Letter to Secretary of the Treasury Blumenthal on IMF Loan to Nicaragua, May 11, 1979

May 11, 1979

The Honorable W. Michael Blumenthal
Secretary of the Treasury
Washington, D. C.

Dear Mr. Secretary:

The proposed $40 million standby loan to the government of Nicaragua by the International Monetary Fund can, if approved, have the dual effect of strengthening a notoriously corrupt and callous regime, and of reenforcing popular perception of the Fund as a political instrument at variance with the aspirations of the people affected.

I realize that much of the pressure for approving the loan stems precisely from the desire to avoid excessive politicization of the Fund. It is argued that to deny the request of the government of Nicaragua because of human rights or other not strictly economic considerations is needlessly to inject politics into the deliberations of the Fund.

It seems to me, however, that a more compelling case can be made for the proposition that Nicaragua is today and for the foreseeable future will remain a supremely politicized element in the world community whose economic condition cannot improve until major social and political changes have first occurred. To attempt to shore up the present political economy of the Sornoza government by means of this loan is not only likely to fail in its stated purpose but, given the worldwide repugnance for the Somoza regime, will make a mockery of the International Monetary Fund's protestations of political neutrality. 

Sincerely yours,

Rev. J. Bryan Hehir
Associate Secretary
Department of Social Development and World Peace
United States Catholic Conference

letter-to-treasury-sec-on-imf-loan-to-nicaragua-1979-05-11.pdf