The World - News from Jan. 31, 1989

Nicaraguan President Daniel Ortega outlined a severe austerity plan for 1989 that cuts the national budget by 44%, restricts credit and slashes capital investment in a bid to curb hyper-inflation and increase productivity. “I appeal to the sensibility and honesty of all Nicaraguans so this proposal doesn’t turn into a political confrontation,” Ortega said in a speech to the National Assembly. He said that if inflation, which reached 20,000% last year, is not brought under control and production is not increased, the government might implement a “war economy” policy. He did not elaborate.