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Nicaragua: Presidential Decree Directs Measures of Austerity

(Feb. 27, 2009) On January 15, 2009, the President of Nicaragua, Daniel Ortega Saavedra, issued a decree on “austerity and savings.” Presidential Decree 02-2009, published in LA GACETA, DIARIO OFICIAL [the official gazette] of January 21, 2009, contains the measures that governmental institutions should take to generate savings within public agencies, with the aim of withstanding the impact of the global financial crisis on the 2009 budget. The Decree is designed to counteract the foreseen impact on the national economy of the global financial crisis, which will affect the estimated tax revenue. The Decree states that the need for measures of austerity is urgent as savings are to go into effect for the current, 2009 fiscal year.

The majority of the provisions contained in the Decree deal with conservation and cost awareness. However, the Decree expressly forbids the financing of the following:

  • Any type of event taking place in hotels, restaurants, amusement centers, and the like, unless these are [covered by] donations; and
  • Social events such as: parties in general, receptions, social gatherings, and festivities of any sort.

The Decree provides for the purchase of “tea, coffee, sugar, drinking water, doughnuts, and cookies” for office hospitality, work meetings, Cabinet sessions, board meetings, and the like. Hospitality food and drink of any other type are forbidden. The Decree also suspends payments for office supplies and advertising/publicity goods such as articles of clothing, calendars, or pens. Several provisions concerning the acquisition of official vehicles, their assignment, and the circumstances for their use are specified, and the Decree calls for fuel appropriations at the established kilometer rate to be carried out per vehicle.

Public officials and senior officers who do not fulfill the provisions delineated in this Decree are in “grave fault,” which will result in the application of the corresponding administrative penalties, pursuant to the legal framework in effect. (Medidas de austeridad y ahorro: Decreto 02-2009, EL PUEBLO PRESIDENTE! [website of the office of the President], Jan. 23, 2009, available at http://www.elpueblopresident