World Notes

Shoppers knew what was coming. In a burst of desperation buying, they emptied store shelves of anything that was for sale. Merchants knew too. Many of them closed their doors, preferring to be stuck with rotting merchandise rather than the worthless currency known derisively as "piggies." When the government of President Violeta Barrios de Chamorro officially devalued the cordoba last week to a stratospheric 25 million to the dollar, most Nicaraguans were simply glad the waiting was over.

The long-rumored shock therapy illustrated the year-old government's failure to stabilize a chaotic economy. Inflation, which last year topped 13,000%, is still out of control. To soften the devaluation's blow, most salaries were tripled and Chamorro promised not to fire any employees on the bloated state payroll.

Over the next two months, new gold cordobas worth 5 million old cordobas, or 20 cents each, will replace the piggies as legal paper tender. Chamorro publicly set fire to a small mountain of worn-out cordobas that had already been exchanged, then went shopping at a Managua supermarket armed with a supply of the new currency.

Chamorro's advisers know what is at stake. Says the President's son-in-law Antonio Lacayo: "If this plan fails, the government will have to go." The opposition Sandinista National Liberation Front's response: "They might as well start packing." The Sandinistas should know: their mishandling of the economy helped sweep Chamorro into power.