Worker harvesting coffee beans
THE NICARAGUAN ECONOMY has seen no "business as usual"
almost twenty years. From the mid-1940s to the mid-1970s,
rates of growth and investment changed Nicaragua's economy
traditional agrarian economy dependent on one crop to one
diversified agricultural sector and a nascent
component. Beginning in the late 1970s, however, more than
decade and a half of civil war, coupled with a decade of
economic policies, severely disrupted the Nicaraguan
Extraordinary expenses to support the constant fighting,
incalculable burden upon the population, the environment,
country's infrastructure, rendered most economic
largely meaningless. Add several catastrophic natural
an earthquake in 1972, a hurricane in 1988, and a drought
1989--and five years of a total trade embargo by the
States to the effects of the fighting, and it becomes
Nicaragua in 1993 vied with Haiti and Guyana as the
country in the Western Hemisphere.
Finding solutions to address the human costs of
wars is the economic challenge facing the government of
Violeta Barrios de Chamorro (1990- ). Those human costs
numerous: the diversion of resources from social programs
military, loss of agricultural and industrial production,
increased misery and widespread hunger, destruction of
resources and infrastructure, the uprooting of families
communities, and demands for land and resources from
returning external refugees. Getting Nicaragua's national
in order may be the easier part of the challenge.
inflation, adjusting exchange rates, and setting new
and industrial prices and priorities are only first steps.
government faces the even larger problems of endemic
widening environmental deterioration.
The relative optimism of 1990, stemming from the
1990 election of a politically moderate president and the
reconciliation of most armed conflict soon after, seemed
a rare opportunity for Nicaragua to build almost from
better future. However, continued political problems and
disasters in 1991 and 1992 dimmed that initial optimism.
of revitalizing Nicaragua's economy in an era of fragile
democracy and increasingly scarce resources remained the
country's greatest problem in 1993.
Data as of December 1993