Nicaragua’s business is based on agriculture and industry, primarily small-scale manufacturing. During the 1980s, the country’s business was paralyzed as a result of the civil war. After 1990, a great deal has been restructured; significant parts have been transferred from state to private ownership. Despite this, a large part of the country’s income comes from international aid and in the form of money that guest workers in the US send home. In 2004, the International Monetary Fund and the World Bank decided to write off 75 percent of Nicaragua’s foreign debt within the framework of the HIPC initiative. This was 60 per cent of GDP at the time, and the country’s economic outlook was very poor at that time.
The country’s economy has subsequently improved, but the importance of international lending institutions for the country’s economic stability has continued. Nicaragua has also for a long time received financial and material support from the US, EU, Venezuela and Cuba, but in 2009 the US and EU froze much of its aid after alleged election fraud in the Nicaraguan municipal elections in 2008.
The country’s GDP has grown by an average of 4 percent per year during the 1990s.
Nicaragua has for a long time had a high unemployment rate. In addition to this, the country also has a large informal sector; half of Managua’s economically active population is found within this.
Agriculture and fishing
The uneven distribution of land in Nicaragua, as in several other Latin American countries, has been the root cause of wars and conflicts. After the 1979 revolution, former large estates were nationalized, but the state farms produced poor results and the government instead invested in cooperatives and small farmers. Since the end of the war in 1990, ownership in Nicaragua’s countryside is often unclear, and the same land may have three different owners at the same time: the cooperatives of the 1980s, large landlords who returned from exile and former soldiers who were allotted land at the disarmament. Violence and murder have often been used to resolve conflicts around land ownership.
Although Nicaragua has a good soil and a good climate, agriculture does not meet the needs of the home, and agricultural production has declined since the 1970s. Large areas are used for the export products coffee, sugar and bananas and as a pasture for steak cows. For house needs, corn, rice, sorghum, beans, vegetables and fruits are grown.
Nicaragua has large fish and shellfish populations off the long coasts. Fishing for shrimp and lobster is increasing but is still modest. Export revenues from fishing are increasing.
The use of forests was strong during the 1950s and 1960s, when American companies mainly exploited the Atlantic coast. Since then the withdrawal has decreased, but in the northern Atlantic coast there is the world’s largest stock of Caribbean pine, which is widely exported. Illegal logging and exporting has been a major problem for periods.
Minerals and energy
Nicaragua’s mineral resources mainly consist of gold and silver. The Talaver mine was opened in the early 1980s with Swedish assistance.
Wood is the most widely used energy source. Nicaragua imports electricity from neighboring Costa Rica. Several large hydropower plants have been planned, but hydropower’s contribution to energy production is modest; In 2010, water energy accounted for about 10 percent of electricity generation and geothermal heat for 5 percent.
In recent years, growth in Nicaragua’s industry has been mainly in the tax-exempt economic zones. There have emerged a large number of assembly plants, called maquilas, which produce for the American and European markets. The majority of these factories are foreign-owned, mainly by Asian companies, and they mainly produce shoes, clothing and jewelry.
This type of production is sensitive to the fluctuations of the world market, and during the global financial crisis of 2008–09, many factories had to close.
Nicaragua’s traditional industry is little developed. It produces tobacco, cement, sugar, beer, ice cream, chemical products and simpler consumer goods for the domestic market. The craft industry is concentrated around Masaya.
According to Countryaah, Nicaragua has for a long time had a deficit in its trade balance. The largest export revenue comes from coffee, meat, seafood, sugar and bananas.
Imports of consumer goods exceed total exports. Imports, which are mainly paid for with aid money, consist mostly of machinery, oil and food. Nicaragua primarily exports to the United States, El Salvador and Venezuela, while the country imports from the United States, Venezuela and Mexico.
Tourism and gastronomy
Tourism was severely hampered by the long civil war. However, from the late 1980s, governments have taken the initiative to develop the industry by promoting hotel construction and ecotourism. In the late 00s, tourism grew rapidly and developed into one of the country’s most important industries. In 2012, the country was visited by 1.2 million tourists.
Nicaragua attracts with a beautiful and exciting volcanic landscape in the west as well as extensive rainforests in the east. In the Caribbean off the Bluefields on the Mosquito Coast are the Maíz Islands with great opportunities for swimming and fishing. Also on the Pacific coast there are conditions for bathing tourism, for example at the beaches west of Managua and in San Juan del Sur further south. The tourist stream is also looking for the big cities, especially the old colonial cities of Leon and Granada.
Maize and vegetables play the main role in Nicaraguan cuisine, which removes strong influences from Colombia in the south, including in the form of meat and vegetable stews. Chayote, a cucumber plant with fairly tasteless but saturating meat, was grown by both Aztecs and Mayan Indians and is included as the main ingredient in, among other things, the sopa de chayote, often extruded with chicken meat. Bananas and flour bananas in puddings, breads and pots are often found. Nacatamales is heavily seasoned chopped meat that is wrapped in banana leaves and then steamed. Fish soups with potatoes and beans or coconut fish pots are common.