Nicaragua - Domestic policy

As of 2002 Nicaragua owed some US $6.4 billion to international lenders. Upon his election Bolaños promised to introduce austerity measures in public spending and take steps to reduce the national debt. In 2002 Bolaños's finance minister, Eduardo Montealegre, worked out a new economic plan with the International Monetary Fund (IMF) and won public support for it even though it called for higher taxes and reduced government spending. The country's tax base was expanded, corporate income taxes were raised, and the government budget was cut, with the goal of reducing the national deficit from 21% of GDP in 2001 to 7.5% by 2005. A program of random audits to crack down on tax dodgers was expected to further enhance government revenues.