concentrated in urban zones, and they lack incentives to remain in their jobs. The shortfall in wages is perhaps the most visible problem affecting these sectors and the purchasing power of the wages is deteriorating faster all the time.

51. In this context, the accumulated results in the social sector should not seem strange. The acknowledgement of these deficiencies in the poverty reduction strategies implemented so far is fundamental in order to look for a more direct route to the poor, more efficient and productive, and more consequent with the overall development strategy. This will allow for seeking out policy options, strategies, resources, and organization in order to be able to integrate macroeconomic stability with social objectives in a harmonic way.

52. The Government of Reconciliation and National Unity began this process, incorporating targets and indicators for social performance into the macroeconomic program that will soon be signed with the IMF. It has established its priorities and the factors for change to the NDP and what it will continue in it. It has made new agreements for cooperation that aim to break structural problems that translate into bottlenecks for social development. It is focusing its strategy on capitalizing the poor so that they become an active party in this. It is developing food programs that favor the poorest and it is organizing the population around the execution of programs and the definition of policies.

2. Social Policy and Structural Reforms

Education

53. The Nicaraguan educative system that was inherited does not respond to the expectations for the development of the country. This sector is in a state of financial subsistence, lagging behind in all aspects, disarticulated from the reality of the country, and with an inadequate infrastructure that is deteriorating. Furthermore, the quality of education at all levels is not competitive, many of the human resources have not received formal training (empirical practitioners), and the academic demands are very poor. As it stands, the prolongation of this educative status would not be coherent with the aims to reduce poverty in Nicaragua.

54. The Government of Reconciliation and National Unity began a process of educative reform that will achieve the transformations necessary to guarantee the country’s future. The government has recognized that the problem is not just of schooling coverage, but also has to do with the rescuing of the values of education, with educative quality in all its dimensions, with the active participation of society as something for all

13 educative strategies, and with the opening up of real opportunities for the poor. However, this is not achieved with just good will, moral solidarity, or political support; it is necessary to invest in the educative sector in a decided fashion and with no more conditions or reward than seeing Nicaragua get out of the club of poor countries.

55. The PND 2006 progress report will report on the policy actions that were taken in the educative sector within the context of the model for school autonomy during that year. With this report, a stage of the education sector is closed and a new route is opened in order to modernize it, strengthen it, and reduce the levels of poverty throughout the national territory. The government has formed a national commission for basic and mid-level education affairs that has a short-term mandate to present the new educative strategy and prepare a draft of a law for the decentralization of education.

56. In 2006, the outgoing government continued to strengthen the model of school autonomy, which contrary to the mandate of free education stated in the Political Constitution, privatized educative services in most schools, which together represented 83.0% of the public enrollment (not counting community schools). The abuse of this policy led to the application of a series of monetary requirements in order to access enrollment, with the consequent effect on schooling coverage, the illiteracy rate, and the rate for staying in school (retention).

57. In 2006, the MECD began a plan for the professionalisation of teaching staff for community, preschool, and primary education and for a small group of teachers that impart classes to indigenous communities in their mother tongue. These initiatives, however, did not have the necessary scale in order to make major qualitative changes if one considers that 50.0% of the teachers in the education system at present have no formal training, and 80.0% of these are in the preschool sector. This level of empiricism is one of the perverse effects of school autonomy since in order to assure the profitability of the autonomous centers, the appointment of untrained teachers was favored.

58. Regarding the special education programs, attention for groups of students with different abilities continued in 2006 in specialized schools and regular schools. Through the program for a nutritional complement, the giving out of daily food rations for preschool and primary students continued; nevertheless, it still is not enough.

59. In regards to the legal frame for the educative sector, the National Assembly approved the General Law for Education in March 2006 and it entered into force in August of that year. It sets the general guidelines for education and for the national educative system, the attributions and

14 obligations of the State, and the rights and responsibilities of the people and society in their educative function. It also regulates all the educative actions done by public or private natural or legal persons in the country and replaces the General Regulation for Primary and Secondary Education promulgated in December 1993.

60. Lastly, the public investment program managed to build 501 replacement classrooms in 147 schools, repair 206 classrooms in 26 schools, and expand 17 schools with the construction of 73 classrooms. School desks were also delivered for primary and secondary schools, along with chairs for preschools and sets of chairs and tables for teachers and students. However, 30.0% of the schools do not have drinking water and 50.0% have no electricity, an indication of the poor level of public investment in the educative sector.

Health

61. The policy and structural reforms in the health sector were not that transcendent over the last five-year period for the population demanding these services. In fact, the indicators for health showed a notable deterioration and a lagging behind, similar to that in education. A model of privatization of specialized attention for those who can afford it was implemented without the results and benefits expected for the poorest. But besides material needs and the lack of a long-term strategy and resources, the mystique and the values and principles that govern this sector were in decline given the abandonment shown over and again in public policy.

62. The rescue of the health sector, as with education, requires the participation of all Nicaraguans and a government that is more committed to the sector and to the poor who are paying with their lives for the absence or inefficiency of healthcare services. This sector is related to other activities that have a direct effect on its development, like the supply of drinking water, environmental health, electricity, and education in which it is necessary to make investments in order increase the supply and quality of these services. The solution for healthcare is not just reduced to a question of hospitals and medicines, but also having the population avoid falling ill and taking on the responsibility to care for their own health.

63. The Government of Reconciliation and National Unity began its program with the elimination of the privatization of services, making healthcare free of charge. Reversing the deterioration of the infrastructure, equipment, and medicines is a matter of resources, but the human capital in the sector and the new strategy that leads to a model of universal healthcare favoring the most vulnerable groups requires time, changes in behavior, a different culture among Nicaraguans in regards to defending health, solidary public policies, and support from the international community.

64. Below is a report on some policy actions and measures taken to strengthen the sector during the previous administration within the scheme of a model of semi-privatization of services in 2006, in the logic of budgetary constraints for the sector, and in a context with constant demands for increased salaries because of the lack of political will to seek solutions, increasing the sacrifice of the most vulnerable population.

65. In 2006, the authorities continued to move ahead with the process of organizing and modernizing the health sector with the Model for Integral Healthcare (MAIS)4, signing 17 more management agreements between MINSA Central and the Local Systems for Integral Healthcare (SILAIS). These agreements established the actions, indicators, and targets used as reference for budget allocations, conditioned by reaching the targets and indicators by at least 90.0%. As part of these actions, there are recognitions and incentives, as well as sanctions as per the Law for Civil Service and Administrative Career.

66. Regarding the provision of services, the coverage and quality of healthcare services increased in 2006 by giving basic benefits to the population in poverty and extreme poverty. Nevertheless, MINSA did not reach universal coverage and it is estimated that only 65.0% of the Nicaraguan population is covered. It is also recognized that the healthcare services under the figure of differentiated attention created by the previous governments was covering up the privatization of the system, limiting access to medicines, examinations, surgery, and the stay of the population in State hospitals and healthcare units.

67. As part of the actions for health promotion and prevention directed at the population in 2006, MINSA made interventions at the community level: the community educative knapsack of materials directed at adolescents; the community first-aid kits; the monitoring of promotion and prevention for the SILAIS; and the system for surveillance of the state of health at the municipal level.

68. In order to develop the sector-wide approach in health, in 2006 there was continuation of the coordination and functioning of the sector table/forum made up by government officials and donors with a new method for functioning. This initiative consisted in carrying out a process of disseminating the “sector-wide” approach that includes the harmonization and alignment of foreign cooperation at the central level and in the SILAIS. This will be done through a technical committee made up by MINSA, the Ministry of Treasury and Public Credit (MHCP), the Technical Secretariat of

4 This model is the conceptual framework in which the sector orients the provision of services, including structural modifications to the components of provision, management, and funding.

16 the Presidency (SETEC), bilateral and multilateral cooperants, and international agencies.

69. In the area of budgetary planning and policy, the sector authorities continued to pressure for more resources in 2006 in order to avoid the drop in the supply of services and to cover salary increases. These efforts did not result in much more than the increases allowed for with a restrictive fiscal policy in the context of the program with the IMF. Despite all that, there was promotion of greater efficiency in the use of resources, using the criteria for authorizing a budget based on results and guidelines from the MHCP.

70. Regarding institutional strengthening, a presidential decree (Decree No. 26-2006) gave rise to a new legal framework for the reorganization of MINSA, under which the authorities formulated a series of norms and protocols to regulate the performance of healthcare providers at the national level. There was also progress in the normative process by approving norms for referrals and counter-referrals and for attention to the main health problems and pathologies affecting the Nicaraguan population at both the first and second level of attention.

71. The authorities put the regulations of the Law for the Health Career in effect and implemented them. This establishes an appropriate legal frame from which MINSA will act on matters of salaries, compensation, and retirement plans. Parallel to this, progress was made with the first draft of the proposal for a salary policy based on performance and which rewards efficiency and productivity.

72. Despite all this, the structural problems of the health sector are so deep that these measures continue to have little impact on the improvement of indicators for the sector. To the contrary, many of them have declined, which can to be seen in the sector analysis made further on in this report. The system continued to experience serious limitations of resources and materials and so the quality, coverage, and supply did not improve, which is consistent with the results from the latest social surveys conducted in the country by the government and independent specialists.

Social protection

73. In practice, social protection has depended more on isolated programs or the preferences of the donors than on a real strategy that is organized with clear targets and objectives and with adequate budget resources. This has evolved in this way despite the government approving the National Policy for Social Protection in 2003 and defining the System of Solidarity for Development for its implementation. This policy has the essential objective of

17 evolving social assistance for social protection according to what is set out in the NDP.5

74. In order to provide it with resources, the System of Solidarity for Development grouped together the programs and projects that were being executed by different State institutions financed with resources from foreign cooperation and modest allocations by the government. More than 80.0% of the budget for the leader organization depends on resources from the financing for the projects, which makes both the projects and the institution itself unsustainable.

75. Beyond the scope of these projects, the social protection policy remained limited to the execution of available resources, with no greater expectations for the medium or long term. The political will expressed in budgetary terms for this sector shows that the previous administration allocated resources that, on average, represented just 0.4% of the GDP during the period from 2003 to 2007, with a clear downward tendency to the extent that the projects were finalized. This shows an inadequate correspondence between the objectives of the leader institution (MIFAMILIA) and the allocation of resources for these purposes.

76. The performance of the sector in 2006 showed the same inertia of previous years with more emphasis on activities for coordination and institutional organization than on some policies that could result in increased social protection in the country. At the same time, there was continued execution of projects grouped together, from which a good part of the operative funding for the leader organization also depends.

77. The government promoted the strengthening of spaces/opportunities for dialogue with the international community and the bodies for coordination inside and outside the government, taking actions to strengthen the Inter-institutional Technical Committee and its executive unit for coordination, as well as developing a more active agenda at the sector table/forum for social protection made up by government delegates, the cooperant community, and civil society organizations.

78. In support of the leader institution, the previous government began the implementation of a model of integral attention of MIFAMILIA in order to integrate the interventions and processes that could put the legal framework approved for the development of the sector into practice, along with the policies designed for social and special protection. The objective of this initiative is to achieve an integrating vision of the actions that the institution should take, in line with the mandate of the law that created it.

5 Government of Nicaragua, National Development Plan, page 56.

18 79. In terms of achieving better administration of the centralized programs, the previous government through MIFAMILIA carried out a process to integrate the following programs: Social Safety Net (SSN), Program for Integral Attention for Nicaraguan Children (PAININ), Program for Integral Attention for Children and Adolescents at Risk (PAINAR), food programs and programs for attention to crises, and Centers for Social Protection.

80. In practice, there were pilot experiences of the System for Solidarity in several municipalities of the country6, into which actions for social protection were incorporated in order to strengthen the municipal investment plans. They established alliances between local governments and non-governmental organizations in order to increase the availability of resources going to social protection. Attention for social protection was expanded in 22 municipalities in which agreements were signed with the municipalities in order to set up windows/wickets for attention to social protection, which were given staff, vehicles, and office equipment.

81. In 2006, the government carried out actions in support of children, adolescents, youth at social risk, and those requiring special protection. It strengthened the National Center for Information and Orientation (CIO) in Managua with a free telephone line and it opened up the Shelter Home to citizens in the Municipality of San Carlos (Río San Juan) in order to attend to repatriated persons, people in transit, highly vulnerable elderly persons, and children and adolescents at social risk.

82. Nonetheless, the whole scheme for social protection was assistance oriented and had high costs of intermediation through the use of outsourcing with service providers and it had little effect on improving social protection.

Social security

83. By late 2006, the social security system in Nicaragua was showing serious structural problems and a difficult financial situation. One alternative for the privatization of pensions had been proposed by the World Bank in order to deal with the actuarial deficit of the Nicaraguan Social Security Institute (INSS). This initiative was aborted because of the weaknesses found in the model and because of rejection from the affected population, but mainly because it was unviable to have the State cover the transaction costs related to the pensions already being paid out, because of the acquired rights for workers paying into the system, and because of the guarantee of a minimum pension. 7

6 Among the municipalities benefited are: El Jicaral, San Lucas, Waspam, El Almendro, and Puerto Morazán. 7 In July 2004, the government suspended indefinitely the entering into force of Law 340 that would lead to the privatization of pensions. In May 2005, the government approved the Law for Reform to Social Security (Law 539).

19 84. The reality of Nicaragua showed that this privatization program would become a pension business in which the market would impose its rules with costs for the most vulnerable population of retirement age. This proposal for reform also did not have financial support from the multilateral body for covering the initial social costs and the technical reserves had to be increased greatly in order to cover the financial losses.

85. It should be mentioned that a review of the premises on which the privatization model was based showed that the financial losses included since 2001 in the account balances were not registered correctly. According to experts from the International Labor Organization (ILO), this really meant the cost of transition for the move to the Pensions Saving System. 8 However, these calculations would give some breathing room, but in no way would it change the tendency of the system towards being unsustainable.

86. Under these conditions, the Nicaraguan social security system was in a situation with very low coverage in 2006, barely 16.0% of the Economically Active Population (EAP). The rate for paying into social security is one of the highest in the area (10.0% in pensions and 21.5% total) and there is poor coverage of services. Nevertheless, as well, the level of evasion of payment for security by employers is significant and the system faces a serious financial crisis.

87. Nevertheless, in 2006, the government continued increasing coverage and there was a 10.8% increase in the number of people insured, the number of employers in it increased by 16.7%, and coverage was extended to the children of those insured up to 12 years of age. Coverage of the informal sector continued to be a challenge for the government because of the low income and job instability faced by workers in this sector and because of a lack of initiatives from the government. In May 2006, a presidential decree aimed to incorporate domestic workers into the social security system, without the expected results.

88. Concretely, insurance for illness and maternity and medical attention for those insured and beneficiaries increased by 18.0% in terms of coverage of the population, compared to 2005. The coverage of medical attention in the program for the elderly increased by 6.0% (2,234 new retirees). For the rightsholding population, there was an 8.7% increase in the provision of check-ups, 12.3% more in laboratory exams, and 2.0% more in hospitalization.

89. As of October 2006, there was expanded coverage of the breast and cervical-uterine cancer program and of the program for gastric, colonic, prostate, leukemia and lymphoma, skin, and lung pathologies. These

8 According to the INSS, the deficit classified as financial losses amounted to C$90.0 million, or about 0.1% of the 2006 GDP. The ILO calculated that the level of actuarial deficit amounted to only C$37.0 million.

20 services covered 365,600 insured persons affiliated to the integral and facultative integral regime, beneficiaries of male insured persons, and pensioners in all the categories. The second campaign of cataract surgery was implemented and there were 350 surgeries performed.

90. Regarding pension insurance, 7,501 new pensions were granted for an increase of 5.0% compared to 2005 and the pension amounts were also increased: 5.0% for those less than or equal to C$8,000; 12.0% for the average amount of old age pension; and the minimum amount for war victim pensions is now set according to the minimum wage of the central government. Nonetheless, in the latter case, the number of those receiving these pensions dropped from 20,400 in 2005 to 19,600 in 2006, mainly because the pensions expire when those who are beneficiaries because of being orphans reach the age of majority.

91. Regarding insurance for professional risks, there were 7,737 visits for oversight/supervision of employers, concentrating on the construction sector and free trade zones. Training was given to workers and employers in occupational health and safety and to improve the attitude of employers and workers towards the prevention of work hazards. There were also workshops for primary attention doctors to raise their awareness of occupational health.

92. In relation to institutional strengthening, the INSS implemented the new Integrated System for Specific Interventions (SIE) with which it is hoped to improve efficiency in the processes of affiliation, invoicing, and collections, providing timely quality information, facilitating the steps taken by employers, insured persons, and pensioners. The approval of the Law for Reform to the Pension System established the maintenance of value of the pensions (old age, disability, and incapacity) in relation to the exchange rate set by the Central Bank of Nicaragua (BCN).

93. In the context of social security, the Government of Reconciliation and National Unity has proposed a new scheme for dealing with this sector in terms of finances, expansion of services, population covered, and institutional strengthening, all within the frame of fiscal stability and desired financial sustainability. A financial strategy to increase the yields from the system and the diversification of risk is being promoted by the authorities of the leader institution. A program of audits applied in the productive centers in order to reduce social service payment evasion by some employers and the search for flexibility in the system in order to incorporate informal sector workers are parts of the policies that the government is promoting.

Labor sector

94. It is estimated that approximately 63.8% of the EAP is working in the informal sector, 37.6% of those employed are women, most with low salaries,

21 and only 19.1% are protected by social security. In this context, the labor sector in Nicaragua has a low skills level, shows natural barriers for its protection, and suffers from a high degree of insecurity. All this creates an environment of labor instability, above all in those sectors where the poorest are found.

95. The absence of promotion by the previous governments of adequate public policies to strengthen and protect the labor sector has created legal and institutional voids that make it difficult to regulate the sector, which creates vulnerability and social and occupational insecurity in it. The structural reforms in the frame of the agreements with the multilateral bodies since 1990 have increased unemployment, as have the natural disasters and the downsizing of the State in different dimensions, without there being compensatory plans to help absorb the social cost for the unemployed families.

96. It was only recently (May 2006) that the previous government approved a national employment policy and presented the drafts for the General Law for Occupational Health and Safety and the General Law for Inspection to the National Assembly. It also approved the General Law for Cooperatives and its regulations. The Ministry of Labor (MITRAB) approved the norms for occupational health and safety, applied in the prevention of biological risks with emphasis on HIV-AIDS, and a ministerial agreement to set norms for the functioning of private employment agencies.

97. In late 2006, the following activities in support of the sector were carried out: (a) approval of the ministerial accord on the list of dangerous jobs applied for the case of Nicaragua for the eradication of child labor; (b) reform of the ministerial resolution on the mixed commissions for occupational health and safety; (c) approval of the ministerial accord on minimum salaries that sets a general average increase of 12.4% for all sectors; (d) issuing of the salary norms for coffee that regulate the payment of temporary and permanent workers and that include a chapter for the prohibition of work for minors under 14 years of age; (e) presentation of the National Strategic Plan for Workers’ Health and Safety; and, (f) creation of the Office for Equality and Non-Discrimination in Employment in order to position gender equity on the labor agenda.

98. The Government of Reconciliation and National Unity promotes equality of access to work and better labor opportunities as a permanent action of the State labor policy. For this, work is being done on a National Plan for Decent Employment and Work; on technical and occupational formation in concordance with the perspectives for the economic and social development of the country and the needs of the labor market; modernizing and expanding public employment services, prioritizing territories according

22 to their economic potential and legally reinforcing the application of international labor conventions, mainly in matters of non-discrimination.

Water and sanitation

99. This sector was on the privatization agenda of the previous governments and so governmental policies lacked strategic content to develop the country’s water resources sustainably. The regulatory companies of the sector suffered continuous decapitalization that reduced its capacity to sustain and increase the coverage of services in recent years. The effective coverage of drinking water at present barely covers 63.0% of the population and only 36.1% for wastewater service.

100. The current financial state of the leader company (ENACAL) is critical. Its operations deficit amounts to 1.1% of the GDP; that is, around US$60.0 million. The increase in fuel prices, the level of unaccounted for water (46.0%), the freezing of rates, the technical losses, and administrative disorder are among the main causes of this financial deterioration.

101. In 2006, the government maintained a policy of responding to immediate situations, making transfers to the leader company in order to palliate its financial situation and its investment program was out of touch with the real dimensions of the sector’s structural problems. At the end of the term of the last government, initiatives were taken to align foreign cooperation into a process of harmonization and alignment of international cooperation and the sector-wide approach (SWAp), an initiative that came out of the work done at the sector sub-table/forum for water and sanitation.

102. The Government of Reconciliation and National Unity has declared that drinking water service is a human right and therefore, is not subject to privatization. It has included the sector as a priority in its program agreed on with the IMF; it has promoted greater national leadership that can accompany the international community in the sector; and, it is formulating an integral strategy to develop it, taking into account that the preservation of water, its rational exploitation, and its protection are tasks for all Nicaraguans. This requires changes in behavior and in the vision of how water management must be treated in Nicaragua.

Policy of subsidies for the poorest population

103. The continuous increase in oil prices in recent years and their effects throughout the economy, the high rate of unemployment, and the deterioration of the real salary of workers before the cost of public services have put pressures on the government’s policy of subsidies and transfers to the most affected population. The freezing of rates for electricity, drinking water, and transport in order to protect the low-income population has been

23 at root of an improvised subsidy policy that becomes more acute to the extent that the structural problems of the sectors providing these services is not resolved.

104. The approval of the Law for Municipal Transfers9 – created in order to promote the integral and harmonic development of the country’s different regions, to reduce the financial imbalance of the municipalities in order to improve their fulfillment of municipal competences, and to promote citizen participation and the process of decentralization of the State – has led to the sustained increase of these budgetary allocations that go towards avoiding a further deterioration of the income and living conditions of the poorest population. According to this law, transfers will reach a level of 10.0% of central government revenues by 2010.

105. It is important to note that the subsidies have been granted with the intention of protecting the population with a low level of consumption, but it has not been accompanied by has not brought about any change in terms of the utility companies improving services. Instead, they tend to cover their inefficiencies with increases in the rates for their services. This is because over the last 16 years, there has been no investment plan made by either the private or public sector in response to the high level of deterioration of the infrastructure of those sectors. This means that maintenance costs are high, as are technical losses. On top of this situation, the continued increase in fuel prices has made the crisis of these sectors even more acute because of the high level of dependency on petroleum in producing these services. Under such conditions, it is necessary to review this policy with a greater presence of the State in terms of investment and with a less generalized policy of subsidies.

106. The subsidies and transfers have increased at an average annual rate of more than one percent, so that during the period 2002-2006, they amounted to a figure equivalent to 4.1% of the GDP, 25.0% of fiscal revenues collection, and 30.8% of poverty spending. In absolute terms, this means US$200.1 million, explained by the rapid growth of municipal transfers.

107. In 2006, subsidies for public services were allocated US$14.5 million in order to maintain the rates for electricity and drinking water and bus fares in the capital and Ciudad Sandino. In the case of electricity, no generalized subsidy was granted but instead the subsidy was targeted at the consumption of retirees and residents of the Caribbean Coast. These subsidies were US$7.3 million less than the year before.

9 Law for Budgetary Transfers to the Municipalities of Nicaragua, Law No. 466, approved July 3, 2003 and published in La Gaceta No. 157, August 20, 2003. This law establishes that 4.0% of the Tax Revenues of the General Budget of the Republic of 2004 are to be transferred to the municipalities; this figure gradually increasing by at least 0.5% a year, so long as the GDP has grown by at least 1.0% over the preceding year, until reaching 10.0% in 2010.

24 108. Despite receiving the same proportion of tax revenues as the year before (6.0%), municipal transfers continued to increase because of the robust growth of revenues collection, going up to US$59.2 million, US$7.7 million more than what was transferred in 2005.

Table 3: Subsidies for Services and Transfers to Municipalities Accum. Items 20022003 2004 2005 2006 2002- 2006 Millions of dollars Total 10.6 9.8 32.8 73.2 73.7 200.1 Subsidies for basic services - - 7.2 21.8 14.5 43.4 For transport /2 - - 4.4 4.8 7.8 17.0 Drinking w ater consumption for retirees - - - 0.6 0.6 1.2 For electricity /3 - - 2.8 16.4 6.1 25.3 Consumption by retirees - - - - 1.8 1.8 Because of tariff detours for electricity /4 - - - 12.2 - 12.2 For consumption on the Atlantic Coast - - 2.8 4.2 4.3 11.2 Municipal transfers 10.6 9.8 25.7 51.5 59.2 156.7

Indicators: Percent Subsidies and transfers / GDP 0.3 0.2 0.7 1.5 1.4 4.1 Subsidies and transfers / tax revenue collectio 1.9 1.6 4.6 9.0 8.0 25.0 Subsidies and transfers / poverty spending 2.4 1.9 5.5 10.7 10.4 30.8 1/ Preliminary 2/ Subsidy for urban collective transport cooperativess of Managua and Ciudad Sandino 3/ Subsidy granted based on Law for Electricity Industry 4/ Tax revenues Central Government Source: SETEC, MHCP

V. Evolution of Targets and Indicators

1. General Aspects

109. Below is a presentation for 2006 of the progress related to the social targets contained in the international commitments and the indicators that include different sectors, which gives a picture of the performance with the poverty reduction strategy included in the NDP. Some of these indicators depend on the periodicity of surveys, others have serious problems of record keeping and major lags, which makes the institutional effort to write up this report more difficult.

110. It should be mentioned that the breadth and diversity of the indicators introduced into the NDP increase the risk of non-fulfillment of these reports, because it involves the will of other powers of State, local governments, the private sector, and other bodies that supply information, which often requires a specialized team, resources, and time. Since the Government of Reconciliation and National Unity has made substantive changes to the poverty reduction strategy, a review of these indicators will be proposed in the context of a review of the NDP.

111. At the Millennium Summit in 2000, the member-States of the United Nations reaffirmed their commitment to continue working towards the objective of achieving sustainable development and reducing poverty. In the case of Nicaragua, these commitments were incorporated into the poverty reduction strategy, which was called for by the international bodies as a requisite in the frame of the HIPC initiative that aims to forgive the foreign debt of poor countries with this problem.

112. These targets and millennium objectives were officially incorporated in 2001 into the first poverty reduction strategy in Nicaragua (ERCERP) and were also adopted by the NDP. The projections and targets to reach in the mid-term took into account the 1995 Population and Housing Census, the LSMS 2001, and the National Demographic Health Survey (NDHS) of 2001. In 2005, there was a new Population Census and a Living Standards Measurement Survey, but not a demographic health one. This will mean fundamental changes to the references for measuring the performance of the indicators.

113. It is important to note that the matrix of targets and indicators for the NDP is made up by seven Millennium Objectives and 47 indicators (14 for production, 36 for human capital, and four for governance). Of these, there is information for 2006 for 42 of them, of which 25 reached the proposed targets. The information presented below corresponds to a comparative and

26 evolutionary analysis of fulfillment of the targets in the different themes included in the matrix.

2. Intermediate Targets and Indicators

Reduction of extreme poverty

114. Millennium Goal: Reduce extreme poverty to 50% by 2015. According to the last two living standards measurement surveys, the index of extreme poverty for the period from 2001 to 2005 increased, despite an increase in per capita income, which shows there is little correlation between both variables in the case of Nicaragua. While per capita GDP increased by 12.4% over the period, the number of extreme poor increased by 14.0%. This result shows that the economic and social policies implemented so far have not had an effect on poverty reduction, despite poverty spending representing close to 50% of the General Budget of the Republic and more than 13.0% of the GDP in last three years.

Education

115. Millennium Goal: Increase the net rate of primary schooling. The millennium goal is universal primary education by 2015. In 2006, the net rate of primary schooling was 86.0%, 0.2 percentage points less than it was in 2005 but above the base for reference of the NDP (82.6%). This denotes that the educative system only has the capacity to absorb the vegetative growth of the population between 6 and 12 years old. Serious structural problems in the sector and the conditions of poverty of the population that pays a cost by exchanging schooling for child labor are limiting meeting this objective.

116. It is estimated that the new strategy for the educative system being pushed by the Government of Reconciliation and National Unity will be able to speed up the growth rate of enrolment and retention so that by 2010, the rate of primary schooling would be 92.6%, greater than the target set in the NDP of the previous government.

117. Intermediate indicators. Of the targets for six indicators in education, only three were met: the net rates of schooling for preschool, primary, and secondary. The rate of finishing primary and the illiteracy rate for the population 10 years and older were not met because of not having the appropriate programs. The indicators for educative coverage, expressed in net rates of schooling, show an upwards trend in preschool, primary, and secondary.

118. With preschool education, both formal and non-formal, there was enrollment of 209,950 children, with a net rate of schooling of 52.1%,

27 surpassing the proposed target of 33.9%. However, problems with the budget for incorporating new primary education teachers made it so that this improvement is concentrated in community preschool enrollment.

119. In the modalities of regular primary, multi-grade, and over-age, enrollment rose to 966,206 students for a net rate of schooling of 86.0%, slightly higher than the 2006 target of 85.7%. The increase of this coverage is consistent with the vegetative growth of the population of primary school age.

120. In secondary, enrollment rose to 425,718 students, for a net rate of schooling of 43.6%, higher than the goal of 43.2% for 2006. Most of the students making up this enrollment come from urban sectors. In terms of the rate of finishing primary, although the proposed goal was not reached, there was 98.0% fulfillment. It should be underlined that in urban zones, 18.3% of the schools do not have the complete six grades of primary, while in rural zones, this reaches 47.0%.

121. In relation to the illiteracy rate, the target of reducing it to 18.8% in 2006 was not met. The latest figure available from the 2005 Census indicates that 20.5% of those 10 years and older are illiterate. This decline in the indicator is based on the figure from the LSMS 2001 that found illiteracy to be 18.7% that year. This target was not accompanied by the literacy programs that are necessary in these cases and for which, an important budgetary outlay must be made. The Government of Reconciliation and National Unity has begun a literacy program and the goal is to reduce illiteracy to 7.2% by 2010. This is impossible to reach with just a State effort and so it will be reached with a combination of central government, local governments, and the community.

Health

122. Millennium goal: Reduce infant mortality and mortality of under 5s. According to results from the NDHS 2006, the infant mortality rate improved slightly, going from 31.0 to 29.0 per 1000 live births, while the drop was more marked for mortality of children under 5, going from 40.0 to 35.0 for every 1000 live births. A major influence in these results was the reduced number of deaths caused by malaria, along with the contribution from social protection programs developed over that period, the health campaigns deployed throughout the country, and the implementation of the strategy for Integral Attention for Prevalent Diseases of Infancy (AIEPI).

123. Despite the reduction of mortality among children one year of age, that was at the expense of post-neonatal mortality (1 to 11 months), while neonatal mortality (0 to 28 days) continued to remain high due to problems of greater complexity and the supply of services with a greater power to

28 resolve problems that require a more efficient healthcare infrastructure. Likewise, with the mortality of children 5 years of age, although deaths caused by diarrhea were fewer, deaths from acute respiratory ailments continued to be high.

124. Nonetheless, this indicator has a limited coverage from the territorial perspective, the situation of poverty, and the high level of malnutrition among the infant population, above all in the central and Atlantic zones of the county where the conditions of infant mortality are different from the average results nationally.

125. Millennium goal: Reduce maternal mortality. To the contrary, the maternal mortality rate increased, going from 88.6 per 100,000 live births in 2004 to 94.0 per 100,000 live births in 2006. This indicator shows the greatest lag in relation to the millennium goal, being three times higher than the target. Despite the efforts made so far, cultural problems and problems of access, among others, still persist in regards to the population’s access to healthcare units. There is insufficient coverage of the maternal houses and very little access to specialized services, especially in rural zones, which makes it difficult to reach the indicated target.

126. It is important to note that the rate could be lower because of having a greater registering of live births, considering that the Law for Certification of Birth and Death allows for registering up to one year after the occurrence. Despite the increase in maternal mortality in 2006, the indicators related to attention for women like prenatal control, institutional births, and early detection of pregnancy increased their coverage in relation to the target for 2006.

127. Intermediate indicators. In 2006, 15 indicators were established for this sector and of these, only 10 met the proposed target. Those not reached mainly have to do with vaccination, family planning, and nutrition. Of these 15 indicators, three are related to maternal mortality (met), three to infant mortality (two met), eight to mortality of children under 5 (three met), and one to the prevalence of HIV-AIDS.

128. The indicators for coverage of institutional births, prenatal care, and early detection of pregnancy were met. However, those related to vaccination were not. Vaccination against tuberculosis (BCG) met the target set for 2006, while vaccination against polio and the 5-in-1 were below the target because of the late start of the vaccination campaigns and delays with organization that had to do with the elections going on that year.

129. On the other hand, the proportion of deaths caused by diarrhea among children under 5 in 2006 fell substantially, registering 6.6%, with which the results were better than the target by 0.8 percentage points. To

29 the contrary, the indicator for deaths by acute respiratory illnesses did not reach the target, registering 10.3% instead of 9.3%. This reflected the lack of resources since it is more complex to deal with respiratory infections, which require more human, technical, and financial resources compared to diarrhea-related diseases.

130. Regarding the reduction in the unmet demand for family planning services, the goal was met by reducing this among women between 15 and 19 with a spouse from 19.8% in 2001 to 18.0% in 2006. The unsatisfied demand among women from 20 to 24 years old with a spouse went from 17.0% to 13.9% over the same period. It must be noted that the educative programs about this and the expansion of services from MINSA and non- governmental organizations had an effect on these results.

131. Contrary to the preceding, the demand for family planning services provided by MINSA, measured by access to contraceptive methods by women of childbearing age (15 to 49), fell with the indicator for demand being at 12.9% in 2006 compared to the target of 27.0% set for that year. This downward trend is attributable to sociocultural factors, a failure to have more sex education at the family level and in schools, problems of accessing contraceptives, limitations in adjusting strategies for women, and there could have been greater demand for these services from private providers. It is also important to mention the change in the variables for calculating the indicator (adjustment in the count of women that access family planning methods for the first time in their life), which made measurement of the indicator more rigorous.

132. Nevertheless, the indicator for the rate of use of safe contraceptives (NDHS 2006) shows that this improved among the same group of women of childbearing age (15 to 49 years old), going from 64.1% in 2003 to 69.1% in 2006. Included in this measurement is not only the coverage by MINSA but also the alternative services being provided by non-governmental organizations.

133. In terms of reducing chronic malnutrition among children under 5, according to the results from NDHS 2006, it was not possible to reach the target of reducing the percentage of children with chronic malnutrition to 16.5%; however, the 16.9% reached in 2006 was a considerable improvement over the 17.8% recorded by the NDHS 2001. It is pertinent to mention that the 2005 Census recorded a figure of 18.2%. This situation has worsened in rural zones because of greater impoverishment of poor campesinos and the lack of measures to reactivate production for household consumption in those zones.

134. With the indicator for HIV-AIDS, the objective of containing the rate of prevalence to 16.1 per 100,000 people in 2006 was not met. To the contrary,

30 this indicator showed a clearly negative trend, reaching a rate of 31.1 per 100,000. The figures show a rapid increase in recent years, mainly in territories with a high level of population migration like Chinandega, Managua, León, Masaya, and the North and South Atlantic Autonomous Regions (RAAN and RAAS).

135. The group most affected continues to be youth, with women being affected more. Sexual transmission persists as the main route for contagion, but there was an increase in vertical transmission (mother-child). It is important to explain that the rate of prevalence is calculated on the basis of the ongoing registry of cases among persons living with HIV-AIDS during the period from 1987 (date of appearance of the first case in Nicaragua) and 2006.

Drinking water

136. Millennium goal: Increase coverage of drinking water. In 2006, ENACAL had 522,663 connections, providing approximately 55.0% of the water supply in the country, with cuts and limited hours of service in 77.0% of the urban households and with rural supply of less than 31.0%.

137. Notwithstanding, according to the latest population census, the national indicator for drinking water coverage was 85.2%, surpassing the target of 79.3% for 2006 and slightly more than the millennium goal, which stipulates coverage of 85.0% by 2015.10 There was also a significant increase of 14.0 percentage points in drinking water coverage in rural areas with respect to the target for 2006 with this indicator reaching 68.5%.

138. Regarding urban population access to wastewater disposal and sanitation, the low amount of investment in this, oriented more towards rehabilitating infrastructure and not expanding coverage, made it difficult to meet the millennium goal of reducing the population without access to sanitary drainage services by at least half.

139. Intermediate indicators. Targets were set in this sector for five intermediate indicators, of which three were met. The projections for water coverage in 2006, based on the 2005 population census, showed national coverage of drinking water of 85.2%, which surpassed the target by 5.9 percentage points. Likewise, urban and rural drinking water coverage met the proposed targets with 98.0% and 68.5%, respectively.

140. The national indicator for sanitation reached 84.4%, not meeting the target of 88.1% set for 2006. It is pertinent to indicate that sanitation has been biased towards the installation of latrines, which represents more than

10 The Population Census includes, besides pipes in the home and pipes on the land, public posts, private wells, public wells, and wells from another home / neighbor /company.

31 90.0% of both urban and rural solutions, and so it is necessary to opt for more integral solutions to the problem of sanitation at the national level. Investment in this field is also dominated by a single project for the environmental clean-up of Lake Managua and the City of Managua.

141. Nonetheless, in 2006 the Emergency Social Investment Fund (FISE), as the coordinating institution for actions in water and sanitation for rural areas, put 35.0% of its resources into investments in rural water and sanitation projects: 43 wells, 10 drinking water distribution systems, and 17 mini-aqueducts, among other works. These projects benefited 95,450 persons who now have access to safe water. Accompanying this effort was a strategy for training that enabled the communities and municipalities attended to develop capacities for the construction, operation, and maintenance of the water and sanitation works. There was also the formation of Water and Sanitation Committees (CAP) through the campaigns for theoretical and practical training.

142. The 32.2% coverage of urban sanitary drainage is 8.2 percentage points under the target. It must be mentioned that there have been no investments in recent years for expanding sanitary drainage. In terms of the rate of water that is not accounted for, at the national level the target set of 52.0% was reached by reducing this to 46.0%. This was due to furthering the programs for the macro-measurement of industrial consumption and the micro-measurement of household consumption and to the expanded coverage of meters and to the setting of fixed rates for a large part of the settlements with illegal connections, above all in the City of Managua.

Table 4. Nicaragua: Millennium Development Objectives} Base Base NDP Target Target International target 2006 Goals 1/ 2004 2010 2015 15.1 Reduce extreme poverty by 50% 19.4 17.2 11.5 9.7 (LSMS 2001) Increase net rate of primary 75.0 82.6 86.0 90.5 100.0 schooling to 100% Reduce infant mortality rate per 31.0 58.0 29.0 27.0 20.0 1000 born by 66% (NDHS 2001) Reduce mortality rate for children 40.0 under 5 per 1000 live births by 72.0 35.0 33.0 24.0 (NDHS 2001) 66% Reduce maternal mortality per 91.0 88.6 94.0 63.0 22.0 100,000 live births by 75% Increase drinking water coverage 70.0 75.8 85.2 83.5 85.0 1/: The base year for most targets is 1990. Source: LSMS, MECD, MINSA, NDHS, ENACAL, and FISE.

32 Social protection

143. Intermediate indicators. Targets were set for five intermediate indicators, of which only one was met. Two were not met and there is no information for the other two. The target met is for the percentage of centers accredited to provide special protection services, which with 69.0% of accreditations was almost double the target of 35.1% set for 2006.

144. The indicator for the number of children under 6 in extreme poverty attended to by integral programs for social programs saw a decline starting in 2005, basically because the PAININ, which mainly attends to this sector, reduced its coverage by 37.8%. The conclusion of the second phase of this program and the delay in approval of the loan from the Central American Bank for Economic Integration (CABEI) as a bridging stage to the third phase explain this behavior. Problems in getting resources were also faced by the program for attention to children, adolescents, and youth at social risk, which only reached 52.3% of the target to attend to 86,250 children.

145. Nonetheless, the actions directed at the most vulnerable population allowed for attending to various segments of the vulnerable population in 2006. The Community Preschool Centers provided a daily ration of food to 10,010 children; 96 community gardens were set up to improve the diet in the children’s cafeterias; 16,204 families received benefits with a food, health, education, and production credit bond/coupon in nine municipalities11; 4,668 adolescents and youths received bonds/coupons for occupational training; and, there was attention for 20,524 children and adolescents from 7 to 13 years of age enrolled in regular education.

11 Ciudad Darío, Esquipulas, Terrabona, Totogalpa, San Dionisio, Río Blanco, Wiwilí, Tuma-La Dalia, and Yalagüina.

3. Matrix of Intermediate Targets and Indicators of the NDP

146. Below is a matrix of intermediate targets and indicators that was incorporated as the instrument for measuring the progress of the policies and strategies contained in the NDP. As will be seen, many of the targets and indicators can only be measured by means of surveys, but others depend on the quality of the public records used to determine the sectoral statistical base for follow-up.

147. It is also possible to observe that meeting the intermediate indicators does not necessarily lead to meeting the target for the master variable. On the other hand, the number of indicators is not the ideal parameter for structuring a matrix for follow-up, but rather the quality of the indicator and its ability to represent. Given this, it is necessary to improve the matrix, reducing it strictly to those indicators that have a direct impact on improvements for the poor. As has been said, the Government of Reconciliation and National Unity is in the process of reviewing and simplifying the matrixes and the group of donors and the Budget Support Group have reacted positively to this.

Table 5. Nicaragua: Matrix of Intermediate Targets and Indicators of the NDP Base Situation of National Targets Target Observed Indicators Year the 2010 2006 2006 2004 Indicator POVERTY Reduce extreme Reduce extreme poverty from 15.1 14.3 17.2 Not met poverty 15.1% in 2001 to 11.5% in LSMS 2010* (2001) EDUCATION Increase average years Increase the Net Rate of 82.6 85.7 86.0 Met of schooling of Primary Schooling from population between 10 82.6% in 2004 to 90.5% in and 19 years of age 1 2010 * Increase the Net Rate of 30.8 33.9 52.1 Met Preschool Schooling from 30.8% in 2004 to 39.2% in 2010. Increase Net Rate of Secondary 40.1 43.2 43.6 Met Schooling from 40.1% in 2004 to 49.7% in 2010. Rate of finishing Increase rate of finishing 66.0 68.0 67.3 Not met primary, broken down primary, broken down by sex, by sex from 66% in 2004 to 72% in 2010. Broken down by sex: Girls 70.2 71.1 68.8 Not met Boys 62.0 64.5 65.8 Met Reduce illiteracy Reduce illiteracy rate among 18.7 18.0 2005 Not met among people 10 and persons 10 and older from LSMS Population older 1 18.7% in 2001 to 15.6% in (2001) Census ** 2010. HEALTH

34 Table 5. Nicaragua: Matrix of Intermediate Targets and Indicators of the NDP Base Situation of National Targets Target Observed Indicators Year the 2010 2006 2006 2004 Indicator Reduce maternal Reduce maternal mortality 88.6 83.0 94.02 Not met mortality from 88.6 per 100,000 live births in 2004 to 63 per 100,000 live births in 2010*

Increase coverage of 51.3 57.7 62.4 Met institutional births from 51.3% in 2004 to 66% in 2010 (average annual increase of 3,300 institutional births). Increase coverage of prenatal 64.5 78.0 80.6 Met care from 64.5% in 2004 to 84% in 2010 (average annual increase of 3,900 prenatal controls a year). Increase coverage of early 30.2 38.0 38.4 Met detection of pregnancy from 30.2% in 2004 to 46% in 2010 (average annual increase of 3500 early prenatal controls a year). Reduce infant Reduce infant mortality 31.0 29.0 Met mortality 3 4 from 31 per 1000 live births NDHS NDHS in 2001 to 27 per 1000 live (2001) births in 2010* Increase coverage of immunizations (%) for children under 1 year: 1d of BCG from 87.8% in 2004 87.8 93.0 100.7 Met to 99% in 2010 3d of antipolio from 79.8% in 79.8 92.0 87.6 Not met 2004 to 95.0% in 2010 3d of 5-in-1 from 79.4% in 79.4 92.0 87.5 Not met 2003 to 95.0% in 2010 Reduce mortality of Reduce mortality of children 40.0 35.0 Met children under 5 years under 5 years from 40 per NDHS NDHS 3 4 1000 live births in 2001 to (2001) 33 per 1000 live births in 2010 * Reduce proportion of deaths 9.1 7.4 6.6 Met due to diarrhea among children under 5 years from 9.1% in 2004 to 6.3% in 2010 Reduce proportion of deaths 17.6 9.3 10.3 Not met caused by acute respiratory infections in children under 5 from 17.6% in 2004 to 7.8% in 2010 Reduce unmet Reduce unmet demand for 19.8 18.0 Met demand for family family planning services among NDHS NDHS planning services women from 15 to 19 with (2001) among women spouse from 19.8% in 2001 to between 15 and 19 17.0% in 2010 4 with spouse3 Reduce unmet Reduce unmet demand for 17.0 13.9 Met demand for family family planning services among NDHS NDHS planning services women from 20 to 24 with (2001) among women spouse from 17.0% in 2001 to between 20 and 24 15.4% in 2010. 4

35 Table 5. Nicaragua: Matrix of Intermediate Targets and Indicators of the NDP Base Situation of National Targets Target Observed Indicators Year the 2010 2006 2006 2004 Indicator with spouse3 Increase percentage of women 16.1 27.0 12.9 Not met of childbearing age who have access to family planning from 16.1% in 2004 to 29.0% in 2010. Rate of use of safe 64.1 66.0 69.1 Met contraceptive methods among (2003) NDHS women of childbearing age (based on this indicator, the unmet demand for family planning services is inferred). Reduce chronic Reduce chronic malnutrition 17.8 16.5 16.9 Not met malnutrition among among children under 5 from NDHS NDHS children under 5 3 17.8% in 2001 to 12.8 % in (2001) 2010 Detain spread of Rate of prevalence of HIV/AIDS 13.8 16.1 33.1 Not met HIV/AIDS and begin (2003) to reverse it in 2015 Percentage of persons with 21.0 85.0 Being prepared * HIV/AIDS with treatment (of (2003) those warranting treatment) Percentage of schools with 0 21% 21% Met teacher-counselors, teaching staff, and student population (secondary and 5th to 6th grade of primary) with training about STDs/HIV/AIDS

WATER AND SANITATION Increase national Increase national coverage 75.8 79.3 85.2 Met coverage of water. of drinking water from 75.8% in 2004 to 83.5% in 2010* Increase urban coverage of 95.1 96.3 98.0 Met drinking water from 95.1% in 2004 to 96.4% in 2010

Increase coverage of safe water 48.5 54.5 68.5 Met in rural areas from 48.5% in 2004 to 65.8% in 2010 Increase national Increase national access to 87.1 88.1 84.4 Not met access to wastewater sanitation from 87.1% in 2004 disposal and to 90.0% in 2010 sanitation Increase access of urban 35.1 40.4 32.2 Not met population to wastewater disposal service from 35.1% in 2004 to 43.4% in 2010 Reduce index of Index of unaccounted for water 56.0 52.0 46.0 Met unaccounted for water at national level 6 SOCIAL PROTECTION Increase coverage of Number of children in extreme 104,000 87,000 64,816 Not met initial education for poverty attended by integral children under 6 in programs of social protection. conditions of poverty

36 Table 5. Nicaragua: Matrix of Intermediate Targets and Indicators of the NDP Base Situation of National Targets Target Observed Indicators Year the 2010 2006 2006 2004 Indicator Increase the Percentage of Centers 13.3 35.1 69.0 Met percentage of Centers accredited to provide Special (2003) for Special Attention Protection that are accredited in the System for Attention from 13.3% in 2003 to 100% in 2010. Increase number of Increase coverage of attention 34,447 86,250 45,074 Not met attention sessions for for children, adolescents, and children, adolescents, youths at social risk. and youths at social risk to 210,068 by 2010 Increase the schools Increase number of students 8,800 13,400 N/D under the Education covered by the Program for for Life Program from Individual Violence Counseling 25% in 2003 to 100% from 8,800 in 2004 to 35,300 in 2010. Increase number of students 40,000 60,700 N/D covered by the Program for Group Violence Counseling from 40,000 in 2004 to 160,000 in 2010. MACROECONOMIC PERFORMANCE Increase Gross Gross Domestic Product (GDP) 3.7 3.7 Met Domestic Product Annual percentage increase of 20.0 15.0 18.6 exports. ECONOMIC INFRASTRUCTURE Provide infrastructure Number of km contracted by 543 1,200 1,751.23 Km Met for support to the FOMAV for highway production maintenance /1 New installed capacity in 0 10 N/D renewable energy (MW) /1 REGULATORY FRAMEWORK AND PROCEDURES Facilitate business Days to register a new 28 15 Being prepared management in terms company of paperwork and No. of new companies 471 650 647 Not met bureaucracy registered in the Single Wicket for Investments in Managua /1 Weeks to legalize purchase- 8 5 Being prepared sale of properties Number of new cases 400 500 640 Met investigated and ruled on in matters of consumer protection /1 PROPERTY RIGHTS Reduce uncertainty Land area recorded in cadastre 0 904 3,212 Km2 Met associated with (km2) in the Departments of property ownership Chinandega, Estelí, and Madriz /1

Increase area in cadastre from 12,065 km2 by 2010 modernizing the Cadastre and Public Registry for Property. Properties legalized 400 700 N/D No. of cases ruled on for 50 300 505 Met cooperatives of farmers that received titles in the period

37 Table 5. Nicaragua: Matrix of Intermediate Targets and Indicators of the NDP Base Situation of National Targets Target Observed Indicators Year the 2010 2006 2006 2004 Indicator from 1980- April 1990 /1 ENVIRONMENTALLY SUSTAINABLE DEVELOPMENT Promote sustainable Number of new management 9 19 19 Met development, plans for protected areas being incorporating the implemented. environmental Number of industries that 0 12 0 Not met dimension and natural dump their wastewater into resource management Lake Managua implementing into the policies and Environmental Management strategies for the Plans (PGA) in order to reduce economic, social, and pollution going to the recipient institutional body of water. development of the country /2 * The goals and indicators presented in italics and bold are Millennium Goals. ** The figure for illiteracy measured by the LSMS is being prepared. For both the base year and the target for 2006, the figure from the LSMS was used given the absence of official figures from the Population Census. 1/: From the LSMS. 2/: Preliminary. 3/: From the NDHS. 4/: Funding for the NDHS 2009 is not assured. 5/: The international targets for 2010 have been calculated based on the behavior necessary to meet international commitments for 2015. Reaching these figures depends on mobilizing additional resources. 6/: Average for 12 departments (except Jinotega and Matagalpa) and the two autonomous regions. Taken from: The ABC for water and its situation in Nicaragua, ENACAL Information Bulletin, Managua 2007. Funded by the PAHO.

VI. Economic Program and Poverty Reduction Strategy

1. General Aspects

148. Over the last 15 years, Nicaragua has applied the macroeconomic policies and structural reforms agreed on with the IMF as part of the content of the government program of the three administrations from 1990 to 2006. The first program of short-term financial assistance agreed on with the IMF was signed in 1991 under the stand-by modality in order to support the monetary reform applied at that time. In 1994, the first three-year program for poor countries, called ESAF, was agreed on and in 2002, the latest agreement was signed, called PRGF, which has just ended. It was reinforced by the HIPC initiative under which the country managed to have the foreign debt forgiven in 2004.

149. Under these programs, there was more sustainable fiscal discipline and a less expansive monetary policy, despite the financial crisis faced at the beginning of the millennium. The structural reform program led to strengthening the private financial system, the privatization of public services, and the design of a smaller and less bureaucratic State with a clear dismantling of this in terms of its sectoral and territorial responsibilities in order to attend to the fight against poverty in the best way. Under the HIPC initiative, the country managed to have more than 90.0% of its foreign debt forgiven, including that contracted with multilateral agencies and there was more opening up of the economy from the point of view of trade and the reestablishing of relations with multilateral and bilateral bodies.

150. In terms of concrete results, hyperinflation was fought back, stabilizing it at single digit levels starting in 2001; the economy began to capitalize itself and show signs of reactivation with an average annual growth rate of 3.3% from 2001 to 2006; and, direct foreign investment increased by 9.0%, maintaining itself at flows equivalent to 5.2% of the GDP over the period. Exports increased at a rate of 21.0% a year, reaching unprecedented levels of 19.4% of the GDP in 2006, and international reserves increased to the equivalent of 17.4% of the GDP that same year. These are the economic performance indicators shown by the Nicaraguan economy in the context of these programs.

151. However, from the social point of view, these programs did not meet the objective of reducing poverty. First, because of the high amount of corruption in the management of State resources during that period, which had profound effects on the poor. Second, because no progress was made in breaking with the obsolete structures of the economy in matters of infrastructure and public services, and the privatization process had results

39 contrary to what was expected. Third, because of the inefficiency with which resources were allocated and the poor design of the projects that aimed to fight poverty. Fourth, because of the bias of public policies to grant preference by means of exonerations, exemptions, subsidies, and incentives to sectors with greater economic possibilities, which contributed to widening the social gaps. Fifth, because of the degree of conditions of international cooperation, its high level of bureaucratic and non-productive content that substantially reduced the net benefit for the sectors to which it was directed. And sixth, because of the marked assistance-oriented approach of the social programs that did not create capacities among the poor so that they can become active agents in the process of reconstruction of the country.

152. This explains why the level of poverty increased, going to 48.3% according to the latest LSMS (2005). Maternal mortality increased more than 6.0% compared to the base year; the level of malnutrition is only comparable to the poorest countries in Africa; the educative system left out more than 30.0% of school age children; 40.0% of the population does not receive drinking water service; the electricity sector entered into crisis, affecting all sectors of the country and a complete reengineering of its structures is required; there are high rates of unemployment; and, there is decapitalization of small and medium rural and urban producers with no opportunities to access credit, fiscal benefits, and public services.

153. In this context, macroeconomic performance in 2006 met expectations and the targets included in the program agreed on with the IMF in 2002, which was favored by the budgetary under-execution of around 2.0% of the GDP. Based on this, the outgoing authorities formulated the General Budget of the Republic for 2007, with which the new government elected in November 2006 should begin operations. Under these conditions, the international community committed itself to supporting the budget with resources equivalent to 9.0% of the GDP, giving continuity to the portfolio of projects underway.

154. This situation allowed for an harmonic political transition and the start of operations with no financial imbalance to deal with, stabilizing the expectations of the private sector and favoring the start of early negotiations between the new authorities and the IMF without preconditions as happened in 2002. The management of the program stands out for having extended it for one more year so that the government elected in November 2006 would be able to present its own program. This constituted the first precedent of this for the country in the cycle of political transition.

2. National and International Setting

155. Several external and internal factors affected the economy in 2006, contributing to the deceleration of GDP growth, as had been foreseen. From the prolonged political crisis of 2005 to the end of the election period the following year, both the government and the private sector and donor community were awaiting the outcome of events, taking attention off the priorities of the NDP, reducing the sectoral dynamism, and freezing disbursements.

156. The protests and pressures in transport, health, and education – demanding greater subsidies and wage increases – and the low level of political will of the government to seek solutions resulted in tensions that affected various sectors, principally the government itself. In turn, the negotiations to raise ceilings for minimum wages resulted in tensions for workers, the private sector, and the government so that the political setting did not allow for making progress in negotiations, leaving them for 2007.

157. The economy suffered from the drastic decline of the coffee harvest in 2005, the production of bananas and other agricultural goods in 2006, and the slow progress with the public investment program that affected the construction sector, contributing to the deceleration of the GDP. This caused social problems in those areas where the workers depend economically on the production of a specific product like coffee or bananas, and many farm laborers had to be helped with social assistance programs carried out by the government.

158. The international setting had combined effects on the economy. On the one hand, it continued to be unfavorable because of increased fuel prices on the international petroleum market after the invasion of Iraq and the military conflict that ensued, and because of the accelerated consumption in the Chinese market. China also had an effect on the prices for raw materials for construction, like steel and cement, which increased prices in this activity in countries like Nicaragua.

159. Nevertheless, there was a positive factor for the country by being benefited by the increase declared by the multilateral bodies (IMF, World Bank, and the IDB) in the amount of foreign debt forgiven for highly indebted poor countries. This reinforced the benefits of the forgiving of foreign debt by bilateral bodies that had already been granted under the HIPC initiative in 2004, which favored the financing of the 2006 budget and the formulation of the 2007 budget.

3. Macroeconomic Policies and Structural Reforms

Fiscal policy

160. Fiscal policy continued in 2006 to concentrate on the reduction of the deficit of the Non-Financial Public Sector (NFPS), as established in the latest review of the program agreed on with the IMF. The fundamental objective was to establish a rule for performance of “zero deficit after donations” that would guarantee sustainable public finances, within which the public debt would controlled around this rule. Because of this, a draft Law for Fiscal Responsibility was included as a condition for guaranteeing the objective in question. The results from 2006 showed compliance with this rule, but not in the way that was expected. Budgetary execution below what was projected in the program and greater tax revenues collections than foreseen contributed to meeting the goal of zero deficit.

161. The search for an equilibrated fiscal balance led to social spending and spending on infrastructure being given out in doses over the last five years, which caused a reservoir of foreign resources that were not executed. Capital spending – which in 1999 was 11.7% of the GDP – was not the same as in previous years. The predominant financial approach of the program did not allow for making progress with improving the quality of the spending, and this was never taken as a parameter for efficiency. On the other hand, the taxation policy was only conceived of with an objective of collections, sometimes deepening the taxation inequity of the system. This also affected the allocation of the foreign debt relief, which could not be translated completely into social spending. The program with the IMF did not include additionality of spending for this item, but rather served as an auxiliary financial instrument to respond to the commitments related to the internal debt.

162. In 2006, the authorities centered their efforts on improving the taxation administration, purging and updating the registry of taxpayers; implementing the single line-up system; finishing the computerization of the tax offices; implementing the e-system for declaring and paying taxes through banks12; and, simplifying the procedures for paying taxes in order to reduce line-ups. Progress was also made in operability with the application of the Law for Fiscal Equity and the Taxation Code and with the correct application of the customs legislation and related laws. A greater intensity of actions taken to fight against customs contraband and tax evasion contributed to having more revenues collection than was estimated.

12 For large taxpayers of Managua and taxpayers under the regime of fixed quota.

42 163. Nonetheless, the reforms to the taxation system have been made with the single objective of increasing government revenues, which has hindered the reduction of the structural deficiencies of the system, making it so that the weight falls on consumers and salaried workers. The fiscal protection for big business and private capital is not necessarily repeated for small-scale production, which creates a perverse incentive to remain in the informal sector and not pay taxes.

164. Looked at this way, the issue of exonerations, the preferential taxation treatments, the problem of prices for transfers, tax evasion, and the concentration of taxes on consumption are all part of the weaknesses of Nicaragua’s tax system. Unless these problems are overcome, the economy will be less competitive, the government will continue to lose income, and the concentration of the tax burden on a few will end up with increased tax evasion. Along this line, the Government of Reconciliation and National Unity will conduct a tax reform that will have the payment of taxes be more equitable, less onerous, and that can generate capacities for granting temporary incentives to new activities, mainly those in small and medium- scale production.

165. Regarding public services companies, the capacity for income generation was affected in 2006, mainly by the freezing of rates, the deterioration of the infrastructure leading to increased technical losses and operating costs, and the high level of illegal consumption of drinking water and electricity services, including altering the meters measuring consumption of these services. There is a similar situation with the INSS because of its poor coverage, evasion by employers already registered who should pay into it, and the effect of the sliding exchange rate.

166. In 2006, spending policy was directed at restricting the salary mass and prioritizing the payment of the pubic debt as part of the agreements with the IMF and to honoring legal commitments for the allocations that correspond to the universities, the CSJ, and the municipalities. The authorities also gave priority to the subsidy policy in order to keep a freeze on urban bus fares and the rates for drinking water and electricity in order to defend low-income consumers. It was also necessary to make an extraordinary allocation of resources to guarantee the elections of new authorities. The rest of the policy was to guarantee the functioning of the government and the public investment program.

167. However, the spending policy was constantly pressured by wage demands from sensitive sectors like education, health, and the police; by last minute programs that entered into operation after the budget had been approved; by the deceleration of disbursements by some donors; and by the poor capacity for execution of the institutions leading the public investment program, which obliged the government to introduce budgetary reforms to

43 the National Assembly in order to adjust the course of spending throughout the year.

168. The fiscal policy for financing the deficit remained within the parameters established in the law for public debt, under the principles of the draft law for fiscal responsibility, and within the limitations imposed by the HIPC initiative for beneficiary countries. Along this line, the policy for public debt responded to the servicing of the foreign and domestic debt, pursued the objective of decelerating the growth of the stock of debt, and approved new contracts with international cooperation under concessional terms.

Public investment policy

169. Over the last 15 years, there has not been a strategic policy for public investment aligned with the objectives of economic growth and poverty reduction. A vision that is more institutional than national has prevailed when it comes to determining investment priorities; a short-term approach more than one of planning as is required for the big structural problems of the economy has been applied in the frame of an annual budget; and there is a high degree of improvisation in the arrangements for foreign resources in which in many cases the particular interest of the donors in given investment projects prevails.

170. The result of all this is a disarticulated, disperse portfolio of projects with a high degree of current spending, focusing on micro projects in which the yield in economic and social terms does not justify the foreign indebtedness that finances the public investment. The rate of public investment in relation to the GDP is one of the highest in the continent, but the least productive. Despite spending for this being around 10.0% of the GDP, its productivity and impact on infrastructure for production, on the coverage of basic services, and on human development has been very poor, which explains in part why the rate of growth of the economy is low and why the levels of poverty in Nicaragua are invariably high.

171. In 2006, the tendency of this policy was the same since the projects that were carried over and included in the budget with assured funding represented around 70.0% of the total portfolio budgeted. However, despite the availability of resources, this policy was always conditioned by the restrictions in the agreement with the IMF. The program agreed on with this institution used public investment as a closing variable, which limited the scope of this policy. Despite all this, in the last two years the preceding authorities showed an inability to execute the public investment program and it remained below what was established in the program with the IMF by more than 2.0 percentage points of the GDP.

44 Monetary policy

172. In recent years, the monetary policy has placed a passive role in obtaining the objectives of stability, not just because of the quasi-fiscal deficit created by the internal indebtedness of the BCN, but also because of exhausting its instruments. The main monetary instrument – open market operations – was compromised as a mechanism for indebtedness in order to finance the bank crisis and the rate of legal reserves was increased from 16.5% to 19.5%, one of the highest in the area.

173. In this sense, fiscal policy, foreign cooperation, and family remittances have been what has sustained the exchange rate stability. This way, the government transfers to the BCN that managed to reach around 3.0% of the GDP not only served to cover the deficit of that institution, but also increased the international reserves to the amount established in the program agreed on with the IMF.

174. This incapacity of the monetary policy compromised the foreign debt relief of the HIPC initiative and some of what was to go towards the objective of financing poverty spending was detoured in part to cover commitments for the internal debt of the BCN13. But not only was the relief affected, but also a portion of foreign cooperation had to be requested for the purposes of balance of payments in order to meet the targets for international reserves. This is a reflection of the structural problem of an economy that does not have the capacity to generate its own foreign exchange because of the increasing balance of payments deficit, and also affected by the increase in the petroleum bill.

175. Monetary policy in 2006 had the objective of avoiding the expansion of net internal assets and keeping the exchange rate anchored in order to contain inflationary expectations. An important factor that favored the monetary policy was the contractive effect on public spending that was exercised by the process to elect authorities that ended in November of that year.

176. In order to restore its instruments, the monetary authority sped up the redemption of titles in order to reduce its internal debt and medium-term titles were withdrawn from the market. As of 2006, this function was assumed by the MHCP and the BCN will only act in the short-term market for the due control of monetary liquidity in the economy and it agreed on a special line of credit financed with funds from the CABEI for banks that had temporary declines in their deposits.

13 See details in the Report on Poverty Spending 2006.

45 Credit policy

177. Credit policy in 2006 from the government perspective focused on maintaining macroeconomic stability, controlling the rediscount operations of the BCN, and applying a contractive credit policy for the government. This objective obliged the government to make transfers equivalent to 1.4% of the GDP that year in order to compensate for the expansive effect of the payment of the internal debt of the monetary authority and to cover for the quasi- fiscal losses.

178. On the other hand, the credit policy in the private sector maintained the same profile of increasing the financial yield for the banks at the cost of high interest rates, the concentration of credit in commerce and credit cards, the differential of rates between lending and savings operations, and the exclusion of small and medium producers. This credit policy has varied little since the private bank monopolized the financial market after the closing of the State banks, and as such, has created a system that is not competitive in the short term with a clear tendency towards dollarization and not very much integrated into the productive process of the country.

179. The demands for collateral for granting credit for production are greater than they are for loans for consumption: credit cards are granted more easily than a loan for a small-scale producer. Along this line, the protection the State grants the banking system (maintaining a maintenance of value clause, minimum charging of taxes, a timid policy of opening up the financial system to the outside world, and offering high yields for the purchase of titles offered by the BCN) is not compensated for with a credit policy that identifies more with the economic and social development of the country.

Exchange rate policy

180. The exchange rate regime continued to be determined by the monetary authority based on a system of pre-announced or scheduled devaluations, adopted in 1993. Since then, the rate of devaluation has had a tendency contrary to what was expected, which made for less effectiveness of the exchange rate on the imbalances in the balance of payments. The deceleration of the devaluation rate had been justified by the high degree of dollarization of the economy that was transmitted to the devaluation of the general system of prices, according to early evidence from 1994 to 1998.

181. However, despite reducing the devaluation rate from 12.0% to 5.0%, the inflation rate was almost always above this. This way, while the devaluation rate registered an annual average of 5.6% from 2000 to 2006, the average annual inflation rate was 8.0%. From 2002 to 2006, the inflation

46 rate tripled, reaching around 10.0% in the last two years, despite the devaluation applied having registered an average of 5.4%.

182. This reveals that the theme of dollarization is not sufficient argument for maintaining the exchange rate system anchored. Furthermore, Nicaragua is the only country in which the financial system enjoys a maintenance of value clause, which contributes to dollarizing the economy. This clause for temporary protection, which was introduced in the early 1990s, appears to have remained in place forever. Under these terms and while inflation in Nicaragua is greater than international inflation, the exchange rate regime will continue to lag behind. The monetary authorities have been studying the theme and are looking to determine a critical route for taking actions in regards to a more flexible regime for the exchange rate.

Trade policy

183. In 2006, the government continued making progress in consolidating the model for opening up to trade, export promotion, and attraction of direct foreign investment based on the multilateral, regional, and bilateral agreements in effect and the strategy of opening up new markets. In this context, Nicaragua made progress with the execution of the CAFTA-DR and free trade agreements with Mexico and Taiwan, as well as moving ahead with the project for the Central American Customs Union.

184. Regarding the CAFTA-DR14, which entered into effect in April 2006, Nicaragua opened ten tariff contingents for imports, benefiting 60 national importers that received 171 Certificates of Award of Contingents (CAC). In exchange, the United States opened tariff contingents for exports for a similar number of groups of Nicaraguan agro-industrial products that are included in 16 tariff subparagraphs; they opened the sugar contingent of the World Trade Organization (WTO) for the 2006-2007 period, as well as other contingents for various products associated with domestic undersupply.15 Nevertheless, this treaty has serious voids in terms of the compensation policy for those productive sectors affected by the subsidy policies that the United States grants to sectors competing with Nicaragua.

185. With the free trade treaty with Mexico, Nicaragua began to reduce tariffs on imports from that country, including 18.0% of the tariff outlays for foreign trade, and this process will conclude in 2007. So far, 80.0% of the imports from Mexico have free access to the Nicaraguan market. In exchange, Mexico opened the contingents for exports of cheese, beans, beef, cattle on the hoof, and a quota for the export of sugar and it moved ahead in designing a mechanism to resolve controversies and in negotiating the

14 It was approved by the Nicaraguan National Assembly on October 11, 2005. 15 Includes rice in the husk, husked rice, skimmed milk, whole milk, butter, beef, pork, soy flour cheese, yellow corn, corn syrup, and powdered milk.

47 reserves for the treaty, to be approved at the next meeting of the Administration Commission.

186. Trade relations with Taiwan were strengthened with the signing of the free trade treaty with that country16, which was ratified by the National Assembly on December 13, 2006. The government moved ahead with different initiatives that include negotiations with Canada, Chile, and Panama, as well as meetings with the European Union to reach an Agreement of Economic and Commercial Association with Central America that includes a free trade zone.

187. There was also progress in the work to have a Central American Customs Union. At present, 94.6% of the tariff universe of the region is harmonized, with sensitive products for the countries pending, like medicines, metals, petroleum, and agricultural products, among others. The trade of petroleum derivatives, ethyl alcohol, and distilled alcoholic beverages was also liberalized and the modifications to the Mechanism for Solution of Central American Trade Controversies entered into effect.

Structural reforms

188. The structural reforms made over the last 15 years had contrary effects. Some of them favored the private sector, State structures, fiscal policy, and transparency in public affairs, but others had serious effects on small and medium producers, consumers, workers, and the poorest in the country. The expected return from the privatization program in terms of a better offering of services was not exactly the result, and so the social cost of the structural reform applied over all those years was absorbed completely by the population in a process of impoverishment. The programs for social compensation for the structural adjustment were not part of the agreements with the IMF and the World Bank.

189. In telecommunications, the financial system, and electricity, the position of the private sector was strengthened in the nascent market economy that Nicaragua was pushing towards. In these three sectors, however, there was a contraction of employment, above all with the closing of the State banks; the energy sector went into crisis because of a lack of investment and this now poses a serious threat for economic and social development; the lack of credit for farmers and small industry has had a strong impact on the living standards of families depending on these sectors, which in part explains their level of poverty. Given the costs of production and inefficiencies that affect these industries, they are not competitive at the Central American level: not in tariffs and not in the quality of the services.

16 The negotiations began in September 2004 and it was signed on June 16, 2006.

48 190. The structural reform program agreed on with the IMF suffered delays in 2006, but this did not stop the country from meeting the rest of its fiscal commitments and it always remained in line with the program. The expectations with the entry of a new government in 2007 served as a bridge so that the pending reforms were discussed in the frame of the program of the new authorities. Nevertheless, two of the big pending reforms – privatization of pensions and the law for fiscal responsibility – had faced serious resistance even before this from the affected sectors, the legislature, and civil society in general.

191. In the first case, it is because the privatization of pensions affects the common fund formed by employers and workers, with which attention is given to the groups protected by the system. The present system includes pensions for socially vulnerable groups that did not pay into it in the past, like war wounded and different groups approved by the National Assembly. But more than that, it is because it set up a model in which the rules of the market would impose an entrepreneurial business based on the pensions.

192. In the second case, it was because it implied a spending constraint that is not compatible with social needs and also because it meant legal reforms, including constitutional ones in order to reform the 6.0% for the universities. This draft law adopted a golden rule of maintaining as a performance indicator a fiscal deficit equal to zero after donations, which is not congruent with the needs for spending on infrastructure and in the social sectors. A budgetary under-execution had created the illusion that it was possible to establish this rule.

193. Apart from the commitments with the IMF, the authorities made progress with the approval of a series of laws to strengthen given sectors. The financial system was favored with the approval of the Law for Capital Markets and the reform of the Law for the Superintendence of Banks and Other Financial Institutions (SIBOIF) in order to give more legal support to the decisions of the superintendent and protection for the managers of banks. There was also the approval of the Law for Regulation of the Real Estate Brokering that will regulate the trade of real estate, the requisites for its exercise, the rights and obligations of the brokers, and the legal protection between the contracting party and the broker.

194. In the energy sectors, steps were also taken to diversify the country’s energy grid. In August, the National Assembly approved reforms to the Law for Exploration and Exploitation of Geothermal Resources in order to promote investment in the sector in compliance with the country’s environmental laws, and the Law for Energy Stability was reformed in order to reduce the value added tax on invoices for consumption between 300 and 1000 KW from 15.0% to 7.0% and to grant a preferential tariff for consumption less than or equal to 150 KW. The National Company for

49 Electricity Transmission (ENATREL) was created to administer the national electricity market and the regulations for the Fund for Development of the Electricity Industry were approved in order to make arrangements for resources from the international community to develop the sector.

195. However, the necessary steps were not taken to solve the energy crisis and it was artificially covered with the purchase of energy from other countries at the expense of the budget of other institutions. Nor were steps taken to establish a strategy that would avoid the collapse of the electricity system in the short term. The previous government limited itself to rationing electricity and the political cost of this would be transferred to the incoming administration. This has been one of the biggest problems for the whole country inherited from the previous government.

196. In trade, the National Assembly approved nine legislative initiatives in the frame of the commitments contracted with the signing of the CAFTA-DR trade agreement. Among these are the reforms to the laws on author’s rights and related rights; patents for invention, utility model, and industrial design; and brands and other trademarks. There was also the approval of the Special Law for the Crime of Bribery and Crimes Against International Trade and International Investment.

197. Other initiatives centered attention on reform to the General Law for Education in order to establish regulations for the salaries of teachers; on reform of the Law for Incentives for the Tourism Industry in order to benefit small and medium-scale tourism firms in the country; and on reforms to the General Law for Telecommunications and Postal Services in order to establish the obligations of the operators of public services and requirements for greater transparency of the operations of the Nicaraguan Institute for Telecommunications and Mails (TELCOR).

4. Productive Policy

Global aspects

198. The productive policy of the government continues to be based on maintaining macroeconomic stability, eliminating procedures that are unnecessary for the sectors, public investment, and provision of fiscal incentives, but mainly on the project to develop clusters. Despite these efforts, growth of production slowed down and the GDP grew at a slower rate than in 2005. Besides these policies having little effect, the electoral expectations and the delay in receiving resources to fund investment in infrastructure explain this behavior.

199. This productive model faces structural problems that limit possibilities for the sustained long-term growth that the country aspires to have. The costs of production were affected severely by the continued increase in fuel prices in recent years; the transaction costs are not competitive before a deteriorating infrastructure; the costs of public services are the highest in Central America; production credit does not flow – small and medium producers are excluded from the credit channels of the formal financial system –; and problems of property ownership are a factor limiting private investment.

200. The focus on clusters as the main pivotal point of the productive policy in the NDP depends essentially on the preferences that the private sector has for investment, and these in turn will depend on the “business climate” provided by the public sector. Given this interrelation between the private sector and the public sector, the government becomes a facilitator with its economic policy and public investment. However, this will not be enough to develop the concept of clusters. It is because of this that there is little progress with the real development of these activities and, in turn, this explains why the principle policies of the government have to do with associativity, organization, training, and discussion, among other non- productive tasks. The private sector will invest where it thinks it can do business, regardless of the government selecting the cluster of tourism, coffee, beef and dairy, shrimp farming, forestry and wood products, and light manufacture as the activities to develop in the NDP.

201. This means that those sectors that are currently decapitalised are the small and medium urban and rural producers, without the means to produce, without access to credit or public policies that favor them, and so they cannot rise up out of the state of misery that they find themselves in. If almost 50.0% of the population is living in poverty and half of them are marginalized producers, the poverty reduction strategy as it is focused on in the NDP has limitations that will hinder reaching its objectives. This obliges

51 the Government of Reconciliation and National Unity to strengthen the productive strategy in favor of the poor.

202. The indicator for exports that has been increasing successfully over the last five year seems to contradict this affirmation. However, a study of the structure of the exports indicates that 47.1% are from free trade zones, a sector characterized by the low wages paid by the industries, and 23.0% are from the group of traditional exports (coffee, shrimp, beef, sugar), a sector in which the big producers and middlemen that commercialize the products obtain the greatest benefits. History has shown that this model is incapable of improving the living standards of the poorest producers.

Policy actions in support of production

203. In 2006, the productive policy continued to focus on the development of agriculture and support for small and medium industrial production in the frame of the opportunities provided by the CAFTA-DR. In the first sector, the government made progress with the program called PRORURAL and with the reactivation of small and medium producers through initiatives like the Program for Rural Productive Reactivation, the National Pound-for-Pound Program, the Fund for Agricultural Development, the Program for Support to the Commercialization of Basic Grains, and the World Food Program, among others. All this contributed to improving the development of the agricultural sector, increasing the volume of production, but it was not articulated with the objectives of reducing poverty.

204. In the second sector, the government continued to support small industry through different programs for technical assistance, sanitary protection, and development of micro, small, and medium businesses (MIPYMEs) linked to the export sector. The institutions leading this sector – Ministry of Industry and Commerce (MIFIC) and the Nicaraguan Institute for Support to Small and Medium Business (INPYME) – together with other kindred institutions and associations representing the producers have made progress in designing and publishing the proposal for the Policy to Promote Small and Medium Business (PYME); in establishing institutional roles through a system of floors under Law No. 290; in defining mechanisms for inter-institutional coordination; in creating spaces/opportunities for reaching agreements (concertación) and national sector commissions; and in holding MIPYME congresses and territorial or national sector gathering as an instrument for the effective execution of the policy. Despite this, all these actions have a limited impact on this sector and do not attack the root problems like the lack of credit and more direct public policies.

205. The PRORURAL program has the objective of ordering national and foreign resources based on a common development strategy agreed on beforehand with the relevant stakeholders. This sub-sector has a public

52 sector decision-making body, the National Agricultural Council (CONAGRO), with a body for dialogue with the private sector in the National Council for Production (CNP) and with a body for dialogue and negotiation with international cooperation, the Sub-Table/Forum for Productive Rural Development. This program has seven components: sustainable forestry development, support services for production, technological innovation, agro-alimentary health and innocuousness, productive infrastructure, policies and strategies, and modernization and institutional strengthening.

206. In 2006, PRORURAL executed its first Annual Operative Plan (AOP) for the sector. This plan integrated for the first time most of the activities carried out by the rural agricultural public sector institutions. It was based on a sector logical frame and an action plan that stems from the policy and strategy for developing the agricultural and forestry sector. An effort was made to give a territorial expression to the activities and to relate the budget to results, but the need was seen to carry out the AOP on the basis of a more elaborate methodology that would involve the institutions of the Rural Agricultural Public Sector (SPAR) from the territories. However, this AOP had weaknesses in terms of the participation of the private sector and in terms of the discrimination of targets by department. But also because it is not totally linked to the activities programmed based on the strategic plan for the sector, and the particular interests of some funding sources remain.

207. Regarding the physical progress of this program, according to the indicators, it shows an average progress of 72.0%. The component with the most progress is support services for production with 89.0%, followed by the components for the development of sustainable forestry and investment in infrastructure and policies and strategies with 75.0%. The components with the lowest level of execution are the activities related to modernization (63.0%) and technological innovation (56.0%). In budgetary terms, all seven components of PRORURAL had a financial execution of 77.4%, equivalent to 1.1% of the GDP (US$58.8 million). This under-execution was largely due to delays in disbursements from some donors because of problems to do with procedures, as well as the expectations around the November 2006 electoral process.

208. With the policy for expansion of basic grains carried out by the government in 2006, the national pound-for-pound program managed to attend to 106,000 farmers with 79,000 hundredweight of certified seed and with the recorded planting of 148,000 manzanas, investing US$2.2 million. This program gave out certified seed for hybrid corn and varieties, red and black beans, white sorghum, dryland rice, and sesame, which has been increasing year by year. It should be mentioned that this program managed to increase the area planted by 20.0%, and it also contributed to increasing yields, like with corn which increased by 15.0% during the period from 2001 to 2006.

209. Regarding the industrial policy, the authorities carried out different actions to support small and medium businesses, among them the institutionalization of the model for attention to the MIPYMEs, which was concretized with the formation of eight national sector commissions that function as bodies for coordination, consultation, and arranging for resources for each of the sectors represented. There was also progress with the process of associativity and decentralization of the sector and support was provided with the policy for commercialization, developing different kinds of events that resulted in a major increase in income for these businesses.

210. There was continued improvement of the Integrated System for Quality (DGPSA/MAGFOR) and expansion of the sanitary protection for livestock and agriculture. The authorities made progress with programs related to the innocuousness of foodstuffs in the primary market, seeking standard levels of quality in the international markets that will broaden the markets for agricultural products. Likewise, the programs for control of pests and exotic illnesses were successful in 2006, protecting the country from those plagues. As part of the effort for quality control, the authorities approved 30 new Nicaraguan Obligatory Technical Norms (NTON) for prioritized sectors of the economy and the officially accredited five laboratories17 in order to cover a wider range of the corresponding sectors.

Progress with the development of the clusters

211. In general, the effect of public policies on the development of the clusters as such has not been determinant or visible. The efforts by the government in 2006 were limited to activities related to technical training, associativity, the regulatory framework, and the implementation and approval of technical norms. The seven productive activities indicated in the NDP saw movement because of the traditional behavior of international prices, the credit supply, and the incentives created by fiscal exonerations. The development of some central activities that group other businesses around them has been improvised by the particular interest of the small businesses and not as the result of any public policy. The government was betting on these activities as a motor force for development, putting them forward as priorities in the NDP; however, this was a vertical top-down process and not the result of social relations of production as has happened in other countries.

212. It is clear that this is a process, but as put forward by the programs of the previous government in the fields of agriculture and small industry,

17 The laboratories are BAGSA, CIDEA-UCA, LABNICSA, CERCAFENIC, and SERAGRO, the latter ones being re- accredited.

54 there is no articulation between these and the objectives for the clusters. Because of this, there are still technological voids that do not allow for visualizing an agro-industrial model that would generate added value for the primary products so that they go from being producers of raw materials to producers of processed products. The small and medium producers also have no support from the State to integrate themselves successfully into the productive chain that the clusters would form. These deficiencies have been noted by the Government of Reconciliation and National Unity and it is looking to reformulate the productive strategy of the NDP.

213. In reality, the clusters as such have not developed in the country and there is no productive process that integrates primary production in agriculture with the industrialization of these raw materials. The approach of complementary activities around a central activity has prevailed in a disorganized, informal, family level, low quality way with little capacity for growth by itself, since they depend on the development of the central activity. The progress made in 2006 in the activities of the clusters is noted below.

214. Dairy sector cluster. As mentioned in the paragraphs above, the activities that the government deployed in support of dairy production are indirect in some cases and in others, they are qualitative, but with no concrete policy for the integral development of this industry. In 2002, the government began with the promotion of associativity, the institutional strengthening of the private sector, the improvement of the regulatory framework for the sector, and the provision of technical assistance on issues of quality, market study, and promotion of private investment.

215. In 2006, the cluster carried out different activities like technical accompaniment of the businesses associated with the Nicaraguan Commercial Exporter of Dairy Products (CENILAC) around the theme of risk analysis and critical control points (HACCP); updating and preparing manuals for Good Manufacturing Practices (GMP); making arrangements with the National Energy Commission (CNE) for the construction of 377 km of power lines to extend the electricity grid in Boaco and Chontales; forming the regional cluster for the dairy zone of Nueva Guinea with support from the project of the United Nations Industrial Development Organization (UNIDO); and the formation of the regional cluster for the dairy zone of Muy Muy, Matiguás, Río Blanco, and Paiwas. However, there are no impact or follow-up indicators for this sector, and so it is difficult to evaluate whether there was some improvement in this sector because of the measures taken.

216. Forestry and furniture cluster. The sector of forestry and furniture manufacture has no central pivotal point that identifies the strategy applied by the previous governments. It is known that smuggling and illegal logging in the forests and desertification have happened because of the improper

55 permits for exploitation of wood. It is also known that the wood industry in Nicaragua at the domestic level is in the hands of small industry, with no appropriate strategy for improving the quality of its products. And it is also known that there are no technical conditions in the country for the treatment of lumber at industrial levels. With this being the situation of the sector, imports of wood furniture make up for the marked deficiencies of this industry.

217. In 2006, the previous government carried out various activities that in concrete terms had no great impact on the sector. It promoted “public- private” alliances between the forestry cluster and different bodies that have to do with the sector and efforts were made for the promotion, monitoring, and publicizing of the activities and achievements of the cluster on web pages. There was also promotion of industrial retooling and improved quality in the productive chain of the cluster, training about the advantages of CAFTA-DR, and the facilitation and promotion of exports.

218. Fishing and shrimp farming cluster. In 2006 in this cluster, the Code of Responsible Conduct and the Manual of Good Farming Practices for the Shrimp Industry in Nicaragua and the Course for Accreditation of Certifiers of the ACC Program were concluded. This code was delivered as an official proposal to the Ministry of Environment and Natural Resources (MARENA). There was also a review of the proposal for technical norms for sanitary practices and innocuousness of fishery products in storage facilities and the Inter-Institutional Group for the Creation of Indicators for the Industrial Sector and Services with a Sustainable Development Approach was formed.

219. Despite this, the sector faced weak governmental institutionality for the management of resources and the promotion of fisheries development. Early in the year, the Government of Reconciliation and National Unity created the Nicaraguan Institute of Fisheries (INPESCA) in order to organize the sector and establish a development strategy for it, provide budgetary support for the development of its activities, and defend the resources from illegal exploitation.

220. Tourism cluster. Despite having associated the present development of tourism with the existence of the cluster, the growth of this sector has to do with the conditions of security in the country, the fiscal shield that protects it, the legal framework that gives it guarantees, and the natural resources of the country that are of interest to foreign investors. This sector has become the main earner of foreign exchange, but not because there are activities related to forming a cluster, but rather because tourists believe in Nicaragua.

56 221. In 2006, the tourism cluster generated US$239.0 million and attended to 773,000 tourists, the maximum number reached since 1990. Tourism promotion concentrated on products for specialized market niches: the United States, Europe, and Central America. The government organized international fairs, special events, and national promotion. Investment in tourism in 2006 was US$62.5 million in projects, of which 77.3% will receive fiscal benefits as per Law 306. According to estimates, these projects will create 1,223 direct jobs. Among the investments approved are 28 new hotels with a total of 703 rooms.

5. Performance of the Economy 2002-2006

Economic growth and inflation

222. Economic growth. For the fourth consecutive year, the Nicaraguan economy continued to grow faster than the population growth rate. However, there has been a deceleration since 2005 associated with the impact on costs caused by the increase in fuel prices, by the delay with the public investment program, and by the political expectations that contained the pace of private investment.

223. Consumption continued to be the determinant factor of the GDP, representing more than 90.0% of it. In exchange, gross investment has explained around 20.0% of the GDP over the last 15 years. It should be noted that exports have doubled their share in this macro variable, accounting for 33.1% of the GDP in 2006. The dimensions of investment and imports explain why the GDP is small in comparison with other economies in the area.

224. The level of industrialization of the country is poor, only representing around 20.0% of the economy. Agriculture represents another 20.0%, as does commerce. The 50% of value added of the economy is explained by the generation of services, which in turn expresses the high degree of informality of the economy and the poor quality of employment created in the sectors. This productive structure has a limited yield in terms of taxation.

225. In this context, the economy grew by 3.7% in 2006, in line with the program. This performance is framed in the economic and social policies that have contributed to economic reactivation since 2002. However, the observed growth prolongs the downward path since 2005 with growth rates that are less all the time because of adverse external factors and internal factors associated with the electoral expectations, along with climatic factors.

57 Figure 4 Economic Growth 1997-2006 8.0

7.0

6.0

5.0

4.0

Percentage 3.0

2.0

1.0

0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 4.0 3.7 7.0 4.1 3.0 0.8 2.5 5.3 4.3 3.7 Years Growth rate real GDP

226. The concurrence of several events locally and internationally characterized 2006. The world economy continued to deal with the effects of the increased fuel prices, which remained in the range of 60 to 67 dollars. This has meant that the losses because of these increases are increasingly permanent in petroleum importing economies like Nicaragua. Worldwide demand also continued to contract, affecting imports from developing countries, especially the poor countries. Nonetheless, Nicaragua was benefited by the price of coffee and by the production from free trade zones that made exports increase by 19.5% compared to the year before.

227. The internal factors that contributed most to slowing down growth were: the electoral expectations, the energy crisis, and the contraction of national public and private investment. Private investment, though it grew by 4.6%, was less than what it was in 2004 and did not counteract the negative growth observed for the second year in a row of public investment. The latter was affected by delays in bidding processes and by a lag between approval and disbursement by the National Assembly and multilateral financial institutions.

228. Regarding the growth observed from the aggregate demand, external demand was the most dynamic sector, expressed in exports, which saw strong growth since 2004, based on increases in the number of manzanas planted, and improved prices that were higher than those over the last three years for primary products like coffee, beans, vegetables, and fruits.

58 Table 6. Nicaragua: Real Growth of the Economy Average Items 2002 2003 2004 2005 2006 1/ 2002-2006 Growth Rate Gross Domestic Product (at 1994 prices) 0.8 2.3 5.3 4.3 3.7 3.2

Aggregate Demand 1. Consumption 3.6 3.7 2.1 3.3 3.7 3.4 Public Consumption -4.6 5.7 3.2 1.0 5.7 1.3 Private Consumption 4.5 3.4 2.0 3.5 3.5 3.6 2. Gross Investment -7.1 -5.5 10.7 5.6 -0.5 -0.9 Public Investment -31.4 13.3 25.8 -3.4 -20.3 -3.3 Private Investment 0.5 -9.5 7.0 8.3 4.6 0.2 3. Exports -3.5 7.9 17.1 9.5 10.5 8.1 4. Minus imports -0.1 4.4 8.2 6.2 6.1 4.2

Sectoral Dynamic 1. Agriculture, ranching, forestry, fisheries -0.3 1.9 5.7 3.9 4.2 3.0 2. Manufacturing Industry 2.1 2.5 9.0 6.5 5.3 5.2 3. Construction -13.3 3.9 12.1 7.0 -8.0 0.6 4. Commerce 3.3 2.5 4.6 4.3 4.5 3.5 5. Transport and Communications 2.7 3.1 4.8 3.4 3.7 3.6 6. Banks and Insurance 7.5 8.9 23.7 4.0 10.3 9.3 1/: Preliminary Source: BCN

229. Levels of inflation. Average annual inflation was 9.1%, the highest level for the period except for 2005, and higher than the target set in the agreement with the IMF. Inflation continued to be affected by the increased prices for petroleum derivatives, prolonging its impact on the costs of production and on prices to the consumer. The chain of impact on transport, electricity, drinking water, and food production has increased the gap between salaries and the cost of the basic shopping basket. Inflation also continued to be influenced by the pre-announced devaluation and by climatic factors like the El Niño phenomenon.

Figure 5 Average Annual Inflation 12.0

10.0

8.0

6.0 Percentage 4.0

2.0

0.0 2000 2001 2002 2003 2004 2005 2006

Tasa 7.1 6.0 3.8 5.3 8.5 9.6 9.1

59 230. It should be noted that the increase for the sub-basket of social goods during the period has been above the general consumer price index (CPI), explained by the direct effects of the variation in the cost of transport and communications and indirectly by the movement of prices in the other sectors. The group of food and beverages, which has the greatest weight in the index, also moved at almost the same level as the general index of 9.0%.

Table 7. Nicaragua: Incidence of Inflation1/ Social Sectors Food and Year CPI Transp. beverages Housing Health Education Sub Index Comunic. Weighting 1.000 0.470 0.098 0.051 0.085 0.098 0.332 (Rates) 2000 7.1 4.9 13.5 4.8 19.3 7.8 12.0 2001 6.0 6.9 6.3 6.0 2.8 9.5 6.2 2002 3.8 3.2 4.1 5.3 2.1 7.4 4.7 2003 5.3 4.3 6.3 6.6 11.0 7.0 7.8 2004 8.5 10.7 8.4 6.4 12.0 7.3 8.7 2005 9.6 11.5 7.8 8.6 15.7 6.7 9.7 2006 2/ 9.1 9.0 12.2 8.6 12.6 9.3 11.0

Average 2000-2006 7.0 7.2 8.4 6.6 10.8 7.9 8.6 Average 2002-2006 7.3 7.8 7.7 7.1 10.7 7.5 8.4 Average 2005-2006 9.4 10.3 10.0 8.6 14.1 8.0 10.3 1/: Annual average 2/: Preliminary Source: BCN

231. The percentage difference, on annual average, between the basic shopping basket and the CPI is 4.8 constantly over the period. This means that although it is true there have been increases in salaries, these on average have not surpassed the variation of the price indexes and social sub- index, and every year the cost of the basket in dollars is increasing, influenced by factors already mentioned, without taking into account the composition. Along this line, the cost of the basic shopping basket was US$167.2, 4.3% more than it was in 2005.

60 Figure 6 Rates of Growth

14.0

12.0

10.0

8.0

6.0 Percent 4.0

2.0

0.0 2000 2001 2002 2003 2004 2005 2006 -2.0

Canasta básica Índice social IPC

Employment and salaries

232. To the extent that the economy decelerated by 0.6%, employment increased slightly (0.4%), mainly in the informal sector, in this way reducing its rate of growth by 4.1% with respect to 2005. The increase in the number of persons employed was 9,000, most of them in agriculture, personal and social services, industry, and construction.

233. The number of persons affiliated to the INSS continued to increase (10.6%), above what was observed in 2005, a result of the program of oversight/supervision and affiliation. The sectors with the most growth of affiliation were agriculture, commerce, construction, and personal and social services (40,127 affiliates). This only represents 1.9% of the total employment in the economy and 1.8% of the EAP.

234. Average minimum salaries increased by 14.5% in nominal terms; nevertheless, the average national salary increased by 8.3%. The important role played in these increases by the expansions approved by the National Assembly for the health sector and the MECD (in order to make adjustments to salaries and the promotion list for teaching staff) should be noted. Despite these wage increases, it was not enough to increase the purchasing power of salaried workers since on average they were dealing with a higher rate of inflation, except for the government sector, which saw its average salary improve by 14.3%.

61 Balance of payments

235. Besides the exchange rate lag that does not favor the stability of the balance of payments, the little development of the economy and the high dependency on imported raw materials have made it difficult to make progress in reducing the current account deficit, which is among the highest in the continent. A worse situation has been avoided by the effect of the HIPC initiative on the burden of interest on the foreign debt, by the high level of family remittances from abroad, and by the changes in some international prices that have favored Nicaraguan exports.

236. The continuous increases in international petroleum prices and for some basic industrial goods translated into a deterioration in the terms of trade that affected the results of the balance of payments so that from 2002 to 2006, the current account deficit before donations was at an annual average of 20.6% of the GDP, explained by the trade deficit that averaged 25.1% of the GDP. The 50.0% reduction in interest payments and the increase in family remittances that averaged around 11.3% of the GDP were palliatives that avoided having greater increases in the current account deficit.

237. A note on the evolution of international trade shows that from 2002 to 2006, contrary tendencies in international prices for petroleum and coffee produced much loss for the Nicaraguan economy. It is estimated that because of the increase in petroleum prices and the fall in coffee prices, the country assumed a cost equivalent to a fifth of the GDP. However, a reversal of the tendency of coffee prices at the end of the period, the results from the free trade zones, and the entry into effect of the trade agreements could have attenuated the impact of the petroleum bill.

238. In 2006, the current account deficit represented 16.1% of the GDP, below the 16.7% of the GDP projected in the NDP. A favorable factor that hindered a further expansion of the current account deficit was the increase in current transfers received from abroad in the form of donations from non- governmental organizations and family remittances, which in 2006 represented the equivalent of 16.1% of the GDP (US$855.5 million), which reflects growth of 61.3% compared to 2002. Of this amount, family remittances represented 12.4% of the GDP, 74.1% more than in 2002. It should be pointed out that in recent years, the increase in these flows has slowed down because of the migratory restrictions adopted by Costa Rica and the downturn observed in the economy of the United States.

239. The funding of the deficit has come from international cooperation (loans and donations), from direct foreign investment, and from exceptional financing (US$84.7 million) that together averaged 17.8% of the GDP over the period. This allowed for meeting the target for international reserves set

62 in the program, creating an annual average accumulation of 2.5% of the GDP. This shows the high dependency of the country on international cooperation and its vulnerability to the situation of employment of Nicaraguans outside the country.

Table 8. Nicaragua: Balance of Payments Ave. annual Average Items 2002 2003 2004 2005 2006 1/ growth 2002- 2002-06 06 Percentage of the GDP Current Account before donations -22.3 -20.7 -20.0 -19.9 -19.9 -20.6 4.4 Current Account after donations -18.5 -16.2 -14.7 -15.3 -16.1 -16.2 3.7 Commercial Balance -23.3 -23.7 -24.4 -26.8 -27.2 -25.1 13.5 Exports 22.7 25.7 30.7 34.1 37.3 30.1 29.1 Merchandise (FOB) 13.9 14.9 17.0 17.8 19.4 16.6 21.0 Goods before transformation 8.6 10.6 13.4 15.9 17.6 13.2 42.1 Goods acquired in ports 0.2 0.3 0.3 0.3 0.3 0.3 27.3 Imports -46.0 -49.4 -55.0 -60.9 -64.6 -55.2 21.2 Merchandise (FOB) -40.2 -42.1 -45.4 -49.5 -51.9 -45.8 17.5 Petroleum -3.5 -4.5 -4.9 -5.7 -6.7 -5.1 38.4 Goods before transformation -5.8 -7.3 -9.6 -11.4 -12.6 -9.4 46.1 Non-factorial services -3.2 -2.9 -2.8 -2.9 -2.7 -2.9 2.2 Income -5.1 -4.8 -4.5 -2.6 -2.3 -3.9 -9.9 Interest -3.4 -2.9 -2.7 -1.2 -1.2 -2.3 -13.5 Current transfers 13.2 15.2 16.9 17.0 16.1 15.7 15.3 Family remittances 9.4 10.7 11.6 12.4 12.4 11.3 18.5 Donations NGOs 3.8 4.5 5.3 4.6 3.8 4.4 7.5

Capital and Financial Account 13.3 11.6 12.8 14.8 17.1 13.9 17.2 Official Capital 6.1 8.8 10.1 9.1 8.7 8.6 22.3 Donations to the public sector 7.7 6.9 6.9 5.9 5.3 6.6 -2.4 Net loans to the public sector -1.7 1.9 3.2 3.2 3.4 2.0 -90.5 Disbursements 5.3 7.4 7.7 5.5 5.6 6.3 9.5 Amortizations -7.0 -5.5 -4.5 -2.3 -2.2 -4.3 -14.7 Private Capital 7.3 2.8 2.7 5.7 8.4 5.4 12.9 Direct foreign investment 5.1 4.9 5.6 5.0 5.3 5.2 9.6 Other investment 2.2 -2.1 -2.9 0.8 3.0 0.2 20.3 Other net capital 2/ -8.3 -2.9 -9.3 -0.8 -0.8 -4.4 -21.8

Balance for Balance of Payments -5.2 -4.6 -2.0 -0.5 0.9 -2.3 -30.9 Financing 5.2 4.6 2.0 0.5 -0.9 2.3 -30.9 Assets of reserves (- Increase) -1.7 -1.3 -3.6 -1.2 -2.5 -2.1 22.7 Net exceptional financing 3/ 6.9 5.9 5.5 1.7 1.6 4.3 -17.6 1/: Preliminary; 2/: Includes errors and omissions; 3/: Includes arrears, PPME alleviation, and additional from foreign debt Note: New components are incorporated into the current account (re-insurances and interest for foreign debt for commercial banks). Source: BCN

63 Foreign trade

240. During the period 2002-2006, exports of goods underwent rapid growth that averaged an annual rate of 29.1%. They went from 27.7% of the GDP at the start of the period to 37.3% of the GDP in 2006, which meant a nominal amount that year of US$1,977.5 million. Of this, the free trade zones had an average share of 47.1%, and in 2006, it was equivalent to 17.6% of the GDP, with an average annual rate of 42.1%.

241. Exports of merchandise continue to be predominant in exports from the manufacturing sector, which had an average annual growth of 22.7%, reaching 9.2% of the GDP in 2006. Agriculture, which in the last year accounted for 7.1% of the GDP, showed growth of 78.8% in relation to 2002, basically because of more coffee export earnings as a result of the improved prices on the international market and an upswing in production during the latest crop cycles.

242. Imports of FOB goods increased in accordance with the increase in the petroleum bill, the needs of the free trade zones, and the demand for raw materials and capital goods to underpin the growth of the GDP. However, imports of consumer goods – favored by the credit facilitated by the financial system, family remittances, and government consumption – also showed an important tendency during the 2002-2006 period.

243. In these terms, total FOB imports in 2006 amounted to the equivalent of 64.6% of the GDP (US$3,421.8 million), showing an average annual growth of 21.2% since 2002. Of this total, the free trade zones imported 12.6% of the GDP, consumer goods 18.0%, raw materials 15.2%, and capital goods 10.4% of the GDP, among the most important imports.

64 Table 9 . Nicaragua: International Trade 2002-2006 Ave. annual Average Products 2002 2003 2004 2005 20061/ growth 2002- 2002-06 06 In relation to the GDP Trade Balance -23.3 -23.7 -24.3 -26.8 -27.3 -25.1 13.5 Total Exports FOB 22.7 25.7 30.7 34.1 37.3 30.1 29.1 Merchandise (FOB) 13.9 14.9 17.0 17.8 19.4 16.6 21.0 Agricultural 4.4 5.0 6.0 6.1 7.1 5.7 28.2 Coffee 1.8 2.1 2.8 2.6 3.8 2.6 43.2 Manufacturing 6.4 7.0 7.9 8.8 9.2 7.9 22.7 Beef 1.9 2.0 2.5 2.5 2.8 2.3 22.1 Free trade zones 8.6 10.6 13.4 15.9 17.6 13.2 42.1 Others 0.2 0.3 0.3 0.3 0.3 0.3 27.3

Total Imports (FOB) 46.0 49.4 55.0 60.9 64.6 55.2 21.2 Free trade zone 5.8 7.3 9.6 11.4 12.6 9.3 46.1 Merchandise (FOB) 40.2 42.1 45.4 49.5 51.9 45.8 17.5 Mercancías (CIF) 44.1 46.0 49.5 54.0 56.4 50.0 17.1 Consumer goods 14.2 15.5 16.6 17.0 18.0 16.3 16.7 Petroleum, fuel, and lubricants 6.3 8.0 9.0 11.2 12.8 9.5 41.6 Intermediate goods 12.7 13.6 14.6 15.3 15.2 14.3 14.2 Capital goods 10.7 8.9 9.2 10.5 10.4 9.9 6.9 Miscellaneous 0.2 0.0 0.1 0.0 0.0 0.1 -0.5 1/: Preliminary Source : BCN, DGA, AD-PESCA, PROBANICSA

Evolution of Foreign Cooperation

244. From 2002 to 2006, the government managed to restore the confidence of the international community and it received support for the program agreed on with the IMF and the poverty reduction strategy included in the NDP. This enabled there to be the good macroeconomic performance mentioned earlier, as well as the strengthening of public finances and the trade opening. It also contributed to strengthening democratic institutionality, governance, the fight against corruption, and the promotion of citizen participation.

245. Unfortunately in social terms, its presence was not notable if one looks at the deterioration of the poverty indicators in relation to the preceding period and the targets proposed in the NDP. Possibly a high content of current expenditure financed with this sources, the model of micro projects with little impact, the dispersion of the cooperation, the high costs of intermediation in projects, and the improvisation of priorities by the authorities explain in part these results. It is clear that the yield from public investment and current spending in economic and social terms will have to improve significantly in the future so that the foreign indebtedness makes sense and does not lead the country into an unsustainable situation.

246. The foreign assistance received by the government during the 2002- 2006 period amounted to US$6,879.7 million, including the debt relief, which means an annual average of aid equivalent to 30.2% of the GDP. Of this cooperation, 42.0% was in loans and donations; that is, US$2,897.9 million. It should be noted that of all the resources disbursed, 19.6% were liquid resources, mainly for budget support and balance of payments support, which allowed for maintaining macroeconomic stability and

65 spending on poverty. It should be highlighted that the social sector absorbed 40.6% of the flows coming in loans and donations.

247. In 2006, the public sector disbursed US$578.2 million (10.9% of the GDP) despite the low execution of the public investment program, which is mostly financed by international cooperation. Of these disbursements, 51.2% came from loans; 33.6% was in the form of liquid resources, mainly used for budget support. In both 2005 and 2006, there were delays with the disbursements, estimated at around US$100.0 million; in 2005 because of the prolonged political crisis that year and in 2006 because of the expectations created around the elections. In both cases, however, there were effects that had to do with the government’s capacity for execution.

248. Foreign cooperation also had good success in the frame of the initiative for forgiving the debt. In 2006, the authorities continued the process of negotiating and formalizing the foreign debt relief in the frame of the HIPC initiative, to which were added the benefits obtained from the additional relief provided by multilateral institutions in the context of the Multilateral Debt Relief Initiative (MDRI)18. Nicaragua was forgiven US$1,184.9 million of foreign debt with the IMF, the World Bank, and the IDB.

249. During the period from 2002 to 2006, this process resulted in debt relief totaling US$3,981.8 million19, one of the most successful experiences and with the greatest scope among the countries that have qualified for that initiative. In terms of stock, this has meant a drop in the nominal balance of the country’s foreign debt of US$4,526.7 million20, which represents 38.0% of the highest stock (as of 1994). In terms of flows, this meant an accumulated reduction of foreign debt service equivalent to 23.0% of the GDP – that is, US$1,217.7 million – during the 2002-2006 period. All of this has given the country a greater level of financial solvency at the international level.

250. These amounts of foreign debt forgiveness improved the fiscal position and the country’s indicators of external sustainability. The substitution of the debt payment by poverty spending favored the government’s social program and improved the balance of payments position by reducing the burden of debt service. It also reduced the relation of foreign debt stock to

18 Multilateral Debt Relief Initiative (MDRI). This initiative was launched at the G8 Summit in July 2005 (Gleneagles, Scotland) and entered into effect in early 2006. The G9 asked for the complete cancellation of the debt from the International Development Association (IDA) of the World Bank, the IMF, and the African Development Fund (FAD) for those countries that concluded the HIPC in support of the Millennium Development Objectives (MDG). Unlike the HIPC, the MDRI did not have any kind of parallel relief from private creditors or bilaterals. In December 2006, the IDB decided to participate in this initiative. 19 The process of formalizing the forgiving of the debt meant a total amount of US$4,589.0 million to 2006. 20 See Report on Public Debt 2006, Central Bank of Nicaragua and Ministry of Treasury and Public Credit, April 2007.

66 the GDP to 85.0% from the 149.0% it represented in 2001, and the relation of it to exports, which went from 671.0% in 2001 to 314.0% in 2006.

Table 10. Nicaragua: Evolution of Foreign Cooperation

Items 2002 2003 2004 2005 2006 2002-06 Average

Millions of dollars Total foreign cooperation 990.4 1,073.8 2,266.9 739.7 1,808.9 6,879.7 1,375.9 Loans and donations 526.6 585.9 652.1 555.1 578.2 2,897.9 579.6 Loans 214.6 302.0 344.7 266.5 295.9 1,423.7 284.7 Bilateral 12.3 29.2 11.1 32.9 20.8 106.3 21.3 Multilateral 191.3 256.9 327.4 224.5 265.3 1,265.4 253.1 Others 10.9 15.9 6.2 9.1 9.8 51.9 10.4 Donations 312.0 283.9 307.4 288.6 282.3 1,474.2 294.8 Bilateral 255.4 213.9 196.4 206.4 193.8 1,065.9 213.2 Multilateral 56.6 70.0 111.0 82.2 88.5 408.3 81.7

Debt forgiveness 463.8 487.9 1,614.8 184.6 1,230.7 3,981.8 796.4 Bilateral 370.8 410.8 1,347.2 108.6 20.1 2,257.5 451.5 Multilateral 93.0 77.1 267.6 76.0 1,210.6 1,724.3 344.9 Indicators En relación al PIB Total cooperation 24.6 26.2 50.8 15.2 34.1 30.2 Loans and donations 13.1 14.3 14.6 11.4 10.9 12.7 Debt forgiveness 11.5 11.9 36.2 3.8 23.2 17.5 Source: BCN

Performance of the Non-Financial Public Sector (NFPS)

251. The electoral scenario that dominated the country’s affairs in 2006 was determinant for the fiscal results. In this context, public spending, besides being pressured by the expenditures for the national elections held in November, also faced the salary demands in the health and education sectors, the pressures from the transport sector because of the rise in fuel prices and the freezing of bus fares, the increasing allocations to the municipalities and the universities, and the rigidity of public spending determined by the payment of the public debt and the constitutional allocations.

252. Nevertheless, the robust performance of fiscal revenues collection, the increased foreign debt relief, and the contraction of the public investment program, as well as the reduced losses of the monetary entity, made it so that the combined public sector (including the BCN) would end 2006 with a better deficit position than projected. The primary deficit before donations was 2.1% of the GDP, half what was programmed. The overall/global deficit before donations was 4.1% of the GDP, 2.5% of the GDP less than the program. However, a major flow of donations allowed for reaching a surplus of 0.2% of the GDP, surpassing the programmed deficit of 1.9% of the GDP. With all this, public savings exceeded expectation, reaching 4.5% of the GDP.

67 253. The strict fiscal discipline implemented since 2002, the taxation reforms approved during this five-year period, and the measures adopted to improve the taxation administration, as well as the contraction of capital spending and the successful process of forgiving the foreign debt, positioned the NFPS in a better situation. Both income (25.1% of the GDP) and the overall balance before and after donations performed better than what was programmed in relation to previous years, resulting in savings of 4.9% of the GDP and a surplus equivalent to 0.7% of the GDP.

Table 11. Nicaragua: Fulfillmet of the Fiscal Program 2006 Deg. of Items2002 2003 2004 2005 Prog. Exec.1/ prog.

Relation to the GDP % Combined Public Sector (SPC) Current income 19.7 21.8 23.2 24.2 24.6 25.0 101.5 Current expenditures 18.8 19.8 18.7 18.9 20.6 20.5 99.5 Savings -2.5 2.0 4.6 5.3 4.0 4.5 112.3 Primary Balance before Donations -3.3 -3.3 -3.3 -2.9 -4.2 -2.1 50.4 Overall Balance before Donations -10.5 -7.7 -6.5 -5.1 -6.6 -4.1 62.4 Overall Balance after Donations -5.5 -3.9 -2.8 -1.6 -1.9 0.2 -11.8

Non-Financial Public Sector (NFPS) Total incomes 20.2 21.8 23.4 24.3 24.6 25.1 102.0 Total expenditures 28.8 27.8 28.4 28.8 30.4 28.8 94.7 of w hich: Interest 5.7 3.1 2.1 2.0 1.9 1.8 96.4 Savings -0.6 3.6 6.0 5.9 4.8 4.9 102.4 Overall Balance before Donations -8.5 -6.1 -5.0 -4.5 -5.8 -3.7 63.6 Overall Balance after Donations -3.6 -2.3 -1.4 -1.0 -1.1 0.7 -61.9

Memorandum: Losses of the BCN 1.9 1.6 1.4 0.6 0.8 0.4 53.8 GDP in millions of dollars 4,026.0 4,101.5 4,464.7 4,854.6 5,370.6 5,300.8 Average annual exchange rate 14.3 15.1 15.9 16.7 17.6 17.6 1/: Preliminary. Source: SETEC, BCN.

Tendency of revenues/income

254. This improved position of the public sector is tentatively explained by the sustained growth of fiscal revenues, which in real terms have grown in a sustained way over the five-year period at an average annual rate of 5.6%, getting to where they represented 25.1% of the GDP in 2006. The changes introduced with the taxation reforms during the period show that the country’s tax system improved taxation equity by reducing the weight of taxes for consumption and making it so that those who earn more pay more (Annex 3). This tendency has been achieved based on a greater share of direct taxes on the taxation structure.

255. Nominally, this meant an increase in public sector revenues of US$145.3 million (0.8% of the GDP) compared to the year before, of which 74.0% (US$106.9 million) is explained by the increase in tax revenue collection, which during the 2002-2006 period reached an average annual growth rate of 11.1%. This was the result of the maturing of the taxation reforms introduced during that period, the upswing in economic activity, and greater administrative efficiency. The administration improved by means of

68 the institutional modernization of the substantive processes for speeding up and modernizing the procedures for registration and collection and the implementation of the strategy for outsourcing collection by means of making declarations over the Internet and being able to pay taxes through the financial system.

256. With the reforms introduced by these laws, income tax (IR) became more dynamic during the period, reaching an average annual velocity of 23.3% that translated into an accumulated marginal income of US$174.4 million during the period, with which it went from representing 2.8% of the GDP in 2002 to 5.1% in 2006. This meant that its relative share of central government revenues went from 18.7% in 2002 to 27.3% in 2006, making it the second most important tax in the taxation system. With this dynamic behavior, the IR displaced the selective consumption tax (ISC), in this way reducing the regressive nature21 of the system by 9.6% and improving equity in the system.

257. Taxes on foreign trade (ICE) Figure 7 continued to be the main source Nicaragua: Principal Taxes of tax revenues, representing on average 29.0% of all central 350 government revenues during the 300 250 five-year period. Collecting this 200 tax has been favored by the 150 simplification of the procedures 100 Millions of dollars 50 for importation, by the correct 0 application of the customs 2002 2003 2004 2005 2006 legislation and related laws, and IR IVA ISC ICE by the reduction of the dispersion of rates applied to imports of luxury goods, as well as by the struggle against fraud and smuggling carried out by the General Office for Customs Services (DGA).

258. In spite of the losses stemming from the application of the harmonization of import tariff rights (DAI), agreed on in the frame of the Central American Customs Union, collection of these taxes in 2006 amounted to US$291.8 million with an annual average growth of 13.2% during the 2002-2006 period, accumulating an additional US$134.4 million over that five-year period. With respect to the GDP, their share went from 4.4% in 2002 to 5.5% in 2006.

259. The collection of the selective consumption tax (ISC) and the value added tax (IVA) show similar dynamism. Nevertheless, in 2006 there were US$209.4 million and US$150.2 million collected in these taxes, respectively, together contributing an additional US$90.4 million to the

21 In 2002, income tax (IR) represented 19.8% of all taxation revenues and in 2006, it represented 29.4%.

69 system during the 2002-2006 period. This level of revenues collection allowed for the IVA to improve its share, going up to 2.8% of the GDP, while the ISC remained at the same level as the year before, equivalent to 4.0% of the GDP.

Table 12. Nicaragua: Non-Financial Public Sector Revenues 2006 2006 Items 2002 2003 2004 2005 2002 2003 2004 2005 Prog. Exec.1/ Prog. Exec.1/ Millions of dollars In relation to GDP Non-Financial Public Sector 812.0 893.2 1,045.9 1,183.7 1,319.2 1,329.0 20.2 21.8 23.4 24.3 24.6 25.1 Central Government (CG) 600.6 672.7 770.2 880.7 994.2 995.1 15.0 16.4 17.2 18.1 18.6 18.8 Current revenues 598.8 672.3 769.2 880.7 993.4 995.1 14.9 16.4 17.2 18.1 18.5 18.8 Taxation revenues 569.1 624.0 707.7 817.1 916.3 924.0 14.2 15.2 15.8 16.8 17.1 17.5 Income tax (IR) 112.6 162.1 189.1 233.7 258.5 271.6 2.8 4.0 4.2 4.8 4.8 5.1 Value Added Tax (IVA) 104.4 105.8 116.9 128.2 151.8 150.2 2.6 2.6 2.6 2.6 2.8 2.8 Selective Consumption Tax (ISC) 148.0 166.9 176.2 193.3 213.3 209.4 3.7 4.1 3.9 4.0 4.0 4.0 Foreign Trade Tax (ICE) 175.2 188.3 213.9 260.8 291.5 291.8 4.4 4.6 4.8 5.4 5.4 5.5 Other tax revenues 28.9 0.9 11.6 1.1 1.2 1.1 0.7 0.0 0.3 0.0 0.0 0.0 Non-tax revenues 29.8 48.3 61.5 63.6 77.1 71.1 0.7 1.2 1.4 1.3 1.4 1.3 Capital Income 1.8 0.4 0.9 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Indicators Percentages Percentage points Taxation / NFPS 70.1 69.9 67.7 69.0 69.5 69.5 0.4 -0.2 -2.2 1.4 0.4 0.1 Taxation / CG 94.7 92.8 91.9 92.8 92.2 92.9 -1.3 -2.0 -0.9 0.9 -0.6 0.7 IR / CG 18.7 24.1 24.6 26.5 26.0 27.3 1.7 5.4 0.5 2.0 -0.5 1.3 IVA / CG 17.4 15.7 15.2 14.6 15.3 15.1 -2.5 -1.7 -0.6 -0.6 0.7 -0.2 ISC / CG 24.6 24.8 22.9 21.9 21.5 21.0 -2.6 0.2 -1.9 -0.9 -0.5 -0.4 IVA+ISC / CG 42.0 40.5 38.1 36.5 36.7 36.1 -5.1 -1.5 -2.5 -1.5 0.2 -0.6 ICE / CG 29.2 28.0 27.8 29.6 29.3 29.3 1.6 -1.2 -0.2 1.8 -0.3 0.0 1/: Preliminary. Source: SETEC, MHCP, BCN.

Public spending

260. In 2006, the authorities put priority on political and social stability and so many of their actions aimed at cushioning the impact of the rise in fuel prices on the real income of workers (subsidy for transport, electricity, and drinking water), at attending to wage demands from very sensitive sectors like health and education, and at guaranteeing the resources allocated to programs for fighting poverty, to the country’s municipalities, and to other Branches of Government. As well, complying with spending that by law must be guaranteed by the State and payment of service on the public debt were among the priorities of the public spending policy.

261. The performance of public spending was below what the program projected, despite the extraordinary spending for the national elections.22 Poor execution of the public investment program of the central government left US$101.1 million not executed, a tendency that was shown since 2005, and the slow disbursement of resources by some donors made it so that

22 Spending for the Supreme Electoral Council (CSE) in 2006 was US$53.0 million, US$38.9 more than in 2005, resources that were allocated to cover expenses related to the national elections held on November 5, 2006.

70 public sector spending would be at the same level as the year before; that is, equivalent to 28.5% of the GDP.

262. Nonetheless, the current spending of the central government increased by US$145.6 million (1.6% of the GDP in relation to 2005) as a net effect of the increase in transfers, subsidies, electoral spending, and salary increases. In particular, the increase in current transfers (US$67.4 million) was determined by the increase in resources transferred to the universities23 and centers for higher technical education (an additional US$16.2 million) and to the country’s municipalities (US$7.7 million), which together represented 35.4% of this additional spending.

263. The spending for the national elections was the determinant factor in the increase of purchases of goods and services by US$43.7 million compared to the spending the year before, while the subsidy went to maintaining bus fares in the capital and Ciudad Sandino, and the increase in the salary mass was because of the wage increases in education and health and for the police. However, during the year, the same level of interest on the public debt was paid, going down in real terms by 0.1% of the GDP.

264. The recurrent problems that arose in bidding processes for public works, conflicts with contractors, late approval of funding or approval outside of the period, besides the weak capacity for execution of the public and private sector institutions, were key elements in the under-execution of public investment projects. It should be noted that the increase in capital transfers to the municipalities in part cushioned the drop in public investment.

23 Includes transfers for payment of electricity, drinking water, and national telephony.

71 Table 13. Nicaragua: Non-Financial Public Sector Spending 2006 2006 Items 2002 2003 2004 20052002 2003 2004 2005 1 1/ Exe c. Prog. Exec. Prog. / Millions of dollars Relation to the GDP Non-Financial Public Sector 1,153.9 1,141.5 1,270.9 1,401.8 1,629.4 1,523.7 28.8 27.8 28.4 28.8 30.4 28.8 Central Government (CG) 944.6 925.6 1,018.8 1,134.4 1,314.2 1,201.3 23.5 22.6 22.8 23.3 24.5 22.7 Current spending 671.4 574.6 582.2 670.4 827.8 815.9 16.7 14.0 13.0 13.8 15.5 15.4 Wages and salaries 174.9 186.2 183.3 203.4 233.3 235.6 4.4 4.5 4.1 4.2 4.4 4.5 Purchase of goods and service 95.1 88.3 95.5 109.9 164.1 153.7 2.4 2.2 2.1 2.3 3.1 2.9 Interest 228.5 127.1 93.0 93.5 100.8 95.7 5.7 3.1 2.1 1.9 1.9 1.8 Transfers 172.9 173.1 210.5 263.5 329.6 330.9 4.3 4.2 4.7 5.4 6.2 6.3 Capital spending 273.2 352.5 436.6 462.9 486.4 385.4 6.8 8.6 9.8 9.5 9.1 7.3 Formation of fixed capital 170.8 226.9 268.4 264.4 265.7 183.2 4.3 5.5 6.0 5.4 5.0 3.5 Transfers 102.5 125.6 168.2 198.5 220.7 202.1 2.6 3.1 3.8 4.1 4.1 3.8 Concession of net loans 0.0 -1.5 0.0 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Indicators Percentages Increase in percentages Current spending / Total spend CG 71.1 62.1 57.1 59.1 63.0 67.9 5.9 -9.0 -4.9 1.9 3.9 4.9 Wages and salaries / Total spend 18.5 20.1 18.0 17.9 17.7 19.6 3.0 1.6 -2.1 -0.1 -0.2 1.9 Interest / Total spending CG 24.2 13.7 9.1 8.2 7.7 8.0 4.5 -10.5 -4.6 -0.9 -0.6 0.3 Capital spending / Total spend CG 28.9 38.1 42.9 40.8 37.0 32.1 -5.0 9.2 4.8 -2.1 -3.8 -4.9 Transfers / Total spending CG 10.8 13.6 16.5 17.5 16.8 16.8 -5.3 2.7 2.9 1.0 -0.7 0.0 1/: Preliminary. Source: SETEC, MHCP, BCN.

Monetary program and financial development

265. Despite the continuation of adverse factors that affected the growth of the economy, monetary policy in 2006 achieved its objectives of keeping inflation below what it was the year before, increasing international reserves, and maintaining exchange rate stability. This was the result of harmonic actions developed between fiscal policy, the financial strategy of the international community, and the use of monetary instruments. An unforeseen budgetary under-execution in the last two years favored monetary policy in 2006.

266. The banking system continued to grow and strengthen itself in different senses. Foreign capital was more present in the financial system with agreements for business mergers24 between Nicaraguan banks and international companies, but also through the opening of new branches of international banks. The banking system also extended its network of branches throughout the country, all of which contributed to a greater opening up of the banking sector, greater indexes of competitiveness, and an increased supply of resources and services nationally.

267. Nonetheless, the Nicaraguan financial system continued to face serious structural problems that raise financial costs, the banking margin, and therefore, interest rates. This means that the system’s resources

24 The General Electric Consumer Finance Group acquired 49.99% of the shares of the Banco de América Central (BAC); the Hong Kong Shanghai Banking Corporation (HSBC) acquired 65.0% of BANISTMO; Citibank acquired 100% of the shares of Banco Uno; and the ASSA Group of Panama acquired 49.0% of the Banco de Finanzas (BDF).

72 continue to be limited for the development of the economy. The greatest offering of resources is for the short term, with interest rates that enjoy maintenance of value, which mostly goes to commerce and consumption. With this, small and medium-scale production, the greatest producer of food in the country, does not fit into the credit parameters applied by the system.

268. On the other hand, and except for the second-floor resources offered by the Nicaraguan Investment Financier (FNI), the system does not generate medium- and long-term resources to promote the activities of the economy. After the closing of the State banks that supplied these markets (small-scale production and promotion), the productive sectors were left with no financial alternatives. This gave rise to informal financial markets, like the micro- financiers that, like the banks, operate with high interest rates and demands for collateral, and the direct financing of Central American importers of national basic grain products, which has remedied the situation of small and medium farmers at high costs. The big productive sector survives off private capital.

269. Lastly, the BCN, whose financial results were negative because of the level of indebtedness, has lost the capacity to inject resources into the economy through an active discount policy. Instead, this institution recently competed for banking liquidity by placing its titles for debt payment, exercising great pressure on the availability of resources, which translated into less capacity for productive credit and increases in the market interest rates. The Government of Reconciliation and National Unity is committed to reinforcing the institutionality of this institution in several directions that go from the election of its authorities to strengthening its monetary instruments and the legal framework that governs it.

270. Monetary program. Monetary policy continued the contractive tendency observed since 2004; however, it was even more so in 2006 as a result of the surplus of deposits that the NFPS kept in the BCN because of the low level of execution of its budget that year. Furthermore, a policy of debt reduction by speeding up the payment of titles reduced the quasi-fiscal losses more than was expected. This facilitated an accumulation of international reserves beyond the targets agreed on with the IMF, which in turn strengthened the exchange rate position of the institution.

271. In this way, the monetary authority modified the payment periods for the debt instruments that the BCN offers through the Open Market Operations; it established a special line of credit financed by funds from the CABEI for banks that had declines in their deposits; and it temporarily increased the legal reserve from 16.5% to 19.5%, a measure that was reversed in the first quarter of 2007. It should be noted that the instrument of monetary policy that helped most to control liquidity was the increase in the legal reserve since the rest of the monetary instruments are exhausted.

272. The results show that the BCN managed to meet the objectives put forward in the program with the IMF so that the level of reserves and the stability achieved in the system could absorb the expectations of the private sector around the elections and establish a positive precedent in the transition of a government. Along this line, the accumulation of international reserves in 2006 amounted to US$252.1 million (4.85 of the GDP), above what was programmed. Playing an important role in these results was the increased amount of legal reserves maintained by the banks in the BCN, the resources from the Deposit Guarantee Fund (FOGADE), and the debt relief received that year from the IMF.

273. As well, credit for the NFPS continued to be contractive, but to a lesser extent than in 2004. This allowed for covering the monetary expansion caused by the payment of the titles. Along the same line, credit to the financial system and the quasi-fiscal losses were less than programmed. The latter represented US$23.2 million, 50.0% less than programmed. It should be mentioned that in 2002 they represented US$78.2 million. The reduction of the quasi-fiscal deficit is attributed to the reduction of the stock of internal debt and the forgiving of interest achieved within the HIPC process.

Table 14. Nicaragua: Monetary Program 2006 2002 2006 Items2002 2003 2004 2005 2003 2004 2005 Prog. Exec. Prog. Exec. Flow in millions of $ In relation to GDP I. Adjusted Net International Reserves 2/ 48.5 18.3 128.0 71.0 246.4 252.1 1.2 0.4 2.9 1.5 4.6 4.8 II. Domestic Assets -30.5 39.6 -75.0 -11.7 -180.5 -150.6 -0.8 1.0 -1.7 -0.2 -3.4 -2.8 Non-Financial Public Sector -93.3 -111.3 -224.0 -96.3 -112.4 -76.6 -2.3 -2.7 -5.0 -2.0 -2.1 -1.4 Central Government -98.1 -68.2 -202.3 -85.1 -106.5 -75.1 -2.4 -1.7 -4.5 -1.8 -2.0 -1.4 Rest of the Public Sector 4.9 -43.1 -21.7 -11.2 -5.9 -1.5 0.1 -1.1 -0.5 -0.2 -0.1 0.0 Other institutions -2.1 -3.2 -2.5 -2.0 2.0 -2.6 -0.1 -0.1 -0.1 0.0 0.0 0.0 National Financial System -40.5 -32.8 -13.0 -9.1 0.0 -8.0 -1.0 -0.8 -0.3 -0.2 0.0 -0.2 Titles 28.6 113.8 94.2 63.7 55.5 92.7 0.7 2.8 2.1 1.3 1.0 1.7 Medium- and long-term loans 10.0 15.7 10.4 9.8 13.5 13.0 0.2 0.4 0.2 0.2 0.3 0.2 Quasi-fiscal loss 78.2 66.6 64.7 29.6 43.6 23.2 1.9 1.6 1.4 0.6 0.8 0.4 Other net assets -1.6 -9.1 -4.8 -7.2 -182.7 -192.4 0.0 -0.2 -0.1 -0.1 -3.4 -3.6 III. Monetary Base 18.0 57.9 53.1 59.3 65.9 101.5 0.4 1.4 1.2 1.2 1.2 1.9 Memorandum: Balances in millions of US$ Monetary base 247.0 289.3 327.4 369.7 410.3 451.1 6.1 7.1 7.3 7.6 7.7 8.5 Gross international reserves 454.2 504.2 670.4 729.9 895.8 924.2 11.3 12.3 15.0 15.0 16.9 17.4 Net international reserves 275.4 308.3 451.1 536.6 832.3 859.0 6.8 7.5 10.1 11.1 15.7 16.2 Adjusted net international reserves 64.1 82.4 210.8 281.8 528.1 472.2 1.6 2.0 4.7 5.8 10.0 8.9 1/: Preliminary; 2/: Refers to adjusted reserves for the purposes of the program Source: BCN y SETEC

274. These results improved the indicators for monetary vulnerability as well as those related to international reserves. It is evident that based on these indicators, exchange rate stability was strengthened, the coverage of the monetary base increased by 0.2% with respect to 2005, as did the indicator for reserves in months of imports, which increased by 0.4 months, despite the increase in the petroleum bill. Along this same line, the BCN

74 titles were reduced as a result of the redemption that was greater than the placement, fundamentally in standardized Letters and Bonds that went down by US$58.5 million.

Table 15. Nicaragua: Indicators for Monetary Consistency Items 2002 2003 2004 2005 2006 Percents Monetary vulnerability GIR/Monetary base 1/ 1.8 1.7 2.0 2.0 2.2 NIR/Monetary base 1/ 1.1 1.1 1.4 1.5 2.0 ANIR/Monetary base 1/ 0.3 0.3 0.6 0.8 1.3 GIR in months of imports 3.1 3.2 3.6 3.3 3.7 Quasi-fiscal losses/GDP 1.9 1.6 1.4 0.6 0.8 Tìtulos BCN/PIB 18.1 16.8 14.6 12.1 9.3 1/: Number of times. Source BCN

275. Financial panorama. The banking system had no variants in its short-term financial policy; credit continued to increase but only in the preferred sectors of the system: commerce and consumption; deposits continued their process of dollarization and also fell because of the electoral process; and interest rates continued to be protected by the maintenance of value clause, reflecting the inefficiency of the sector as shown by the over- levels of legal deposits in the BCN and in the cost of financial intermediation.

276. Overall, the system managed to maintain the same coefficient of liquidity of the economy (liquid assets over GDP) that it showed in 2005 when the deceleration of economic growth and total deposits had an influence. Deposits in dollars were more affected by the election expectations than those in national currency, going down 2.1% in relation to the GDP. Also during this period and for the same reasons, there was an effect of substitution by economic agents towards more liquid assets.

277. However, active operations increased so that credit expanded by US$350.3 million in 2006, or 6.6% of the GDP. This credit level is the highest since 2001. The sectors that absorbed most of these resources were commerce, cattle ranching, industry, housing, personal credit, and credit cards. As seen in the following table, the agricultural sector was less favored, as always because of the risk associated with this sector and the lack of real guarantees in the terms required by the banking system.

75 Table 16. Nicaragua: Indicators of the Financial System Items 2002 2003 2004 20052006 2002 20032004 2005 2006 Balances in millions of dollars In percent of the GDP

Liquid assets (M3A) 1,740.4 1,876.9 2,098.0 2,275.8 2,398.4 45.0 46.5 47.3 45.3 45.2 Deposits 1,598.2 1,710.6 1,908.0 2,053.7 2,153.9 39.7 41.7 42.7 42.3 40.6 In Córdobas 438.4 513.3 591.8 654.7 741.1 10.9 12.5 13.3 13.5 14.0 In Dollars 1,159.8 1,197.3 1,316.2 1,399.0 1,412.8 28.8 29.2 29.5 28.8 26.7 Others 142.2 166.3 190.0 222.1 244.5 5.3 4.8 4.5 3.0 4.6 Credit 772.1 946.8 1,149.9 1,424.0 1,774.3 19.2 23.1 25.8 29.3 33.5 Agriculture 132.0 140.1 141.3 156.9 165.1 3.3 3.4 3.2 3.2 3.1 Ranching 16.4 18.7 26.9 46.4 76.7 0.4 0.5 0.6 1.0 1.4 Commercial 198.4 234.1 325.9 398.4 489.2 4.9 5.7 7.3 8.2 9.2 Industrial 85.7 109.6 119.0 144.4 173.7 2.1 2.7 2.7 3.0 3.3 Housing 69.3 96.3 139.7 181.9 234.9 1.7 2.3 3.1 3.7 4.4 Others 270.3 348.0 397.0 496.0 634.7 6.7 8.5 8.9 10.2 12.0 Implicit interest rates Percentage Change in % points Savings 7.0 4.8 3.7 3.1 3.4 -1.1 -2.2 -1.1 -0.6 0.3 Lending 18.7 17.5 17.0 16.2 16.4 0.9 -1.2 -0.5 -0.8 0.2 National banking spread 1/ 9.6 8.8 8.6 7.4 6.3 1.0 -0.8 -0.2 -1.2 -1.1 International spread 2/ 2.6 3.1 1.7 0.0 -0.8 -0.5 0.5 -1.4 -1.8 -0.8 Indicator: Savings/Credit 207.0 180.7 165.9 144.2 121.4 5.0 -26.3 -14.7 -21.7 -22.8 1/: Savings rate 6 months minus active short-term rate in córdobas; 2/: Difference betw een 10-year US Treasury Bond Rate and 3 month libor interbank USD deposit rate Source: BCN, SETEC

278. Interest rates increased in response to the need to have liquidity in order to deal with the volatility of deposits and the increase in the legal reserve that the BCN decreed temporarily in 2006. The direction in the rise of savings rates happened in order to counteract the effect of the elections and to contain the flight of deposits in dollars. Nevertheless, the savings rates in national currency were practically equal to the international rate, although they enjoyed maintenance of value. In exchange, the lending rates increased not only to reduce the effect on the banking spread but also as a consequence of the cost of maintaining excess legal reserves in the BCN and the pressure form credit demand associated with commerce and consumption.

279. In this way, the interest rates of the banking system continue to be a limiting factor for the development of sectors in which most economic activity is concentrated. Not only are they excluded from the system by the financial effect that maintenance of value have on credit, but also because of the high financial cost that covers for the inefficiencies of the banking sector and that is reflected in the banking spread. This makes it so that the productive sector under these conditions is not competitive with countries where interest rates are a factor linked to development and, therefore, with advantages at the international level.

76 6. Tendency of Poverty Spending25

General aspects

280. Poverty spending represented approximately 50% of the General Budget of the Republic and has meant more than 13.0% of the GDP over the last three years. Its content is diverse and most is financed with resources from the international community (Annex 7). Only 70.0% of what is classified as poverty spending has an effect on the poor and it is based on a network of micro projects, most of which have no capacity to move indicators at the national level.

281. Public spending for poverty reduction, despite its tendency to increase since 2002, has not had the expected impact as conceived of in the social strategy of the last 15 years. The quality of public spending, the definition of poverty spending, and the allocation of HIPC relief have been questioned by both donors and civil society organizations, looking for an explanation of this phenomenon. However, poverty spending in any way that is defined in the public spheres will not be enough to reverse the accumulated backwardness of social sectors and the budgetary lag that has accumulated for years in the sectors in charge of providing coverage of basic services to the population.

282. Improving the indicators related to poverty goes beyond the quality and intensity of the spending defined for these objectives. This requires a strategic, thoroughgoing, and direct change in the actions of the public administration in a public policy that is more indulgent with the poor, in the alignment of international cooperation, and in a structural change of the programs and projects directed at reducing poverty. But it also requires taking actions to reverse the effect of the cost of the policies and adjustment measures of previous programs, the effects of which were borne by the poor.

283. The Government of Reconciliation and National Unity has made progress along this line. It has rescued the principle of education and health services free of charge; it is reversing the effects of the privatization in the energy and drinking water sectors; it has a program for capitalization of the poor for food production underway; and it included the social sector in the program being discussed with the IMF, incorporating greater resources from the 2007 budget in line with the millennium goals. It is estimated that starting this year, poverty spending will improve in quality and intensity, reversing the tendency of the poverty indicators.

25 For more details, see “Nicaragua: Report on Poverty Spending and HIPC Relief 2006”, June 2007.

77 Poverty spending, priorities, and financing

284. In this context, total poverty spending in 2006 showed an execution equivalent to 13.4% of the GDP, or US$706.6 million. This was a reduction by 0.2% of the GDP in relation to the program, meaning an under-execution of US$20.1 million. This behavior was explained by the deceleration of the projects for highway construction and maintenance, rural roads, municipal infrastructure, and rural development (Table 17, Annexes 4 and 5).

285. Despite the pronounced fall of the public investment program – by more than US$100.0 million, a large part of which constituted poverty spending – the spending to respond to the wage demands of health26 and education workers, support for municipal governments, and the freezing of subsidized bus fares in the capital largely compensated for this behavior (Annex 6).

286. The spending with the greatest incidence (first level of incidence) on the poor has shown a sustained upward tendency since 2002, doubling its average monthly velocity of spending and increasing its share of the GDP from 6.3% in 2002 to 9.2% in 2006. Contrary to this, the spending for capacity building in order to improve income showed a slightly downward tendency because of the delays faced in recent years by the public investment program for internal highways, roads, and productive programs. This level went from 3.5% of the GDP in 2002 to 2.9% in 2006. The poverty spending at the third level of incidence remained much the same with levels around 1.3% of the GDP from 2002 to 2006, except for the extraordinary execution in 2005 (Table 17, Annexes 4 and 5).

287. The results show that the provision of basic services and the direct transfers to the poor together represented the equivalent of 9.2% of the GDP (US$486.5 million), higher by 0.1% of the GDP than the year before. This level represented 68.9% of total poverty spending, of which 90.6% corresponded to expansion and improvement of social services (8.3% of the GDP). Nonetheless, the direct transfers for protection of the poor dropped by 0.3% of the GDP in relation to the year before with the finalization of some projects of importance for this sector in 2006 (Table 17, Annexes 4 and 5).

288. Among the programs that stand out at this level are those in education and health (more than 68.0% of what was invested in the provision of social services), the construction of low-income housing, and the development of water and sanitation systems. The latter included the integrated water and sanitary drainage projects built in Managua, Estelí, Ocotal, Boaco,

26 The health sector had a long strike that ended in an agreement in which the government made the commitment to establish a route for bringing the salaries of doctors up to the Central American average over a period of five years, starting in 2007, applying a 16.0% wage increase in order to complete a total increase of 30.0%, and creating a fund of C$50.0 million for a housing program.

78 Chontales, and the RAAS, as well as the project to clean up Lake Managua. The construction and maintenance of municipal infrastructure continued to benefit with the transfers to the municipalities. To the contrary, the construction and maintenance of rural roads and highways fell drastically, due to delays in the executing companies meeting the preconditions and in the bidding processes that were held up by high-cost offers and by legal challenges from the losing bidders (Annex 6).

289. Standing out at the second level of incidence of poverty spending was the abrupt fall in investment in trunk roads and the partial compensation for this by greater investment in electricity, productive rural development, and ports. That made investment at this level the same as in 2005 in relation the GDP (2.9%). At this level, 32.7% of the resources went to support for the production, technification, and commercialization of agricultural, fishery, artisanal, and forestry products, which enabled increases in income and the nutrition level of small and medium producers. Of these resources, 25.7% was absorbed by investment in roadway infrastructure, affected by problems related to the capacity for execution, by the delay in resources to fund it, and other problems already mentioned (Annexes 4, 5, and 6).

290. Among the most important projects at this level was the dredging of the Bluefields Bay, Escondido River, and Corinto that resulted in a wet-dry canal that links the Caribbean Coast, El Rama, and Corinto,27 which will benefit producers. The electricity project for developing a hydroelectric plant, the construction of the electricity interconnection system for Central America (SIEPAC), and the broadening of the networks in the countryside constituted major progress in the sector28 in 2006. Secondary education (including technical) continued to increase, with investment rising to US$24.0 million, the largest amount during this five-year period. This increase is mainly explained by wage increases in the sector and the construction of the Technological Institute for Academic Excellence (Annexes 4, 5, and 6).

291. With the programs to increase efficiency in institutions that provide basic social services and to improve the business climate and governance, they could not maintain the upswing seen the year before. There was US$67.0 million invested (equivalent to 1.3% of the GDP), 0.3% of the GDP less than in 2005. This reduction affected the programs for improving the administration in the educative sector, with the finalization of some programs that that investment sustained. The resources for improving the business climate continued their sustained increase (since 2002) and in

27 This route will allow for transporting merchandise from one ocean to the other without using the ports of neighboring countries. Preliminary estimates show that use of this route will result in a reduction of costs of between US$600 and US$800 per container. 28 This year, 415 km of additional networks were built in 132 communities of 48 municipalities in the country, benefiting 37,055 people and 6,503 homes.

79 2006, there was double the investment made in the first years of the five- year period.

Current and capital poverty spending

292. In analyzing poverty spending by its components, it can be observed that the rate at which current spending is increasing is increasingly greater than the increase in capital spending, which could indicate that the factor of capitalization as an essential element for a sustained reduction of poverty is being relegated in exchange for prioritizing immediate problems that put pressure on the spending most demanded for the poor, like basic services, social protection, salaries, and subsidies. However, this may only be a reflection of weaknesses in the capacity for execution of the budget and not an express policy of taking dynamism away for social infrastructure. The presence of a stock of unbudgeted external resources is proof that the reduced dynamic of spending on infrastructure to reduce poverty is not because of a lack of financing.

293. Current spending was favored by three important elements in 2006. One is legal, related to the transfers to the municipalities; another is related to external economic factors like the impact of international petroleum prices; and the third is rooted in Figure 8 the political pressures from some Poverty spending adjusted for subsidies and organized representative municipal transfers associations for wage increases. 15 14 13 . 2 13. 6 13. 4 294. During the period from 2004 13 12 . 6 12 12. 4 12. 5 to 2006, the increase in transfers 11. 1 12. 1 12 . 0 11 10. 8 to the municipalities and subsidies 10 for transport made it possible to 2002 2003 2004 2005 2006 keep poverty spending above 13.0% Gasto pobreza ejecutado Gasto pobreza ajustado of the GDP. These increases represented 0.7%, 1.5%, and 1.4% of the GDP in those years. This Figure 9 Growth of poverty spending meant a net accumulated increase of approximately US$150.0 million 45

(Table 3). If not for these outlays, 30 poverty spending would have 15 remained around 12.2% of the 0

GDP, as shown in the figure. -15 Nevertheless, budgetary under- 03/02 04/03 05/04 06/05 execution is a factor that affected Gasto Corriente Gasto de Capital poverty spending notably in the last two years.

80 295. While current spending increased at an average annual rate of 21.4% in real terms during the 2004-2006 period, capital spending dropped at an average annual rate of 8.9% over the same period. The marginal increase of current spending in the last year was US$61.9 million compared to 2005, while capital spending decreased by US$38.8 million. This tendency can be seen in the graph. A re-composition of these tendencies is expected since the demand for roads, schools, health centers, drinking water, and electricity continues to be unmet (Annex 7).

Financing

296. In the financing for poverty spending, the accelerated increase of treasury resources in the last two years stands out. These resources have shown a downward tendency from 2002 to 2004, coming in at an annual average of 3.5% of the GDP; however, in the period from 2005 to 2006, they were at 5.9%, a growth rate of 68.6%. As shown by the indicators, the rigidity of public spending did not allow for freeing up more resources for the social programs.

297. Greater efficiency in tax revenue collection and the counterpart for projects not executed allowed for an accumulation of resources for attending to poverty program. The treasury resources allocated to poverty reduction in 2006 amounted to 6.4% of the GDP, 1.1% of the GDP more than in 2005; that is, a nominal increase of US$71.1 million (Annex 7). The program only increased by 0.3% of the GDP (US$12.8 million).

298. External financing – which had shown an upward tendency during the 2002-2004 period, reaching 10.0% of the GDP in 2004 – slowed down to 7.0% of the GDP in 2006. Weaknesses in the government’s capacity for execution, the delay in fulfilling conditions to do with loans, legal problems with some executing companies, and the conservative expectations of donors regarding the electoral process contributed to this result. In 2006, external support fell by 1.3% of the GDP (US$48.0 million) compared to 2005, and by 0.5% of the GDP in relation to what was budgeted.

81 Table 17. NICARAGUA: Priorities and Financing for Poverty Spending Accum. Aver. Levels 2002 2003 2004 2005 20061/ 2002 2003 2004 2005 20061/ 2002-06 2002-06 Millions of dollars Relation to GDP Priorities 446.5 522.2 601.2 683.5 706.6 2,959.9 11.1 12.6 13.2 13.6 13.4 12.8 Programs with direct incidence on poverty reduction 254.7 335.8 397.4 456.2 486.5 1,930.7 6.3 8.1 8.7 9.1 9.2 8.3 Direct transfers to the poor 20.3 27.0 38.8 60.8 45.8 192.7 0.5 0.7 0.9 1.2 0.9 0.8 Provision of basic services 234.5 308.8 358.5 395.4 440.7 1,738.0 5.8 7.4 7.9 7.9 8.3 7.5 Strengthening of capacities to improve income 139.1 134.6 142.2 146.8 153.1 715.9 3.5 3.2 3.1 2.9 2.9 3.1 Roadways infrastructure 50.5 42.4 30.7 49.7 39.4 212.8 1.3 1.0 0.7 1.0 0.7 0.9 Electricity 18.2 12.2 26.6 17.6 21.6 96.2 0.5 0.3 0.6 0.4 0.4 0.4 Productive rural development 40.4 43.7 47.8 43.2 50.1 225.2 1.0 1.1 1.0 0.9 0.9 1.0 Secondary and technical education 14.6 18.3 18.7 21.1 24.0 96.7 0.4 0.4 0.4 0.4 0.5 0.4 Environment 15.4 18.1 18.4 15.1 18.0 85.0 0.4 0.4 0.4 0.3 0.3 0.4 Institutional strengthening, governance, business climate 52.6 51.7 61.6 80.5 67.0 313.4 1.3 1.2 1.3 1.6 1.3 1.4

Financing 446.5 522.2 601.2 683.5 706.6 2,959.9 11.1 12.6 13.2 13.6 13.4 12.8 Internal resources 149.0 148.6 144.4 268.3 339.4 1,049.7 3.7 3.6 3.2 5.3 6.4 4.4 External resources 297.5 373.6 456.8 415.2 367.2 1,910.2 7.4 9.0 10.0 8.3 7.0 8.3 HIPC relief 2/ 70.6 96.7 124.6 121.5 95.0 508.4 1.8 2.3 2.7 2.4 1.8 2.2 Loans 136.2 175.0 225.9 163.9 138.3 839.2 3.4 4.2 4.9 3.3 2.6 3.7 Donations 90.7 102.0 106.3 129.8 133.9 562.7 2.3 2.5 2.3 2.6 2.6 2.5

Memorandum Current GDP 4,026.0 4,148.8 4,555.6 5,007.5 5,300.8 Average annual exchange rate 14.3 15.1 15.9 16.7 17.6 1/: Preliminary. 2/: Includes additional relief granted by the World Bank and IMF in the frame of the MDRI. Source: SETEC, MHCP.

Foreign debt relief

299. Throughout 2006, the authorities continued the process of negotiating and formalizing foreign debt relief in the frame of the HIPC initiative, to which was added the benefits obtained from the additional relief provided by multilateral institutions in the context of the MDRI. This process culminated with the formalization of a total of US$4,589.0 million in relief, which brought the nominal balance of the country’s foreign debt down to US$4,526.7 million, a reduction of 15.3% with respect to the balance the year before.

300. In terms of flows, this meant an accumulated reduction of foreign debt service equivalent to 23.0% of the GDP – US$1,217.7 million – during the period from 2002 to 2006. However, of these flows, only 47.0% had budgetary reserves for their due cancellation, which constituted savings to be directed at poverty spending equivalent to 10.8% of the GDP (US$571.7 million). The rest only meant an accounting adjustment for balance of payments purposes. This situation was related to the real repayment capacity of the country so that the HIPC relief that could be converted into poverty spending was that which came from the forgiving of the debt that Nicaragua was honoring in its budget.

82 301. The progress with the HIPC process resulted in a re-composition of public finances and the indicators for the country’s external sustainability. On the one hand, it freed up resources that went to fight poverty; on the other, it improved the balance of payments position by reducing the burden of service. The indicators for external sustainability also improved, with the relation between the present value of the foreign debt and the GDP going down to 80.0% from the 149.0% it represented in 2001. The relation of this balance to exports went from 671.0% in 2001 to 314.0% in 2006.

302. After Nicaragua reached the culmination point in 2004, the flows of relief for fighting poverty began to go down a lot, although those going to the balance of payments increased. This affected the indicators related to the HIPC initiative. The relief received in 2006 was 25.0% less in relation to the GDP; 30.9% less in relation to taxation revenue collections; and 24.7% less in relation to total poverty spending. A reduction in the relief from the countries making up the Paris Club of US$27.9 million compared to 2005 explains the deterioration of these indicators (Table 18, Annex 8).

303. The flow of HIPC resources for the fight against poverty executed in 2006 amounted to 1.8% of the GDP (US$95.0 million), including the effect of the extraordinary relief from the multilateral debt initiative. These amounts were in line with the program, but meant 21.8% less than the year before. Most of these resources were granted by multilaterals (US$56.7 million), mainly the World Bank, which under the terms of the MDRI doubled its relief, getting to where it represented 24.2% of all relief for poverty spending. The rest of the financing came from the countries of the Paris Club (US$38.3 million), in lesser proportions than in previous years.

304. The budgetary execution of HIPC resources in 2006 shows that 62.8% (US$59.7 million) was allocated to current spending in order mainly to finance the salaries of teachers and healthcare workers and to support the programs of social protection and assistance. For capital spending on poverty, US$35.3 million was executed, going to projects to support production and social infrastructure with the objective of expanding and improving the coverage of basic social services (Annexes 9 and 10).

305. The sectoral allocations continued to prefer basic social services, which absorbed most of the HIPC resources. In 2006, this sector was allocated the equivalent of 1.3% of the GDP, which represented 73.9% of the HIPC resources. This allocation was reduced by 23.5% compared to the year before. In this, the allocations to education (US$46.9 million) and health (US$19.1 million) stand out. These sectors had major reductions compared to what was allocated in 2005.

306. After this group, the allocation of the remaining resources was more disperse. There are six types of programs with a given number of projects,

83 among which the remaining HIPC relief is diluted, so that their allocation in relation to the GDP is insignificant. The only one standing out among these programs is for support for production, which executed 15.4% of the total relief going to poverty reduction that year, resources that were invested in the construction and rehabilitation of highways and rural roads, rural electrification projects, and support for the rural productive reactivation, as well as the development of agricultural technology.

Table 18. Nicaragua: Sources of HIPC relief 2006 1/ Accum. 2006 Items 2001 2002 2003 2004 2005 Prog Exec 2001- 2001 2002 2003 2004 2005 1/ . . 06 Millions of dollars Structure Total HIPC relief 2/ 99.4 ### ### ### ### 211.4 214.5 1,217.7 100.0 100.0 100.0 100.0 100.0 100.0

For poverty spending 3/ 63.3 70.8 96.6 ### 121.5 97.0 95.0 571.7 63.7 29.6 40.7 59.9 55.4 44.3 Multilaterals 48.1 70.8 75.1 79.2 55.3 58.6 56.7 385.2 48.4 29.6 31.6 38.1 25.2 26.4 World Bank 5.7 8.0 7.8 9.7 11.1 24.1 23.0 65.4 5.7 3.3 3.3 4.7 5.1 10.7 IDB 19.8 35.3 38.1 36.3 33.6 22.7 21.9 185.0 19.9 14.8 16.1 17.5 15.3 10.2 CABEI 22.6 22.9 20.6 23.9 9.6 9.5 9.4 109.1 22.7 9.6 8.7 11.5 4.4 4.4 IMF 0.0 0.9 4.1 6.4 0.0 0.0 0.0 11.4 0.0 0.4 1.7 3.1 0.0 0.0 OPEC 0.0 3.7 4.5 1.8 0.0 0.5 0.5 10.5 0.0 1.5 1.9 0.9 0.0 0.2 Others 0.0 0.0 0.0 1.1 0.9 1.8 1.8 3.8 0.0 0.0 0.0 0.5 0.4 0.8 Bilaterals 15.2 0.0 21.5 45.2 66.2 38.4 38.3 186.5 15.3 0.0 9.0 21.8 30.2 17.9 Paris Club 15.2 0.0 21.5 45.2 66.2 38.4 38.3 186.5 15.3 0.0 9.0 21.8 30.2 17.9

Balance of payment support 36.1 ### 141.0 83.4 97.9 114.4 119.5 646.0 36.3 70.4 59.3 40.1 44.6 55.7

Indicators Average HIPC relief/GDP 1.5 1.8 2.3 2.7 2.4 1.8 1.8 2.1 HIPC relief/Tax revenues 4/ 12.1 13.0 15.5 17.6 14.9 10.6 10.3 13.9 HIPC relief/Total spend NFPS 4.9 6.1 8.5 9.8 8.7 6.4 6.2 7.4 HIPC relief/Poverty spending 13.6 15.8 18.5 20.7 17.8 13.4 13.4 16.6

1/: Preliminary. 2/: Calculated as the difference between service after a hypothetical stock operation in Naples Terms, and service after implementation of the Cologne Terms. 3/: Calculated based on the amount that results

Source: SETEC, BCN.

Factors of change in poverty spending

307. The definition of poverty spending and its quality have been questioned by international bodies, donors, and civil society given the deterioration of the social indicators in recent years. However, many have believed that an upwards tendency of this spending is enough to reduce poverty, which at root is not entirely true. Nicaragua’s experience has shown that many small projects have had success in given regions of the country, but their impact at the national level in moving the indicator for maternal mortality, for example, is not notable.

308. During the 2001-2005 period, Nicaragua’s poverty spending increased constantly, going from 11.3% of the GDP in 2001 to 13.6% of the GDP in 2005; however, poverty increased throughout the country precisely during that period. Other factors were the context for this variable, like unemployment, droughts, impact of fuel prices, and public policy that was not very solidary with the poor, all of which have had a greater negative

84 impact on the population than what could be done with poverty spending in order to improve the living standards of the population at high social risk.

309. The Government of Reconciliation and National Unity has evaluated that the structure of poverty spending as it stands now does not respond to the objectives and priorities of its program. Because of this, it is introducing some factors for change that will improve the yield from this spending in social terms, and so the definition, allocation of resources, and quality of poverty spending will be in function of: (a) changes in the strategic vision of the social program; (b) the targeting and focusing of poverty spending on the sectors most linked to this problematic situation; (c) the management by organized citizen power in the territories as an instrument for promoting the efficiency of this spending; (d) the type and dimensions of the programs aimed directly at the poor; (e) the treatment of the poor who can have their productive capacities strengthened and can stop being the subjects of social assistance; and, (f) the effective political will reflected in preference for the poor in the budget, in the laws, in the reforms, and in public policies in general.

310. The poverty spending included in the Economic Financial Program (PEF) 2007-2010 agreed on with the IMF includes: (a) a new dimension in quantitative terms; (b) the targeting of the marginal increase of spending on the prioritized sectors of education, health, drinking water, and food policy; (c) a new generation of programs aimed directly at the poor; (d) greater flexibility for reducing salary lags in the health and education sectors; and, (e) furthering investment in infrastructure linked to the setting for impoverished small and medium producers. It should be clarified that the marginal spending to fight poverty defined in the PEF is in addition to the base scenario incorporated in the NDP, without changing the definition of poverty spending.

311. In this context, the profile for poverty spending included in the PEF reflects an average of 17.0% of the GDP for the 2007-2010 period, made up by the average of poverty spending defined in the base scenario of the NDP of 13.7% of the GDP, plus the marginal increase of 3.3% of the GDP that comes from the programs agreed on between the Government of Reconciliation and National Unity and the IMF. This will make poverty spending increase from 13.4% of the GDP in 2006 to 17.8% of the GDP in 2010. In all, the government would be adding more than 13.0% of the GDP to poverty spending during the five years of its administration; that is, more than US$200.0 million a year. Most of these resources will be allocated to education, health, drinking water, and roads, which will absorb more than 80.0% of this increase.

85 Tabl e 19. Ni caragua: Changes i n Poverty Spendi ng Average Items 2007 2008 2009 2010 Acum. 2007-10

In percent of the GDP Total 15.7 16.9 17.6 17.8 68.1 17.0 Base projections of the NDP 1/ 13.6 13.7 13.8 13.9 55.0 13.7 Education 3.7 4.3 4.4 4.2 16.7 4.2 Health and nutrition 4.2 4.7 4.8 4.7 18.4 4.6 Highways, roads, ports, and airports 0.9 1.1 1.2 0.9 3.9 1.0 Water and sanitation 0.9 1.0 1.1 0.7 3.5 0.9 Electricity 0.4 0.5 0.4 0.3 1.4 0.4 Others 2/ 3.7 2.2 2.0 3.2 11.1 2.8

Marginal increase of the PEF 3/ 2.1 3.2 3.8 3.9 13.1 3.3 Education 0.0 1.0 1.0 1.9 3.9 1.0 Health and nutrition 0.3 0.4 0.8 1.1 2.5 0.6 Highways, roads, ports, and airports 0.9 0.9 1.1 1.4 4.3 1.1 Water and sanitation 0.1 0.4 0.3 0.7 1.6 0.4 Electricity 0.3 0.6 1.2 1.3 3.4 0.8 Others 2/ 0.4 0.0 -0.5 -2.5 -2.6 -0.6 Memorandum: GDP, millions of US$-NDP 5,587 5,789 6,037 6,308 5,930.3 GDP, millions of US$-PEF 5,675 6,091 6,512 6,973 6,312.7 Marginal increase of the PEF in US$ 119.2 194.9 247.5 272.0 833.6 208.4 1/: Projections calculated on basis of the objectives of the National Development Plan (November 2005). 2/: Includes social protection, rural development and property rights, promotion of exports and investment, environmental s us tainability, and co ns tructio n o f lo w-inco me ho us ing, amo ng o thers . 3/: Projections based on Economic Financial Program 2007-2010 agreed on with the IMF. Source: SETEC.

312. A more detailed vision of the new programs and projects incorporated into poverty spending and the projects that have had budget increases will be given in the review/revision of the NDP. However, Annex 11 has a list of the new projects that will have greater impact on the infrastructure in benefit of the poor, mainly in the last years of the period. The main new projects justify more than 70.0% of the marginal increase of poverty spending in the frame of the priorities of the PEF during the 2008-2010 period.

313. The change of scale of poverty spending from 13.4% of the GDP in 2006 to 15.7% in 2007 is explained by the budget increases that the sectors applied for once the diagnosis/analysis was finished and negotiations began with the IMF, mainly in regards to education, health, and drinking water. This change also includes the effect of new programs that did not exist before in the budget, like the Production Bond in the frame of the Zero Hunger Program and the increase of the subsidy for transport that had been partially considered in the original budget for 2007. The increases in capital spending presented in Annex 12, the production bond, and the transport subsidy together increase poverty spending by US$68.0 million (1.3% of the GDP) over the initial budget.

VII. Medium-Term Perspectives 2007-2012

1. General Aspects

314. Since the first poverty reduction strategy (ERCERP)was implemented in 2001, the perspectives for the economy have been revised periodically in light of international events, the results of the surveys, censuses, and performance evaluations, based on the priorities and approaches introduced by the new governments, and based on national events. It has always been the case that the poverty reduction strategy must be updated in order to adjust the policies and programs and the allocation of resources in line with the desired objectives.

315. In 2003, the government presented the international community at the Consultative Group meeting in September of that year a revised version of that strategy, called the National Development Plan, was finalized in November 2005 and discussed by the Directorate of the World Bank and the IMF in February 2006. This time, many of the targets and indicators had to be adjusted because of the effect of the banking crisis, the brusque fall of coffee prices, the increase in fuel prices, and the behavior of the international economy. But also, new approaches for production, poverty spending, and the territorial strategy were introduced. Other factors of a political nature had their impact on the lagging behind of the social program.

316. In January 2007, the Government of Reconciliation and National Unity took office with a different approach for the poverty reduction strategy and production. This government must deal with a severe energy crisis that is transmitted to the most sensitive social and economic sectors; foreign cooperation that is adapted to particular interests and to the changes of fortune of the country; a health, education, drinking water, and housing sector without resources and with serious structural problems; and lagging salaries in the most sensitive sectors that does not allow for making progress towards the social targets. The perspectives for these sectors shall be more encouraging in consequence with the targets being proposed to reduce poverty. However, the Government of Reconciliation and National Unity will give continuity to those elements of the NDP that are in line with its priorities.

317. The growth rate of the economy slowed down totally, going from 7.0% in 1999 to just 0.8% in 2002. From that point, the economy managed to recover part of its dynamism, reaching a growth rate of 5.3% in 2004; however, there is once again a worrisome deceleration of growth, down to 3.7% in 2006, all of which appears to be associated with the increase in fuel prices, a poor policy of public investment, and the country risk perceived by

87 direct foreign investment. A new review of the path of growth of the GDP has been made in the frame of the new agreement between the Government of Reconciliation and National Unity and the IMF.

318. It should be mentioned that during the last five-year period, the economy had to deal with a financial crisis that ended up with the closing down of several banks and an internal debt that still exercises pressure on the monetary policy. Political aspects also happened continually, affecting the investment climate in the country. But there was also an adverse international setting created by the petroleum crisis that led many countries into imbalances of the balance of payments, above all highly indebted countries like Nicaragua. A more optimistic perspective is rooted in the medium-term expectations presented below.

2. Tendency of International Markets

319. According to the perspectives for the world economy as updated by the IMF, 29 it will see a strong upturn in 2007-2008. World production will grow at an annual average rate of 5.2% over the period. This tendency will mainly be upheld by the growth of emerging economies, among them China, India, and Russia, which will have growth rates of more than 9.0%.

320. Despite that, this worldwide economic dynamic will not dynamize foreign trade beyond what was reached in the preceding period (2005-2006). It is estimated that the volume of imports of developed countries will grow at an average annual rate of 5.3%, lower than the rate of 6.9% during the previous period. In exchange, the exports of those countries will increase by 5.8%, also under the average recorded (7.2%) in the two preceding years.

321. The international import market has been adverse for the Nicaraguan economy in the last five-year period, with the increases in prices for petroleum, iron, zinc, and urea standing out. The first one has affected the whole economy, the next two construction, and the last one agriculture. The inflation imported through these raw materials has pressured fiscal policy, particularly in the case of petroleum, which has unleashed a policy of subsidies and transfers so that the companies in charge of water, electricity, and transport services do not collapse and to protect the population that has low consumption.

322. The prospects for prices for this market show that, in general, prices will tend to drop during the 2007-2010 period. It is expected that China will stabilize the demand for raw materials that developing countries like Nicaragua also consume, that the military conflicts in petroleum producing countries will lower in intensity, and that the supply will dynamize the

29 IMF: World Economic Outlook, July 2007.

88 rhythm of the demand from countries with greater growth potential, all of which will favor this tendency of prices.

323. However, there is a re-composition of prices on the export market for raw materials that does not completely favor countries depending on these markets. In spite of it all, in the case of Nicaragua, the coffee market will remain about US$100.00 and cacao will remain stable, but not sugar, beef, and bananas. This shows that developing countries that produce these raw materials shall have to make greater efforts in terms of productivity and diversification of export production.

324. In this context, the Nicaraguan economy will be affected by the changes in fortune of the world economy. However, it looks like the balance over the terms of trade will be almost neutral as of 2009. Once again, the productivity of the export sectors and the expansion of markets will be vital to achieving the objectives put forward in the program. Along this line, the medium-term perspectives may be favored with the opening up of new markets with Venezuela, Brazil, Iran, the European Union, and other countries that the Government of Reconciliation and National Unity has included in its strategy for diversification of international trade, as well as taking more advantage of the trade agreements underway beforehand and new forms of cooperation like the Bolivarian Alternative for the Americas (ALBA).

Table 20. Nicaragua: Perspectives of the International Market Growth Products Unit 1/ 2005 2006 2007 2008 2010 2015 2010/06

Economic grow th Crecimiento mundial % 4.9 5.5 5.2 5.2 nd nd nd United States % 3.2 3.3 2.0 2.8 nd nd nd Japan % 1.9 2.2 2.6 2.0 nd nd nd China % 10.4 11.1 11.2 10.5 nd nd nd Europe % 2.0 3.2 3.1 3.5 nd nd nd Imports Crude oil, average $/bbl 50 58 49 46 40 29 -31.0 Iron c/dmtu 61 70 67 56 43 33 -38.6 Urea $/mt 205 197 188 184 172 154 -12.7 Zinc c/kg 129 285 262 217 120 100 -57.9

Exports Banana, US $/mt 563 616 584 572 455 462 -26.1 Beef, US c/kg 245 226 214 208 189 191 -16.4 Coffee, arabic c/kg 237 224 204 193 170 174 -24.1 Coffee, robust c/kg 104 120 111 107 90 141 -25.0 Cacao c/kg 144 140 140 140 140 128 0.0 Sugar, w orld c/kg 20 30 26 22 18 19 -40.0 1/: $=US$ dollar; c=US$ cents; bbl=barrel; dmtu=metric short ton; mt=metric ton; kg=kilogram. Source: World Bank: Commodity Forecasts Real Prices

3. Perspectives for the Nicaraguan Economy

325. In this context, the medium-term perspectives for the 2007-2012 period are based not only on the results shown in this progress report, but also on the tendencies of the international markets; on the priorities, policies, and strategies for poverty reduction of the Government of Reconciliation and National Unity; on the expectations the government has for international cooperation; and on the intentions of the private sector to invest, all of which has been taken into account in preparing the proposal for the Economic Financial Program (PEF) 2007-2010 agreed on with the IMF.

326. Nevertheless, the positive effects of the progress made in the previous programs will have their impact in the next five-year period. The culmination of the process of forgiving the foreign debt under the HIPC initiative extended by the multilateral agencies30 in 2006 will have its impact on the budgetary availabilities for the program to fight poverty by freeing up resources equivalent to 34.2% of the GDP. The macroeconomic achievements that maintained stability and kept the economy growing despite the impact of petroleum facilitated the new agreement with the IMF, which gives stability by continuing with clear rules of the game for the private sector.

327. The expiration of important cooperation agreements like those with the World Bank, the IDB, and other bilateral donors will facilitate the contracting of new agreements in the frame of the priorities of the government; that is, the component of projects carried over that are not adjusted to the new reality of Nicaragua will be reduced. Along this same line, the initial negotiations of new cooperation agreements by the government and countries that in the past were not part of the club of cooperants for Nicaragua will give new perspectives for resources with greater structural scope in sectors that are more socially and economically sensitive.

328. Economic growth and inflation. It is estimated that the Nicaraguan economy will stabilize its growth rate somewhere above 5.0% as of 2009, once private sector expectations around the government program are consolidated. The signing of a new agreement with the IMF for the 2007- 2010 period, respect for private property, and the acceptance of the taxation reform being worked out will be key elements in stabilizing the expectations of this sector.

329. Another factor for growth of the economy will be the public investment program, for which the authorities will have to overcome the inconveniences faced by budgetary execution in recent years. It is estimated that investment

30 The Multilateral Debt Relief Initiative (MDRI) forgave US$1,811.0 million (IMF – US$133.0 million; World Bank – US$694.0 million, and IDB – US$984.0).

90 in infrastructure will be strongly pressured by the sectors of electricity, drinking water, health, education, and housing; sectors that are directly linked to the poverty reduction strategy, but which also have considerable lags/shortfalls. The international community has been called upon to concentrate most of the cooperation in these sectors in order to break out of the structural problems that hinder having the social strategy be effective.

330. Along this line, it is expected that international cooperation directed at the productive sector will have a greater presence during this period. The World Bank and the IDB are leading programs that will have a direct impact on the productive sector, like the Program for Rural Development and the Program for Small and Medium Industry. Furthermore, in the frame of the new cooperation agreements, an important component is the obtaining of resources for support for small producers.

331. An important element in the growth of the economy is the increase in the area planted with crops for export and domestic consumption. It is estimated that agricultural export products will increase by more than 4.0% a year on average during the 2007-2010 period, and basic grains will increase by more than 6.0%. The technical assistance provided to small farmers will improve yields. A greater availability of credit coming from the concentration of resources dispersed in several State institutions and fed by liquid resources from Venezuela, other countries, and the State will have a major impact on small and medium rural production, as will the importation of inputs and agricultural machinery in the frame of the new cooperation agreements with friendly countries.

332. Along that same line, programs directed and financed by the government to capitalize the poor, like Zero Hunger, the intensified Pound- for-Pound Program, and the Zero Usury Program will not benefit the production of food, but will also create surpluses for export. It is estimated that the first program will favor 75,000 families over the five years of this government.

333. Large-scale production will get support from the government through its program of investment in infrastructure, with the framework of stability that will be created with the program agreed on with the IMF, with the appropriate fiscal incentives, with a propitious legal framework, and with the elimination of unnecessary procedures/paperwork in the running of their business.

334. Regarding inflation, the authorities have estimated that this will drop slightly starting in 2007 and be at around 6.0% by the end of the period. Based on the considerations of the evolution of international prices for the main raw materials imported by the country, of the monetary control, and of

91 the supply of goods and services estimated for the 2007-2012 period, it is projected that inflation will run at an average annual rate of 7%.

335. Balance of payments. The current account deficit in the balance of payments is one of the most pronounced in the continent and reflects the weaknesses of the export sector, the high technical coefficients for importation in the economy, and the high dependence on foreign aid, expressed in both family remittances and official cooperation for the government. As of 2006, this deficit represented 15.8% of the GDP, and it will go to 16.3% by 2008 because of the cost of the petroleum bill and the purchase of electricity. It will be in 2009, with the upswing of growth of the economy, that the current account deficit will begin a process of adjustment that will reduce it to 13.5% by 2012.

336. The structure of the deficit is determined by the net result of international trade. Despite an average annual increase of 16.0% of exports of merchandise in FOB terms over the 2007-2012 period, the commercial balance will be 63.0% greater than the current account deficit at the end of the period in GDP terms. Nevertheless, the trade deficit will go from 27.4% of the GDP in 2007 to 22.1% in 2012. It is estimated that petroleum prices will stabilize around US$65.0 a barrel, that export volumes will increase at an annual average of no less than 10.0%, and that coffee prices will remain above US$100.0 a hundredweight.

337. It should be mentioned that international cooperation and transfers from the private sector would continue to be of vital importance in financing the current account deficit, but also for maintaining a level of international reserves that would cover at least 2.8 months of imports, in line with what is established in the monetary program of the PEF. Under these terms, the gross international reserves shall cover more than twice the monetary base, which will guarantee exchange rate stability.

338. Public sector. The perspectives for the public sector are directed at continuing a fiscal policy that is sustainable over the medium and long term, but at the same time seeking sufficient fiscal room to expand the most urgent social spending in education, health and nutrition, drinking water, and food production, as put forward in the PEF. The quantitative parameters presented here do not include the effects of the projected taxation reform or a possible renegotiation of the internal debt associated with the breaking of the banks, or the effects of a State reform being worked out.

339. The fiscal deficit after donations of the combined public sector (including the BCN) will be at a level less than 2.0% of the GDP in the 2007- 2012 period. This deficit will be part of the fiscal room allowed for increasing social spending. It is important to note that in order to achieve these results, it will be necessary for foreign donations to be around 4.5% of the GDP. It

92 should be mentioned that this deficit was around an average of about 4.0% of the GDP during the 2002-2005 period. In 2006, the public sector recorded a surplus of 0.2% of the GDP, which was not a reference for the projections given the level of budgetary under-execution that year.

340. For the above, it has been estimated that income may increase slightly in relation to the GDP just with the improvement in taxation administration, economic growth, and international trade. Based on this, revenues could go from 25.0% of the GDP in 2005 to 27.7% in 2012. This does not include, as noted earlier, the effects on revenue collection of the projected taxation reform.

341. On the spending side, priority will continue to be put on the constitutional commitments, the service of the public debt, and greater emphasis on social spending. The fiscal room identified so far in order to have more social spending is found in the gap created between the program and what is executed, which is estimated at 2.0 points of the GDP during 2005-2006 and possibly 2007. That is to say, it is necessary to improve the efficiency of the institutions in the execution of their budget. The finalizing of carry-over projects at a rate of more than 20.0% a year will allow for increasing the budget for investment in the prioritized sectors, without altering the overall spending ceiling.

342. On the other hand, a re-composition of salaries in the public sector, reducing salaries for officials, eliminating the number of consultancies and advisors, and closing those programs with a high level of unproductive current spending will serve to achieve major salary adjustments in education, health, and the police, without altering the growth of the salary mass of the State beyond levels compatible with the targets set for inflation.

343. In this context, it is expected that the level of combined public sector spending will increase from 29.1% of the GDP in 2007 to 34.0% in 2011, its maximum point. This means growth of barely 16.8% over the period. Of these spending levels, around 1.4% of the GDP corresponds to BCN losses. However, the spending for the fight against poverty will have significant expansion, going from 13.4% of the GDP in 2006 to 18.0% in 2012. The increase in this spending is because of the increased budget for education, health, drinking water, and electricity, among other prioritized sectors, with a strong component in infrastructure in the last years.

93 Table 21. Nicaragua: Medium-term Projections Projections Items 2006 2007 2008 2009 2010 2011 2012

Real sector In percent Real GDP, growth rate 3.7 4.2 4.7 5.0 5.0 5.3 5.5 Inflation, at the end of the period 9.5 7.3 7.0 7.0 7.0 6.5 6.0 Inflaction, annual average 9.1 8.2 7.3 7.0 7.0 6.7 6.2 Deflator of the GDP 10.6 7.9 7.6 7.0 7.0 6.7 6.2 Terms of trade (percentage variation) -1.2 0.0 -1.6 -0.1 0.1 0.0 0.0 Balance of Payment In millions of dollars Current Account -838 -896 -993 -998 -1,020 -1,049 -1,087 (in % of the GDP) -15.8 -15.8 -16.3 -15.3 -14.6 -14.0 -13.5 Commercial account -1,444.0 -1,550.0 -1,666.0 -1,712.0 -1,747.0 -1,772.4 -1,772.1 (in % of the GDP) -27.2 -27.3 -27.4 -26.3 -25.1 -23.7 -22.1 Exports of goods, FOB 1,978.0 2,185.0 2,520.0 2,878.0 3,230.0 3,553.0 3,872.8 Imports of goods, FOB -3,422.0 -3,735.0 -4,186.0 -4,590.0 -4,977.0 -5,325.4 -5,644.9 Gross International Reserves (GIR) 924 925 1,043 1,183 1,317 1,392 1,476 (in months of total imports of goods and services) 2.8 2.6 2.6 2.7 2.8 2.8 2.8 Adjusted Net International Reserves 535 595 665 745 835 935 1,044 Combined public sector (CPS) In percent of the GDP Income 25.0 26.1 26.8 27.2 27.4 27.6 27.7 Expenditure 29.1 31.9 33.2 32.8 32.9 34.0 33.5 Of which: Interest 1.8 1.6 1.4 1.4 1.3 1.4 1.3 Result of Central Bank operations -0.4 -0.4 -0.6 -0.3 -0.3 -0.3 -0.3 Poverty spending 13.4 15.7 16.9 17.6 17.8 17.9 18.0 Primary balance of the CPS (a/d) -2.1 -4.0 -4.7 -4.2 -4.2 -5.0 -4.5 Overall balance, before donations -4.1 -5.8 -6.4 -5.6 -5.5 -6.4 -5.8 Donations 4.3 4.8 4.6 4.6 4.6 4.5 4.4 Overall balance, after donations 0.2 -1.0 -1.8 -1.0 -1.0 -1.9 -1.4

Public debt 108.7 55.5 55.4 54.8 53.7 53.9 53.2 Intenal debt 1/ 23.3 19.2 15.8 11.9 8.3 6.4 4.4 Foreign debt 2/ 85.4 36.3 39.6 42.9 45.4 47.5 48.8

Investment 29.5 28.8 29.5 29.1 28.6 28.7 28.7 Private sector privado 23.7 21.5 21.5 21.1 20.7 20.7 20.7 Public sector público 5.8 7.3 8.0 8.0 7.9 8.0 8.0

Savings 13.4 12.7 13.2 13.8 14.0 14.6 15.2 Private sector 11.9 11.3 11.3 11.4 11.6 12.3 12.9 Public sector 1.5 1.4 1.9 2.4 2.4 2.4 2.3

Memorandum: Nominal GDP in millions of C$ 93,135 104,702 117,991 132,452 148,909 167,269 187,457 Nominal GDP, in millions of US$ 5,301 5,675 6,091 6,512 6,973 7,476 8,037 Exchange rate, average annual 17.6 18.4 19.4 20.3 21.4 22.4 23.3

1/: Projections include accumulated deposits by public sector companies, except INSS; 2/: The values observed up to 2006 correspond to the contractual situation, excluding interest for debt pending with private creditors. The projection for 2007 includes the IDB relief under the PPME and IADM initiatives and assumes that the pending debt with bilateral creditors not members of the Paris Club and private creditors has been negotiated in terms comparable to those foreseen under the PPME initiative. Of the 50% reduction of foreign debt in 2007, 21% corresponds to the IDB, 25% to bilateral creditor not members of the Paris Club, and 34% to private creditors. Sources: Central Bank of Nicaragua; Ministry of Treasury and Public Credit; Technical Secretariat of the Presidency and IMF estimates/projections

4. International Cooperation

344. The levels of international cooperation incorporated into the PEF do not include the potential resources from the new cooperation agreements that the Government of Reconciliation and National Unity has managed to sign with Venezuela, Iran, and Brazil. They will be incorporated into the annual reviews of the program once the disbursements are made available for inclusion in the budget.

345. It is estimated that international cooperation in the frame of the agreement with the IMF will increase in an accumulated way to 10.6% of the GDP during the 2007-2010 period. Donations will continue to be important in order to cushion the pace of indebtedness of the country and cooperation linked to programs and projects will continue to prevail, especially for financing investment in infrastructure and the government’s social program. Along this line, the donations expected will be around 3.7% of the GDP during the period. It should be mentioned that despite the existence of the Budget Support Group, which includes multilaterals, the expected flows from this group of donors would barely account for 1.7% of the GDP.

Table 22. Nicaragua: International Cooperation for the NFPS Total Items 2007 2008 2009 2010 2007-2010 Millions of dollars % GDP Total outside resources 586.8 651.1 702.3 726.1 2,666.3 10.6 Liquid resources 114.9 98.4 101.9 102.0 417.2 1.7 Loans 55.2 39.0 38.9 39.0 172.1 0.7 IDB 15.0 15.1 15.0 15.0 60.1 0.2 World Bank 25.2 20.1 20.0 20.0 85.3 0.3 Germany 5.0 3.8 3.9 4.0 16.7 0.1 OPEC 10.0 - - - 10.0 0.0 Donations 59.7 59.4 63.0 63.0 245.1 1.0 Sweden 5.5 8.0 8.0 8.0 29.5 0.1 Holland 14.2 13.0 13.0 13.0 53.2 0.2 Switzerland 5.3 5.3 5.0 5.0 20.6 0.1 European Union 25.5 25.0 29.0 29.0 108.5 0.4 Others 9.2 8.1 8.0 8.0 33.3 0.1 Tied resources 471.9 552.7 600.4 624.1 2,249.1 8.9 Loans 261.4 331.8 364.2 368.7 1,326.1 5.3 IDB 129.9 114.6 107.5 74.1 426.1 1.7 BIRF/IDA 50.8 54.1 67.6 28.9 201.4 0.8 Spain 20.8 41.9 13.6 8.9 85.2 0.3 CABEI 12.7 21.2 34.5 21.0 89.4 0.4 Others 47.2 100.0 141.0 235.8 524.0 2.1 Donations 210.5 220.9 236.2 255.4 923.0 3.7 Germany 14.2 20.5 15.7 4.2 54.6 0.2 Denmark 18.0 12.0 16.0 9.1 55.1 0.2 Holland 14.3 14.5 13.0 12.9 54.7 0.2 Japan 26.1 30.6 27.1 35.0 118.8 0.5 European Union 18.4 15.0 8.7 8.7 50.8 0.2 Others 119.5 128.3 155.7 185.5 589.0 2.3 Memorandum: GDP in US$ millions 5,675.3 6,090.8 6,512.1 6,972.5 25,250.8 Source: BCN

VIII. Mechanisms for Evaluation and Follow-up

346. There are several Leader Entities that have created a number of administrative regulations and spheres of competence around the management and follow-up of programs and projects. Among them are: the National System for Public Investment (SNIP) coordinated by the Investments Unit of the Technical Secretariat of the Presidency; the General Offices for Budget, Governmental Accounting, Treasury, State Procurements and Contracts, Public Credit (all in the Ministry of Treasury and Public Credit – MHCP); and the Secretariat for Foreign Cooperation of the Ministry of Foreign Affairs.

347. However, there is no articulation between the existing official systems: System of Information for Financial Management and Administration (SIGFA), the Projects Bank of the National System for Public Investment (SNIP), the System of Information of International Cooperation (SySODA), the System of Information for Management of National Policies (SGP), and the information systems for support to municipal affairs (SISCAT, SISREC, SISCO, SIF) and the National System for Follow-up to Millennium Development Indicators (SINASID).

348. The SIGFA. This system is the fundamental tool for administering the State’s financial resources. The SIGFA registers 70% of the consolidated spending of the public sector. The SIGFA has not advanced much since 2005 when it had 50 State institutions on line.

349. One of the weaknesses that there is now is that the Public Sector Institutions still do not have a standard accounting system in order to produce their financial statements. The Office of the Controllers-General calls on each public entity to present their financial accounts statements. Each entity resolves this deficiency in isolation, duplicating the registering of spending in their accounting systems, parallel to SIGFA.

350. In the case of SIGFA, there are even documented operative mechanisms that are not applied because the coordination between the Technical Secretariat of the Presidency and the Ministry of Treasury and Public Credit is to exchange information by means of written reports.

351. One of the systems that relates to the SIGFA is the system called Municipal Financial Management for Municipal Transfers (TRANSMUNI) that operates exclusively in order to control budget transfers to the municipalities. The registering of spending does not constitute an element of relevance for the SIGFA. Parallel to this, INIFOM has taken the initiative to create information systems for the Local Governments, systems made on the Client-Server platform and not integrated into SIGFA.

352. The SNIP. It functions like a Projects Bank that has 5,600 projects registered, of which approximately 500 are operative. The Projects Bank is a repository of information about the projects. This Bank is checked by those in charge of the projects via Internet and by the public investment analysts. The system currently has some deficiencies like: the information required for producing reports must be prepared manually, since part of the information is completed manually on Excel worksheets; and some institutions do not deliver the information requested by the SNIP on time and it has to be completed or estimated manually by the SNIP analysts.

353. SINASID. In 2006, in coordination with the institutions responsible for the implementation of the NDP, the SINASID continued to strengthen the database for the system of follow-up and evaluation with sectoral statistical information and information about policy actions for the themes of structural reform, regulatory framework and procedures, social development, infrastructure, environment, and governance.

354. In relation to follow-up of the government’s commitments in the frame of the cooperation, progress was also made with the follow-up of the matrixes established in the Joint Financing Arrangement (JFA), the Sectoral Social Program II, and the Poverty Reduction Support Credit. These programs have been directed at supporting the implementation of the National Development Plan, in which were established matrixes of conditions, performance criteria, and progress reports that constitute commitments included in the cooperation agreements.

355. SySODA. The Ministry of Foreign Affairs has developed SySODA, the central core of which is the registering of the disbursements from the agreements signed between Nicaragua and international cooperants. The articulation of information between agreements and programs and projects has not been concretized. In addition, the Ministry of Foreign Affairs needs to have a Projects Bank that reflects the portfolio of projects demanded by the public sector institutions. At present, the gathering together of the portfolio of projects is done manually in coordination with the National System for Public Investment.

356. Information systems to support municipal affairs. There are a number of support systems for municipal affairs that partially meet the needs of the municipalities; like SISCAT, SISREC, SISCO, and SIF. The situation with municipal information, above all in rural zones, is one of considerable backwardness because of a lack of technological infrastructure, means for telecommunication, and technical support. Government support in this area is key in order to push ahead with the decentralization process and to have effective coordination between all stakeholders operating at the local level in the fight against poverty. Coordination with INIFOM has begun

97 in order to deal with this issue and to establish a common agenda that would prioritize the development and implementation of the municipal systems.

357. Given this situation, the Government of Reconciliation and National Unity has proposed the objective of designing and putting into practice an integrated information system for support to the running of the government, which would articulate the different disperse systems there are now, all focusing on the priorities and plans of the Plan for the Development of Nicaragua.

358. The Integrated System that would articulate people-government- territory with policies-targets-results and with plans-programs-projects- processes.

359. At the same time, the Integrated System for Government (SIGOB) would include the following areas of work:

98 ANNEXES

Annex 1. Nicaragua: Social Indicators Items 2001 2002 2003 2004 2005 2006 1/

Population Population (1000s of inhabitants) 5,173.9 5,244.7 5,312.7 5,380.5 5,450.4 5,524.5 Population growth rate 2.0 1.4 1.3 1.3 1.3 1.4 Economically Active Population (EAP in 1000s of inhabitants) - - 2,117.6 - 2,203.4 2,204.3

Poverty National (percentage of total population) 45.8 - - - 48.3 - Urban (percentage of urban population) 30.1 - - - 30.9 - Rural (percentage of rural population) 67.8 - - - 70.3 -

Poverty spending (percentages of the GDP) Total spending 11.3 11.1 12.6 13.2 13.6 13.4 Internal financing 4.0 3.7 3.6 3.2 5.3 6.4 External financing 5.8 5.7 6.7 7.3 5.9 5.2 HIPC relief 1.5 1.8 2.3 2.7 2.4 1.8

Distribution of consumption Gini coefficient 43.0 - - - 40.0 - Lowest quintile 5.6 - - - 6.2 - Highest quintile 49.2 - - - 47.2 -

Education Public spending on education (percentage of GDP) 3.6 3.9 4.7 4.4 4.7 4.7 Public spending on education per student (dollars) 70.4 68.9 76.9 79.8 92.2 94.2 Illiteracy rate (percentage) 18.7 - - - 20.5 - Net rate of preschool schooling (percentage) 28.4 31.5 32.9 36.3 39.3 52.1 Net rate of primary schooling (percentage) 80.9 86.2 86.0 87.0 86.9 86.0 Neet rate of secondary schooling (percentage) 35.7 37.4 38.4 39.9 42.0 43.6

Health Public spending on health (percentage of GDP) 2.8 3.1 3.5 3.2 3.5 3.4 Public spending on health per inhabitant (dollars) 22.3 22.2 25.3 24.9 29.2 32.4 Beds x 10,000 inhabitants 9.9 9.4 9.2 8.9 9.0 9.1 Medical consultations (1000s) 7,099.0 7,205.9 7,248.5 6,970.0 7,390.4 6,630.7 Medical consultation x inhabitant 1.4 1.3 1.3 1.2 1.3 1.2 Concentration prenatal control (average controls per pregancy) 3.2 3.3 3.4 3.6 3.6 3.4 Institutional births (1000s) 82.5 81.6 82.7 92.3 95.5 98.0 Concentration CCD (average controls of children under 5) 3.5 3.6 3.7 4.5 5.2 4.7 1/: Preliminary Source: Prepared by SETEC based on information supplied by governmental institutions

100 Annex 2. Nicaragua: Economic Indicators Items 2001 2002 2003 2004 2005 2006 1/

Economic Activity Real GDP (millions of 1994 córdobas) 27,877.4 28,087.6 28,795.5 30,325.2 31,643.0 32,810.9 Rate of growth of real GDP 3.0 0.8 2.5 5.3 4.3 3.7 Current GDP (millions of córdobas) 55,155.3 57,376.3 61,958.5 71,155.6 81,233.1 93,134.9 Deflactor of the GDP 197.8 204.3 215.2 234.6 256.7 283.9 GDP in dollars (millions) 4,102.4 4,026.0 4,101.5 4,464.7 4,854.6 5,291.8 Per capita GDP (dollars per inhabitant) 792.9 767.6 772.0 829.8 890.7 957.9 Per capita GDP (growth) 2.1 -3.2 0.6 7.5 7.3 7.5

Employment, Prices, and Exchange Rate Unemployment rate (percentage of EAP) - 6.0 7.0 6.5 5.6 5.2 Inflation rate (average) 6.0 3.8 5.3 8.5 9.6 9.1 Inflation rate (accumulated) 4.8 3.9 6.5 9.3 9.6 9.45 Nominal devaluation (rate of growth) 6.0 6.0 6.0 5.0 5.0 5.0 Average exchange rate (córdobas per dollar) 13.4 14.3 15.1 15.9 16.7 17.6 Exchange rate end of year (córdobas per dollar) 13.8 14.7 15.5 16.3 17.1 18.0

Monetary Indicators Monetary base (millions of córdobas) 3,366.3 3,623.2 4,498.4 5,345.5 6,338.1 8121.8 Monetary base (growth) 23.5 7.6 24.2 18.8 18.6 28.1 Monetary base (percentage of GDP) 6.1 6.3 7.3 7.5 7.8 8.7 Numerary (millions of córdobas) 1,949.4 2,085.8 2,506.6 3,103.3 3,808.0 4401.3 Numerary (growth) 11.1 7.0 20.2 23.8 22.7 15.6 Numerary (percentage of GDP) 3.5 3.6 4.0 4.4 4.7 4.7 Total deposits (millions of córdobas) 20,654.6 23,447.6 26,602.1 31,155.9 35,211.3 38775.9 Total deposits (growth) 11.8 13.5 13.5 17.1 13.0 10.1 Total deposits (percentage of GDP) 37.4 40.9 42.9 43.8 43.3 41.6 M3A (millions of córdobas) 24,180.6 26,580.4 29,988.8 34,252.2 38,969.0 43319.7 M3A (growth) 19.9 9.9 12.8 14.2 13.8 11.2 M3A (percentage of GDP) 43.8 46.3 48.4 48.1 48.0 46.5 Credit Balances (millions of córdobas) 10,226.4 11,327.1 14,724.6 18,776.3 24,415.5 31941.8 Credit Balances (growth) -20.6 10.8 30.0 27.5 30.0 30.8 Credit Balances (percentage of GDP) 18.0 19.7 23.8 26.4 30.1 34.3 ANIR Central Bank (flow millions of dollars) -170.3 48.5 18.3 128.0 71.0 252.1 ANIR Central Bank (percentage of GDP) -4.2 1.2 0.4 2.9 1.5 4.8

Fiscal Indicators Non-Financial Public Sector (percentages of GDP) Fiscal burden 13.4 14.2 15.9 16.6 17.6 18.3 Current savings (+) 0.5 2.9 3.6 6.0 5.9 5.0 Overall balance before donations (-) -9.6 -5.1 -6.1 -5.0 -4.5 -3.6 Overall balance after donations (-) -6.6 -1.9 -2.3 -1.4 -1.0 0.7 External financing 2/ 7.1 7.2 9.4 11.2 8.2 8.0

External Indicators Current account deficit (percentage of GDP) -19.6 -18.5 -16.2 -14.7 -15.3 -16.1 Exports FOB (millions of dollars) 589.4 558.7 610.9 759.8 866.0 1,027.5 Exports FOB (percentage of GDP) 14.4 13.9 14.9 17.0 17.8 19.4 Imports FOB (millions of dollars) 1,617.3 1,617.5 1,726.1 2,027.7 2,404.6 2,751.9 Imports FOB (percentage of GDP) -39.4 -40.2 -42.1 -45.4 -49.5 -51.9 Imports CIF (millions of dollars) 1,775.3 1,774.0 1,886.6 2,209.6 2,623.2 2,988.4 Effective foreign debt service (percentage of GDP) 3.7 3.9 2.4 1.7 1.8 1.9 Balance foreign debt (millions of dollars) 6,374.5 6,362.7 6,595.8 5,390.6 5,347.5 4526.7 Balance foreign debt (percentage of GDP) 155.4 158.0 160.8 120.7 110.2 85.4 Gross International Reserves (percentage of GDP) 9.3 11.3 12.3 15.0 15.0 17.4 Gross International Reserves/Import. CIF (months of coverage) 2.6 3.1 3.2 3.6 3.3 3.7 Official external resources (millions of dollars) 535.6 526.6 585.9 652.1 555.1 578.2 Official external resources (percentage of GDP) 13.1 13.1 14.3 14.6 11.4 10.9 1/: Preliminary 2/: Includes external donations Source: Prepared by SETEC based on information supplied by governmental institutions 101

Annex 3. Nicaragua: Taxation Reforms 2002-2006 Law for Reforms and Law for Broadening Tax Base 1/ Law for Fiscal Equity 2/ Additions to the Law for Fiscal Equity 3/ IR - Increases from 25% to 30% the - Unifies the maximum aliquant to - Introduces the banks to the annual rate for legal persons 30% for natural and legal persons, regime of proportionality for allowing the deduction of the INSS calculation of annual IR contribution for calculation of the IR of salaried workers - Establishes retention of 10% of - Establishes a retention on interest on savings and term deposits account of IR for banks of equal to or more than US$5,000.00 or 0.4% of the monthly average its equivalent in córdobas of total deposits for the previous period =G4- Limits the system of - Limits the accelerated depreciation accelerated depreciation for only for exporters industrial, agricultural, and export - Establishes the minimum payment sectors of 1% of the value of gross assets for purposes of IR - Establishes retention of 10% for - Establishes retention of 1% and 2% - Creates a tax for casinos professional services and for primary and secondary goods, and games of chance, slot emoluments respectively, traded on the agricultural machines, and gaming tables exchange IVA - Taxes products of basic shopping - Returns products of basic shopping basket with zero rate, including basket to regime of exemption consumption of household electricity of less than 300 - Incremento progresivo del IGV al - Equalizes the rate of 15% for all - Exonerates from IVA the cemento sin pulverizar desde 5% goods contracts for construction of en 2002 hasta 15% en 2006 public works of social impact by the MTI, MINSA, and MECD IEC - Establishes price to retailer as base for application of tax on gasified beverages and juices ISC - Reduces the dispersion of rates for - Increases by 5% the rate of imports of luxury goods the ISC for a list of luxury goods - Establishes the return of 25% of the ISC conglobated for fuels for companies under the regime of temporary admission DAI - Applies the harmonization of theDAI,agreedoninthe frame of the Central American Customs Union 1/: Law No. 439, published in La Gaceta No. 177, Thursday, September 19, 2002. 2/: Law No. 453, published in La Gaceta No. 82 of Tuesday, May 6, 2003. 3/: Law No. 528, published in La Gaceta No. 104 of Tuesday, May 31, 2005. Source: Government of Nicaragua: Economic Financial Program (draft), April 2007.

102

Annex 4. Nicaragua: Poverty Spending of the Non-Financial Public Sector 2004 2005 2002 2003 2006 1/ Curr. Cap. Groups Curr. Cap. Curr Cap. Total Curr Cap. Curr. Cap. Total Total Spen Spen Total Total Spen Spen . Spe . Spe Spen Spen Millions of dollars 175.3 271.2 446.5 188.2 334.0 522.2 191.6 409.5 601.2 257.1 426.4 683.5 319.1 387.5 706.6 I. Programs with direct incidenceTOTAL on poverty reductio n 135.5 119.3 254.7 162.4 173.4 335. 8 167.0 230.4 397.4 227.5 228.7 456.2 284.6 201.9 486.5 1.1 Direct transfers to the poor5 15.7 4. 20. 3 3. 3 23. 7 27.0 6.1 32. 7 38. 8 24.6 36.2 60.8 18.7 27.1 45.8 1.2 Provision of basic services 131.0 103.5 234.5 159.17 149.308. 8 160.8 197.7 358.5 202.9 192.5 395.4 265.8 174.9 440.7 1.2.1 Water and sanitation 0.0 33.55 33. 0.0 30. 3 30. 3 0.0 39.4 39.4 0.1 32.1 32.2 0. 2 38.4 38.6 1.2.2 Housing5 1. 0.05 1.0.4 4. 8 5. 2 0. 5 7.0 7. 5 0. 5 10.8 11.3 0. 5 11. 2 11.7 1.2.3 Primary, preschool, adult, and special education 48.6 26.88 75.440.4 99. 58. 2 68.0 33. 8 101.8 82.2 22.4 104.6 108.9 20. 9 129.9 1.2.4 Health 80.5 20.83 101.435. 8 134. 98. 2 85.0 40.1 125.0 107.2 33.0 140.2 140.6 29. 8 170.4 1.2.4.1 First level5 87.1 80.5 98. 6.3 14. 6 112. 9 85.0 19. 6 104.6 107.2 23.3 130.4 140.6 19.1 159.8 1.2.4.2 Second level7 0.08. 8.7 0.0 11. 6 11. 6 0.0 13.1 13.1 0.0 4.0 4.0 0.0 5. 7 5. 7 1.2.4.3 Nutrition 0.0 5. 5 5. 5 0.0 7. 9 7. 9 0.0 4. 5 4. 5 0.0 5. 6 5. 6 0.0 4. 9 4. 9 1.2.4.4 Population 0.0 0.0 0.0 0.0 1. 7 1. 7 0.0 2. 8 2. 8 0.0 0. 2 0. 2 0.0 0.1 0.1 1.2.5 Highw ays and rural roads 0.03 10.30.0 10. 22. 6 22. 6 0.0 39. 7 39. 7 0.0 40.1 40.1 0.0 16. 9 16.9 1.2.6 Municipal infrastructure8 10.7 12. 5 1. 1. 5 15. 8 17.4 7.4 37. 7 45.1 12.9 54.1 67.1 15.6 57. 6 73.2 II. Building capacities in order to improve income 17.6 121.63 117. 139.13 134.6 17. 18. 3 123.9 142.2 22.4 124.3 146.8 24.5 128.6 153.1 2.1 Roadw ays infrastructure 0.0 50.55 50. 0.0 42.4 42.4 0.0 30. 7 30. 7 0.0 49.7 49.7 0.0 39.4 39.4 2.1.1 Trunk roads 0.0 50.33 50.0.0 42.4 42.4 0.0 30. 7 30. 7 0.0 45.2 45.2 0.0 22. 9 22.9 2.1.2 Ports and airports2 0. 2 0.00.0 0. 0.0 0.0 0.0 0.0 0.0 0.0 4. 6 4. 6 0.0 16. 6 16.6 2.2 Electricity2 0.0 18.20.0 12. 18. 2 12. 2 0.0 26. 6 26. 6 0.0 17.6 17.6 0.0 21. 6 21.6 2.2.1 Rural electrif ication3 3. 3 0.00.0 3. 4. 6 4. 6 0.0 11.1 11.1 0.0 10.8 10.8 0.0 9. 2 9. 2 2.2.2 Development and modernization of energy secto r 0.0 14.8 14. 8 0.0 7. 6 7. 6 0.0 15. 5 15. 5 0.0 6. 8 6. 8 0.012.412.4 2.3 Productivet rural developmen 4. 8 35.7 40.4 4.1 39. 6 43. 7 4.0 43. 7 47. 8 3. 6 39.6 43.2 3. 8 46. 3 50.1 2.4 Secondary and technical education5 14. 11.16 12. 3.3 6.0 18. 3 13. 8 4. 9 18. 7 16.2 4. 9 21.1 17.8 6. 2 24.0 2.5 Environment7 13.7 15.4 1. 0. 9 17.1 18.1 0. 5 17. 9 18.4 2. 7 12.5 15.1 2. 9 15.1 18.0 III. Institutional strengthening, governance, business climate 22.2 30.45 52.643.2 51. 8. 7 6. 3 55.2 61.6 7.2 73.3 80.5 10.1 56.9 67.0 3.1 Institutional strengthening 15.5 22.38 37. 3. 3 26.4 29. 8 3. 2 30.0 33.1 3. 3 43.6 46.9 6.1 27.1 33.3 3.1.1 Health7 11.5 14.2. 2 0.0 10. 3 10. 3 0.0 5. 5 5. 5 0.0 0.4 0.4 0.0 1. 9 1. 9 3.1.2 Education 9. 6 2.1 11. 7 1.1 2. 2 3. 2 1.1 8.4 9. 5 1.4 26.2 27.6 3. 8 8.0 11.9 3.1.3 Social protection5 0. 0.16 0.0.1 1.0 1.1 0.0 1. 5 1. 5 0.0 2. 3 2. 3 0.0 1.1 1.1 3.1.4 Local development2 11. 3.02 8.2. 2 13.0 15. 2 2.0 14. 6 16. 6 1. 9 14.7 16.6 2. 3 16. 2 18.4 3.2 Governance8 2. 8 0.00.0 2. 4.0 4.0 0.0 7.1 7.1 0.0 4. 3 4. 3 0.0 5. 8 5. 8 3.2.1 Strengthening of justice 0.0 0. 3 0. 3 0.0 1. 5 1. 5 0.0 1.0 1.0 0.0 1. 2 1. 2 0.0 1. 7 1. 7 3.2.2 Strengthening of Electoral Branch 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.2.3 Strengthening of the CG R 0.0 0.1 0.1 0.0 0. 3 0. 3 0.0 0. 6 0. 6 0.0 0. 6 0. 6 0.0 0. 8 0. 8 3.2.4 Security and Citizen Participation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 3.2.5 Others 0.0 2. 3 2. 3 0.0 2. 2 2. 2 0.0 5. 5 5. 5 0.0 2. 5 2. 5 0.0 3. 3 3. 3 3.3 Improve business climate 6. 7 2.4 9.1 5. 2 7.1 12. 3 3. 2 12. 2 15.4 3. 8 15.5 19.3 3. 9 21.0 24.9 y 3.3.1 Ordering of propert 1. 5 0. 7 2.1 1.1 2. 2 3.4 1.1 5. 7 6. 7 1. 7 6.4 8.1 1. 7 6. 3 8.0 3.3.2 Support f or production and export promotion9 1. 5 5.4 3. 2. 6 4. 3 6. 9 0.1 5. 3 5.4 0.1 7.4 7. 5 0.1 5. 7 5. 8 3.3.3 Support for development of small and medium business 0. 2 0.1 0. 3 0.1 0.4 0. 5 0.1 1.1 1. 2 0.1 1. 5 1. 6 0. 3 1. 5 1. 9 3.3.4 Fisheries developmen t 0. 5 0.1 0. 6 0.1 0.1 0. 2 0. 5 0.0 0. 5 0. 5 0. 2 0. 6 0.4 7.4 7. 8 3.3.5 Other 0. 7 0.0 0. 7 1. 2 0.1 1. 3 1.4 0. 2 1. 6 1. 5 0.0 1. 6 1.4 0.1 1. 5 3.4 Other 0.0 2. 9 2. 9 0.0 5. 8 5. 8 0.0 6.0 6.0 0.0 9. 9 9. 9 0.0 3.0 3.0 3.4.1 Censuses and surveys3 1. 0.03 1.0.0 1. 8 1. 8 0.0 0. 6 0. 6 0.0 8. 3 8. 3 0.0 1. 5 1. 5 3.4.2 PAI 0.0 1.1 1.1 0.0 3. 3 3. 3 0.0 4. 2 4. 2 0.0 0.0 0.0 0.0 0.0 0.0 3.4.3 Others 0.0 0.6 0.6 0.0 0.7 0.7 0.0 1.2 1.2 0.0 1.7 1.7 0.0 1.5 1.5 1/: Preliminary . Source: SETEC . 103

Annex 5. Nicaragua: Poverty Spending of the Non-Financial Public Sector 2002 2003 2004 2005 2006 1/ Groups CurCap. Cu Cap. Cap. r Total r Total rCu Total Cur Cap. Cur Cap. Spe Total Total . Spe r. r. Spe r. Spe r. Spe Relation to GDP 4.4 6.8 11.1 4.5 8.0 12.6 4.2 9.0 13.2 5.1 8.5 13.6 6.0 7.4 13.4 TOTAL TOTAL 3.4 3.0 6. 3 3. 9 4.2 8.1 3. 7 5.0 8. 7 4. 5 4. 6 9.1 5.4 3. 8 9.2 I. Programs with direct incidence on poverty reduction 50.10.1 0.4 0. 0.6 0. 7 0.1 0. 7 0. 9 0. 5 0. 7 1. 2 0.4 0. 5 0. 9 1.1 Direct transfers to the poor 3.3 2.6 5. 8 3.8 3.6 7. 4 3.5 4.3 7. 9 4.0 3.8 7. 9 5. 0 3.3 8.3 1.2 Provision of basic services 0.0 0.8 0.8 0.0 0.7 0.7 0.0 0.9 0.9 0.0 0.6 0.6 0.0 0.7 0.7 1.2.1 Water and sanitation 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0. 2 0. 2 0.0 0. 2 0. 2 0.0 0. 2 0. 2 1.2.2 Housin g 1.2 0.7 1.9 1.4 1.0 2.4 1.5 0.7 2.2 1.6 0.4 2.1 2.1 0.4 2.5 1.2.3 Primary, preschool, adult, and special education 2.0 0.5 2.5 2.4 0.9 3.2 1.9 0.9 2.7 2.1 0.7 2.8 2.7 0.6 3.2 1.2.4 Health 2.0 0. 2 2. 2 2.4 0.4 2. 7 1. 9 0.4 2. 3 2.1 0. 5 2. 6 2.7 0.4 3.0 1.2.4.1 First level 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.1 0.1 0.0 0.1 0.1 1.2.4.2 Second level 0.0 0.1 0.1 0.0 0. 2 0. 2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 1.2.4.3 Nutrition 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 1.2.4.4 Population 0.0 0.3 0.3 0.0 0.5 0.5 0.0 0.9 0.9 0.0 0.8 0.8 0.0 0.3 0.3 1.2.5 Highw ays and rural roads 0.0 0. 3 0. 3 0.0 0.4 0.4 0. 2 0. 8 1.0 0. 3 1.1 1. 3 0.3 1.1 1.4 1.2.6 Municipal inf rastructure 0.45 3.00.4 3. 2. 8 3.2 0.4 2. 7 3.1 0.4 2. 5 2. 9 0.5 2.4 2. 9 II. Building capacities in order to improve income 0.0 1.3 1.3 0.0 1.0 1.0 0.0 0.7 0.7 0.0 1.0 1.0 0.0 0.7 0.7 2.1 Roadways inf rastructure 0.0 1. 3 1. 3 0.0 1.0 1.0 0.0 0. 7 0. 7 0.0 0. 9 0. 9 0.0 0.4 0.4 2.1.1 Trunk roads 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.3 0.3 2.1.2 Ports and airports 0.0 0.5 0.5 0.0 0.3 0.3 0.0 0.6 0.6 0.0 0.4 0.4 0.0 0.4 0.4 2.2 Electricit y 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0. 2 0. 2 0.0 0. 2 0. 2 0.0 0. 2 0. 2 2.2.1 Rural electrification 0.0 0.4 0.4 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.1 0.1 0.0 0.2 0.2 2.2.2 Development and modernization of energy sector 0.1 0. 9 1.0 0.1 1.0 1.1 0.1 1.0 1.0 0.1 0. 8 0. 9 0.1 0. 9 0. 9 2.3 Productive rural development 0.3 0.1 0.4 0.3 0.1 0.4 0.3 0.1 0.4 0.3 0.1 0.4 0.3 0.1 0.5 2.4 Secondary and technical education 0.0 0.3 0.4 0.0 0.4 0.4 0.0 0.4 0.4 0.1 0.2 0.3 0.1 0.3 0.3 2.5 Environmen t 0. 6 0. 8 1. 3 0.2 1.0 1.2 0.1 1.2 1. 3 0.1 1. 5 1. 6 0.2 1.1 1. 3 III. Institutional strengthening, governance, business climate 0.4 0.6 0.9 0.1 0.6 0.7 0.1 0.7 0.7 0.1 0.9 0.9 0.1 0.5 0.6 3.1 Institutional strengthenin g 0.1 0.3 0.4 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 3.1.1 Health 0. 2 0.1 0. 3 0.0 0.1 0.1 0.0 0. 2 0. 2 0.0 0. 5 0. 6 0.1 0. 2 0. 2 3.1.2 Education 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.1.3 Social protection 0.1 0.2 0.3 0.1 0.3 0.4 0.0 0.3 0.4 0.0 0.3 0.3 0.0 0.3 0.3 3.1.4 Local developmen t 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0. 2 0. 2 0.0 0.1 0.1 0.0 0.1 0.1 3.2 Governance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.2.1 Strengthening of justice 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.2.2 Strengthening of Electoral Branch 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.2.3 Strengthening of the CG R 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.2.4 Security and Citizen Participation 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 3.2.5 Others 0.2 0.1 0.2 0.1 0.2 0.3 0.1 0.3 0.3 0.1 0.3 0.4 0.1 0.4 0.5 3.3 Improve business climate 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.1 0.2 3.3.1 Ordering of propert y 0.1 0.0 0.1 0.1 0.1 0. 2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 3.3.2 Support for production and export promotion 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.3.3 Support for development of small and medium business 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 3.3.4 Fisheries development 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.3.5 Other 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.1 0.1 3.4 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0. 2 0. 2 0.0 0.0 0.0 3.4.1 Censuses and surveys 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 3.4.2 PAI 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.4.3 Others 1/: Preliminary .

104 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Millions of dollars TOTAL 175.3 271.3 446.5 188.2 334.0 522.2 191.6 409.5 601.2 257.1 426.4 683.5 319.1 387.5 706.6

CENTRAL GOVERNMENT 175.3 233.5 408.7 188.2 308.3 496.6 191.6 370.8 562.4 257.1 399.1 656.2 319.1 327.6 646.6

Programs with direct effect on poverty reduction 135.5 94.9 230.4 162.4 155.1 317.5 167.0 206.1 373.1 227.5 209.9 437.4 284.6 168.9 453.5 Direct transfers to the poor 4.5 15.7 20.3 3.3 23.7 27.0 6.1 32.7 38.8 24.6 36.2 60.8 18.7 27.1 45.8 Office for Development and Social Assistance 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 1.4 0.0 1.4 1.1 0.0 1.1 Program for attention to low-income population 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Program for attention to low-income population 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Program for attention to low-income population 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.1 Implementation of National Action Plan for Children and Adolescents 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Project for prevention and attention to youth violence 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1 Social Emergency Fund 0.0 0.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination for attention and integral protection of children and adolescents 0.1 0.0 0.1 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for rural families in zones affected by droughts and flooding 0.0 2.4 2.4 0.0 2.7 2.7 0.0 1.9 1.9 0.0 2.3 2.3 0.0 2.8 2.8 Assistance, rehabilitation and construction for families affected by Hurricane Mitch 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Food assistance for persons affected by disasters (WFP/OPSR-10212) 0.0 0.0 0.0 0.0 1.7 1.7 0.0 2.7 2.7 0.0 2.8 2.8 0.0 2.7 2.7 Food Security Peace Corps - INTA 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 Nicaraguan Program for Rural Youth (PRONIJUR-Phase II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Cooperation for Humanitarian Mine Removal Program 0.0 0.4 0.4 0.0 0.7 0.7 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.4 0.4 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.2 0.2 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 1.4 0.0 1.3 1.3 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 0.0 0.4 0.4 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 0.0 0.0 0.0 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.0 1.3 1.3 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.3 0.3 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.6 0.6 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.8 0.0 0.5 0.5 Program for Promotion, Prevention, Education and Communication for Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Social Safety Net 0.0 0.0 0.0 0.0 1.7 1.7 0.0 1.5 1.5 0.0 1.2 1.2 0.0 0.3 0.3 Social Safety Net MECD 0.0 0.0 0.0 0.0 1.0 1.0 0.0 1.7 1.7 0.0 3.0 3.0 0.0 1.8 1.8 Social Safety Net MINSA 0.0 0.0 0.0 0.0 3.2 3.2 0.0 4.1 4.1 0.0 3.4 3.4 0.0 3.5 3.5 Program for Integral Attention for Nicaraguan Children (PAININ II) 0.0 0.0 0.0 0.0 8.5 8.5 0.0 12.5 12.5 0.0 7.7 7.7 0.0 0.0 0.0 Program for Integral Attention for Nicaraguan Children Phase III 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.6 2.6 Project for Poverty Reduction and Local Development 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3 1.3 Program for Social Safety Net Phase III 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 1.6 Project Attention to population in situation of vulnerability and social risk 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Integrated assistance for vulnerable women and children 0.0 1.7 1.7 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 Integral attention for children of 6 years in situation of vulnerability 0.0 2.4 2.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for Integral Attention for children and adolescents at high risk (PAINAR) 0.0 0.0 0.0 0.0 1.0 1.0 0.0 1.0 1.0 0.0 1.4 1.4 0.0 0.2 0.2 Integral development for prevention of school violence 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 Program of Support for Design of National Plan Against Violence - INIM 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program of Social Assistance 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3 0.7 0.0 0.7 0.0 0.0 0.0 Territorial Delegations 1.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 1.0 1.0 0.0 1.0 Management and Coordination of Protection for children and adolescents 1.5 0.0 1.5 1.3 0.0 1.3 1.1 0.0 1.1 0.0 0.0 0.0 2.2 0.0 2.2 Psychosocial Attention 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Nicaraguan Institute for Women 0.4 0.0 0.4 0.3 0.0 0.3 0.3 0.1 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Network services, attention, domestic/sexual viol. women, children, adolescents INIM 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transfer to Indigenous Communities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.2 0.0 0.2 Let's Save Youth Association 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Association of disabled women, Los Pipitos 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 Foundation for Integral Development of Rural Women and Adolescents 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Association for Defense and Promotion of Human Rights (APRODEVIDA) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Bartolomé de las Casas Foundation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Shelters and homes (MIFAM/FISE) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.3 0.3 0.0 0.0 0.0 Children's Centers (MIFAM/FISE) 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.0 0.0 Social Safety Net - FISE 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Social Safety Net (MECD/FISE) 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Social Safety Net (MINSA/FISE) 0.0 2.6 2.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 National Council for Fight Against Drugs 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transfer to Institute against Alcoholism and Drug Addiction 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transfer to the Office of Ombudsman for Defence of Human Rights 1.1 0.0 1.1 1.1 0.0 1.1 0.9 0.1 1.1 1.1 0.0 1.1 1.3 0.0 1.3 Project for Support to Communities 0.0 2.6 2.6 0.0 2.4 2.4 0.0 2.3 2.3 2.3 0.0 2.3 2.2 0.0 2.2 Beneficient Institutions 0.0 0.0 0.0 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Red Cross 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Electricity Subsidy for Retirees 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.8 0.0 1.8 Subsidy of tariff detours for electricity 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12.2 0.0 12.2 0.0 0.0 0.0 Subsidy for Water Consumption for Retirees 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.6 0.6 0.0 0.6 Subsidy for Electricity for the Atlantic Coast 0.0 0.0 0.0 0.0 0.0 0.0 1.3 1.5 2.8 0.4 3.8 4.2 0.4 3.9 4.3 Urban Collective Transport Cooperatives of Municipality of Managua 0.0 0.0 0.0 0.0 0.0 0.0 1.9 2.5 4.4 4.8 0.0 4.8 7.8 0.0 7.8

105 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 2) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Provision of basic services 129.2 58.2 187.4 157.6 93.0 250.6 153.5 96.0 249.5 190.0 79.5 269.4 250.2 67.3 317.5 Water and sanitation 0.0 9.2 9.2 0.0 12.0 12.0 0.0 15.1 15.1 0.1 13.3 13.4 0.2 5.4 5.6 DRINKING WATER SYSTEMS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.3 10.3 0.0 9.0 9.0 0.0 2.1 2.1 LATRINE PROGRAM (MINSA/FISE) 0.0 1.5 1.5 0.0 3.0 3.0 0.0 1.7 1.7 0.0 2.4 2.4 0.0 0.6 0.6 WATER AND SANITATION IN NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.5 0.5 CONCENTRATED RURAL DRINKING WATER (ENACAL/FISE) 0.0 2.1 2.1 0.0 7.6 7.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for Rural Drinking Water and Sanitation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 CONSTRUCTION OF LATRINES IN MUNCIPALITIES OF THE RAAN 0.0 0.1 0.1 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Water supply for communities of Oro Fino, Guayaba 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transfer to ENACAL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rural water supply and sanitation, Matagalpa and Jinotega 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 WATER AND SANITATION, MATAGALPA AND JINOTEGA 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 Treatment system and sanitary drainage in Sébaco, Matagalpa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 WATER AND SANITATION REGIONS I, V, AND VI 0.0 0.5 0.5 0.0 0.3 0.3 0.0 0.4 0.4 0.0 0.4 0.4 0.0 0.5 0.5 RURAL DRINKING WATER REGIONS I, II AND CENTRAL (VII, VIII y IX PHASE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 RURAL DRINKING WATER REGIONS I, II AND CENTRAL (IX PHASE) 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 RURAL DRINKING WATER REGIONS I, II AND CENTRAL (X PHASE) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 RURAL DRINKING WATER REGIONS I, II AND CENTRAL (XI PHASE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 WATER AND SANITATION, RURAL ZONES OF MATAGALPA 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 Upgrading and expansion of drinking water systems in Matagalpa and Jinotega 0.0 3.8 3.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM DRINKING WATER, SANITATION, AND COMMUNITY ORG., COMMUNITIES NUEV 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Prog. Environmental Clean-up Lake Managua and City, Stage I (978-NI-IDB/1060-NI-IDB/154-NDF 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.7 0.7 0.0 0.1 0.1 0.0 0.2 0.2 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.4 0.4 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Water and sanitation in zones of high economic potential (Boaco, Chontales, RAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 National Commission for Drinking Water and Sanitary Drainage 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.2 0.0 0.2 Housing 0.0 1.5 1.5 0.4 4.8 5.2 0.5 7.0 7.5 0.5 10.8 11.3 0.5 11.2 11.7 Transfer INVUR 0.0 0.0 0.0 0.4 0.0 0.4 0.5 0.0 0.5 0.5 0.0 0.5 0.5 0.0 0.5 Multi-phase program for low-income housing (I PHASE) (IDB 1111/SF-NI) 0.0 0.0 0.0 0.0 2.5 2.5 0.0 7.0 7.0 0.0 10.8 10.8 0.0 10.0 10.0 Multi-phase program for low-income housing (II PHASE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for Self-Sustainable Rural Settlements (ARAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 PROGRAM OF SUPPORT FOR CIVIL HOUSING (Floor and Roof) 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR CIVIL HOUSING 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Plan Roof Housing for Teachers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for upgrading of homes damaged by Hurricane Mitch (SAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SOLIDARY HOUSING RECONSTRUCTION 0.0 1.0 1.0 0.0 2.3 2.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Primary, preschool, adult, and special education 48.6 26.8 75.4 58.8 40.4 99.2 68.0 33.8 101.8 82.2 22.4 104.6 108.9 20.9 129.9 Financial Administrative Service 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.5 0.0 4.5 COORDINATION OF DELEGATIONS AND DESCENTRALIZATION 0.0 0.0 0.0 0.4 0.0 0.4 0.6 0.0 0.6 0.0 0.0 0.0 0.2 0.0 0.2 SERVICE FOR COORDINATION FOR DELGATIONS AND SUPERVISION 0.6 0.0 0.6 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 COORDINATION OF AFFAIRS OF AUTONOMOUS REGIONS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Departmental and Municipal Coordination 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination of Common Activities 2.2 0.0 2.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP NUEVA SEGOVIA 0.0 0.0 0.0 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP MADRIZ 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP ESTELI 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP JINOTEGA 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP MATAGALPA 0.0 0.0 0.0 0.4 0.0 0.4 0.5 0.0 0.5 0.9 0.0 0.9 1.1 0.0 1.1 MANAGEMENT AND FOLLOW-UP BOACO 0.0 0.0 0.0 0.1 0.0 0.1 0.3 0.0 0.3 0.0 0.0 0.0 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP CHONTALES 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP RIO SAN JUAN 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP ZELAYA CENTRAL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP CHINANDEGA 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.3 0.0 0.3 MANAGEMENT AND FOLLOW-UP LEON 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.3 0.0 0.3 MANAGEMENT AND FOLLOW-UP MANAGUA 0.0 0.0 0.0 0.2 0.0 0.2 0.3 0.0 0.3 0.2 0.0 0.2 0.4 0.0 0.4 MANAGEMENT AND FOLLOW-UP CIUDAD SANDINO 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP TIPITAPA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP EL CRUCERO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP JINOTEPE 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP MASAYA 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP GRANADA 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP RIVAS 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP RAAN 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP MINING SECTOR 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP RAAS 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 MANAGEMENT AND FOLLOW-UP SAN RAFAEL DEL SUR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP VILLA EL CARMEN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP SAN FRANCISCO DEL CARNICERO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP DIRIAMBA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 MANAGEMENT AND FOLLOW-UP SAN MARCOS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP SANTA TERESA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Academic Advice for Schools 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Manage. and Coord. Educ. Progs for Primary, Secondary, Preschool, and Special 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.4 0.4 0.0 0.4 0.2 0.0 0.2 SUPERVISION OF PRIVATE SCHOOLS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

106 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 3) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Program Identification Needs for Infrastructure and School Repairs (PINRE) 0.0 0.0 0.0 0.0 3.8 3.8 0.0 2.1 2.1 0.0 0.3 0.3 0.0 0.2 0.2 Program Identification Needs for Infrastructure and School Repairs (PINRE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.0 0.3 0.3 Program Identification Needs for Infrastructure and School Repairs (PINRE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Program Identification Needs for Infrastructure and School Repairs (PINRE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 IMPROVEMENT IN QUALITY OF EDUCATION (APRENDE II) 0.0 12.2 12.2 0.0 11.4 11.4 0.0 9.6 9.6 0.0 0.0 0.0 0.0 0.0 0.0 Program for Expansion of Coverage of Primary Education 0.0 0.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT BASIC EDUCATION AND EDUCATIVE POLICIES UNICEF 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 BASIC EDUCATION PROJECT (APRENDE II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 COORDINATING UNIT FOR BASIC EDUCATION (APRENDE II) 0.0 0.5 0.5 0.0 0.4 0.4 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 INCREASE EFFECTIVENESS OF TEACHERS (BASE II) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Improved quality of multi-grade and bilingual education (BASE II) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 COMMUNITY PARTICIPATION (BASE II) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Basic Education (BASE II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF PRIMARY EDUCATION SCHOOLS (PHASE II) 0.0 4.1 4.1 0.0 6.2 6.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONTRIBUTION TO SUPPLEMENTARY SOCIAL FUND, INCENTIVES (PPRE) 0.0 0.3 0.3 0.0 1.2 1.2 0.0 1.8 1.8 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION OF ACCESS AND COVERAGE (APRENDE II) 0.0 0.8 0.8 0.0 1.3 1.3 0.0 1.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0 EDUCATION FOR ALL (EFA) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.5 0.5 Strrength Educative Infrastructure, Basic Mid-Level Education Centers in Nicaragua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 1.6 0.0 1.7 1.7 Strengthening educative quality in rural area in Boaco, Chontales and Río San Juan 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination of Primary Education 1.7 0.0 1.7 1.3 0.0 1.3 0.3 0.0 0.3 0.3 0.0 0.3 0.6 0.0 0.6 Primary Education Services 42.2 0.0 42.2 52.0 0.0 52.0 61.7 0.0 61.7 75.8 0.0 75.8 93.7 0.0 93.7 Rehab. School Facilities for Basic and Mid-Level Education, Dept. of Managua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.5 2.5 0.0 4.9 4.9 0.0 6.1 6.1 Program of basic education and citizenship for all (EBACIT-multi-grade education) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.9 0.9 0.0 0.3 0.3 0.0 0.3 0.3 Program of basic education and citizenship for all (EBACIT-Over-age education) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.2 0.2 0.0 0.2 0.2 Program of basic education and citizenship for all (EBACIT-initial education and preschool) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.5 0.5 0.0 0.1 0.1 Strengthening Bilingual Intercultural Education on Atlantic Coast (FOREIBCA-PHASE II) 0.0 0.6 0.6 0.0 0.9 0.9 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of school infrastructure in Rivas, Boaco and Chontales (PHASE IV) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 4.3 4.3 Support for Primary Education / France-Nicaragua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 Expansion of the Centers for Excellence with emphasis on APA method 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and coordination of Preschool Education 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 Services for Preschool Education 0.8 0.0 0.8 0.8 0.0 0.8 0.7 0.0 0.7 1.1 0.0 1.1 1.0 0.0 1.0 Community Preschool Education 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.8 0.0 1.8 Preschool Education (PPRE) 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Assistance for Preschool Age Children 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination for Special Education 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 Services for Special Education 0.7 0.0 0.7 0.7 0.0 0.7 0.7 0.0 0.7 0.9 0.0 0.9 1.1 0.0 1.1 Support for infrastructure, equipment, transport means for special education centers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.1 0.1 Labor Formation for Disabled Youth attended to in Special Educative Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 MANAGEMENT AND COORDINATION OF ADULT EDUCATION 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.3 0.0 0.3 ADULT EDUCATION SERVICES 0.3 0.0 0.3 0.3 0.0 0.3 0.2 0.0 0.2 0.0 0.0 0.0 0.3 0.0 0.3 Community Social Services for Literacy 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.6 LITERACY AND EDUCATION PROGRAM (PAEBANIC-PHASE II) 0.0 1.9 1.9 0.0 2.8 2.8 0.0 1.6 1.6 0.0 0.0 0.0 0.0 0.0 0.0 MULTI-PHASE BASIC EDUCATION PROGRAM (PHASE I) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0 COORDINATION AND MANAGEMENT RADIO EDUCATION 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 EDUCATIVE TECHNOLOGY 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Tele-secondary 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 PROGRAM FOR BASIC EDUCATION FOR YOUTH AND ADULTS (1528) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0 5.0 0.0 3.6 3.6 Provision of school and sports materials (ASEN) 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION PRIMARY AND PRESCHOOLS (MECD/FISE) 0.0 4.5 4.5 0.0 10.8 10.8 0.0 9.2 9.2 0.0 7.0 7.0 0.0 1.3 1.3 MAINTENANCE FUND (MECD/FISE) 0.0 0.5 0.5 0.0 0.5 0.5 0.0 0.8 0.8 0.0 0.8 0.8 0.0 0.8 0.8 Equipment and furnishings (MECD/FISE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of dormitory for students in Waspán 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Association for Popular Educadtion "Carlos Fonseca Amador" 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Construction of classrooms (District III) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Agustina Miranda de Quezada School, Camoapa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Local Government of Santo Domingo (Reh. little school El Mono rural district) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Bertha Briones School, Estelí 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Educative Center for the Blind of Managua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 German Library Bookmobile / Brecht Nicaraguan-German Association for Culture 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Preschools Pequeña Sonrisa and La Arañita (District IV) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Upgrading of Miguel Larreynaga Public Library 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Health 80.5 20.8 101.4 98.3 35.8 134.2 85.0 40.1 125.0 107.2 33.0 140.2 140.6 29.8 170.4 First level 80.5 6.5 87.1 98.3 14.6 112.9 85.0 19.6 104.6 107.2 23.3 130.4 140.6 19.1 159.8 PURCHASE OF MEDICINES 7.0 0.0 7.0 14.4 0.0 14.4 2.8 0.0 2.8 15.2 0.0 15.2 0.0 0.0 0.0 PROGRAM FOR PROVISION OF MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.4 0.4 0.0 0.2 0.2 0.0 0.4 0.4 PROGRAM FOR PROVISION OF MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.2 0.2 PROGRAM FOR PROVISION OF MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 PROGRAM FOR PROVISION OF MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 PROGRAM FOR PROVISION OF NON MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.5 4.5 0.0 0.6 0.6 PROGRAM FOR PROVISION OF NON MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 PROGRAM FOR PROVISION OF NON MEDICAL EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Surveillance for health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3 Financial adminisrtative management 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.0 0.3 11.3 Services for laboratory and diagnosis 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 19.8 0.0 19.8 Prmotion, education, and communication 0.1 0.0 0.1 0.2 0.0 0.2 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Epidemiological Control and Surveillance 0.6 0.0 0.6 0.9 0.0 0.9 0.4 0.0 0.4 0.2 0.0 0.2 0.0 0.0 0.0 Ambulatory Attention, Diagnosis, and Treatment 4.9 0.0 4.9 6.3 0.0 6.3 5.3 0.0 5.3 0.1 0.0 0.1 0.0 0.0 0.0

107 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 4) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Specific actions 0.2 0.0 0.2 0.0 0.0 0.0 0.1 0.0 0.1 0.2 0.0 0.2 0.0 0.0 0.0 Actions for prevention 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 Technical Administrative and Financial Management 24.3 0.0 24.3 27.7 0.0 27.7 26.4 0.0 26.4 34.7 0.0 34.7 41.8 0.0 41.8 Actions for Public Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3 0.0 1.3 Assurance for special groups 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 0.0 1.7 Technical Administrative and Financial Management and Coordination of SILAIS 0.0 0.0 0.0 0.0 0.0 0.0 4.9 0.0 4.9 5.6 0.0 5.6 6.9 0.0 6.9 Strengthening local integral system for healthcare (SILAIS) of Granada 0.0 0.3 0.3 0.0 0.5 0.5 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Program for Support to 6 SILAIS (PROSILAIS) 0.0 0.5 0.5 0.0 1.5 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of services for primary attention and strengthening of SILAIS Managua 0.0 0.0 0.0 0.0 0.4 0.4 0.0 1.7 1.7 0.0 0.0 0.0 0.0 0.0 0.0 Recovery of Infrastructure for Health Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for SILAIS of Nueva Segovia, Jinotega, Children's Hospital 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Improvement Integral Healthcare 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 STRENGTHENING RURAL PRIMARY ATTENTION 0.0 1.2 1.2 0.0 4.0 4.0 0.0 3.3 3.3 0.0 0.0 0.0 0.0 0.0 0.0 PRIMARY HEALTHCARE AND NUTRITION (PMSS) 0.0 1.6 1.6 0.0 2.4 2.4 0.0 1.3 1.3 0.0 0.0 0.0 0.0 0.0 0.0 Construction and Equipping Health Centers with Beds in Somotillo 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Emergency obstetric care for safe maternity 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 FUND FOR SAFE MATERNITY AND INFANCY - FONMAT (PMSS) 0.0 1.2 1.2 0.0 2.5 2.5 0.0 3.5 3.5 0.0 0.0 0.0 0.0 0.0 0.0 INTEGRATED SUPPORT FOR SILAIS OF MASAYA, CARAZO AND RIVAS (MACARI) 0.0 0.0 0.0 0.0 0.8 0.8 0.0 2.5 2.5 0.0 0.0 0.0 0.0 0.0 0.0 REINFORCING CHILD HEALTH IN NICARAGUA 0.0 0.0 0.0 0.0 0.2 0.2 0.0 3.8 3.8 0.0 0.0 0.0 0.0 0.0 0.0 PROMOTION OF INTEGRAL HEALTH FOR WOMEN (PROSIM PHASE II) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Strengthening referral services and systems, Granada and Chinandega 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 Healthy Families Program 0.0 0.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR EXPANSION OF COVERAGE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 0.0 6.7 6.7 PROGRAM FOR EXPANSION OF COVERAGE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.7 4.7 0.0 3.3 3.3 UPGRADING OF PRIMARY HEALTHCARE UNITS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.8 UPGRADING OF PRIMARY HEALTHCARE UNITS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.7 0.7 UPGRADING OF PRIMARY HEALTHCARE UNITS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.1 UPGRADING OF PRIMARY HEALTHCARE UNITS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.8 5.8 0.0 1.0 1.0 UPGRADING OF PRIMARY HEALTHCARE UNITS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.7 4.7 0.0 2.0 2.0 External Consultation Services 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.1 0.0 0.1 0.0 0.0 0.0 Emergency Services 0.2 0.0 0.2 0.3 0.0 0.3 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 Hospitalization Services 5.3 0.0 5.3 10.1 0.0 10.1 7.2 0.0 7.2 2.6 0.0 2.6 1.4 0.0 1.4 Technical, Administrative, Financial Management for Health Recovery and Rehab Services 37.4 0.0 37.4 37.8 0.0 37.8 36.9 0.1 36.9 48.1 0.1 48.2 55.9 0.1 56.1 Support Services 0.3 0.0 0.3 0.4 0.0 0.4 0.2 0.0 0.2 0.2 0.0 0.2 0.1 0.0 0.1 Support Services for Diagnosis and Treatment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Control and Surveillance of Environmental Risks 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 0.1 0.0 0.1 Control and Surveillance of urbanizations and housing 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 HEALTH CENTERS (MINSA/FISE) 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.9 0.9 0.0 0.5 0.5 0.0 0.9 0.9 HEALTH POSTS (MINSA/FISE) 0.0 0.5 0.5 0.0 0.7 0.7 0.0 1.1 1.1 0.0 0.7 0.7 0.0 0.1 0.1 MAINTENANCE FUND (MINSA/FISE) 0.0 0.4 0.4 0.0 0.3 0.3 0.0 0.4 0.4 0.0 0.3 0.3 0.0 0.1 0.1 Second level 0.0 8.7 8.7 0.0 11.6 11.6 0.0 13.1 13.1 0.0 4.0 4.0 0.0 5.7 5.7 PROGRAM FOR HEALTH SURVEILLANCE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.2 0.2 PROGRAM FOR HEALTH SURVEILLANCE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.4 0.4 PROGRAM FOR HEALTH SURVEILLANCE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.4 0.4 REHABILITATION HOSPITALS PUERTO CABEZAS, BLUEFIELDS AND SAN CARLOS 0.0 0.0 0.0 0.0 0.7 0.7 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION AND EQUIPPING OF HEALTH CENTERS, PACIFIC NICARAGUA 0.0 1.2 1.2 0.0 3.7 3.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF HOSPITAL NETWORK (PMSS) 0.0 4.2 4.2 0.0 6.0 6.0 0.0 11.8 11.8 0.0 0.0 0.0 0.0 0.0 0.0 PROMOTION RATIONAL USE OF MEDICAMENTS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR TECHNICAL COOPERATION PAHO/WHO 0.0 2.7 2.7 0.0 0.3 0.3 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR SUSTAINING EQUIPMENT 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.5 0.5 0.0 0.5 0.5 PROGRAM FOR SUSTAINING EQUIPMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.2 0.2 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.2 0.2 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 1.0 1.0 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.4 0.4 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.1 0.1 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.6 0.6 Program for Preinvestment Studies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Major repairs Carlos Roberto Huembes Hospital 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1

108 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 5) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend INTEGRAL PROGRAM FOR SCHOOL NUTRITION (PINE) 0.0 5.5 5.5 0.0 7.9 7.9 0.0 4.5 4.5 0.0 5.6 5.6 0.0 4.9 4.9 Food Security and Nutritional Surveillance Program 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Association of Children Nutrition Project, Managua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Population 0.0 0.0 0.0 0.0 1.7 1.7 0.0 2.8 2.8 0.0 0.2 0.2 0.0 0.1 0.1 National program of non formal education in population and sexuality (PHASE I) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 EQUALING OF OPPORTUNITIES FOR DISABLED PERSONS 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 Model Demonstration Experience, Dept. of Differentiated Services for Adolescents 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Formulation Natl. Prog. for Reproductive Healtth with sectoral approach in sector reform 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Packet of Basic Services in Reproductive Health 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 NATIONAL PROGRAM FOR REPRODUCTIVE HEALTH 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.0 0.0 0.0 0.0 0.0 REPRODUCTIVE HEALTH, EQUIT, AND RIGHTS IN NICARAGUA PROGRAM (SARED) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 1.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0 Supoprt for Reproductive Health and Family Planning Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Project for Sexual and Reproductive Health in Support of Services of MINSA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPRODUCTIVE HEALTH AND ENHANCEMENT OF WOMEN (SAREM) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROMOTION OF RESPONSIBLE PATERNITY AND MATERNITY 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0

Highways and rural roads 0.0 10.3 10.3 0.0 22.6 22.6 0.0 39.7 39.7 0.0 40.1 40.1 0.0 16.9 16.9 Paving stone road Ocotal-Macuelizo 0.0 0.0 0.0 0.0 2.3 2.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Paving stone of 13 kms. from bridge to El Tránsito, Municipality of Nagarote 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 Paving stone for highway from Jinotepe to El Ojochal 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Paving stone from San Martín to Sangre de Cristo Sanctuary, Camoapa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 Highway Santa Rita Junction, Villa El Carmen-Los Aburtos 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 Highway San Rafael del Sur-Los Larios 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 Construction of highway Esquipulas-Muy Muy, feasibility and design, (IDB 1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of highway San Rafael del Norte-Yalí, feasibility and design, (IDB 1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of highway Sapoá-Cárdenas-Colón 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of highway entrance INTA-PROINCO km. 17.5 highway to Masaya 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 Construction of definitive bridge El Gallo 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of definitive bridge El Guarumo 0.0 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of definitive bridge El Guasaule 0.0 2.8 2.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of definitive bridge Estero Real 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of definitive bridge Hato Grande 0.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of bridges at departmental border León-Estelí 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 Design of paving stone for Juigalpa-Puerto Díaz (IDB 1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Design of paving stone for Juigalpa-La Libertad-Santo Domingo (IDB 1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Miramar Junction- El Velero Complex 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 Feasibility Study and Design Las Piedrecitas-Izapa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Feasibility Study and Design Chinandega-El Congo-Potosí 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Feasibility Study and Design for paving highway Nueva Guinea-Bluefields 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 Feasibility Study and Design paving highway Río Blanco-Siuna-Puerto Cabezas 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Study and design highway Telica-San Isidro 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MAINTENANCE OF RURAL ROADS (FSS) 0.0 0.0 0.0 0.0 1.9 1.9 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 UPGRADING OF RURAL ROADS (PAVING STONE) (No.3464) 0.0 1.7 1.7 0.0 7.4 7.4 0.0 13.2 13.2 0.0 11.8 11.8 0.0 0.0 0.0 UPGRADING ROAD SANTA CLARA - SUSUCAYAN - EL JICARO (No.1608) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 2.9 2.9 0.0 0.1 0.1 IMPROVEMENTS ON HIGHWAY RÍO BLANCO - PUERTO CABEZAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.1 4.1 0.0 4.9 4.9 SMALL PROJECTS ATLANTIC REGION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PLAN COFFEE (REHABILITATION OF COFFEE ROADS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ROADWAY PLAN FOR COMPETITIVENESS ZONE III (LEON, MATAGALPA AND JINOTEGA) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Program for support to transport sector (PAST) II PHASE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.5 3.5 Special program repair, reconstruction of damages caused by rainy season 2005 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.7 2.7 TRANSPORT PROGRAM DEPARTMENT OF ESTELÍ 0.0 0.1 0.1 0.0 0.6 0.6 0.0 0.6 0.6 0.0 1.4 1.4 0.0 0.0 0.0 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 1.0 1.0 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.5 2.5 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.8 0.8 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 ROADWAY PROJECT FOR COMPETITIVENESS FOR ZONE II (No.1530/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 MINOR TRANSPORT PROJECTS ATLANTIC REGION 0.0 0.4 0.4 0.0 1.0 1.0 0.0 0.8 0.8 0.0 1.0 1.0 0.0 0.0 0.0 RECONSTRUCTION OF BRIDGE LAS MANGAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 RECONSTRUCTION OF BRIDGE EL JICARAL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 RECONSTRUCTION OF BRIDGE WASWAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of road for the Mining Triangle 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of secondary roads 0.0 2.2 2.2 0.0 2.2 2.2 0.0 3.3 3.3 0.0 4.2 4.2 0.0 0.0 0.0 Rehabilitation of secondary roads 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 1.7 0.0 0.0 0.0 Rehabilitation of highway Cerro Colorado-San José de las Mulas 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Rehabilitation of highway León-Poneloya 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Rehabilitation of highway Rivas-San Jorge 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 Rehabilitation of highway San Lorenzo-Muhan 0.0 0.0 0.0 0.0 6.0 6.0 0.0 16.8 16.8 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of highway Tipitapa-Las Flores (No.846P) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.6 2.6 0.0 2.4 2.4 0.0 0.4 0.4 Rehabilitation of highway San Rafael del Sur 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of highway Tipitapa-Masaya-Catarina-El Guanacaste-Nandaime 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation Las Flores Junction-Catarina-El Guanacaste-Nandaime 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of highway Waslala-Puerto Cabezas 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation and upgrading of road La Pavona-La Pita-Empalme 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation and upgrading of highway San Benito-Santa Rosa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

109 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 6) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend REPAIR OF 5 KM OF HIGHWAY SANTA TERESA (CALIGUATE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 REPAIR OF HIGHWAY EL JOBO JUNCTION TO MATIGUAS SUBSTATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 REPAIR HIGHWAY PANTASMA-EL PLATANO Y BOCA DE BILAN-FLOR DE PINO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 REPAIR HIGHWAY SAN BENITO - EL RAMA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPAIR ACCESS TO HIGHWAY TO SAN FRANCISCO LIBRE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Restore roads Sta Cruz, Las Tablas, Los Castillos, Sn José de Gracia, El Congo (10 KM) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 REVISION DESIGN SANTA RITA - IZAPA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation rural roads (IDR) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.3 6.3 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.4 0.4 1.5 0.9 2.4 Municipal infrastructure 1.8 10.7 12.5 1.5 15.8 17.4 7.4 37.7 45.1 12.9 54.1 67.1 15.6 57.6 73.2 ROAD WORKS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.7 10.7 0.0 9.7 9.7 0.0 1.4 1.4 OTHER COMMUNITY SERVICES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 1.5 0.0 0.6 0.6 0.0 0.2 0.2 RAIN DRAINAGE (INIFOM/FISE) 0.0 0.1 0.1 0.0 0.3 0.3 0.0 1.3 1.3 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR SPORTS COURTS (INIFOM/FISE) 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MUNICIPAL INFRASTRUCTURE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.3 1.3 0.0 0.8 0.8 MUNICIPAL INFRASTRUCTURE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.7 0.7 MUNICIPAL INFRASTRUCTURE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.6 0.6 MUNICIPAL INFRASTRUCTURE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.2 0.2 Streets, roads, and accesses (INIFOM/FISE) 0.0 0.2 0.2 0.0 2.4 2.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other municipal services (INIFOM/FISE) 0.0 0.1 0.1 0.0 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Bridges (INIFOM/FISE) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Social Infrastructure (NI-L1008-IDB) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 INSTALLATION OF 4 BAILEY BRIDGES IN THE ATLANTIC REGION 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Bailey Bridges Mongallo, Okonwas, Pawanka and El Gallo 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of inter-municipal roads 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.0 4.0 CONSTRUCTION ARTISANAL WELLS, COMMUNITIES OF THE RAAN 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION WALKWAYS IN PUERTO CABEZAS 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Construction of SISIN bridge 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction of bridge SAN PEDRO in PUERTO CABEZAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUC. PEDESTRIAN BRIDGES IN MUNICIPALITIES OF WASPAM AND PUERTO CABEZ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 CONSTRUCTION PEDESTRIAN BRIDGE No. 1, COMMUNITY OF TAWASAKIA, SANDY BAY 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF DOCKS IN MUNICIPALITY OF PUERTO CABEZAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.1 0.1 CONSTRUCTION OF MARKET IN BILWI-PUERTO CABEZAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 REPLACEMENT OF FERRY, WAWA RIVER 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 CONSTRUCTION OF PAVING AND LINING OF DITCHES IN SIUNA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 CONSTRUCTION OF PEDESTRIAN WALKWAYS IN MUNICIPALITIES OF THE R.A.A.N. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.3 0.3 Construction of paving, walkways, and ditches in Puerto Cabezas 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 PAVING STREETS WITH CEMENT SLABS IN ROSITA, RAAN 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF COMMUNITY DOCKS R.A.A.S. 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION AND CONSTRUCTION OF PERIPHERAL STREETS IN BLUEFIELDS 0.0 0.1 0.1 0.0 0.8 0.8 0.0 0.5 0.5 0.0 0.5 0.5 0.0 0.3 0.3 CONSTRUCTION OF STREETS IN BLUEFIELDS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF PEDESTRIAN WALKWAYS IN THE R.A.A.S. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1 CONSTRUCTION OF WALKWAYS AWAS - LAGUNA DE PERLAS, R.A.A.S. 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF RETAINING WALL, LAGUNA DE PERLAS 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF TWO-WAY VEHICLE BRIDGE IN CITY OF BLUEFIELDS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF PEDESTRIAN WALKWAYS IN THE R.A.A.S 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Construction of street in Municipality of Nueva Guinea 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 CONSTRUCTION OF STREET IN MUNICIPALITY OF KUKRA HILL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 MUNICIPAL TRANSFER 1.8 8.8 10.6 1.5 8.3 9.8 7.4 18.3 25.7 12.9 38.5 51.5 14.1 45.1 59.2 Transfer to local governments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3 Transfer to local governments for collection revenues from mining exploration, exploitation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 0.0 1.2 Repair of highway Moyogalpa-Altagracia 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Local Government of Diriamba 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 MUNICIPAL WORKS NIQUINOHOMO 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 Local Government of Sébaco (Community Park in Chaguitillo) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Local Government of León (Resufacing streets and Historic Center of León) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 Paving stone central touristic street, Catarina 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Repair of paving stones, Puerto Sandino Junction - Miramar Junction 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Infrastructure damaged by Hurricane Beta 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Upgrading of Economic and Social Infrastructure of Santa Teresa 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction bridge La Potranca 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for urban populations of Estelí, Matagalpa, Jinotega, Ocotal and Somoto 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.0 1.5 1.5 Municipal roadways works 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Muncipal Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Program of Municipal Works FSS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0

110 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 7) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend

Roadways infrastructure 0.0 50.3 50.3 0.0 42.4 42.4 0.0 30.7 30.7 0.0 46.4 46.4 0.0 22.9 22.9 Trunk roads 0.0 50.3 50.3 0.0 42.4 42.4 0.0 30.7 30.7 0.0 45.2 45.2 0.0 22.9 22.9 Widening of highway Ticuantepe-Masaya-Granada 0.0 0.0 0.0 0.0 5.4 5.4 0.0 5.3 5.3 0.0 12.5 12.5 0.0 5.4 5.4 Design for rehab. and upgrading highway Granada-Guanacaste Junction (IDB No.1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Drainage for highways 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.9 0.9 0.0 0.9 0.9 Study and design for rehab. highway Las Esquinas-San Marcos-Catarina (IDB No.1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Study and design for rehab. and upgrading highway Jinotepe-Nandaime (IDB No.1545/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 II Program for rehabilitation and maintenance of highways (No.3085) 0.0 7.3 7.3 0.0 3.0 3.0 0.0 5.3 5.3 0.0 0.9 0.9 0.0 0.0 0.0 III Program for rehabilitation and maintenance of highways (No.3085) 0.0 15.0 15.0 0.0 29.4 29.4 0.0 6.2 6.2 0.0 5.7 5.7 0.0 2.0 2.0 IV Program for rehabilitation and maintenance of highways 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IV Program for rehabilitation and maintenance of highways 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 2.0 IV Program for rehabilitation and maintenance of highways 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 Upgrading highway Matagalpa-Jinotega 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 1.5 0.0 0.0 0.0 Paving highway Coastal South Littoral 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.4 0.4 Paving highway Guayacán-Jinotega (EU NIC/B7-3100/2000/001) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.4 0.4 0.0 0.9 0.9 0.0 2.7 2.7 Paving highway Santa Emilia-El Tuma-La Dalia 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Paving highway Acoyapa-San Carlos (Study and Design) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.7 Reconstruction of bridges over main highways 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of highway Chinandega-Guasaule (CABEI No.1576) 0.0 0.0 0.0 0.0 0.6 0.6 0.0 10.2 10.2 0.0 12.8 12.8 0.0 1.1 1.1 Rehabilitation of highway Matagalpa-Santa Emilia 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehabilitation of highway Sébaco-Matagalpa (NI-L1005) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 Rehabilitation of Pan-Am highway (San Benito-Yalagüina-El Espino) 0.0 21.4 21.4 0.0 2.4 2.4 0.0 1.8 1.8 0.0 0.1 0.1 0.0 0.0 0.0 Rehabilitation of highways (IDB 1088/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.7 6.7 0.0 1.8 1.8 Rehabilitation of highways (IDB 1088/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.2 0.2 Rehabilitation of highways (IDB 1088/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.7 0.0 0.0 0.0 Rehabilitation and upgrading of highway San Benito-San Lorenzo 0.0 5.4 5.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Resurfacing of highways 0.0 1.2 1.2 0.0 1.2 1.2 0.0 1.2 1.2 0.0 1.0 1.0 0.0 3.7 3.7 Ports and airports 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.0 0.0 National Port Authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.0 0.0

Electricity 0.0 4.9 4.9 0.0 4.9 4.9 0.0 12.1 12.1 0.0 12.5 12.5 0.0 11.3 11.3 Rural electrifciagtion 0.0 3.3 3.3 0.0 4.6 4.6 0.0 11.1 11.1 0.0 10.8 10.8 0.0 9.2 9.2 RURAL ELECTRICITY 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 INSTALLATION OF ELECTRICITY DISTRIBUTION NETWORK IN THE R.A.A.S 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 RURAL ELECTRIFICATION (FCOSER) 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 DEVELOPMENT OF RURAL ELECTRIFICATION OFF GRID 0.0 0.3 0.3 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ELECTRIFICACIÓN RURAL (CNE) 0.0 1.3 1.3 0.0 3.0 3.0 0.0 1.8 1.8 0.0 1.8 1.8 0.0 2.7 2.7 ELECTRIFICACIÓN RURAL (CNE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 ENERGIZACION RURAL 0.0 1.5 1.5 0.0 0.4 0.4 0.0 1.6 1.6 0.0 0.0 0.0 0.0 0.0 0.0 RURAL ELECTRIFICATION IN 6 DEPARTMENTS (IDB -1017-SF-NI) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.6 0.6 0.0 1.6 1.6 0.0 0.7 0.7 Small-scale hydroelectricity development for productive uses off grid 0.0 0.2 0.2 0.0 0.1 0.1 0.0 1.5 1.5 0.0 1.8 1.8 0.0 1.5 1.5 Rural electrification for dairy development in Boaco and Chontales (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 1.1 1.1 0.0 1.9 1.9 0.0 0.6 0.6 Project for rural electrification for isolated zones (PERZA / WB-3760/TF051960) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.1 3.1 0.0 2.2 2.2 0.0 2.1 2.1 Fund for support to networks of local organizations, rural electrification (FAROL-ER) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.2 0.2 0.0 0.3 0.3 Program for rural electrification in productive zones, concessioned area 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 1.2 1.2 Program for rural electrification in support of clusters (IDB-Support NDP) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 RURAL ELECTRIFICATION ZONE OF EL ROSARIO, MURRA, NUEVA SEGOVIA 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rural electrification in communities of Los Cabros, Marlon Alvarado, El Cacao, El Sol 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Electrification El Carrizal-Las Vegas and La Montañita, El Jícaro, Nva. Segovia 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 ELECTRIFICATION COMMUNITIES OF EL JICARO, SAN MIGUELITO 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Evaluation of Small Centrals in Boaco, Chontales and RAAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Development and modernization of energy sector 0.0 1.6 1.6 0.0 0.3 0.3 0.0 1.0 1.0 0.0 1.8 1.8 0.0 2.1 2.1 Strategy for Promotion of Renewable Energy in Nicaragua 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ENERGY PLANNING AND DEVELOPMENT SCENARIOS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Feasibility Study Geotherma Area Masaya-Granada-Nandaime for mulit-use of geothermal power 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 PROG. IN ENERGY EFFICIENCY FOR INDUSTRIAL AND COMMERCIAL SECTORS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION OF ELECTRICITY DISTRIBUTION SYSTEM MANAGUA (PHASE III) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION OF ELECTRICITY DISTRIBUTION SYSTEM MANAGUA (PHASE IV) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Expansion and upgrading National Transmission System 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Expansion and upgrading Transmission System II 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION OF LINES AND SUBSTATIONS OF THE SIN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION ELECTRICAL SYSTEM NORTH REGION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION BAY FOR LINE TO SUBSTATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION OF ELECTRICITY DISTRIBUTION SYSTEM MANAGUA (PHASE III) 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION OF ELECTRICITY DISTRIBUTION SYSTEM MANAGUA (PHASE IV) 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.3 0.3 0.0 0.4 0.4 EXPANSION TICUANTEPE SUSTANTION SECOND STAGE 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 SUPPLY POWER TRANSFORMERS (IDB-1017/10 SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.2 0.2 REHABILITATION NANDAIME SUBSTATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.2 0.2 ELECTRICITY INTERCONNECTION SYSTEM AMÉRICA CENTRAL (SIEPAC/IDB-1096-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.7 0.7 0.0 0.3 0.3 ELECTRICAL INTERCONNECTION BLUEFIELDS - EL BLUFF (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 LINE FOR SUB-TRANSMISSION MATIGUÁS-SIUNA AND ASSOCIATED WORKS (IDB-1017-SF 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.3 0.3 0.0 0.5 0.5 MOMOTOMBO - LEON LINE (IDB 1017/07 SF-NI) 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IMPROVEMENTS IN METERING AND COMMERCIAL CONTROL (IDB-1017/02-SF-NI) 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Modernization Communication System National Dispatch Center (IDB 1017/05-SF-NI) 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Modernization SCADA System, National Dispatch Center (IDB 1017/06-SF-NI) 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Rehab. lines and substations for National Interconnected System (SIN) (IDB 1017-SF-NI) 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

111 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 8) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend MODERNIZATION OFLAS BANDERAS SUBSTATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.2 0.2 MODERNIZATION OF BOACO SUBSTATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1

Productive rural development 4.8 35.7 40.4 4.1 39.6 43.7 4.0 43.7 47.8 3.6 39.6 43.2 3.8 46.3 50.1 EXPANDED ACCESS TO FINANCIAL SERVICES (No.3903/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.5 0.5 Prog. Improvement of Moveable Collateral to facilitate access to credit 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.3 0.3 Support to INTA in new technological development strategy in agriculture (PASADANIDA II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.0 0.0 SUPPORT FOR PROCESS OF COMMERCIALIZATION OF BASIC GRAINS 0.0 1.1 1.1 0.0 0.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SERVICE CENTER FOR LIVESTOCK UPGRADING 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Detection of Contaminant Residues and Control of Pesticides 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 Plant health diagnoses and seed quality 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 Vetineray diagnoses in laboratories 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.3 0.0 0.3 MANAGEMENT AND COORDINATION SEED CERTIFICATION 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination of Agricultural Services 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination of Services for Registry and Control of Agricultural Inputs 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Management and Coordination of Animal Health Services 0.1 0.0 0.1 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 FUND FOR AGRICULTURAL DEVELOPMENT (FONDEAGRO) PHASE II 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 1.7 0.0 1.4 1.4 STRENGTHENING OF OPERATIONS OF INTA (WB-3371-NI) 0.0 3.9 3.9 0.0 4.8 4.8 0.0 4.3 4.3 0.0 1.6 1.6 0.0 0.0 0.0 STRENGTHENING OF OPERATIONS OF INTA (WB-3371-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 STRENGTHENING NATIONAL PROGRAM FOR PLANT HEALTH SURVEILLANCE 0.0 0.5 0.5 0.0 0.1 0.1 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.3 0.3 INICIATIVE FOR RURAL DEVELOPMENT OF NICARAGUA 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 INICIATIVE FOR RURAL DEVELOPMENT OF NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.7 0.0 1.0 1.0 0.0 0.5 0.5 INICIATIVE FOR RURAL DEVELOPMENT OF NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.0 0.0 Inspecction of innocuousnesss and compliance with sanitary norms 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.4 0.0 0.4 Sanitary Inspection of Food Processing Plants 0.3 0.0 0.3 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Inspection and Control of Imports, Animal Health Services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.1 0.0 0.1 Nicaraguan Institute for Agricultural Technology (INTA) 2.4 0.0 2.4 2.0 0.0 2.0 1.9 0.0 1.9 1.9 0.0 1.9 2.0 0.0 2.0 NATIONAL LABORATORY FOR BIOLOGICAL RESIDUES 0.3 0.0 0.3 0.4 0.0 0.4 0.2 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Integrated pest management for small and medium producers - INTA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Improved ranching productivity for small and medium producers in Nicaragua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Livestock Genetic Improvement 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 Improve situation for small and medium coffee producers in Río San Juan Basin 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 Model for productive attention to small and medium low income producers (PESA) - INTA 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.1 0.1 Multiplication and dissemination of improved breeders in Nicaragua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 PROGRAM FOR SUPPORT TO AGRICULTURAL SECTOR (PASADANIDA II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.1 PROGRAM FOR IRRIGATION IN THE NORTHWEST 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR ERADICATION OF SCREW WORM IN CATTLE 0.0 0.4 0.4 0.0 0.5 0.5 0.0 0.5 0.5 0.0 0.5 0.5 0.0 0.5 0.5 REGIONAL PROGRAM FOR ANIMAL TRACTION - INTA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT FOR AGRICULTURAL TECHNOLOGY (PHASE I/WB-3371-NI) 0.0 3.2 3.2 0.0 4.7 4.7 0.0 6.6 6.6 0.0 2.4 2.4 0.0 0.0 0.0 PROJECT FOR AGRICULTURAL TECHNOLOGY PHASE II (MAGFOR-PRORURAL) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 PROJECT FOR AGRICULTURAL TECHNOLOGY PHASE II (INAFOR-PRORURAL) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT FOR AGRICULTURAL TECHNOLOGY PHASE II (INTA-PRORURAL) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.8 2.8 National Pound-for-Pound Program 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 Program for Sustainable Development in Muncipality of El Castillo 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Sectoral Program for Sustainable Productive Rural Development (PRORURAL-INTA) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 1.6 Sectoral Program for Sustainable Productive Rural Development (PRORURAL-INAFOR) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 1.5 Sectoral Program for Sustainable Productive Rural Development (PRORURAL-MAGFOR) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.9 1.9 Registry of Pesticides, Fertilizers, and Agricultural Inputs (agro-chemical products) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 Registry of Veterinary Products and Feed for Animals 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 SERVICE OF ANIMAL QUARANTINE 0.1 0.0 0.1 0.2 0.0 0.2 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 SERVICES OF PLANT OS DE CUARENTENA VEGETAL SERVIC 0.0 0.2 0.3 0.0 0.3 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Services of Inspection on Farms and Traceability 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 Services of HACCP inspection and innocuousness of food in animal origin products 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Services of field operations 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Services of Processes and Granting Certficates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Services oof Agricultural Protection and Health 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Services of Regstry of Veterinary Products and Agricultural Inputs 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SERVICES OF REGISTRY, CONTROL, AND CERTIFICATION OF SEEDS 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 SERVICES FOR AGRICULTURAL AND FORESTRY HEALTH (IDB-1500-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.8 0.0 0.6 0.6 Services for Epidemiological and Animal Health Surveillance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Services of Surveillance and Traceability 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SERVICES OF SURVEILLANCE, DIAGNOSIS, AND INSPECTION FOR ANIMAL HEALTH 0.3 0.0 0.3 0.2 0.0 0.2 0.5 0.0 0.5 0.0 0.0 0.0 0.0 0.0 0.0 SERVICES OF SURVEILLANCE, DIAGNOSIS, AND PLANT HEALTH CERTIFICATION 0.2 0.0 0.2 0.1 0.0 0.1 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Information processing services 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRANSFER OF POST-HARVEST TECHNOLOGY PHASE III - INTA 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Surveillance and Epidemiological Campaigns 0.0 0.9 0.9 0.0 0.1 0.1 0.0 0.0 0.0 0.2 0.0 0.2 0.2 0.0 0.2 Surrveillance and Control of Agricultural Inputs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SECOND PROJECT FOR RURAL MUNICIPALITIES. AGREEMENT No.3480-NI 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.4 2.4 0.0 3.1 3.1 0.0 0.0 0.0 Foundation for Development of the Central Region of the RAAS (FUNPADRAAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Foundation for the Integral Development of Nagarote 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Civil Association for Development of Masatepe (ACIDEMAS) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Transfer to the IDR 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 Social economic development Waslala, Cua Bocay, Tuma La Dalia and Rancho Grande 0.0 2.1 2.1 0.0 4.7 4.7 0.0 3.5 3.5 0.0 2.2 2.2 0.0 0.0 0.0 SOCIAL ECONOMIC DEVELOPMENT IN THE NORTH AND CENTRAL ZONE OF NICARAGUA 0.0 0.7 0.7 0.0 3.4 3.4 0.0 2.6 2.6 0.0 0.2 0.2 0.0 0.0 0.0 DEVELOPMENT OF THE NORTH PACIFIC COAST OF NICARAGUA 0.0 0.1 0.1 0.0 1.0 1.0 0.0 2.3 2.3 0.0 3.4 3.4 0.0 4.1 4.1 PROGRAM FOR RICE REHABILITATION AND CAMPESINO DEVELOPMENT 0.0 0.7 0.7 0.0 1.0 1.0 0.0 0.6 0.6 0.0 0.2 0.2 0.0 0.3 0.3 PROMOTION OF BASIC GRAIN PRODUCTION KR-II 0.0 0.2 0.2 0.0 3.6 3.6 0.0 2.7 2.7 0.0 4.5 4.5 0.0 3.3 3.3

112 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 9) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend PROGRAM OF DEVELOPMENT POLES (POLDES) 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.2 0.2 RURAL INTEGRAL DEVELOPMENT, MARGINAL COMMUNITIES LEÓN AND CHINANDEGA (PR 0.0 0.6 0.6 0.0 0.6 0.6 0.0 0.5 0.5 0.0 0.4 0.4 0.0 0.2 0.2 LOCAL DEVELOPMENT IN DEPARTMENT OF RIVAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.5 0.5 0.0 1.1 1.1 PROGRAM FOR RURAL PRODUCTIVE REACTIVATION (PRPR/IDB-1110-SF-NI) 0.0 0.0 0.0 0.0 3.0 3.0 0.0 11.0 11.0 0.0 10.8 10.8 0.0 15.8 15.8 PROGRAM FOR AGRO-ALIMENTARY PRODUCTIVE REACTIVATION (PRPA / PHASE II) 0.0 11.0 11.0 0.0 1.3 1.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT FOR RURAL LIVESTOCK DEVELOPMENT (PRODEGA III) 0.0 1.0 1.0 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT FOR RURAL DEVELOPMENT SOUTH REGION (PROSESUR) 0.0 2.9 2.9 0.0 1.6 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPOPULATION AND GENETIC IMPROVEMENT OF LIVESTOCK (IDR) 0.0 1.1 1.1 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TROPISEC 0.0 0.5 0.5 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR ECONOMIC DEVELOPMENT OF THE DRY ZONE OF NICARAGUA (PRODESE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 1.1 1.1 0.0 1.6 1.6 PROG. STRENGTHENING RURAL DEVELOPMENT AND POVERTY REDUCTION, BOACO-CHO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.5 0.5 0.0 1.2 1.2 PROGRAM Sectorial de Desarrollo Rural Productivo Sostenible (PRORURAL-IDR) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 PROJECT FOR SOCIOECONOMIC INFRASTRUCTURE 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.6 0.6 0.0 1.0 1.0 0.0 0.0 0.0 PROGRAM TWO FOR ONE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION OF SILOS AND BASIC GRAIN STORAGE IN THE R.A.A.N. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 STORAGE, PROCESSING, AND COMMERCIALIZATION AGRIC. PRODUCTS, WASPAN 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for improved competitiveness of small and medium sesame farmers, León 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.0 0.0 Storage and commercialization sorghum for small and medium farmers affiliated to ANPROSOR 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Agro-Industrial Project for Milk Processing - El Triunfo Cheese Plant 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for Beekeeping Sector of Nicaragua 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Productive development in Ciudad Darío 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Agricultural financing for commercialization of surpluses 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for support for commercialization of basic grains 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SECOND PROJECT FOR RURAL MUNICIPALITIES (3480) 0.0 3.0 3.0 0.0 5.3 5.3 0.0 3.3 3.3 0.0 0.1 0.1 0.0 3.2 3.2 SECOND PROJECT FOR RURAL MUNICIPALITIES (3480) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Secondary and technical education 11.1 3.5 14.6 12.3 6.0 18.3 13.8 4.9 18.7 16.2 4.9 21.1 17.8 6.2 24.0 Management and Coordination of Secondary Education 0.2 0.0 0.2 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Services for Secondary Education 9.8 0.0 9.8 11.0 0.0 11.0 12.8 0.0 12.8 14.8 0.0 14.8 15.8 0.0 15.8 Technological Bachalaureate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Design of Basic and Mid-level Educative Reform with Labor Orientation and Skills Building 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Construction Technological Institute for Academic Excellence 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.4 2.4 DESIGN OF REFORM TO SECONDARY EDUCATION (PPRE) 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 USE OF EDUCATIVE TECHNOLOGY IN ALTERNATIVE MODALITIES OF EDUCATION (PPRE) 0.0 0.7 0.7 0.0 2.7 2.7 0.0 1.6 1.6 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT FOR LABOR SKILLS UPGRADING - VULCANO OF NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 COURSE IN LABOR SKILLS UPGRADING 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.5 0.5 INATEC 0.4 0.0 0.4 0.1 0.0 0.1 0.1 0.0 0.1 0.4 0.0 0.4 0.4 0.0 0.4 EXPANSION PROJECT FOR TRAINING IN SELF-CONSTRUCTION OF HOMES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION ENMA CHINANDEGA 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION AGRICULTURAL INSTITUTE SIUNA 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION TECHNICAL INSTITUTE FOR ADMINISTRATION, ECONOMICS, COMPUTATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION CONSTRUCTION BARTOLOME COLÓN TECHNOLOGICAL INSTITUTE, PTO. CA 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSIONS FIXED TRAINING CENTER - BOACO - INATEC 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 SUPPORT FOR PROFESSIONAL FORMATION IN HOTELTY AND TOURISM IN NICARAGUA - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.0 1.5 1.5 TRAINING IN SELF-CONSTRUCTION OF HOMES, CARAZO 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES, CHONTALES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES, ESTELI 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES, LEON 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES, MASAYA 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES, MATAGALPA 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES, VILLA CARLOS FONSECA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TRAINING OCCUPATIONAL PROMOTION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION AGRICULTURAL TECHNICAL TEACHING CENTER, NUEVA GUINEA 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CREATION OF 50 TECHNOLOGICAL KIOSKS TECNOLÓGICOS THROUGHOUT COUNTRY - IN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 AGRICULTURAL TECHNICAL EDUCATION AND TRAINING (WB-3371-NI) - INATEC 0.0 0.6 0.6 0.0 0.6 0.6 0.0 0.8 0.8 0.0 0.2 0.2 0.0 0.0 0.0 STRENGTHENING EDUCATIVE SECTOR IN ZONES AFFECTED BY HURRICANE MITCH - INA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 PROGRAM OF TRAINING IN SELF-CONSTRUCTION OF HOMES - INATEC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.6 0.6 0.0 0.6 0.6 REHAB. AND EXPANSION OF AGRICULTURAL TECHNICAL TRAINING CENTER, JALAPA - IN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 REHABILITATION AND EXPANSION OF POLYTECHNICAL INSTITUTE / JINOTEPE - INATEC 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.3 0.3 REHAB. AND EXPANSION UNITED NATIONS AGRO-INDUSTRIAL POLYTECHNICAL INSTITUT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHAB. AND EXPANSION CRISTOBAL COLÓN POLYTECHNICAL INSTITUTE, BLUEFIELDS - 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 REHABILITATION AND EXPANSION VOCATIONAL TECHNICAL INSTITUTES, INATEC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHAB. AND EXPANSION AGRICULTURAL TECHNICAL EDUCATIVE CENTER, CHINANDEGA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 REHABILITATION SECONDARY INSTITUTES (MECD/FISE) 0.0 0.3 0.3 0.0 1.5 1.5 0.0 1.2 1.2 0.0 1.2 1.2 0.0 0.2 0.2 Transfer to INTECNA 0.8 0.0 0.8 1.1 0.0 1.1 0.9 0.3 1.2 0.9 0.4 1.3 1.6 0.0 1.6 Expansion of National Technological Institute (INTECNA) 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Environment 1.7 13.7 15.4 0.9 17.1 18.1 0.5 17.9 18.4 2.7 12.5 15.1 2.9 15.1 18.0 Natural resouces: policies and norms 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.2 0.0 0.2 Natural resources: Administration of concessions 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 PROGRAM FOR SUPPORT TO ENVIRONMENTAL SECTOR IN NICARAGUA PASMA-MIFIC 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.4 0.4 Geological Resources: Monitoring, Surveillance, and Control 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 0.1 0.0 0.1 Geology 0.5 0.0 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Promotion of Administration of Forestry Resources 0.0 0.0 0.0 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Forestry Investigation, Administration of Forestry Resources 0.0 0.0 0.0 0.2 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for Forestry Development of Northeast Nicaragua (PFNE) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SUPPORT FOR CAMPESINO FORESTRY ACTIVITY IN NUEVA SEGOVIA (PROCAFOR / INAFO 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

113 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 10) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Transfer of technology and forestry promotion for management of natural forests (TRANSFORMA/ 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROMOTION OF INVESTMENT IN SUSTAINABLE FORESTRY 0.0 1.8 1.8 0.0 1.9 1.9 0.0 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 National Forestry Institute (INAFOR) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 0.0 1.6 1.8 0.0 1.8 STUDY MASTER PLAN FORESTRY ZONE NORTH PACIFIC NICARAGUA - INAFOR 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MASTER PLAN FOR FORESTRY MANAGEMENT - INVESTMENT PHASE - INAFOR 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.1 0.1 0.0 0.1 0.1 STRENGTHEN WATERSHED MANAGEMENT AND NATURAL DISASTER PREVENTION (FOCU 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 SOCIO-ENVIRONMENTAL PROGRAM AND FOREST CONSERVATION (0025) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR SUPPORT TO NICARAGUAN ENVIRONMENTAL MANAGEMENT 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR SUPPPORT TO NICARAGUA ENVIRONMENTAL SECTOR 0.0 2.6 2.6 0.0 1.5 1.5 0.0 3.7 3.7 0.0 1.5 1.5 0.0 0.5 0.5 Conservation of biodiversity of dry tropical forest and coastal marine 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Management and Coordination of Environmental Quality 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 Policies and Norms for Environmental Quality 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Evaluation and Protection from Environmental Impact 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Services for Environmental Protection 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Territorial Coordination 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 0.2 0.0 0.2 Coordination and Supervision, Protection of Biodiversity 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SOCIO-ENVIRONMENTAL PROG. AND FORESTRY DEVELOPMENT II (POSAF II) IDB No.1084 0.0 1.8 1.8 0.0 3.4 3.4 0.0 6.1 6.1 0.0 6.5 6.5 0.0 10.0 10.0 Coordination and Supervision of Protected Areas 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Norms and Control for the SINAP 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Promotion, Development and Management of the SINAP 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.0 0.1 Protection and Improvement of Masaya Volcano National Park 0.1 0.0 0.1 0.2 0.0 0.2 0.0 0.0 0.0 0.2 0.1 0.2 0.3 0.0 0.3 International Treaties and Conventions on Environment 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 PROTECtION ENDANGERED SPECIES (CITES) 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 MESOAMERICAN BIOLOGICAL CORRIDOR 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 HUMAN DEVELOPMENT AND ENVIRONMENT IN SOUTHEAST BIOSPHERE OF NICARAGUA 0.0 0.4 0.4 0.0 0.5 0.5 0.0 0.8 0.8 0.0 0.7 0.7 0.0 0.7 0.7 Conservation and Sustainable Forestry Development, North of the country SI-A-PAZ 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Integral System of Protected Areas for Peace (SIAPAZ) 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ATLANTIC BIOLOGICAL CORRIDOR 0.0 1.7 1.7 0.0 2.2 2.2 0.0 2.7 2.7 0.0 0.9 0.9 0.0 0.0 0.0 MANAGEMENT OF NATURAL RESOURCES IN PROTECTED AREAS 0.0 0.8 0.8 0.0 1.1 1.1 0.0 0.5 0.5 0.0 0.7 0.7 0.0 0.5 0.5 MANAGEMENT AND CONSERVATION OF COASTAL ECOSYSTEM, GULF OF FONSECA 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ENVIRONMENTAL PROGRAM NICARAGUA-FINLAND (PHASE II) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ENVIRONMENTAL MANAGEMENT AND SUSTAINABLE DEVELOPMENT OF RÍO SAN JUAN BA 0.0 0.5 0.5 0.0 0.5 0.5 0.0 0.3 0.3 0.0 0.1 0.1 0.0 0.0 0.0 PROGRAM BIOSPHERE RESERVE OF SOUTHEAST NICARAGUA (RBSEN) 0.0 0.0 0.0 0.0 0.6 0.6 0.0 1.0 1.0 0.0 0.4 0.4 0.0 0.2 0.2 BOSAWÁS BIOSPHERE RESERVE 0.0 0.9 0.9 0.0 1.2 1.2 0.0 0.6 0.6 0.0 0.4 0.4 0.0 0.1 0.1 Second Project for Rural Municipalities 0.0 0.6 0.6 0.0 1.5 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 1.4 Sustainable management of land in degraded areas, prone to drought in Nicaragua 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 Sustainable management of natural resources and promotion of business capacities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Pro-basin San Juan, related to international waters 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Cross-border biosphere reserve, heart of Mesoamerican Biological Corridor 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Prevention of forest fires in Nueva Segovia 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Foundation for Sustainable Development of Río San Juan 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SUSTAINABLE MANAGEMENT OF NATURAL RESOURCES, SOUTHWEST OF NICARAGUA (S 0.0 0.5 0.5 0.0 0.6 0.6 0.0 0.6 0.6 0.0 0.7 0.7 0.0 0.2 0.2

Instiuttional strengthening, governance, and business climate 22.2 30.4 52.6 8.5 43.2 51.7 6.3 55.2 61.6 7.2 73.3 80.5 10.1 56.9 67.0

Institutional strengthening 15.5 22.3 37.8 3.3 26.4 29.8 3.2 30.0 33.1 3.3 43.6 46.9 6.1 27.1 33.3 Health 2.7 11.5 14.2 0.0 10.3 10.3 0.0 5.5 5.5 0.0 0.4 0.4 0.0 1.9 1.9 INSTITUTIONAL STRENGTHENING (PMSS) 0.0 7.6 7.6 0.0 6.7 6.7 0.0 5.4 5.4 0.0 0.0 0.0 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING OF HEALTH SECTOR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 1.8 1.8 INSTITUTIONAL STRENGTHENING OF HEALTH SECTOR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 STRENGTHENING OF NATIONAL AND LOCAL HEALTH SYSTEM 0.0 3.8 3.8 0.0 3.6 3.6 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Modernization of Health Sector 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Strategic Activity for Poverty Reduction 2.7 0.0 2.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Education 9.6 2.1 11.7 1.1 2.2 3.2 1.1 8.4 9.5 1.4 26.2 27.6 3.8 8.0 11.9 Promotion of Educative Participation 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Innovation and Technological Development 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program Education for Life 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Managment and Coordination 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.0 0.5 Educative information processing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Educative technology 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.2 Technical, Curriculum Strengthen, Management, Innvovation, Technol. Development MECD 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PREVENTION OF SCHOOL VIOLENCE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 PREPARATION PROGRAM FOR EDUCATIVE REFORM, PPRE(1034) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.0 0.0 PREPARATION PROGRAM FOR EDUCATIVE REFORM, PPRE(1034) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 1.4 0.0 0.0 0.0 PREPARATION PROGRAM FOR EDUCATIVE REFORM, PPRE(1034) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 PROGRAM FOR REGIONAL RECONSTRUCTION FOR CENTRAL AMERICA (PRRAC/MECD) 0.0 0.5 0.5 0.0 0.4 0.4 0.0 2.7 2.7 0.0 4.9 4.9 0.0 0.0 0.0 PROGRAM FOR REGIONAL RECONSTRUCTION FOR CENTRAL AMERICA (PRRAC/MECD) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 1.0 0.0 0.0 0.0 PROGRAM FOR REGIONAL RECONSTRUCTION FOR CENTRAL AMERICA (PRRAC/MECD) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING AND MODERNIZATION (APRENDE II) 0.0 1.2 1.2 0.0 1.4 1.4 0.0 3.3 3.3 0.0 0.0 0.0 0.0 0.0 0.0 Institutional Strengthening in support of Decentralization of Primary Education (BASE II) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR SUPPORT TO SECTOR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.1 2.1 0.0 0.0 0.0 0.0 0.0 0.0 PROG. SUPPORT FOR EDUCATIVE SECTOR POLICIES AND DESCENTRALIZATION (PAPS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.7 8.7 0.0 2.6 2.6 PROG. SUPPORT FOR STRUCTURAL TRANSFORMATION OF EDUCATIVE SYSTEM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 0.0 1.6 1.6 PROJECT OF EDUCATION FOR NICARAGUA (PASEN) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.0 6.0 0.0 3.3 3.3 PROJECT OF EDUCATION FOR NICARAGUA (PASEN) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.0 0.0 PROFESSIONALIZATION OF MUNICIPAL PEDAGOGIC ADVISORS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

114 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 11) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend PROG. BASIC EDUCATION, BASE II (HEALTHIER MORE EDUCATED POPULATION) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 PROG. BASIC EDUCATION, BASE II (HEALTHIER MORE EDUCATED POPULATION) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 PROG. BASIC EDUCATION, BASE II (HEALTHIER MORE EDUCATED POPULATION) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 PROMOTION HUMAN RIGHTS IN PRIMARY EDUCATION SCHOOLS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 DESIGN BASIC MID-LEVEL EDUCATIVE REFORM W/ LABOR ORIENTATION, SKILLS BUIL 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.0 0.0 System for Improvement of Education in Nicaragua (SIMEN II Stage) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Transformation Educative Curriculum 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 Management and Coordination of Teacher Training and Formation 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.2 0.1 0.0 0.1 Services for Education and Teacher Training 1.1 0.0 1.1 0.8 0.0 0.8 0.9 0.0 0.9 1.2 0.0 1.2 1.8 0.0 1.8 Formation and Training (ASEN) 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Professional Development 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 1.1 0.0 1.1 Strategic Activity for Poverty Reduction 8.4 0.0 8.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Social protection 0.1 0.5 0.6 0.1 1.0 1.1 0.0 1.5 1.5 0.0 2.3 2.3 0.0 1.1 1.1 STRENGTHENING CHILD PARTICIPATION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 INSTITUTIONAL STRENGTHENING (FOLLOW-UP, MONIT, AND EVAL. OF CHILD RIGHTS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 NATIONAL PROGRAM FOR YOUTH INFORMATION 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.1 PROGRAM FOR YOUTH COMMUNITY EMPLOYMENT 0.0 0.4 0.4 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 RISK MANAGEMENT WITH FOCUS ON CHILDREN AND ADOLESCENTS 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.1 0.1 Management and Coordination of Targeted Integral Programs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Attention for programs and projects 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROG. INSTITUTIONAL STRENGTHENING FOR PROTECTION OF VULNERABLE GROUPS 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 PROG. INSTITUTIONAL STRENGTHENING FOR PROTECTION OF VULNERABLE GROUPS 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.3 0.3 0.0 0.1 0.1 0.0 0.0 0.0 NATIONAL SOLIDARITY PROGRAM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.3 0.3 STRENGTHENING OF SOCIAL PROTECTION 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.8 0.0 1.5 1.5 0.0 0.4 0.4

Local development 3.0 8.2 11.2 2.2 13.0 15.2 2.0 14.6 16.6 1.9 14.7 16.6 2.3 16.2 18.4 STRENGTHENING LOCAL CAPACITIES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.7 2.7 0.0 2.2 2.2 0.0 0.0 0.0 PROGRAM FOR LOCAL DEVELOPMENT ON THE ATLANTIC COAST (IDB 1051/SF-NI) 0.0 0.4 0.4 0.0 0.4 0.4 0.0 2.3 2.3 0.0 3.1 3.1 0.0 2.6 2.6 INSTITUTIONAL DEVELOPMENT FISE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.4 6.4 0.0 5.1 5.1 0.0 4.1 4.1 Descentralization and Participatory Micro-Planning 0.0 1.5 1.5 0.0 3.7 3.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Fund for Innovation for Social Development 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Strengthening FISE 0.0 2.0 2.0 0.0 4.5 4.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program to Promote Local Development and Governance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 STRATEGIC TERRITORIAL PLAN MATAGALPA 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 STRATEGIC TERRITORIAL PLAN ESTELÍ 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 STRATEGIC TERRITORIAL PLAN RAAN 0.0 0.3 0.3 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 STRATEGIC TERRITORIAL PLAN NUEVA SEGOVIA 0.0 0.1 0.1 0.0 0.4 0.4 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 STRATEGIC TERRITORIAL PLAN MADRIZ 0.0 0.2 0.2 0.0 0.5 0.5 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Transfer to Government of the RAAN 1.0 0.0 1.0 1.0 0.1 1.1 0.8 0.0 0.8 0.9 0.1 0.9 1.0 0.0 1.0 Transfer to the Government of the RAAS 0.7 0.0 0.7 0.6 0.1 0.7 0.6 0.0 0.6 0.6 0.0 0.6 0.7 0.0 0.7 Poorest local governments in the country 0.5 0.0 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 New Local Governments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Social Productive Investment Fund, 15 municip of Madriz, Nva. Segovia and Matagalpa 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 Association of Municipalities of Nicaragua (AMUNIC) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 Transfer to INIFOM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.6 MANAGEMENT AND COORDINATION FOR MUNICIPAL PROMOTION 0.2 0.0 0.2 0.1 0.0 0.1 0.3 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 Municipal Promotion 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Adminstrative Financial Services 0.4 0.0 0.4 0.2 0.0 0.2 0.1 0.0 0.1 0.3 0.0 0.3 0.0 0.0 0.0 FOLLOW-UP AND CONTROL OF APPLICATIONS OF TRANSFERS 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Information processing services and technical support 0.1 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Technical Assistance and Integral Advice through Territorial Delegations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 STRENGTHENING OF SELF-SUFFICIENCY FOR SOCIAL DEVELOPMENT (FADES) 0.0 1.0 1.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 STRENGTHENING AND DEVELOPMENT OF MUNICIPALITIES (PROFIN III PHASE) 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR SUPPORT TO MUNICIPAL STRENGTHENING (PFM) 0.0 0.6 0.6 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROG. INTEGRAL DEVELOPMENT OF HUMAN SETTLEMENTS (PRODIAH) 0.0 1.3 1.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for Local Development and Food Security (PRODELSA) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 Project for Promotion of Capacities for Local Development (PROCADEL) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 PROGRAM FOR MUNICIPAL STRENGTHENING AND DEVELOPMENT (IDB 1086/SF/NI) 0.0 0.2 0.2 0.0 1.2 1.2 0.0 1.5 1.5 0.0 2.2 2.2 0.0 4.6 4.6 MUNICIPAL STRENGTHENING AND LOCAL DEVELOPMENT IN RIO SAN JUAN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR LOCAL DEVELOPMENT IN LAS SEGOVIAS AND THE NORTHWEST 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SUPPORT MUNICIPAL STRENGTHENING, CHONTALES (JUIGALPA, COMALAPA AND CUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.2 0.2 PROMOTION OF EMPLOYMENT AND INCOME GENERATION IN LOCAL SPHERE (PRO-EM 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 PROG. SUPPORT FOR DESCENTRALIZATION AND LOCAL DEVELOPMENT (APDEL-INIFOM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.2 0.2 PROG. STRENGTHENING MUNICIPAL MANAGEMENT AND LOCAL DEVELOPMENT (PROG 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 1.6 0.0 2.1 2.1 Transmission of Local Government 2000 - 2001 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 STRATEGIC POVERTY REDUCTION ACTIVITY 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Governance 0.0 2.8 2.8 0.0 4.0 4.0 0.0 7.1 7.1 0.0 4.3 4.3 0.0 5.8 5.8 Strengthening of Justice 0.0 0.3 0.3 0.0 1.5 1.5 0.0 1.0 1.0 0.0 1.2 1.2 0.0 1.7 1.7 Strengthening Mid-Level Justice Administration in the North of Nicaragua 0.0 0.3 0.3 0.0 1.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Construction Judicial Complex, Bluefields 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 Expanded infrastructure for Public Defenders at the national level 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 PROG. JUDICIAL STRENGTHENING AND ACCESS TO JUSTICE. AGREEMENT No.1074/SF-N 0.0 0.0 0.0 0.0 0.4 0.4 0.0 1.0 1.0 0.0 0.8 0.8 0.0 1.0 1.0 Pilot project to make possible access to justice for low-income sectors, Masaya 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 PROJECT FOR SIMPLIFICATION OF OFFICE FOR RECEIVING CASES, ESTELÍ AND MASAYA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Strengthenin of Electoral Branch 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING OF SUPREME ELECTORAL COUNCIL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

115 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 12) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend STRENGTHENING OF CGR AT DEPARTMENTAL AND MUNICIPAL LEVEL 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING OF THE C.G.R. 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR MODERNIZATION OF THE C.G.R (No. 1100/SF-NI) 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.6 0.6 0.0 0.1 0.1 0.0 0.1 0.1 PROGRAM FOR MODERNIZATION OF THE C.G.R (No. 1100/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 PROGRAM FOR MODERNIZATION OF THE C.G.R (No. 1100/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR MODERNIZATION OF THE C.G.R (No. 1100/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 PROGRAM FOR MODERNIZATION OF THE C.G.R (No. 1100/SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.3 0.3 Security and citizen participation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Citizen participation and National Electoral Observation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program for Citizen Security 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Others 0.0 2.3 2.3 0.0 2.2 2.2 0.0 5.5 5.5 0.0 2.5 2.5 0.0 3.3 3.3 Efficiency and Transparency in State Contracts (No.1064/SF-NI) 0.0 2.2 2.2 0.0 1.8 1.8 0.0 5.2 5.2 0.0 1.6 1.6 0.0 2.5 2.5 Anticorruption Program 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Center for Education for Peace and Justice (CEDUPAZ) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Improve business climate 6.7 2.4 9.1 5.2 7.1 12.3 3.2 12.2 15.4 3.8 15.5 19.3 3.9 21.0 24.9 Ordering of property 1.5 0.7 2.1 1.1 2.2 3.4 1.1 5.7 6.7 1.7 6.4 8.1 1.7 6.3 8.0 Management and Coordination, Property Ordering 0.3 0.0 0.3 0.3 0.0 0.3 0.4 0.4 0.8 0.5 0.0 0.5 0.6 0.0 0.6 Program for Property Ordering 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Titling of Property} 0.9 0.0 0.9 0.6 0.0 0.6 0.2 0.0 0.2 0.1 0.0 0.1 0.4 0.0 0.4 Quantification and Compensation for Property 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 Coordination Property Delegations 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3 0.3 0.0 0.3 0.0 0.0 0.0 Services for Clearing up and Legalization 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 Project for Planning - Muncipal Cadastre System 0.0 0.4 0.4 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Program Alternative Methods for Conflict Resolution related to property 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mining Cadastre 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 National Program for Territorial Ordering (PRONOT) 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPAND COVERAGE, PROJECT FOR ORDERING OF PROPERTY (PRODEP) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 ORDERING OF PROPERTY LAS TUNAS, WASLALA, MANAGUA AND NUEVA GUINEA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ORDERING OF PROPERTY LAS TUNAS, WASLALA, MANAGUA AND NUEVA GUINEA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 ORDERING OF PROPERTY LAS TUNAS, WASLALA, MANAGUA AND NUEVA GUINEA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for production and export promotion 3.9 1.5 5.4 2.6 4.3 6.9 0.1 5.3 5.4 0.1 7.4 7.5 0.1 5.7 5.8 Tax reintegration on exports 3.7 0.0 3.7 2.5 0.0 2.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for Constitution of an Agricultural Information System 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.4 Support to Improve Public Management for Attention to Production Sector and Competitiveness 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 STRENGTHENING DE PRODUCTORES EXPORTADORES DE CAFE 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 REHABILITATION OF COFFEE SECTOR IN NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 STRENGTHENING MANAGEMENT OF FOREIGN TRADE IN NICARAGUA 1117/SE/NI-IDB PHA 0.0 0.0 0.0 0.0 0.9 0.9 0.0 1.6 1.6 0.0 1.8 1.8 0.0 1.4 1.4 STRENGTHENING OF MANAGEMENT OF FOREIGN TRADE OF NICARAGUA PHASE II 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Project Regional Customs Union to strengthen Central American Integration 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Promotion of Competition and Deregulation 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 PROJECT FOR COMPETITIVENESS, LEARNING, AND INNOVATION 3456-NI WB-PHASE I 0.0 0.7 0.7 0.0 1.3 1.3 0.0 1.6 1.6 0.0 1.7 1.7 0.0 1.8 1.8 SUPPORT FOR TECHNOLOGICAL INNOVATION IN NICARAGUA 1070/SF-NI-IDB-PHASE I 0.0 0.4 0.4 0.0 0.9 0.9 0.0 1.7 1.7 0.0 2.7 2.7 0.0 0.8 0.8 SYSTEM FOR SIMPLIFIED ATTENTION AND PROCEDURES FOR FORMING BUSINESSES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.3 0.3 Integrated System for Quality 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROMOTION OF PRIVATE INVESTMENT AND REGULATORY IMPROVEMENT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Administration of Concessions 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 LABORATORY FOR FOOD TECHNOLOGY (LABAL) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM FOR PRODUCTIVE TRANSFORMATION 0.0 0.0 0.0 0.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Support for development of small and medium business 0.2 0.1 0.3 0.1 0.4 0.5 0.1 1.1 1.2 0.1 1.5 1.6 0.3 1.5 1.9 NATIONAL PROGRAM FOR DEVELOPMENT OF NICARAGUAN MIPYMES 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 0.0 1.4 1.4 0.0 1.3 1.3 SUPPORT FOR COMMERCIALIZATION BY THE PYMES AT THE MICRO-FAIR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 DEVELOPMENT SMALL AND MEDIUM WOOD FURNITURE INDUSTRY IN NICARAGUA 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Technical Assistance for Small and Medium Industry 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Financing for small-scale mining 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Integral Support for Micro, Small and Medium Businesses of Bluefields 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Block and brick making 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Fisheries development 0.5 0.1 0.6 0.1 0.1 0.2 0.5 0.0 0.5 0.5 0.2 0.6 0.4 7.4 7.8 FISHERIES DEVELOPMENT ON THE PACIFIC COAST OF SAN JUAN DEL SUR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7.3 7.3 Project for Support to Nicaragua Fishery Sector 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Monitoring, Surveillance and Control of Fisheries and Seafood Farming 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.0 0.3 0.3 0.0 0.3 Promotion of Fisheries and Seafood Farming 0.2 0.0 0.2 0.0 0.0 0.0 0.3 0.0 0.3 0.0 0.0 0.0 0.1 0.0 0.1 Fishery and Seafood Farming Investigation 0.2 0.0 0.2 0.1 0.0 0.1 0.2 0.0 0.2 0.1 0.0 0.2 0.1 0.0 0.1 INTEGRAL DEVELOPMENT ARTISANAL FISHING IN THE RAAN (DIPARAAN) 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 INTEGRAL DEVELOPMENT ARTISANAL FISHING IN THE RAAS (DIPAL II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Shrimp farming activity in Zones of Extreme Poverty 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Promotion of Non Traditional Fishery Products 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 INSTALL FISH AND SEAFOOD STORAGE PLANT, SANDY BAY NORTE, RAAN 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 Others 0.7 0.0 0.7 1.2 0.1 1.3 1.4 0.2 1.6 1.5 0.0 1.6 1.4 0.1 1.5 Consumer defense 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 Standardization and Metrology 0.1 0.0 0.1 0.2 0.0 0.2 0.2 0.0 0.2 0.1 0.0 0.1 0.1 0.0 0.1 Registry of Intellectual Property 0.4 0.0 0.4 0.8 0.0 0.8 0.8 0.0 0.8 0.8 0.0 0.8 0.6 0.0 0.6 Strengthen Institutions, Capacities in polices for Competition and Consumer Defense 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 INTEGRATED SYST. STANDARDIZATION, ACCREDITATION, CERTIFICATION, METROLOGY 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Policies and norms 0.0 0.0 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Pronicaragua/UNDP 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.4 0.6 0.0 0.6 0.6 0.0 0.6

116 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 13) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Censuses and survey 0.0 1.3 1.3 0.0 1.8 1.8 0.0 0.6 0.6 0.0 8.3 8.3 0.0 1.5 1.5 LIVING STANDARDS MEASUREMENT SURVEYS 0.0 0.1 0.1 0.0 0.8 0.8 0.0 0.6 0.6 0.0 0.4 0.4 0.0 0.5 0.5 III NATIONAL AGRICULTURAL CENSUS 0.0 1.1 1.1 0.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 VIII CENSUS OF POPULATION AND IV OF HOUSING (AGREEMENT No.1535/SF-NI) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 7.5 7.5 0.0 1.0 1.0 LIVING STANDARDS MEASUREMENT - FISE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 PAI 0.0 1.1 1.1 0.0 3.3 3.3 0.0 4.2 4.2 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR THE IMPLEMENTATION OF ERCERP (PAI/CONPES) 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR THE IMPLEMENTATION OF ERCERP (PAI/INIFOM) 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR THE IMPLEMENTATION OF ERCERP (PAI/MAGFOR) 0.0 0.3 0.3 0.0 0.7 0.7 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR THE IMPLEMENTATION OF ERCERP (PAI/MECD) 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR THE IMPLEMENTATION OF ERCERP (PAI/MIFAMILIA) 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR THE IMPLEMENTATION OF ERCERP (PAI/SETEC) 0.0 0.6 0.6 0.0 0.4 0.4 0.0 0.8 0.8 0.0 0.0 0.0 0.0 0.0 0.0 Others 0.0 0.6 0.6 0.0 0.7 0.7 0.0 1.2 1.2 0.0 1.7 1.7 0.0 1.5 1.5 SOCIAL SUPPLEMENTARY FUND 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.7 0.7 0.0 0.7 0.7 0.0 0.5 0.5 NAT. SYST. FOR CONCERTATION, COORDINATION, INFORMATION AND PARTICIPATION (P 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 0.0 1.0 1.0 BASEBALL ACADEMY 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 TECHNICAL SECRETARIAT FCV CANADA-NICARAGUA 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 TECHNICAL SECRETARIAT FCV ITALY NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

AUTONOMOUS ENTITIES 0.0 37.8 37.8 0.0 25.6 25.6 0.0 38.7 38.7 0.0 27.2 27.2 0.0 60.0 60.0

Programs with direct effect on poverty reduction 0.0 24.3 24.3 0.0 18.3 18.3 0.0 24.3 24.3 0.0 18.8 18.8 0.0 33.1 33.1

Provision of basis services 0.0 24.3 24.3 0.0 18.3 18.3 0.0 24.3 24.3 0.0 18.8 18.8 0.0 33.1 33.1 Water and sanitation 0.0 24.3 24.3 0.0 18.3 18.3 0.0 24.3 24.3 0.0 18.8 18.8 0.0 33.1 33.1 RURAL DRINKING WATER REGIONS I, II AND CENTRAL (XI PHASE) 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 RURAL DRINKING WATER REGIONS I, V AND VI (YH015) 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.5 0.5 0.0 0.9 0.9 WATER AND SANITATION IN RURAL ZONES OF MATAGALPA 0.0 0.2 0.2 0.0 2.7 2.7 0.0 3.1 3.1 0.0 1.4 1.4 0.0 0.7 0.7 PROG. WATER AND SANITATION, COMMUNITY ORGS, NUEVA GUINEA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 WATER AND SANITATION, MATAGALPA AND JINOTEGA 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 UPGRADING DRINKING WATER SYSTEM, MANAGUA (PHASE II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PROG. ENVIRONMENTAL CLEAN-UP LAKE MANAGUA AND CITY-STAGE I 978-NI-IDB/1060-N 0.0 2.1 2.1 0.0 2.7 2.7 0.0 4.7 4.7 0.0 7.2 7.2 0.0 7.7 7.7 UPGRADE WATER AND SANITATION SYST. IN URBAN NUCLEI OF NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 UPGRADE EXPAND SANITARY DRAINAGE SYST. AND DRINKING WATER, BLUEFIELDS 0.0 0.4 0.4 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IMPROVE WATER AND SANITATION SERVICE IN NICARAGUA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.8 3.8 0.0 4.0 4.0 0.0 0.1 0.1 INTEGRATED PROJECT MANAGUA PERIPHERY (PRRAC/N/SE/02/048) 0.0 0.0 0.0 0.0 0.2 0.2 0.0 1.4 1.4 0.0 1.1 1.1 0.0 6.5 6.5 UPGRADE WATER AND SANITATION SYSTEM, MASAYA ATN/SF-9447-NI 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 DRINKING WATER IN NUEVA SEGOVIA AND MADRIZ NIC/012 0.0 0.0 0.0 0.0 0.3 0.3 0.0 2.4 2.4 0.0 2.4 2.4 0.0 1.8 1.8 OPTIMIZE SUPPLY SYSTEM, IMPROVE MACRO AND MICRO MEASUREMENT INDEXES, PLA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TREATMENT SYSTEM AND SANITARY DRAINAGE IN SEBACO, MATAGALPA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.3 0.3 WATER AND SANITATION, ZONES OF HIGH ECONOMIC POTENTIAL (BOACO, CHONTALES, 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.6 6.6 UPGRADING DRINKING WATER SYSTEM (PALO GRANDE, DULCE NOMBRE, SOMOTILLO), C 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 WATER AND SANITATION TOURISM CLUSTER, RIVAS-ALTAGRACIA-MOYOGALPA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 0.0 0.9 0.9 0.0 0.0 0.0 WATER AND SANITATION, TOURISM CLUSTER GRANADA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 SUPPLY WATER AND SANITATION, RURAL AREAS NICARAGUA, MATAGALPA AND JINOTE 0.0 2.2 2.2 0.0 2.9 2.9 0.0 2.5 2.5 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION SANITATION SYSTEM, CITY OF LEON 0.0 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TREATMENT PLANT FOR SANITATION, CITY OF LEON 0.0 1.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 PILOT PROG. FOR WATER AND SANITATION FOR RURAL SECTOR OF THE RAAN 0.0 0.1 0.1 0.0 0.3 0.3 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 DRINKING WATER, COMMUNITY EL CRUCERO-LA CHONA (SECTORS OF EL DESENREDO A 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ACCESSORIES FOR PUMPING DRINKING WATER FOR DIRIAMBA/CARAZO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Strengthening capacities for improving income 0.0 13.5 13.5 0.0 7.3 7.3 0.0 14.5 14.5 0.0 8.4 8.4 0.0 26.9 26.9

Roadways infrastructure 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.4 3.4 0.0 16.6 16.6 Ports and airports 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.4 3.4 0.0 16.6 16.6 REHABILITATION PORT OF CORINTO 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Upgrading navigation on the San Juan River 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Dredging Bluefields Bay and Escondido River 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.7 8.7 REPAIR OF ACCESS BRIDGE TO DOCK IN PUERTO CABEZAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2 CONSTRUCTION OF BARGE FOR PUERTO SANDINO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPAIR OF BARGES B-15 ANDLUIS DELGADO IN PUERTO SANDINO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.5 0.0 0.2 0.2 CONSTRUCTION OF MULTI-PURPOSE DOCK IN RAMA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 2.0 0.0 0.0 0.0 UPGRADING PORT OF EL RAMA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPAIR OF WOODEN DOCK IN PUERTO CABEZAS (STAGE I) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPAIR AND MAINTENANCE OF BARGE 60-80 AT EL BLUFF PORT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REPAIR OF BARGE 32-79 AT BLUEFIELDS PORT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 Maintenance multi-purpose dock in El Rama 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 PORT SECURITY, NATIONAL PORT AUTHORITY 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Electricity 0.0 13.2 13.2 0.0 7.3 7.3 0.0 14.5 14.5 0.0 5.1 5.1 0.0 10.3 10.3 Development and modernization of energy sector 0.0 13.2 13.2 0.0 7.3 7.3 0.0 14.5 14.5 0.0 5.1 5.1 0.0 10.3 10.3 CONSTRUCTION OF FIREFIGHTING SYSTEM, MANAGUA PLANT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION PROTECTION WORKS, EL DORADO DAM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONSTRUCTION PROTECTION WORKS, MANCOTAL DAM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 DEVELOPMENT HYDROELECTRIC CENTRAL, LARREYNAGA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 1.2 1.2 STRUCTURAL DESIGN PROTECTION WORKS, BYPASS CENTRAL AMERICA PLANT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 STRUCTURAL DESIGN PROTECTION WORKS, EL DORADO DAM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

117 Annex 6. Nicaragua: poverty Spending of the Non-Financial Public Sector by project (Page 14) 2002 2003 2004 2005 20061/ Group / Project Curr Cap Curr Cap Curr Cap Curr Cap Curr Cap Total Total Total Total Total Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Micro hydroelectric central Bonanza (Bonanza, Mukuwas and Españolita field) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 LA VERBENA MICRO HYDROELECTRIC CENTRAL 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Micro hydroelectric central, development poles (Plan Grama, Putunka, Las Bocas, Caratera) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 COOLING TOWER, BRISAS NO. 2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION SUBSTATION LOS BRASILES AND EL PERIODISTA (IDB 1017/04 SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION TICUANTEPE SUBSTATION, FIRST STAGE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION TICUANTEPE SUBSTATION, SECOND STAGE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION AND UPGRADES TO SYSTEM FOR TRANSMISSION II 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EXPANSION AND UPGRADES TO NATIONAL TRANSMISSION SYSTEM I (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 CONNECTION SUBSTATION TIPITAPA, SANTA BARBARA AND NICARAGUA PLANT 0.0 0.0 0.0 0.0 0.4 0.4 0.0 0.6 0.6 0.0 1.4 1.4 0.0 0.2 0.2 ELECTRICAL INTERCONNECTION BLUEFIELDS - EL BLUFF (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 0.9 LEON - LA PAVANA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SUB-TRANSMISSION LINE MATIGUAS-SIUNA AND ASSOCIATED WORKS (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 0.0 2.7 2.7 LINE MOMOTOMBO LEON (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IMPROVED METERING AND COMMERCIAL CONTROL (IDB 1017/02 SF-NI) 0.0 2.6 2.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, BOACO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, EL VIEJO 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, LA GATEADA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, LAS BANDERAS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, MASATEPE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, NICARAGUA PLANT 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZATION OF SUBSTATION, TICUANTEPE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.0 0.0 MODERNIZ. COMMUNICAT. SYSTEM, NATIONAL DISPATCH CENTER (IDB 1017/05 SF-NI) 0.0 6.5 6.5 0.0 1.6 1.6 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.4 0.4 MODERNIZ. SCADA SYSTEM, NATIONAL DISPATCH CENTER (IDB 1017/06 SF-NI) 0.0 2.0 2.0 0.0 3.4 3.4 0.0 0.9 0.9 0.0 0.1 0.1 0.0 0.2 0.2 MODERNIZATION ELECTRICAL SYSTEM, NORTH REGION 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.2 0.2 0.0 0.0 0.0 REHABILITATION OF TRANSMISSION LINES (IDB 1017/11 SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHAB. LINES AND SUBSTATIONS, NATIONAL INTERCONNECTED SYSTEME (IDB-1017-SF- 0.0 1.4 1.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION NANDAIME SUBSTATION 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.0 0.0 0.0 0.1 0.1 REHABILITATION WATER CIRCULATION SYSTEM, NICARAGUA PLANT (IDB-1017-SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION ELECTRICITY DISTRIBUTION SYSTEM, MANAGUA (PHASE II) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION ELECTRICITY DISTRIBUTION SYSTEM, MANAGUA (PHASE III) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 REHABILITATION ELECTRICITY DISTRIBUTION SYSTEM, MANAGUA (PHASE IV) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.6 0.0 0.2 0.2 0.0 3.8 3.8 SYST. FOR ELECTRICAL INTERCONNECTION FOR CENTRAL AMERICA (SIEPAC /IDB-1096-S 0.0 0.1 0.1 0.0 0.0 0.0 0.0 4.6 4.6 0.0 1.6 1.6 0.0 0.5 0.5 MOBILE SUBSTATION 25 MVA 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.1 0.0 1.0 1.0 0.0 0.0 0.0 SUBSTATION SANTO DOMINGO (IDB 1017/09 SF-NI) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 SUPPLY MATERIALS AND EQUIPMENT FOR TRANSMISSION SYSTEM 0.0 0.0 0.0 0.0 0.4 0.4 0.0 2.4 2.4 0.0 0.2 0.2 0.0 0.0 0.0 SUPPLY POWER TRANSFORMERS (IDB 1017/10 SF-NI) 0.0 0.1 0.1 0.0 1.1 1.1 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.3 0.3 1/: Preliminary. Source: SETEC.

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Annex 7. Nicaragua: Balance and Poverty Spending of the NFPS 2006 2006 Items 2002 20032004 2005 2002 2003 2004 2005 Exe c.1 Prog. Exec. 1/ Prog. / Millions of dollars Relation to GDP Total Income 812.0 893.2 1,045.9 1,183.7 1,308.5 1,328.9 20.2 21.5 22.9 23.6 24.5 25.1 Total Spending 1,153.9 1,141.5 1,270.9 1,401.8 1,514.5 1,523.7 28.8 27.5 27.8 27.9 28.3 28.8 Current 833.6 745.0 770.9 890.1 1,056.5 1,060.9 20.8 17.9 16.9 17.7 19.8 20.0 of w hich: interest 228.6 127.2 94.8 95.0 102.0 97.3 5.7 3.1 2.1 1.9 1.9 1.8 Capital 320.3 396.6 500.0 511.6 458.1 462.9 8.0 9.6 11.0 10.2 8.6 8.7 Total Poverty Spending 446.5 522.2 601.2 683.5 726.7 706.6 11.1 12.6 13.2 13.6 13.6 13.4 Internal resources 149.0 148.6 144.4 268.3 326.6 339.4 3.7 3.6 3.2 5.3 6.1 6.4 External resources 297.5 373.6 456.8 415.2 400.2 367.2 7.4 9.0 10.0 8.3 7.5 7.0 HIPC relief 70.6 96.7 124.6 121.5 97.0 95.0 1.8 2.3 2.7 2.4 1.8 1.8 Loans 136.2 175.0 225.9 163.9 156.7 138.3 3.4 4.2 4.9 3.3 2.9 2.6 Donations 90.7 102.0 106.3 129.8 146.4 133.9 2.3 2.5 2.3 2.6 2.7 2.6 Poverty Spending Central Governm 408.7 496.6 562.4 656.2 667.9 646.6 10.2 12.0 12.3 13.1 12.5 12.2 Current Spending 175.3 188.2 191.6 257.1 308.2 319.1 4.4 4.5 4.2 5.1 5.8 6.0 Internal resources 127.5 120.5 101.4 169.5 238.3 253.3 3.2 2.9 2.2 3.4 4.5 4.8 External resources 47.7 67.7 90.2 87.6 70.0 65.8 1.2 1.6 2.0 1.7 1.3 1.2 Loans 0.0 0.0 0.0 5.2 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0 Donations 0.0 0.0 6.3 4.3 10.1 6.0 0.0 0.0 0.1 0.1 0.2 0.1 HIPC r elief 47.7 67.7 83.9 78.1 59.9 59.8 1.2 1.6 1.8 1.6 1.1 1.1 Capital Spending 233.5 308.3 370.81 399.1 359.6 327.6 5.8 7.4 8.12 8.0 6.7 6.2 Internal resources 20.9 27.8 38.2 95.3 83.4 81.4 0.5 0.7 0.8 1.9 1.6 1.5 External resources 212.5 280.5 332.6 303.8 276.2 246.1 5.3 6.8 7.3 6.1 5.2 4.7 Loans 120.9 166.0 206.1 145.5 128.8 106.9 3.0 4.0 4.5 2.9 2.4 2.0 Donations 68.8 85.5 85.8 114.8 110.3 104.0 1.7 2.1 1.9 2.3 2.1 2.0 HIPC r elief 22.8 29.0 40.7 43.4 37.2 35.3 0.6 0.7 0.9 0.9 0.7 0.7 Poverty Spending Autonomous Enti 37.8 25.6 38.74 27.3 58.9 60.0 0.9 0.6 0.85 0.5 1.1 1.2 Capital Spending 37.8 25.6 38.7 27.3 58.9 60.0 0.9 0.6 0.8 0.5 1.1 1.2 Internal resources 0.6 0.3 4.8 3.4 4.9 4.7 0.0 0.0 0.1 0.1 0.1 0.1 External resources 37.2 25.4 34.0 23.8 53.9 55.3 0.9 0.6 0.7 0.5 1.0 1.1 Loans 15.3 9.0 19.8 13.1 27.9 31.4 0.4 0.2 0.4 0.3 0.5 0.6 Donations 21.9 16.4 14.2 10.7 26.0 23.9 0.5 0.4 0.3 0.2 0.5 0.5 Non Poverty Spending 707.4 619.4 669.7 718.3 787.8 817.1 17.6 14.9 14.7 14.3 14.7 15.4 Internal resources /2 650.0 552.7 566.3 562.9 733.3 741.2 16.2 13.3 12.4 11.2 13.7 14.0 External resources 57.5 66.7 103.4 155.4 54.5 76.0 1.4 1.6 2.3 3.1 1.0 1.4 Overall Balance before Donations -341.9 -248.3 -225.0 -218.1 -206.1 -194.8 -8.5 -6.0 -4.9 -4.3 -3.9 -3.7 Financing 341.9 248.3 225.0 218.1 206.0 194.8 8.5 6.0 4.9 4.3 3.9 3.7 External financing 3/ 367.6 372.0 439.0 388.4 446.5 413.6 9.2 9.0 9.6 7.7 8.3 7.8 Internal financing -41.5 -137.5 -278.3 -180.6 -251.5 -231.6 -1.0 -3.3 -6.1 -3.6 -4.7 -4.4 Income from privatization 15.8 13.7 64.4 10.2 11.1 12.7 0.4 0.3 1.4 0.2 0.2 0.2 1/: Preliminar.y 2/: Includes interest. 3/: Includes donations, disbursements, amortizations, and reduction of delays. Source: SETEC, MHCP, BCN.

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Annex 8. Nicaragua: Sources of HIPC Relief 2006 Items 2001 2002 2003 2004 2005 Approv.1/ Ref.2/ Exec.3/ Millions of dollars 4/ Total 63.3 70.8 96.6 124.4 121.5 85.5 97.0 95.0 For Current Spending 49.9 47.9 67.7 84.0 78.1 50.2 59.9 59.7 Multilaterals 34.7 47.9 46.2 38.8 12.1 11.8 21.5 21.4 World Bank 2.5 0.0 0.0 0.4 1.5 0.0 9.7 9.6 IDB 9.6 20.4 17.0 5.3 0.0 0.0 0.0 0.0 CABEI 22.6 22.9 20.6 23.8 9.6 9.5 9.5 9.4 IMF 0.0 0.9 4.1 6.4 0.0 0.0 0.0 0.0 OPEC 0.0 3.7 4.5 1.8 0.0 0.5 0.5 0.5 Others 0.0 0.0 0.0 1.1 0.9 1.8 1.8 1.8 Bilaterals 15.2 0.0 21.5 45.2 66.0 38.4 38.4 38.3 Paris Club 15.2 0.0 21.5 45.2 66.0 38.4 38.4 38.3 For Capital Spending 13.4 22.9 28.9 40.4 43.4 35.3 37.2 35.3 Multilaterals 13.4 22.9 28.9 40.4 43.2 35.3 37.2 35.3 World Bank 3.2 8.0 7.8 9.3 9.6 12.6 14.4 13.4 IDB 10.2 14.9 21.1 31.0 33.6 22.7 22.7 21.9 CABEI 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 Bilaterals 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0 Paris Club 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.0

1/: Budget approved. 2/: Budget reformed, includes additional relieft granted by the IMF and World Bank in the frame of the Multilateral Debt Reduction Initiative. 3/: Preliminary. 4/: Calculated based on amount that is greater.

Fuente: SETEC, BCN.

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Annex 9. Nicaragua: Allocation of HIPC relief by Program 2001 2002 20032004 2005 2006 1/ Cap. Cap. Cap. Cap Programs Curr. Curr. Curr. Cap. Cap. Curr Total Total TotalCurr. Curr. Total Spe Spe Spe Spe Total Spe Spe Total Spen Spen Spen Spen Spen Spen n n n n n n Millions of dollars 13.4 63.3 47.8 23.0 70.8 67.7 29.0 96.7 84.0 40.4 124.4 78.1 43.4 121.5 59.7 35.3 95.0 Support for productionTotal 0.0 0.0 0.0 0.0 0.249.9 0.2 0.1 4.8 4.9 4.6 11.9 16.5 0.5 17.6 18.1 0.0 14.6 14.6 Basic social services 47.2 8.8 56.0 43.6 8.5 52.2 64.3 10.7 75.0 77.6 13.2 90.7 76.8 10.7 87.4 58.3 11.9 70.2 Education 33.1 5.5 38.6 32.3 5.9 38.2 45.7 6.9 52.5 52.5 6.1 58.6 51.0 5.4 56.4 42.0 4.9 46.9 Health 14.1 0.3 14.4 11.3 1.0 12.3 18.2 1.9 20.1 24.6 2.7 27.3 24.9 2.0 26.9 13.4 5.6 19.1 Water and sanitation 0.0 2.0 2.0 0.0 1.2 1.2 0.0 1.5 1.5 0.0 1.8 1.8 0.0 1.5 1.5 2.8 0.8 3.7 Housing 0.02/ 1.01.4 1.0 0.7 2.00.0 0.5 4.2 0.5 2.4 6.60.4 0.4 1.8 0.9 2.7 4.5 0.5 2.5 1.7 3.0 2.9 4.60.9 1.7 0.9 2.6 2.6 3.40.0 0.6 1.4 0.6 3.9 5.3 ProtectionRural of vulnerableprimary attention groups 0.0 0.0 0.0 0.0 1.5 1.5 0.0 1.3 1.3 0.0 1.2 1.2 0.0 1.6 1.6 0.0 2.1 2.1 Development of Atlantic Coast 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 1.7 1.7 0.0 0.2 0.2 Protection of environment3/ 0.01.3 0.03.9 0.05.2 0.0 10.0 0.0 10.0 0.0 0.01.5 0.09.2 10.8 0.0 0.1 1.89.2 1.99.3 0.0 1.87.5 1.87.5 0.0 0.52.1 0.52.1 OthersMunicipal infrastructure 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.2 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 1/: Preliminary. 2/: Incluydes Social Safety Net. 3/: Includes FISE. Source: SETEC.

121 Annex 10. Nicaragua: Allocation of HIPC Relief by Program and Project 2006 Programs / Projects 2002 2003 2004 2005 Prog. Exec.1/ 1000s of dollars TOTAL 70,827.4 96,650.5 124,392.6 121,495.4 97,001.9 94,997.2

1. Support for Production 249.0 4,853.4 16,458.7 18,070.6 14,935.6 14,599.8 RURAL ELECTRIFICATION (CNE) 0.0 1,847.4 1,250.3 1,785.3 2,670.0 2,670.0 RURAL ENERGIZATION 0.0 0.0 30.0 0.0 0.0 0.0 RURAL ELECTRIFICATION IN SIX DEPARTMENTS 0.0 0.0 60.0 61.5 49.6 49.6 RURAL ELECTRIFICATION, DAIRY DEVELOPMENT IN BOACO AND CHONTALES 0.0 0.0 140.0 53.9 29.9 29.9 ELECTRIFICATION COMMUNITIES OF EL JICARO, SAN MIGUELITO 0.0 165.5 0.0 0.0 0.0 0.0 ELECTRIFICATION OF THE COMMUNITIES OF MELCHORRITAS, SAN CARLOS 0.0 19.9 0.0 0.0 0.0 0.0 PROJECT FOR RURAL ELECTRIFICATION FOR ISOLATED ZONES (PERZA) 0.0 0.0 731.6 462.7 330.2 330.2 SUPPORT FUND, NETWORKS LOCAL ORGANIZATIONS, RURAL ELECTRIF (FAROL-ER) 0.0 0.0 100.0 0.0 0.0 0.0 PROG. RURAL ELECTRIFICATION, PRODUCTIVE ZONES, CONCESSIONED AREA 0.0 0.0 49.5 89.8 148.5 148.5 PRODUCTIVE USES OF SMALL-SCALE HYDROELECTRICITY IN NICARAGUA 0.0 0.0 116.0 0.0 0.0 0.0 SMALL-SCALE HYDROELECTRICITY DEVPT FOR PROD. USES, ZONES OFF GRID 0.0 0.0 0.0 97.6 0.0 0.0 ELECTRIFICATION SANTA CLARA. MUNIC. SAN FERNANDO, NUEVA SEGOVIA 0.0 0.0 0.0 4.5 0.0 0.0 RURAL ELECTRIFICICATION EL MAMON-CATARINA, MASAYA 0.0 0.0 0.0 9.8 0.0 0.0 RURAL ELECTRIFICATION MATA DE GUAYABA-NANDASMO, MASAYA 0.0 0.0 0.0 9.8 0.0 0.0 RURAL ELECT. COMMUNITIES LOS CABROS, MARLON ALVARADO, EL CACAO, EL SOL 0.0 0.0 0.0 53.9 0.0 0.0 HIGH TENSION ELECTRIFICATION BARRIO MARIA AUXILIADORA 0.0 0.0 0.0 41.4 0.0 0.0 ELECTRIFICATION RURAL DISTRICT CAGINICUIL, CHONTALES 0.0 0.0 0.0 3.6 0.0 0.0 PROJECT FOR ELECTRIFICATION JOCOMICO 0.0 0.0 0.0 0.0 0.0 0.0 PROJECT FOR ELECTRIFICATION, COMMUNITY SARCA 0.0 0.0 0.0 0.0 0.0 0.0 SUBSIDY ELECTRICITY FOR ATLANTIC COAST 0.0 0.0 1,257.9 0.0 0.0 0.0 TRANSFERS TO INPYME 0.0 95.7 62.9 59.9 0.0 0.0 PROMOTION OF COMPETITION AND DEREGULATION 0.0 0.0 34.6 0.0 0.0 0.0 CONSUMER DEFENSE 0.0 0.0 12.6 0.0 0.0 0.0 STANDARDIZATION AND METROLOGY 0.0 0.0 33.2 0.0 0.0 0.0 REGISTRY OF INTELLECTUAL PROPERTY 0.0 0.0 58.2 0.0 0.0 0.0 STRENGTHENING OF COFFEE PRODUCERS/EXPORTERS 0.0 0.0 44.2 33.8 0.0 0.0 PROJECT FOR COMPETITIVENESS AND LEARNING AND INNOVATION 0.0 0.0 162.4 165.9 0.0 0.0 SUPPORT FOR TECHNOLOGICAL INNOVATION IN NICARAGUA 0.0 0.0 170.9 168.0 0.0 0.0 INITIATIVE FOR RURAL DEVELOPMENT IN NICARAGUA 0.0 0.0 29.1 29.9 0.0 0.0 PROGRAM FOR SUPPORT TO MAGFOR AND DEVELOPMENT OF FACTORS 0.0 0.0 102.5 18.8 0.0 0.0 PROJECT FOR AGRICULTURAL TECHNOLOGY (PHASE I/WB-3371-NI) 0.0 0.0 778.8 472.0 0.0 0.0 PROMOTION OF INVESTMENT IN SUSTAINABLE FORESTRY 0.0 0.0 18.9 0.0 0.0 0.0 MODEL FOR PRODUCTIVE ATTENTION TO SMALL-SCALE LOW INCOME PRODUCERS 0.0 0.0 100.0 95.2 78.3 78.3 FOOD SECURITY, PEACE CORPS-INTA 0.0 0.0 22.0 21.0 0.0 0.0 STRENGTHENING OF INTA OPERATIONS (WB-3371-NI) 0.0 0.0 856.3 967.1 0.0 0.0 SUPPORT TO INTA, NEW DEVELOPMENT STRATEGY 0.0 0.0 86.6 50.4 0.0 0.0 INTA 0.0 0.0 1,840.2 137.2 0.0 0.0 UPPER MANAGEMENT 0.0 0.0 15.8 43.2 0.0 0.0 SERVICES FOR FOREIGN INVESTMENT AND COOPERATION 0.0 0.0 14.6 0.0 0.0 0.0 FINANCIAL ADMINISTRATIVE SERVICES 0.0 0.0 69.1 30.3 0.0 0.0 SERVICES FOR AGRICULTURAL FORESTRY POLICIES 0.0 0.0 13.1 20.6 0.0 0.0 SERVICES FOR TERRITORIAL STRATEGIES 0.0 0.0 17.2 99.7 0.0 0.0 SERVICES FOR TERRITORIAL COORDINATION 0.0 0.0 44.8 0.0 0.0 0.0 SERVICES FOR LAND AND AGRARIAN REFORM 0.0 0.0 16.5 0.0 0.0 0.0 SERVICES FOR AGRICULTURAL HEALTH AND FORESTRY (IDB-1500-SF-NI) 0.0 0.0 4.6 181.1 115.0 114.2 GENERAL OFFICE FOR AGRICULTURAL HEALTH 0.0 0.0 11.5 0.0 0.0 0.0 MANAGEMENT AND COORDINATION OF PLANT HEALTH 0.0 0.0 15.9 0.0 0.0 0.0 MANAGEMENT AND COORDINATION OF ANIMAL HEALTH 0.0 0.0 21.8 0.0 0.0 0.0 MANAGEMENT, COORDINATION SERVICE FOR REGISTRY, CONTROL, AGRO INPUTS 0.0 0.0 16.4 0.0 0.0 0.0 REGISTRY CONTROL AND CERTIFICATION OF SEEDS 0.0 0.0 0.0 13.7 0.0 0.0 INSPECTION AND CONTROL OF IMPORTS 0.0 0.0 0.0 21.8 0.0 0.0 SURVEILANCE AND EPIDEMIOLOGICAL CAMPAIGNS 0.0 0.0 0.0 9.2 0.0 0.0 REGISTRY VETERINARY PRODUCTS AND FOOD FOR ANIMAL USE 0.0 0.0 0.0 1.0 0.0 0.0 VETERINARY DIAGNOSES IN LABORATORY 0.0 0.0 0.0 21.2 0.0 0.0 PLANT HEALTH DIAGNOSES AND SEED QUALITY 0.0 0.0 0.0 0.8 0.0 0.0 INSTALL FISH/SEAFOOD STORAGE PLANT, SANDY BAY NORTE, RAAN 0.0 0.0 0.0 118.9 0.0 0.0 CONSTRUCTION OF SILOS BASIC GRAIN STORAGE IN THE RAAN 0.0 0.0 0.0 179.6 0.0 0.0 RURAL ELECTRIFICATION PROGRAM, SUPPORT CLUSTERS (IDB-SUPPORT NDP) 0.0 0.0 0.0 147.6 0.0 0.0 REHABILITATION COFFEE SECTOR OF NICARAGUA 0.0 0.0 0.0 15.8 0.0 0.0 MULTIPLICATION AND DISSEMINATION OF IMPROVED REPRODUCERS OF NICARAGUA 0.0 0.0 0.0 124.6 0.0 0.0 TRANSFER TO THE IDR 0.0 0.0 132.1 0.0 0.0 0.0 SERVICES OF SURVEILANCE, DIAGNOSIS, AND PLANT HEALTH CERTIFICATION 0.0 0.0 3.7 0.0 0.0 0.0 SERVICES OF SURVEILANCE, DIAGNOSIS, AND ANIMAL HEALTH CERTIFICATION 0.0 0.0 1.9 0.0 0.0 0.0 SERV. REGISTRY AGRIC. PRODUCTS AND INPUTS, TOXIC DANGEROUS SUBSTANCES 0.0 0.0 1.9 0.0 0.0 0.0 PROGRAM FOR RURAL PRODUCTIVE REACTIVATION (PRPR/PHASE II) 0.0 0.0 864.1 658.0 774.1 774.1 INTEGRAL DEVELOPMENT ARTISANAL FISHERY IN THE RAAN (DIPARAAN) 0.0 0.0 31.4 0.0 0.0 0.0 ECON, SOC. DEVELOPMENT WASLALA, CUA BOCAY, TUMA-LA DALIA, RANCHO GRANDE 249.0 472.9 503.1 353.7 0.0 0.0 ECONOMIC SOCIAL DEVELOPMENT, NORTH AND CENTRAL NICARAGUA 0.0 0.0 165.4 216.4 0.0 0.0 PROGRAM FOR RICE REHABILITATION AND CAMPESINO DEVELOPMENT 0.0 0.0 62.9 59.9 0.0 0.0 PROMOTION OF BASIC GRAIN PRODUCTION KR-II 0.0 0.0 220.1 209.6 0.0 0.0 PROGRAM OF DEVELOPMENT POLES (POLDES) 0.0 0.0 125.8 119.8 0.0 0.0 INTEG. RURAL DEVPMT, MARGINAL COMMUNITIES LEON, CHINANDEGA (PROCHILEON) 0.0 0.0 169.8 161.7 0.0 0.0 LOCAL DEVELOPMENT, DEPT. OF RIVAS 0.0 0.0 175.7 188.6 0.0 0.0 PROGRAM ECON. DEVELOPMENT, DRY ZONE OF NICARAGUA (PRODESEC) 0.0 0.0 127.9 149.7 0.0 0.0 RURAL DEVELOPMENT PROGRAM BOACO-CHONTALES 0.0 0.0 62.9 167.7 0.0 0.0 DEVELOPMENT OF NORTH PACIFIC COAST OF NICARAGUA 0.0 79.4 527.8 481.4 0.0 0.0 REPLACE FERRY, WAWA RIVER 0.0 0.0 0.0 191.6 0.0 0.0 REHABILITATION OF SECONDARY ROADS 0.0 2,172.6 2,639.7 2,269.9 0.0 0.0 UPGRADING RURAL ROADS (PAVING STONES, NO. 3464) 0.0 0.0 0.0 1,625.9 0.0 0.0

122

Annex 10. Nicaragua: Allocation of HIPC Relief by Program and Project (Page 2) 2006 Programs / Projects 2002 2003 2004 2005 Prog. Ejec.1/ UPGRADING HIGHWAY MATAGALPA-JINOTEGA 0.0 0.0 0.0 1,293.1 0.0 0.0 REPAIR HIGHWAY ESTELI-MIRAFLOR-YALI 0.0 0.0 0.0 12.0 0.0 0.0 REHABILITATION HIGHWAY CERRO COLORADO-SAN JOSE DE LAS MULAS 0.0 0.0 0.0 119.8 0.0 0.0 UPGRADING OF ROAD, CHAGUITILLO-RIO SAN JUAN 6 KM. 0.0 0.0 0.0 35.9 0.0 0.0 ROADWAY PROJECT, COMPETITIVENESS ZONE II (1530/SF-NI) 0.0 0.0 0.0 851.6 21.9 0.0 ROADWAY PLAN, COMPETITIVENESS ZONE III (LEON, MATAGALPA AND JINOTEGA) 0.0 0.0 0.0 0.0 271.8 119.7 REHABILITATION INTERMUNICIPAL ROADS 0.0 0.0 0.0 0.0 4,035.6 4,034.0 HIGHWAY DRAINAGE 0.0 0.0 0.0 0.0 944.1 943.5 PAVING STONE WORKS (IDB 1530/SF-NI) 0.0 0.0 0.0 0.0 8.8 0.0 ASPHALT POTHOLING, STRETCH FROM OCOTAL-MOZONTE-NUEVA SEGOVIA 0.0 0.0 0.0 0.0 18.1 18.1 HIGHWAY RESURFACING 0.0 0.0 0.0 0.0 340.9 340.9 REHABILITATION RURAL ROADS (IDR) 0.0 0.0 0.0 299.6 0.0 0.0 III PROGRAM, HIGHWAY REHABILITATION AND MAINTENANCE (No. 3464) 0.0 0.0 0.0 1,617.5 427.5 425.9 IV PROGRAM, HIGHWAY REHABILITATION AND MAINTENANCE (No. 3464) 0.0 0.0 0.0 0.0 2.9 2.9 ROADWAY MAINTENANCE (IV AGREEMENT, WB CREDIT) 0.0 0.0 0.0 0.0 974.4 881.3 SPECIAL PAVING STONE PLAN (IV AGREEMENT WB CREDIT) 0.0 0.0 0.0 0.0 1,869.7 1,961.4 Reconstruction of paved highway El Viejo - El Con 0.0 0.0 0.0 0.0 34.3 20.0 Reconstruction and upgrading, Telica - Malpaisillo (IDB 153 0.0 0.0 0.0 0.0 17.4 27.1 TRANSPORT PROGRAM, ESTELI DEPARTMENT 0.0 0.0 18.5 19.0 0.0 0.0 MINOR TRANSPORT PROJECTS, ATLANTIC REGION 0.0 0.0 22.1 0.0 0.0 0.0 UPGRADING ROAD, SANTA CLARA-SUSUCAYAN-EL JICARO 0.0 0.0 45.8 0.0 142.0 0.0 IMPROVEMENTS HIGHWAY RIO BLANCO - PUERTO CABEZAS 0.0 0.0 1,278.2 0.0 1,630.6 1,630.3 PROMOTION OF EMPLOYMENT AND INCOME GENERATION, LOCAL LEVEL (PRO-EMPLEO 0.0 0.0 0.0 10.7 0.0 0.0 TERRITORIAL ORDERING, DEPT. OF MADRIZ 0.0 0.0 0.0 16.2 0.0 0.0 PROJECT ORDERING OF PROPERTY (WN-3665-NI) 0.0 0.0 0.0 754.5 0.0 0.0 PROPERTY ORDERING: LAS TUNAS, WASLALA, MANAGUA AND NVA. GUINEA 0.0 0.0 0.0 188.9 0.0 0.0 STRENGTHENING SNIP/MAGFOR 0.0 0.0 0.0 35.9 0.0 0.0 NATL SYST FOR CONCERTACION COORDINATION INFORMATION PARTICIPATION (PASE) 0.0 0.0 0.0 40.0 0.0 0.0 PRONICARAGUA/UNDP 0.0 0.0 377.4 0.0 0.0 0.0 CONPES 0.0 0.0 163.5 0.0 0.0 0.0 SELECTIVE, CARGO LAND TRANSPORT COOP. AND FIRMS 0.0 0.0 327.3 0.0 0.0 0.0

2. Greater Coverage of Basic Social Services 52,181.0 75,014.8 90,729.1 87,447.7 71,470.1 70,210.3

2.1 Education 38,204.4 52,543.9 58,589.4 56,442.0 48,097.4 46,922.0 Autonomy Primary 21,310.5 0.0 0.0 0.0 0.0 0.0 Autonomy Secondary 0.0 0.0 0.0 0.0 0.0 0.0 Subsidized centers 0.0 0.0 0.0 0.0 0.0 0.0 Municipalities 0.0 0.0 0.0 0.0 0.0 0.0 Decentralized Municipalities Primary 0.0 0.0 0.0 0.0 0.0 0.0 MULTIGRADE EDUCATION (EBACIT) 0.0 0.0 26.4 70.0 16.3 15.9 OVER-AGE EDUCATION (EBACIT) 0.0 0.0 8.1 403.1 3.9 2.9 INITIAL AND PRESCHOOL EDUCATION (EBACIT) 0.0 0.0 13.0 0.0 14.2 13.7 AGRICULTURAL TECHNICAL EDUCATION AND TRAINING (WB-3371-NI) 69.8 105.9 199.7 52.0 0.0 0.0 PRESCHOOL EDUCATION (PPRE) 0.0 0.0 58.4 0.0 0.0 0.0 PROG. LITERACY AND BASIC EDUCATION FOR ADULTS (PAEBANIC - PHASE II) 992.6 1,485.2 1,210.1 0.0 0.0 0.0 INTEGRAL PROGRAM FOR SCHOOL NUTRITION (PINE) 974.5 913.5 930.1 1,013.9 965.9 859.5 DESIGN OF REFORM TO SECONDARY EDUCATION (PPRE) 22.2 15.0 49.7 0.0 0.0 0.0 USE OF EDUCATIVE TECHNOLOGY, ALTERNATIVE MODALITIES FOR EDUCATION (PPRE) 135.1 152.4 308.1 0.0 0.0 0.0 DESIGN REFORM, BASIC AND MID EDUC. WITH LABOR ORIENTATION AND SKILLS BUILDI 0.0 0.0 41.3 34.1 48.3 20.3 EXPANDED ACCESS AND COVERAGE (APRENDE II) 33.0 106.2 80.4 0.0 0.0 0.0 DEVELOPMENT OF EDUCATIVE PLANS 1,292.0 0.0 0.0 0.0 0.0 0.0 STRATEGIC ACTIVITY, POVERTY REDUCTION 8,446.6 0.0 0.0 0.0 0.0 0.0 PROGRAM TO EXPAND COVERAGE OF PRIMARY EDUCATION 529.4 0.0 0.0 0.0 0.0 0.0 UPPER MANAGEMENT 0.0 0.0 48.6 6.9 0.0 0.0 INTERNAL AUDIT SERVICES 0.0 0.0 1.4 0.0 0.0 0.0 SOCIAL COMMUNICATION 0.0 0.0 28.0 0.0 0.0 0.0 INVESTMENTS AND COOPERATION 0.0 0.0 8.1 0.7 0.0 0.0 COORDINATION OF EDUCATIVE EVENTS 0.0 0.0 0.0 2.8 0.0 0.0 SCHOOL EMERGENCY SERVICES 0.0 0.0 0.6 0.2 0.0 0.0 SERVICES FOR TECHNICAL SUPPORT SYSTEMS 0.0 0.0 0.1 0.3 0.0 0.0 PROSPECTION AND EDUCATIVE POLICIES 0.0 0.0 0.0 9.1 0.0 0.0 COORDINATION OF DELEGATIONS AND DECENTRALIZATION 1.8 0.0 28.8 1.8 8.9 0.8 FINANCIAL ADMINISTRATIVE SERVICES 0.0 0.0 548.1 92.8 0.0 0.0 LEGAL AFFAIRS 0.0 0.0 0.0 5.9 0.0 0.0 MANAGEMENT AND COORDINATION 1.4 0.0 0.0 22.6 369.9 0.0 MANAGEMENT AND FOLLOW-UP VARIOUS DEPARTMENTS 0.0 0.0 0.0 131.9 0.0 0.0 MANAGEMENT AND COORDINATION PRIMARY EDUCATION 0.0 0.0 164.1 6.3 0.0 0.0 MANAGEMENT AND COORDINATION EDUCATIVE PROGRAMS 0.0 0.0 0.4 0.0 0.7 0.7 MANAGEMENT AND FOLLOW-UP NUEVA SEGOVIA 0.0 0.0 2.6 0.0 1.3 1.3 MANAGEMENT AND FOLLOW-UP MADRIZ 0.0 0.0 0.4 0.0 1.4 1.4 MANAGEMENT AND FOLLOW-UP ESTELI 0.0 0.0 2.6 0.0 5.6 3.9 MANAGEMENT AND FOLLOW-UP JINOTEGA 0.0 0.0 9.6 0.0 1.8 1.7 MANAGEMENT AND FOLLOW-UP BOACO 0.0 0.0 0.2 0.0 9.4 3.8 MANAGEMENT AND FOLLOW-UP CHONTALES 0.0 0.0 11.5 0.0 1.5 1.5 MANAGEMENT AND FOLLOW-UP RIO SAN JUAN 0.0 0.0 0.2 0.0 1.3 1.1 MANAGEMENT AND FOLLOW-UP CHINANDEGA 0.0 0.0 0.7 0.0 2.0 2.0 MANAGEMENT AND FOLLOW-UP LEON 0.0 0.0 1.0 0.0 1.7 3.2 MANAGEMENT AND FOLLOW-UP MANAGUA 0.0 0.0 72.8 0.0 0.4 0.4 MANAGEMENT AND FOLLOW-UP CIUDAD SANDINO 0.0 0.0 0.7 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP TIPITAPA 0.0 0.0 0.4 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP EL CRUCERO 0.0 0.0 0.0 0.0 0.2 0.2 MANAGEMENT AND FOLLOW-UP JINOTEPE 0.0 0.0 0.3 0.0 0.3 0.3

123 Annex 10. Nicaragua: Allocation of HIPC Relief by Program and Project (Page 3) 2006 Programs / Projects 2002 2003 2004 2005 Prog. Ejec.1/ MANAGEMENT AND FOLLOW-UP MASAYA 0.0 0.0 0.4 0.0 0.8 0.8 MANAGEMENT AND FOLLOW-UP GRANADA 0.0 0.0 0.3 0.0 0.5 0.5 MANAGEMENT AND FOLLOW-UP RIVAS 0.0 0.0 0.5 0.0 1.1 1.8 MANAGEMENT AND FOLLOW-UP RAAN 0.0 0.0 0.2 0.0 1.1 1.1 MANAGEMENT AND FOLLOW-UP MINING SECTOR 0.0 0.0 0.2 0.0 1.2 1.2 MANAGEMENT AND FOLLOW-UP RAAS 0.0 0.0 1.1 0.0 1.2 1.2 MANAGEMENT AND FOLLOW-UP SAN RAFAEL DEL SUR 0.0 0.0 0.1 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP VILLA EL CARMEN 0.0 0.0 0.0 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP SAN FRANCISCO DEL CARNICERO 0.0 0.0 0.1 0.0 0.3 0.8 MANAGEMENT AND FOLLOW-UP DIRIAMBA 0.0 0.0 0.1 0.0 1.5 1.2 MANAGEMENT AND FOLLOW-UP SANTA TERESA 0.0 0.0 0.4 0.0 0.0 0.0 MANAGEMENT AND FOLLOW-UP SAN MARCOS 0.0 0.0 0.1 0.0 1.2 1.2 MANAGEMENT AND FOLLOW-UP MATAGALPA 0.0 251.9 188.9 680.9 2.4 2.4 MANAGEMENT AND FOLLOW-UP ZELAYA CENTRAL 0.0 0.0 0.0 0.0 0.3 0.4 COORDINATION AND MANAGEMENT SPECIAL EDUCATION 0.0 0.0 16.2 0.0 0.0 0.0 COORDINATION AND MANAGEMENT RADIO AND TELEVISION EDUCATION 0.0 0.0 0.0 10.9 0.0 0.0 COORDINATION AND MANAGEMENT ADULT EDUCATION 0.0 0.0 12.4 6.0 0.0 0.0 COORDINATION AND MANAGEMENT TEACHING STAFF TRAINING 0.0 0.0 1.6 0.0 0.0 0.0 PROFESSIONAL DEVELOPMENT 0.0 0.0 44.1 0.0 4.5 0.0 ADULT EDUCATION SERVICES 0.0 16.2 171.2 12.7 80.7 148.3 SPECIAL EDUCATION SERVICES 0.0 46.1 131.9 95.2 1.0 7.9 PRESCHOOL EDUCATION SERVICES 0.0 65.4 158.2 95.4 11.8 14.1 SERVICIOS DE EDUCACION PRIMARIA 0.0 35,435.3 41,762.0 36,896.5 31,819.2 32,081.0 SECONDARY EDUCATION SERVICES 0.0 9,181.1 7,909.4 12,130.1 8,875.8 8,870.4 TEACHER TRAINING EDUCATION SERVICES 0.0 0.0 334.7 31.1 4.1 7.8 SUPPORT TO EDUCATIVE SECTOR (ASEN) 0.0 0.0 0.0 0.0 0.0 0.0 ATTENDANCE PRESCHOOL AGE CHILDREN, DEPRESSED ZONES /4515.01 (PINE) 0.0 0.0 0.0 0.0 0.0 0.0 SYSTEM FOR EDUCATIVE IMPROVEMENT IN NICARAGUA (SIMEN III ETAPA) 0.0 0.0 0.0 0.0 0.0 0.0 EQUIPMENT AND FURNISHINGS (MECD/FISE) 0.0 0.0 0.0 0.0 0.0 0.0 PREPARATION OF PROGRAM FOR EDUCATIVE REFORM (PPRE) 0.0 0.0 0.0 0.0 0.0 0.0 BASIC EDUCATION (BASE II) 0.0 0.0 0.0 0.0 0.0 0.0 BASIC EDUCATION PROJECT (APRENDE II) 0.0 0.0 0.0 0.0 0.0 0.0 PROJ. EXPAND PRIMARY EDUC. COVERAGE, EXTREME/HIGH POOR MUNIICIPALITIES 662.6 0.0 0.0 0.0 0.0 0.0 FORMATION AND TRAINING (ASEN) 76.2 0.0 0.0 0.0 0.0 0.0 ASSISTANCE FOR NON FORMAL AND FORMAL PRESCHOOLS (WFP) 0.0 0.0 0.0 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING AND MODERNIZATION (APRENDE II) 87.3 113.5 146.9 0.0 0.0 0.0 IMPROVEMENT OF EDUCATION QUALITY (APRENDE II) 889.2 2,043.0 1,226.0 0.0 0.0 0.0 STRENGTHEN BILINGUAL INTERCULTURAL EDUCATION, ATLANTIC COAST (FOREIBCA - P 203.3 196.5 144.9 0.0 0.0 0.0 COORDINATION UNIT BASIC EDUCATION (APRENDE II) 254.8 194.3 319.5 0.0 0.0 0.0 PROGRAM TO IDENTIFY INFRASTRUCT AND SCHOOL REPAIR NEEDS (PINRE) 0.0 794.4 650.9 598.5 217.8 205.4 STRENGTH. INFRASTR. EDUC. CENTERS, BASIC AND MID EDUCATION NATIONALLY 0.0 0.0 0.0 621.1 1,228.7 818.0 COURSE FOR LABOR SKILLS UPGRADING 0.0 0.0 0.0 28.1 31.9 31.8 EDUCATION FOR NICARAGUA PROJECT 0.0 0.0 0.0 243.8 485.2 435.3 REHAB. SCHOOL INFRASTRUCT. ESCOLAR IN RIVAS, BOACO AND CHONTALES (PHASE I 0.0 0.0 0.0 2.6 340.9 164.9 REHAB. SECONDARY INSTITUTES (MECD/FISE) 0.0 0.0 0.0 58.3 0.0 0.0 PREP. OF PROGRAM FOR EDUCATIVE REFORM (PPRE1034) 0.0 0.0 0.0 173.9 0.0 0.0 REHAB. PRIMARY AND PRESCHOOLS (MECD/FISE) 0.0 0.0 0.0 255.1 69.9 69.9 MAINTENANCE FUND (MECD/FISE) 500.6 0.0 0.0 771.9 829.6 829.6 CREATION OF 50 TECHNOLOGICAL KIOSKS THROUGHOUT THE COUNTRY 0.0 0.0 0.0 59.0 59.7 59.3 SUPPORT PROFESSIONAL FORMATION FOR HOTEL AND TOURISM IN NIC. - INATEC 0.0 0.0 0.0 84.0 0.0 0.0 CONSTRUCTION PRIMARY EDUCATION SCHOOLS (PHASE II) 493.6 368.4 0.0 0.0 0.0 0.0 REHAB. SCHOOL FACILITIES DEPARTMENT OF MANAGUA (PHASE III) 0.0 0.0 299.4 522.1 426.1 220.0 TRANSFER TO INTECNA 0.0 662.0 794.9 778.4 852.3 852.3 EXPANSION EMMA CHINANDEGA 0.0 0.0 162.6 0.0 0.0 0.0 REHAB. AND EXPANSION CRISTOBAL COLON POLYTECHNICAL INSTITUTE, BLUEFIELDS 84.7 166.1 170.6 61.0 0.0 0.0 REHAB. AND EXPANSION, AGRIC. TECHNICAL TEACHING CENTER, JALAPA, N.S. 0.0 0.0 82.9 191.4 0.0 0.0 EXPAND AND BUILD, BARTOLOME COLON POLYTECHNICAL INSTITUTE, PUERTO CABEZA 66.6 0.0 0.0 0.0 0.0 0.0 EXPANSION AGRICULTURAL INSTITUTE, SIUNA 159.2 0.0 0.0 0.0 0.0 0.0 EXPANSION NATIONAL TECHNOLOGICAL INSTITUTE (INTECNA), GRANADA 712.2 0.0 0.0 0.0 0.0 0.0 JUAN PABLO II SPECIALIZED TECHNICAL INSTITUTE 0.0 33.1 0.0 0.0 0.0 0.0 CONSTRUCTION AGRICULTURAL TECHNICAL TEACHING CENTER, NUEVA GUINEA 129.9 198.5 0.0 0.0 0.0 0.0 REHABILITATION AND EXPANSION, JINOTEPE POLYTECHNICAL INSTITUTE - INATEC 0.0 0.0 0.0 114.4 298.7 298.7 EXPANSIONS, FIXED TRAINING CENTER, BOACO - INATEC 75.2 0.0 0.0 65.5 225.2 225.2 PROGRAM FOR BASIC EDUCATION FOR YOUTH AND ADULTS (IDB 1528/SF/NI) 0.0 0.0 0.0 0.0 329.1 329.0 Training in care, maintenance, and repair of locales 0.0 0.0 0.0 0.0 412.9 300.7 PROGRAM FOR BASIC EDUCATION AND CITIZENSHIP FOR ALL - EBACIT 0.0 0.0 0.0 0.0 0.0 0.0 EDUCATION PROJECT FOR NICARAGUA, PASEN (WB 3978-NI) 0.0 0.0 0.0 0.0 0.0 0.0 PREVENTION OF SCHOOL VIOLENCE 0.0 0.0 0.0 0.0 2.8 4.4 EDUCATIVE CURRICULUM TRANSFORMATION 0.0 0.0 0.0 0.0 0.5 0.5 COMMUNITY PRESCHOOL EDUCATION 0.0 0.0 0.0 0.0 8.9 0.0 COMMUNITY SOCIAL SERVICES FOR LITERACY 0.0 0.0 0.0 0.0 12.3 0.0 EDUCATIVE TECHNOLOGY 0.0 0.0 0.0 0.0 1.2 0.0

2.2 Health 12,300.3 20,088.5 27,305.0 26,874.8 19,148.8 19,064.4 Medicines 4,093.5 0.0 0.0 0.0 0.0 0.0 Insecticides 0.0 0.0 0.0 0.0 0.0 0.0 Compuestos químicos 0.0 0.0 0.0 0.0 0.0 0.0 Water 0.0 0.0 0.0 0.0 0.0 0.0 Electricity 0.0 0.0 0.0 0.0 0.0 0.0 MAINTENANCE FUND (MINSA/FISE) 362.5 347.8 389.6 299.4 146.5 146.5 STRENGTHENING INTEGRAL LOCAL HEALTHCARE SYSTEM (SILAIS-GRANADA) 0.0 44.9 12.5 0.0 0.0 0.0

124 Annex 10. Nicaragua: Allocation of HIPC Relief by Program and Project (Page 4) 2006 Programs / Projects 2002 2003 2004 2005 Prog. Ejec.1/ ADOLESCENT REPROD. HEALTH SERVICES (DEMONSTR. EXPERI, HOSP. BERTHA CALDE 0.0 0.0 25.1 0.0 0.0 0.0 INTEGRAL SUPPORT FOR SILAIS MASAYA, CARAZO AND RIVAS (MACARI) 0.0 0.0 19.7 0.0 0.0 0.0 REINFORCEMENT OF INFANT HEALTH IN NICARAGUA 0.0 0.0 0.5 0.0 0.0 0.0 PROG. REPROD. HEALTH, EQUITY AND RIGHTS IN NICARAGUA (SARED) 0.0 0.0 15.8 0.0 0.0 0.0 STRENGTHEN HEALTH SERVICES AND REFERRAL SYSTEMS, GRANADA AND CHINANDEG 0.0 0.0 110.1 0.0 0.0 0.0 SPECFIC ACTIONS 2.5 7.2 23.2 117.3 0.0 0.0 ATENCION AMBULANTORIA, DIAGNOSTICO Y TRATAMIENTO 2,679.3 4,978.9 5,152.9 37.5 11.8 13.4 INVEST., CONTROL AND SURVEILLANCE, ENVIRON. HEALTH AND EPIDEMIOLOGY 0.0 263.2 2.1 0.0 0.0 0.0 CONTROL AND SURVEILLANCE OF ESTABLISHMENTS, COMMERCE, INDUST, SERVICES 0.0 0.0 0.0 0.0 0.0 0.0 TECHNICAL MANAGEMENT AND COORDINATION OF SILAIS 0.0 0.0 199.1 675.9 1.9 1.9 CONTROL AND SURVEILLANCE OF ENVIRONMENTAL RISKS 0.0 0.0 111.0 153.2 100.0 90.7 CONTROL AND SURVEILLANCE OF URBANIZATIONS AND HOUSING 0.0 0.0 29.8 0.0 0.0 0.0 CONTROL AND SURVEILLANCE OF WATER 0.0 0.0 0.3 0.0 0.0 0.0 EPIDEMIOLOGICAL CONTROL AND SURVEILLANCE 497.4 480.8 348.8 136.5 0.0 0.0 FINANCIAL ADMINSTRATIVE MANAGEMENT 182.5 733.8 3,937.2 13,102.3 208.2 1,231.3 FINANCIAL ADMINSTRATIVE MANAGEMENT 309.7 997.6 2,047.6 0.0 0.0 0.0 FINANCIAL ADMINSTRATIVE MANAGEMENT 774.4 3,723.1 5,543.2 8,269.5 922.4 991.8 STRATEGIC POVERTY REDUCTION ACTIVITY 2,742.9 0.0 0.0 0.0 0.0 0.0 PROMOTION, EDUCATION AND COMMUNICATION 0.0 155.4 12.6 299.7 0.0 0.0 INTRA AND EXTRA SECOTR LEADING ROLE, MANAGEMENT, AND COORDINATION 0.0 0.0 5.0 0.3 0.0 0.0 SUPPORT SERVICES 0.0 34.6 129.1 109.8 10.7 10.7 EXTERNAL CONSULTANCY SERVICES 0.0 7.2 62.2 19.5 8.1 8.1 EMERGENCY SERVICES 0.0 0.0 91.6 42.0 2.5 2.4 HOSPITALIZATION SERVICES 0.0 6,801.2 6,536.9 2,075.9 305.3 301.4 LABORATORY AND DIAGNOSIS SERVICES 0.0 0.0 357.5 27.9 9,094.1 8,058.2 PROMOTION OF RATIONAL USE OF MEDICAMENTS 0.0 0.0 87.4 0.0 0.0 0.0 PROGRAM FOR ENVIRONMENTAL SECURITY AND NUTRITIONAL SURVEILLANCE 0.0 0.0 24.9 0.0 0.0 0.0 MODERNIZATION OF HOSPITAL NETWORK (PMSS) 0.0 0.0 425.4 79.8 0.0 0.0 PRIMARY ATTENTION IN HEALTH AND NUTRITION (PMSS) 61.9 118.3 50.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR SIX SILAIS 7.3 27.9 27.8 0.0 0.0 0.0 FUND FOR SAFE MATERNITY AND INFANCY FONMAT- (PMSS) 0.0 643.9 1,091.9 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING (PMSS) 340.7 596.6 207.6 88.0 231.9 228.9 ADMINISTRATION HUMAN RESOURCES AND TEACHING STAFF 0.0 0.0 1.6 0.0 0.0 0.0 SOCIAL COMMUNICATION SERVICE 0.0 0.0 1.4 128.0 0.0 0.0 INTERNAL AUDIT SERVICE 0.0 0.0 0.1 0.0 0.0 0.0 PLANNING, MANAGING FOREIGN COOP, AND INFORMATION SYSTEM 0.0 0.0 1.5 0.0 0.0 0.0 REGULATION, STANDARDIZATION, AND UPGRADING OF SERVICES 0.0 0.0 2.0 0.0 0.0 0.0 MANAGEMENT AND COORDINATION OF HEALTH SERVICES 0.0 0.0 0.1 0.0 0.0 0.0 PROGRAM FOR EXPANSION OF COVERAGE 0.0 0.0 0.0 64.3 0.0 0.0 IMPROVEMENT OF PRIMARY HEALTHCARE UNITS 0.0 0.0 0.0 270.7 1,048.5 1,048.1 MINOR REPAIRS TO HEALTH CENTERS AND POSTS 0.0 0.0 0.0 0.0 0.0 0.0 HEALTH CENTERS (MINSA/FISE) 0.0 0.0 0.0 31.7 56.4 56.4 HEALTH POSTS (MINSA/FISE) 0.0 0.0 0.0 37.4 8.1 8.1 PROMOTION, EDUCATION AND COMMUNICATION IN HEALTH 0.0 0.0 0.0 12.3 6.8 4.5 PROGRAM FOR PROVISION OF MEDICAL EQUIPMENT 0.0 0.0 0.0 403.4 953.2 941.9 PROGRAM FOR PROVISION OF NON MEDICAL EQUIPMENT 0.0 0.0 0.0 119.5 490.2 483.7 SUPPORT FOR MODERNIZATION OF HOSPITALS, IDB 1027/SF-NI 0.0 0.0 0.0 239.5 0.0 0.0 PROGRAM FOR HEALTH SURVEILLANCE 0.0 0.0 0.0 33.6 175.5 174.9 REHABILITATION AND EQUIPPING OF HEALTH CENTERS, PACIFIC OF NICARAGUA 245.6 126.0 0.0 0.0 0.0 0.0 REHABILITATION HOSPITALS PTO. CABEZAS, BLUEFIELDS AND SAN CARLOS 0.0 0.0 220.1 0.0 0.0 0.0 CONSTRUCTION AND REHABILITATION OF NATIONAL HOSPITALS 0.0 0.0 0.0 0.0 2,166.0 2,164.0 CONTROL AND SURVEILLANCE OF PUBLIC HEALTH 0.0 0.0 0.0 0.0 11.2 4.0 ACTIONS FOR PREVENTION 0.0 0.0 0.0 0.0 5.0 6.1 ACTIONS FOR PUBLIC HEALTH 0.0 0.0 0.0 0.0 948.6 853.7 ASSURING SERVICES FOR SPECIAL GROUPS 0.0 0.0 0.0 0.0 1,665.0 1,665.7 EQUIPMENT MAINTENANCE PROGRAM 0.0 0.0 0.0 0.0 570.8 567.9

2.3 Water and sanitation 1,158.9 1,518.0 1,812.2 1,528.2 3,655.7 3,655.7 RURAL DRINKING WATER REGIONS I, II and CENTRAL (VII, VIII y IX PHASE) 0.0 0.0 0.0 0.0 0.0 0.0 RURAL DRINKING WATER REGIONS I, II and CENTRAL (X PHASE) 404.6 284.4 380.7 399.1 0.0 0.0 WATER AND SANITATION REGIONS I, V and VI 319.5 269.2 422.6 426.6 531.0 531.0 WATER AND SANITATION IN RURAL ZONES OF MATAGALPA 114.9 137.5 125.8 55.5 0.0 0.0 WATER AND SANITATION MATAGALPA and JINOTEGA 56.7 41.9 59.6 54.8 0.0 0.0 UPGRADING, EXPANSION WATER AND SANITATION SYSTEM, MATAGALPA JINOTEGA CO 0.0 0.0 0.0 0.0 RURAL DRINKING WATER RURAL, CONCENTRATED (ENACAL/FISE) 0.0 0.0 0.0 0.0 DRINKING WATER URBAN AND RURAL ZONE, DIRIAMBA 0.0 0.0 37.7 249.3 0.0 0.0 CONSTRUCTION OF LATRINES IN MUNICIPALITIES OF THE RAAN 56.1 317.7 248.9 176.8 0.0 0.0 CONSTRUCTION OF COMMUNITY DUG WELLS IN THE RAAN 0.0 327.6 177.2 2.1 0.0 0.0 RURAL WATER SUPPLY AND SANITATION, MATAGALPA AND JINOTEGA 207.1 139.7 192.1 26.1 0.0 0.0 PILOT PROGRAM FOR WATER AND SANITATION, RURAL SECTOR RAAN 0.0 0.0 36.5 137.9 0.0 0.0 PROGRAM FOR CLEAN-UP OF MANAGUA, LAKE AND CITY (STAGE I) 0.0 0.0 131.1 0.0 173.5 173.5 LATRINE PROGRAM (MINSA/FISE) 0.0 0.0 0.0 0.0 9.7 9.7 TRANSFER TO ENACAL 0.0 0.0 0.0 0.0 2,840.9 2,840.9 DRINKING WATER SYSTEMS 0.0 0.0 0.0 0.0 100.6 100.6

2.4 Housing 517.5 864.4 3,022.4 2,602.6 568.2 568.2 MULTI-PHASE PROGRAM FOR LOW-INCOME HOUSING 0.0 373.6 1,144.4 1,141.9 0.0 0.0 TRANSFERS TO INVUR 0.0 430.3 495.8 0.0 0.0 0.0 PROGRAM FOR SUPPORT TO COMMUNITIES 0.0 0.0 1,056.6 860.5 0.0 0.0 PROGRAM FOR TRAINING IN SELF-CONSTRUCTION OF HOMES 0.0 0.0 325.6 600.2 568.2 568.2 TRAINING IN SELF-CONSTRUCTION OF HOMES IN LEON 41.5 30.2 0.0 0.0 0.0 0.0 TRAINING IN SELF-CONSTRUCTION OF HOMES IN ESTELI 55.0 30.2 0.0 0.0 0.0 0.0 PROGRAM FOR SUPPORT TO CIVIL HOUSING (FLOOR AND ROOF) 421.1 0.0 0.0 0.0 0.0 0.0

125 Annex 10. Nicaragua: Allocation of HIPC Relief by Program and Project (Page 5) 2006 Programs / Projects 2002 2003 2004 2005 Prog. Ejec.1/ 3. Protection of Vulnerable Groups 6,632.3 4,485.5 4,634.1 3,409.0 5,695.6 5,308.2 3.1 Protección a Grupos Vulnerables 5,818.4 3,817.9 3,880.0 2,719.8 3,651.1 3,369.6 PROGRAM FOR INTEGRAL ATTENTION TO NICARAGUAN CHILDREN (PAININ II) 335.0 1,013.9 954.0 0.0 298.8 280.4 OFFICE FOR SOCIAL DEVELOPMENT AND ASSISTANCE 0.0 0.0 385.6 451.6 340.9 340.9 FINANCIAL ADMINSTRATIVE SERVICES 0.0 0.0 208.1 207.5 0.0 0.0 UPPER MANAGEMENT 0.0 0.0 0.7 33.2 0.0 0.0 INTERNAL AUDIT SERVICES 26.7 0.0 0.0 0.0 0.0 0.0 LEGAL ADVICE SERVICES 47.2 0.0 0.0 31.4 0.0 0.0 SOCIO-EDUCATIVE FORMATION (CEFORSE) 49.1 0.0 0.0 179.6 0.0 0.0 DEPARTMENTAL DELEGATIONS 1,026.8 0.0 37.0 13.4 0.0 0.0 MANAGEMENT AND COORDINATION FOR ATTENTION TO THE FAMILY 11.1 0.0 0.0 359.1 0.0 0.0 FAMILY STRENGTHENING 14.3 754.4 0.0 159.2 0.0 0.0 MANAGEMENT AND COORDINATION, TARGETED INTEGRAL PROGRAMS 0.0 0.0 0.0 272.9 0.0 0.0 ATTENTION TO PROGRAMS AND PROJECTS 84.9 0.0 0.0 544.9 0.0 0.0 MANAGE, COORD, EMERGENCY ATTENTION FOR VULNERABLE COMMUNITIES 40.9 0.0 0.0 312.2 0.0 0.0 ATTENTION TO VULNERABLE COMMUNITIES 17.3 0.0 0.0 0.0 0.0 0.0 ATTENTION FOR EMERGENCY ACTIONS 25.1 0.0 0.0 0.0 0.0 0.0 MANAGE AND COORD. PROTECTION FOR CHILDREN AND ADOLESCENTS 1,465.1 0.0 79.1 60.8 500.0 500.0 PSYCHO-SOCIAL ATTENTION 79.5 0.0 0.0 32.7 0.0 0.0 LEGAL SERVICES 0.0 0.0 0.0 19.5 0.0 0.0 INTEGRATED ASSISTANCE FOR VULNERABLE WOMEN AND CHILDREN 457.1 198.5 186.7 41.8 181.8 181.6 INTEGRAL ATTENTION FOR CHILDREN 6 YEARS OLD IN SITUATION OF VULNERABILITY 217.4 0.0 0.0 0.0 0.0 0.0 NATIONAL SOLIDARITY PROGRAM 0.0 0.0 90.1 0.0 255.7 255.6 MITIGATION AND PREVENTION OF GEO-RISKS IN NIC. AND CENTRAL AMERICA 0.0 0.0 27.2 0.0 0.0 0.0 SUPPORT RURAL FAMILIES, ZONES AFFECTED BY DROUGHTS AND FLOODS 363.6 424.2 376.8 0.0 369.3 369.2 FOOD ASSISTANCE FOR PERSONS AFFECTED BY DISASTERS (WFP/OPSR-10212) 0.0 81.8 284.5 0.0 397.7 395.9 TRANSFER TO OFFICE OF HUMAN RIGHTS OMBUDSPERSON 1,122.7 1,026.1 987.0 0.0 0.0 0.0 INSTITUT. STRENG. PROG. FOR PROTECTION OF VULNERABLE GROUPS, PHASE II 0.0 0.0 61.5 0.0 56.8 1.9 INTEGRAL DEVELOPMENT FOR PREVENTION OF YOUTH VIOLENCE 59.2 66.2 44.0 0.0 0.0 0.0 NATIONAL PROGRAM FOR YOUTH INFORMATION 0.0 0.0 64.1 0.0 0.0 0.0 PROGRAM FOR YOUTH COMMUNITY EMPLOYMENT 375.4 253.0 0.0 0.0 0.0 0.0 NATL. PROG. FOR NON FORMAL EDUCATION IN POPULATION AND SEXUALITY (PHASE I) 0.0 0.0 31.8 0.0 0.0 0.0 PROJECT FOR PREVENTION AND ATTENTION TO YOUTH VIOLENCE 0.0 0.0 61.8 0.0 0.0 0.0 CDI (Centers for Child Development) 0.0 0.0 0.0 0.0 0.0 0.0 POVERTY REDUCTION AND LOCAL DEVELOPMENT 0.0 0.0 0.0 0.0 66.0 66.0 PROJECT, ATTENTION TO POPULATION IN SITUATION OF VULNERABILITY 0.0 0.0 0.0 0.0 425.0 219.5 PROG. INTEGRAL ATTENTION FOR CHILDREN AND ADOLESCENTS AT HIGH RISK (PAINA 0.0 0.0 0.0 0.0 152.3 151.8 SUBSIDY FOR CONSUMPTION OF WATER FOR RETIREES 0.0 0.0 0.0 0.0 159.1 159.1 SUBSIDY FOR CONSUMPTION OF ENERGY FOR RETIREES 0.0 0.0 0.0 0.0 447.7 447.7 3.2 Social Safety Net 814.0 667.6 754.1 689.1 2,044.4 1,938.7 SOCIAL SAFETY NET MINSA 366.3 81.9 125.5 137.7 196.7 196.7 SOCIAL SAFETY NET MECD 195.4 119.0 142.6 149.0 93.1 93.1 SOCIAL SAFETY NET 252.3 466.7 486.0 402.4 54.6 54.6 PROGRAM FOR SOCIAL SAFETY NET, PHASE III 0.0 0.0 0.0 0.0 1,700.0 1,594.2

4. Primary Rural Attention 1,482.7 1,257.7 1,194.2 1,558.3 2,126.6 2,105.8 PROGRAM FOR EXPANSION OF COVERAGE 0.0 0.0 0.0 0.0 0.0 0.0 STRENGTHENING RURAL PRIMARY ATTENTION (FSS) 1,482.7 1,257.7 1,194.2 1,558.3 2,126.6 2,105.8

5. Development of the Atlantic Coast 210.5 121.8 92.5 1,725.0 159.1 159.1 PROGRAM FOR LOCAL DEVELOPMENT ON THE ATLANTIC COAST 210.5 121.8 92.5 258.5 159.1 159.1 UPGRADING HIGHWAY, RIO BLANCO-PUERTO CABEZAS 0.0 0.0 0.0 1,365.5 0.0 0.0 MINOR TRANSPORT PROJECTS, ATLANTIC COAST REGION 0.0 0.0 0.0 23.3 0.0 0.0 SUPPORT FUND, NETWORKS LOCAL ORGS, RURAL ELECTRIFICATION (FAROL-ER) 0.0 0.0 0.0 77.7 0.0 0.0

6. Protection of the Environment 0.0 0.0 1,894.6 1,765.0 496.9 496.2 PROGRAM FOR ENVIRONMENTAL SECTOR IN NICARAGUA PASMA-MIFIC 0.0 0.0 26.1 17.3 0.0 0.0 MASTER PLAN, FOREST MANAGEMENT, DISASTER PREVENTION, NOR PACIFIC ZONE 0.0 0.0 48.5 0.0 0.0 0.0 STRENGTHEN, BASIN MANAGEMENT AND NATURAL DISASTER PREVENTION 0.0 0.0 22.0 21.0 0.0 0.0 PROGRAM, SUPPORT FOR NICARAGUA ENVIRONMENT SECTOR 0.0 0.0 411.4 424.6 0.0 0.0 PROGRAM, INSTITUTIONAL SUPPORT, ENVIRONMENTAL MANAGEMENT (PROAMBIENTE) 0.0 0.0 111.0 105.8 0.0 0.0 SECOND PROJECT FOR RURAL MUNICIPALITIES (SPMR) 0.0 0.0 169.8 167.6 159.1 159.0 SOCIO-ENVIRONMENTAL AND FORESTRY DEVELOPMENT PROGRAM II (POSAF) 0.0 0.0 94.0 119.5 95.5 95.5 MESO-AMERICAN BIOLOGICAL CORRIDOR (CBM) 0.0 0.0 62.8 60.5 0.0 0.0 ATLANTIC BIOLOGICAL CORRIDOR (CBA) 0.0 0.0 113.2 126.4 0.0 0.0 MANAGEMENT OF NATURAL RESOURCES IN PROTECTED AREAS (MARENAP) 0.0 0.0 100.6 99.1 94.6 94.5 ENVIRONMENTAL MANAGEMENT AND SUSTAINABLE DEVELOPMENT, RIO SAN JUAN BA 0.0 0.0 53.0 50.8 0.0 0.0 BOSAWAS BIOSPHERE RESERVE 0.0 0.0 156.1 155.5 147.7 147.2 GEODESIC DENSIFICATION OFSOUTHERN BORDER 0.0 0.0 53.8 38.9 0.0 0.0 DELIMITATION MARITIME AND LAND BORDERS OF NICARAGUA 0.0 0.0 130.8 89.8 0.0 0.0 ESTABLISH HYDRO-GEOLOGICAL NETWORK, AQUIFERS OF THE COUNTRY 0.0 0.0 37.8 39.6 0.0 0.0 STRENGTHENING CAPACITY, HYRDO-GEOLOGICAL MONTORING (PRR) 0.0 0.0 44.6 0.0 0.0 0.0 TERRITORIAL ORDERING DEPT. OF MADRIZ 0.0 0.0 23.8 0.0 0.0 0.0 SUSTAINABLE MANAGEMENT NATURAL RESOURCES SOUTHWEST OF NICARAGUA 0.0 0.0 163.5 172.5 0.0 0.0 SUPPORT FOR OFFICE OF PROCURATOR FOR THE ENVIRONMENT 0.0 0.0 8.4 8.6 0.0 0.0 POLICES AND NORMS 0.0 0.0 6.3 0.0 0.0 0.0 ADMINISTRATION OF CONCESSIONS 0.0 0.0 3.9 0.0 0.0 0.0 INVESTIGATION 0.0 0.0 18.7 0.0 0.0 0.0 CONTROL AND MONITORING 0.0 0.0 29.9 0.0 0.0 0.0 PROMOTION 0.0 0.0 4.5 0.0 0.0 0.0 PROJECT FOR RISK MANAGEMENT, PLANNING PROCESS IN 10 MUNICIPALITIES 0.0 0.0 0.0 3.6 0.0 0.0 MASTER PLAN FOR FOREST MANAGEMENT - INVESTMENT PHASE 0.0 0.0 0.0 63.9 0.0 0.0

126 Annex 10. Nicaragua: Allocation of HIPC Relief by Program and Project (Page 6) 2006 Programs / Projects 2002 2003 2004 2005 Prog. Exec.1/ 7. Municipal infrastructure 10,020.9 10,763.8 9,274.3 7,519.8 2,117.9 2,117.9 7.1 Municipal Infrastructrure 6,047.0 6,727.7 4,052.4 4,108.3 2,117.9 2,117.9 UPGRADING RURAL ROADS (PAVING STONES) (No.3464) 157.2 1,384.0 1,253.9 174.9 0.0 0.0 CONSTRUCTION OF WALKWAYS IN CABEZAS 0.0 0.0 152.8 526.4 0.0 0.0 SECOND PROJECT FOR RURAL MUNICIPALITIES 0.0 723.6 624.4 119.8 0.0 0.0 SECOND PROJECT FOR RURAL MUNICIPALITIES (3480) 461.7 0.0 0.0 302.0 349.4 349.4 PROGRAM FOR MUNICIPAL STRENGTHENING AND DEVELOPMENT 194.5 393.6 298.2 239.5 773.2 773.2 CONSTRUCTION PEDESTRIAN BRIDGES IN WASPAN AND PTO. CABEZAS 0.0 0.0 179.1 319.2 0.0 0.0 COSTRUCTION OF DOCKS IN MUNICIPALITY OF PUERTO CABEZAS 0.0 0.0 205.2 229.5 0.0 0.0 CONSTRUCTION OF MARKET IN BILWI, PUERTO CABEZAS 0.0 0.0 200.0 209.0 0.0 0.0 CONSTRUCTION OF WALKWAYS IN WASPAN 0.0 0.0 42.8 200.1 0.0 0.0 REHABILITATION AND CONSTRUCTION PERIPHERAL STREETS IN BLUEFIELDS 0.0 760.3 503.1 19.4 0.0 0.0 REPLACEMENT OF PRIMARY SCHOOLS IN THE RAAS 0.0 0.0 86.8 149.7 0.0 0.0 CONSTRUCTION OF TWO-WAY VEHICLE BRIDGE IN BLUEFIELDS 0.0 0.0 175.8 453.5 0.0 0.0 CONSTRUCTION OF PEDESTRIAN WALKWAYS IN THE RAAS 0.0 0.0 100.6 78.4 0.0 0.0 INSTALLATION OF ELECTRICITY DISTRIBUTION NETWORK IN THE RAAS 0.0 0.0 113.2 298.8 0.0 0.0 PROGRAM OF MUNICIPAL WORKS 0.0 0.0 31.4 30.8 0.0 0.0 BRIDGES (INIFOM/FISE) 0.0 0.0 0.0 0.0 0.0 0.0 STREETS, ROADS, AND ACCESSES (INIFOM/FISE) 0.0 0.0 0.0 0.0 0.0 0.0 MUNICIPAL SERVICES 0.0 0.0 0.0 0.0 0.0 0.0 MUNICIPAL ROADWAY WORKS 0.0 0.0 0.0 0.0 0.0 0.0 SUPPORT FOR URBAN POPULATIONS OF ESTELI, MATAGALPA AND JINOTEGA 0.0 0.0 10.6 83.5 0.0 0.0 MANAGEMENT AND COORDINATION FOR MUNICIPAL PROMOTION 0.0 0.0 74.4 94.1 0.0 0.0 PROG. STRENGTHEN MUNICIPAL MANAGEMENT AND LOCAL DEVELOPMENT (PROGESTI 0.0 0.0 0.0 169.1 170.5 170.5 MUNICIPAL INFRASTRUCTURE 0.0 0.0 0.0 388.9 681.8 681.8 SUPPORT MUNICIPAL STRENGTHENING CHONTALES (JUIGALPA, COMALAPA, CUAPA) 0.0 0.0 0.0 21.7 15.9 15.9 REHABILITATION OF ROAD IN MINING TRIANGLE 0.0 662.0 0.0 0.0 0.0 0.0 PROJECT FOR PLANNING MUNICIPAL CADASTRE SYSTEM 0.0 91.9 0.0 0.0 0.0 0.0 MUNICIPAL STRENGTHEING AND LOCAL DEVELOPMENT IN RIO SAN JUAN 0.0 37.9 0.0 0.0 0.0 0.0 TRANSFERS TO MUNICIPALITIES 5,233.5 2,674.4 0.0 0.0 0.0 0.0 INSTITUTIONAL STRENGTHENING INIFOM, SPDMR (WB 3480-NI) 0.0 0.0 0.0 0.0 0.0 0.0 PROG. SUPPORT FOR DESCENTRALIZATION AND LOCAL DEVELOPMENT (APDEL-INIFOM 0.0 0.0 0.0 0.0 127.2 127.2 7.2 Emergency Social Investment Fund 3,973.9 4,036.1 5,222.0 3,411.4 0.0 0.0 MAINTENANCE FUND (MECD/FISE) 500.6 484.9 810.7 0.0 0.0 0.0 INSTITUTIONAL DEVELOPMENT FISE 0.0 0.0 3,455.1 56.3 0.0 0.0 STRENGTHENING FISE 1,957.5 2,068.0 0.0 0.0 0.0 0.0 DESCENTRALIZATION AND PARTICIPATORY MICROPLANNING / FISE 1,515.9 1,483.1 0.0 0.0 0.0 0.0 HEALTH CENTERS FISE 0.0 0.0 58.3 3,289.5 0.0 0.0 REHABILITATION SECONDARY INSTITUTES (MECD/FISE) 0.0 0.0 60.0 0.2 0.0 0.0 HEALTH POSTS (MINSA/FISE) 0.0 0.0 20.1 9.1 0.0 0.0 REHABILITATION PRIMARY SCHOOLS AND PRESCHOOLS (MECD-FISE) 0.0 0.0 174.9 56.2 0.0 0.0 OTHER COMMUNITY SERVICES 0.0 0.0 440.3 0.0 0.0 0.0 PROJECT FOR SOCIOECONOMIC INFRASTRUCTURE 0.0 0.0 44.2 0.0 0.0 0.0 PROGRAMS TWO FOR ONE 0.0 0.0 158.5 0.0 0.0 0.0

8. Others 50.9 153.5 115.1 0.0 0.0 0.0 8.1 Program for support for implementation of the ERCERP 50.9 153.5 115.1 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/MINSA) 7.5 20.6 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/MECD) 5.6 23.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/MAGFOR) 7.5 28.6 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/SETEC) 10.4 20.8 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/MIFAMILIA) 12.0 29.0 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/CONPES) 7.9 20.6 0.0 0.0 0.0 0.0 PROGRAM OF SUPPORT FOR IMPLEMENTATION OF ERCERP (PAI/INIFOM) 0.0 10.9 110.2 0.0 0.0 0.0 STRATEGIC ACTIVITY POVERTY REDUCTION 0.0 0.0 4.9 0.0 0.0 0.0 1/: Preliminary. Source: SETEC.

127 Annex 11. Nicaragua: New Projects for Public Investment Program Institution / Project 2008 2009 2010 2008 2009 2010 Millions of dollars Relation to GDP TOTAL 78.2 197.0 253.1 1.3 3.0 3.6 MINISTRY OF EDUCATION 27.5 47.9 35.1 0.5 0.7 0.5 Housing construction for teachers 0.0 0.0 0.2 0.0 0.0 0.0 Programs to develop in education 0.0 0.0 28.1 0.0 0.0 0.4 Rehabilitation and equipping of schools in North Region (Phase V) 7.1 7.1 0.0 0.1 0.1 0.0 Remodelling and investments in technical education centers and provision of equipment 1.4 2.0 2.3 0.0 0.0 0.0 Equipping and infrastructure: technical education 0.1 0.1 0.1 0.0 0.0 0.0 Rehabilitation and infrastructure and provision of school furnishings nationally 10.0 26.9 0.0 0.2 0.4 0.0 Repairs of schools nationally 8.7 8.6 4.4 0.1 0.1 0.1 Rehabilitation of institutes located in Municipality of Managua 0.2 3.2 0.0 0.0 0.0 0.0 MINISTRY OF HEALTH 16.4 39.6 0.1 0.3 0.6 0.0 Construction and equipping of hospital : Chinandega 0.0 10.9 0.0 0.0 0.2 0.0 Construction and equipping of hospital : Puerto Cabezas 0.0 5.4 0.0 0.0 0.1 0.0 Construction and equipping of hospital : General Western in Managua 9.8 4.9 0.0 0.2 0.1 0.0 Construction and equipping of hospital : León 0.0 8.5 0.0 0.0 0.1 0.0 Phase III Program for Modernization and Extension of Health Services 4.6 4.9 0.0 0.1 0.1 0.0 Strengthening of installed capacity of service network of the Atlantic Coast 2.1 4.9 0.1 0.0 0.1 0.0 MINISTRY OF TRANSPORT AND INFRASTRUCTURE 0.0 4.0 64.2 0.0 0.1 0.9 Reconstruction of Paso Real Bridge (Muy Muy - Matiguas) 0.0 1.6 2.0 0.0 0.0 0.0 Paving of highway, Rio Blanco - Siuna 0.0 0.0 16.6 0.0 0.0 0.2 Construction of Santa Fe Bridge (over the Rio San Juan) 0.0 1.8 3.4 0.0 0.0 0.0 Rehabilitation and improvement of Jinotepe - Nandaime Highway 0.0 0.0 3.4 0.0 0.0 0.0 Construction of roads to support tourism sector 0.0 0.6 0.0 0.0 0.0 0.0 Reconstruction of Las Banderas, Tecolostote, La Tonga, and Cuisala Bridges 0.0 0.0 2.7 0.0 0.0 0.0 Reconstruction bridges on Rio Blanco - Siuna Highway (Chico Smith, Labu, Mulukuku, El 0.0 0.0 7.7 0.0 0.0 0.1 Paving stone for road Juigalpa - La Libertad - Santo Domingo 0.0 0.0 6.7 0.0 0.0 0.1 Paving stone road San Juan del Rio Coco - Monte Cristo 0.0 0.0 0.6 0.0 0.0 0.0 Paving stone road Monte Cristo - Las Cruces 0.0 0.0 1.1 0.0 0.0 0.0 Paving stone Junction Las Vueltas - Las Cruces 0.0 0.0 2.1 0.0 0.0 0.0 Paving stone road Susucuan - Las Vueltas Junction 0.0 0.0 1.5 0.0 0.0 0.0 Paving stone road Las Cruces - Quilali 0.0 0.0 0.9 0.0 0.0 0.0 Paving stond road Palacios Junction - Tempisquiapa 0.0 0.0 3.0 0.0 0.0 0.0 Paving stone road Juigalpa - Puerto Diaz 0.0 0.0 5.0 0.0 0.0 0.1 Construction highway Nueva Guinea - Bluefields 0.0 0.0 7.1 0.0 0.0 0.1 Rehablitation and upgrading highway El Cua - San Jose de Bocay 0.0 0.0 0.3 0.0 0.0 0.0 Rehabilitation highway Wiwili - Wamblan 0.0 0.0 0.1 0.0 0.0 0.0 NATIONAL PORT AUTHORITY 3.1 3.0 2.8 0.1 0.0 0.0 Rehabilitation and upgrading of ports 3.1 3.0 2.8 0.1 0.0 0.0 NICARAGUAN COMPANY FOR WATER AND SEWAGE 2.6 35.4 61.0 0.0 0.5 0.9 Improve water supply, southwest region 0.0 0.0 8.0 0.0 0.0 0.1 Improve distribution system, Managua 2.6 4.5 4.4 0.0 0.1 0.1 Improve and optimize operations of Managua aqueduct 0.0 0.0 10.9 0.0 0.0 0.2 Program to develop water and sanitation in disperse rural areas 0.0 0.0 7.4 0.0 0.0 0.1 Water and sanitation for high poverty zones (Nueva Segovia, RAAN) 0.0 4.9 4.6 0.0 0.1 0.1 Program to improve water supply and sanitation in settlements of Managua and cities in interior 0.0 17.7 18.4 0.0 0.3 0.3 Program of investments in drinking water and sanitation - Phase II 0.0 8.4 7.3 0.0 0.1 0.1 MINISTRY OF ENERGY AND MINES 0.3 8.9 7.1 0.0 0.1 0.1 Program for rural electrification in support of clusters 0.0 1.3 1.2 0.0 0.0 0.0 Program in support of electricity development on Atlantic Coast 0.0 2.0 0.1 0.0 0.0 0.0 Productive uses of small-scale hydroelectricity in Nicaragua, Phase II 0.1 1.1 1.1 0.0 0.0 0.0 Program of Rural Energization, Second Phase in RAAN, RAAS, and Jinotega 0.0 1.2 1.3 0.0 0.0 0.0 Moodernization of Dendro-Energy Sector, Phase II 0.0 0.1 0.0 0.0 0.0 0.0 Project for Electrification of Nicaragua (PELNICA) 0.1 1.0 1.0 0.0 0.0 0.0 Program for Rural Electrification in Dairy Zone and Mining Triangle 0.0 2.2 2.5 0.0 0.0 0.0 Dendro-Energy in Development 0.2 0.0 0.0 0.0 0.0 0.0 NICARAGUAN ELECTRICITY COMPANY 26.7 45.9 47.4 0.4 0.7 0.7 Construction of protection work on the by-pass 0.9 0.0 0.0 0.0 0.0 0.0 Structural design protection works, El Dorado Dam 0.2 1.5 0.0 0.0 0.0 0.0 Construction of fire protection system, Managua Plant 0.2 0.0 0.0 0.0 0.0 0.0 Construction of La Sirena Hydroelectric Plant - Los Calpules 18.8 14.5 12.0 0.3 0.2 0.2 Construction of spillway, Mancotal Dam 4.0 0.0 0.0 0.1 0.0 0.0 Construction of spillway, El Dorado Dam 1.4 0.0 0.0 0.0 0.0 0.0 Dredging of Aduction Channel, Central America Plant 0.1 0.0 0.0 0.0 0.0 0.0 Maintenance of 69 KV transmission line, including substitution of wooden towers, Central 0.1 0.0 0.0 0.0 0.0 0.0 Modernization of fire protection systems for Central America Plant generators and transformers 0.1 0.0 0.0 0.0 0.0 0.0 Construction of stainless steel sluice gates, cofferdams, in uptake works at Central America 0.2 0.0 0.0 0.0 0.0 0.0 Construction weed retention/control devices for aduction channel, Asturias pumping station 0.1 0.0 0.0 0.0 0.0 0.0 Acquisition of fifth wheel for turbines, Santa Barbara Plant 0.6 0.0 0.0 0.0 0.0 0.0 Paving stone on access road to valve chamber and by-pass (1000 meters) 0.0 0.2 0.0 0.0 0.0 0.0 Rehabiltation of electricity generation plants 0.0 29.7 35.4 0.0 0.5 0.5 NATIONAL COMPANY FOR ELECTRICITY TRANSMISSION 1.5 12.2 35.5 0.0 0.2 0.5 Construction 138 KV line, San Rafael de Sur - Los Brasiles 0.0 0.0 0.6 0.0 0.0 0.0 Modernization substations 0.0 0.0 1.4 0.0 0.0 0.0 National reinforcement SIEPAC Project 1.5 3.0 3.9 0.0 0.0 0.1 138KV ring in northwest and conversion of substations 0.0 2.9 2.6 0.0 0.0 0.0 Supply power transformers, lot I, II, and III 0.0 4.6 3.9 0.0 0.1 0.1 Transmission line, San Ramon - Matiguas 0.0 1.4 1.4 0.0 0.0 0.0 Modernization and relocation of Matagalpa substation 0.0 0.0 0.3 0.0 0.0 0.0 Managua - Masaya ring in 230 KV 0.0 0.3 1.6 0.0 0.0 0.0 Substution of wooden posts with concrete posts, 69KV lines Stage I 0.0 0.0 0.3 0.0 0.0 0.0 Supply equipment for protection and modernization of control system 0.0 0.0 0.2 0.0 0.0 0.0 Construction new power transformer workshop 0.0 0.1 0.8 0.0 0.0 0.0 Supply equipment for substations 0.0 0.0 1.6 0.0 0.0 0.0 Expansion and rehabilitation of national transmission system 0.0 0.0 17.1 0.0 0.0 0.2 Source: SNIP. 128 Annex 12. Nicaragua: Increase of Public Investment Program 2007 2007 Institutions Initial budget Proyection Increase Inicial Millions of dollars TOTAL 505.2 552.3 47.1 Central Government 459.3 480.7 21.4 POVERTY 414.4 429.3 14.9 Ministry of Transport and Inf rastructure 92.1 92.0 0.0 Nicaraguan Water and Sew age Company 2.1 4.3 2.2 Institute of Urban and Rural Housing 3.7 2.0 -1.7 Ministry of Health 45.2 45.2 0.0 Ministry of Labor 2.4 2.4 0.0 Nicaraguan Institute f or Municipal Af f airs 10.0 10.8 0.8 Ministry of Education 39.4 39.6 0.2 Emergency Social Investment Fund 20.4 25.8 5.4 Ministry of Energy and Mines 13.1 13.1 0.0 Ministry of Family, Adolescents, and Children 16.1 16.1 0.0 Transf ers to Municipal Government 51.8 51.0 -0.8 Ministry of Agriculture and Forestry 31.5 32.9 1.4 Ministry of Environment and Natural Resources 9.5 9.5 0.0 Ministry of Industry and Commerce 5.5 5.3 -0.2 Nicaraguan Institute f or Tourism 3.3 2.9 -0.4 Institute for Rural Development 27.7 33.8 6.1 National Institute for Information for Development 1.0 1.0 0.0 Ministry of Governance 1.2 1.2 0.0 Of f ice of the Controllers-General of the Republic 2.4 2.3 -0.1 RAAN Government 1.1 1.1 -0.1 RAAS Government 1.2 1.2 0.0 Supreme Court of Justice 4.0 4.0 0.0 Supreme Electoral Council 5.0 5.0 0.0 Presidency of the Republic 2.4 2.4 0.0 Ministry of Defense 0.7 0.7 0.0 National Company for Electricity Transmission 2.2 2.2 0.0 Program for Eff iciency and Transparency in State Contracts 3.0 3.0 0.0 Project for Ordering Property 5.5 7.1 1.6 UCRESEP 1.0 1.0 0.0 Reduction of vulnerability to natural disasters 0.2 0.2 0.0 Nicaraguan Investment Financier 0.0 1.7 1.7 Superintendence of Banks and Other Financial Institutions 1.1 1.1 0.0 Program for Support to Strengthening Strategic Planning and Pre-investment 1.6 0.8 -0.8 Nicaraguan Institute of Fisheries and Seaf ood Farming 2.0 1.8 -0.3 Nicaragaun Institute f or Youth 0.2 0.2 0.0 Local Government of Niquinohomo DE NIQUINOHOMO 0.1 0.1 0.0 Local Government of Managua 3.8 3.8 0.0 Transf ers to 15 municipalities of Madriz, Nueva Segovia, Jinotega, and Matagalpa 0.9 0.9 0.0 Local Government of San Carlos 0.0 0.0 0.0 NON POVERTY 45.0 51.4 6.5 Ministry of Transport and Inf rastructure 4.4 4.5 0.0 Nicaragaun Institute f or Telecommunications 0.9 0.9 0.0 Nicaraguan Institute f or Territorial Studies 1.0 1.0 0.0 Ministry of Health 0.6 0.6 0.0 Nicaraguan Institute f or Municipal Af f airs 1.1 1.1 0.0 Ministry of Agriculture and Forestry 0.7 0.7 0.0 Ministry of Environment and Natural Resources 1.3 1.3 0.0 Ministry of Industry and Commerce 0.1 0.1 0.0 Nicaraguan Institute f or Tourism 0.3 0.6 0.3 Institute for Rural Development 0.0 0.0 0.0 Ministry of Governance 4.9 4.9 0.0 Ministry of Treasury and Public Credit 2.3 2.8 0.5 RAAN Government 0.1 0.1 0.0 RAAS Government 0.0 0.0 0.0 Supreme Court of Justice 2.5 2.5 0.0 Supreme Electoral Council 0.0 0.0 0.0 Presidency of the Republic 1.4 1.4 0.0 Of f ice of the Procurator General 0.3 0.3 0.0 Project for Ordering Property 1.9 1.9 0.0 UCRESEP 11.8 11.8 0.0 Reduction of vulnerability to natural disasters 3.7 3.2 -0.5 General Of f ice f or Revenues 0.3 0.3 0.0 General Of f ice f or Customs Adminstration 0.2 0.2 0.0 Centralization of taxation system 1.4 1.5 0.0 National Council f or Sports, Education, and Physical Recreation 1.1 1.1 0.0 Program for Support to Strengthening Strategic Planning and Pre-investment 1.2 0.6 -0.6 Nicaraguan Institute of Fisheries and Seaf ood Farming 0.0 6.7 6.7 Nicaraguan Institute f or Culture 0.7 0.7 0.0 Nicaraguan Institute f or Youth 0.0 0.0 0.0 Nicaraguan Institute f or Women 0.3 0.3 0.0 Ruben Dario National Theater 0.1 0.1 0.0 Autonomous Entiities 45.9 71.5 25.7 POVERTY 37.8 58.8 21.0 Nicaraguan Water and Sew age Company 30.5 37.0 6.5 Nicaraguan Electricity Company 0.0 16.8 16.8 National Port Authority 4.2 1.9 -2.3 National Company for Electricity Transmission 3.1 3.1 0.0 NON POVERTY 8.1 12.7 4.7 Nicaraguan Water and Sew age Company 7.6 12.1 4.5 Nicaraguan Electicity Transmission Company 0.5 0.6 0.1 Source: SNIP. 129 Acronyms

AIEPI Integral Attention for Illnesses Prevalent among Children ALBA Bolivarian Alternative for the Americas ANIR Adjusted Net International Reserves AOP Annual Operative Plan BCN Central Bank of Nicaragua CABEI Central American Bank for Economic Integration CAC Certificates for Award of Contingents CAFTA-DR Central American Free Trade Agreement with the United States and the Dominican Republic CAP Water and Sanitation Committee CENILAC Nicaraguan Commercial Exporter of Dairy Products CGR Office of the Controllers-General of the Republic CIO National Center for Information and Orientation CNE National Energy Commission CNP National Production Council CONAGRO National Agriculture Council CONPES National Council for Economic and Social Planning CPI Consumer Price Index CPP Penal Procedures Code CSE Supreme Electoral Council CSJ Supreme Court of Justice DAI Tariff Rights for Importation DGA General Office for Customs Services EAP Economically Active Population ENACAL Nicaraguan Water and Sewage Company ENATREL National Company for Electricity Transmission ERCERP Reinforced Strategy for Economic Growth and Poverty Reduction ESAF Enhanced Structural Adjustment Facility FISE Emergency Social Investment Fund FNI Nicaraguan Investment Financier FOB Free On Board FOGADE Deposit Guarantee Fund FOMAV Roadways Maintenance Fund GBP Good Business Practices GDP Gross Domestic Product GIR Gross International Reserves HACCP System for analysis of danger and critical points of control HIPC Highly Indebted Poor Countries Initiative ICE Tax on Foreign Trade IDB Interamerican Development Bank ILO International Labor Organization IMF International Monetary Fund INATEC National Technological Institute INIDE National Institute of Information for Development INIFOM Nicaraguan Institute for Municipal Affairs INJUVE Nicaraguan Institute for Youth INPESCA Nicaraguan Institute for Fisheries INPYME Nicaraguan Institute for Support to Small and Medium Business INSS Nicaraguan Institute for Social Security

130 IR Income Tax ISC Selective Consumption Tax IVA Value Added Tax LSMS Living Standards Measurement Survey MAGFOR Ministry of Agriculture and Forestry MAIS Model for Integral Healthcare MARENA Ministry of Environment and Natural Resources MDRI Multilateral Debt Reduction Initiative MECD Ministry of Education, Culture, and Sports MHCP Ministry of Treasury and Public Credit MIFAMILIA Ministry of the Family MIFIC Ministry of Industry and Commerce MIGOB Ministry of Governance MINREX Ministry of Foreign Affairs MINSA Ministry of Health MIPYME Micro, Small, and Medium Businesses MITRAB Ministry of Labor NDHS National Demographic Health Survey NDP National Development Plan NFPS Non-Financial Public Sector NIR Net International Reserves OEP Office of Public Ethics of the Presidency PAHO Pan-American Health Organization PAINAR Program for Integral Attention to Children and Adolescents at Risk PAININ Program for Integral Attention to Nicaraguan Children PEF Economic Financial Program PRGF Poverty Reduction Growth Facility PYME Small and Medium Businesses RAAN North Atlantic Autonomous Region RAAS South Atlantic Autonomous Region SETEC Technical Secretariat of the Presidency SGP System of Information for Management of National Policies SIBOIF Superintendence of Banks and Other Financial Institutions SIE Integrated System of Specific Applications SIEPAC System for Electric Connection for Central America SIGFA System of Information for Financial Management and Administration SILAIS Local Systems for Integral Healthcare SINASID National System for Follow-up to Millennium Development Indicators SNIP National System for Public Investment SNN Social Safety Net SPAR Rural Agricultural Public Sector SWAp Sector-Wide Approach SySODA System of Information about International Cooperation TELCOR Nicaraguan Institute for Telecommunications and Mails TRANSMUNI Municipal Financial Management for Municipal Transfers UNIDO United Nations Organization for Industrial Development WTO World Trade Organization …

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