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Nicaragua The Economy
![[GIF]](http://lcweb2.loc.gov/frd/cs/nicaragua/ni03_00a.gif)
Worker harvesting coffee beans
THE NICARAGUAN ECONOMY has seen no "business as usual"
for
almost twenty years. From the mid-1940s to the mid-1970s,
high
rates of growth and investment changed Nicaragua's economy
from a
traditional agrarian economy dependent on one crop to one
with a
diversified agricultural sector and a nascent
manufacturing
component. Beginning in the late 1970s, however, more than
a
decade and a half of civil war, coupled with a decade of
populist
economic policies, severely disrupted the Nicaraguan
economy.
Extraordinary expenses to support the constant fighting,
with its
incalculable burden upon the population, the environment,
and the
country's infrastructure, rendered most economic
indicators
largely meaningless. Add several catastrophic natural
disasters--
an earthquake in 1972, a hurricane in 1988, and a drought
in
1989--and five years of a total trade embargo by the
United
States to the effects of the fighting, and it becomes
clear why
Nicaragua in 1993 vied with Haiti and Guyana as the
poorest
country in the Western Hemisphere.
Finding solutions to address the human costs of
Nicaragua's
wars is the economic challenge facing the government of
President
Violeta Barrios de Chamorro (1990- ). Those human costs
are
numerous: the diversion of resources from social programs
to the
military, loss of agricultural and industrial production,
increased misery and widespread hunger, destruction of
natural
resources and infrastructure, the uprooting of families
and
communities, and demands for land and resources from
internal and
returning external refugees. Getting Nicaragua's national
economy
in order may be the easier part of the challenge.
Controlling
inflation, adjusting exchange rates, and setting new
agricultural
and industrial prices and priorities are only first steps.
The
government faces the even larger problems of endemic
poverty and
widening environmental deterioration.
The relative optimism of 1990, stemming from the
February
1990 election of a politically moderate president and the
reconciliation of most armed conflict soon after, seemed
to offer
a rare opportunity for Nicaragua to build almost from
scratch a
better future. However, continued political problems and
natural
disasters in 1991 and 1992 dimmed that initial optimism.
The goal
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
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