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Nicaragua ECONOMY
Salient Features: Formerly mixed economy
undergoing
extensive market-oriented structural adjustment, mainly by
means
of privatization of state enterprises and downsizing of
public
sector. Restoration of economic stability and
reconstruction
after eight years of civil war major concerns. Production
dominated by primary commodities, mainly agricultural, for
export
and domestic consumption. Small manufacturing sector
produces
mainly for domestic and regional markets. Debt and
political
instability hampering growth and preventing return of
foreign
capital in early 1990s, despite dramatic progress in
reducing
inflation since 1990. Economy heavily dependent on foreign
aid.
Gross Domestic Product (GDP): US$1.6 billion in
1992
(US$425 per capita), one of lowest per capita figures in
Western
Hemisphere. Economy contracted sharply during late 1980s
and
stagnant since 1990, with real GDP growth at minus 0.5
percent in
1992. Slow recovery expected by mid-1990s.
Agriculture: Mainstay of economy, accounted for
approximately 29 percent of GDP in 1989 and an estimated
24
percent in 1991; employs about 45 percent of work force.
Production heavily oriented toward export of coffee and
cotton,
which generate about half of total export revenues;
bananas,
sugar, tobacco, sesame, rice, and beef also important
export
commodities. Domestic-use agriculture robust, but
increasingly
supplemented by food and basic grains imports.
Approximately 80
percent of agricultural production controlled by private
sector,
following expropriation and redistribution of large
landholdings
during 1980s.
Industry: Small industrial sector producing for
domestic and regional markets; experienced substantial
growth
during 1960s in response to tariff protection and
intraregional
trade expansion under Central American Common Market
(CACM) but
declined precipitously thereafter. Industrial production
as share
of GDP peaked at 23 percent in 1978, dropping to 19
percent by
1989. Agro-industries dominate, accounting for 75 percent
of
total industrial output; other domestic use industries
include
cement production, chemicals processing, metals
processing, and
petroleum refining. Industrial recovery impeded during
early
1990s by outdated and inefficient equipment and production
methods, fuel shortages, lack of spare parts, labor
unrest, and
lack of supporting infrastructure.
Minerals: Mining not significant economic
activity;
accounted for 0.6 percent of GDP in 1990. Gold, silver,
and salt
mining main sources of mineral income; known deposits of
copper,
lead, iron, antimony, tungsten, molybdenum, and phosphate
remain
unexploited. Mining sector, nationalized in 1979, remained
under
state control in 1993. Offshore oil and natural gas
exploration
being undertaken off Pacific and Caribbean coastlines.
Energy: Domestic energy needs met by petroleum
imports,
as well as by hydroelectric and geothermal electricity
generation. Imported oil, mainly from Mexico and
Venezuela,
satisfies approximately half of domestic demand. One
geothermal
and one hydroelectric plant in operation; a second,
400-megawatt
hydroelectric plant under construction. Electrification
uneven,
heavily concentrated in urban areas. National power grid
damaged
by civil war.
Foreign Trade: Exports valued at US$343 million
in
1991, dominated by coffee, cotton, bananas, sugar, and
beef.
Imports valued at US$650 million in 1991, mainly petroleum
and
its byproducts, other raw materials, nondurable consumer
goods,
and machinery. Soviet Union, Eastern Europe, Cuba, the
European
Community (EC), and Latin America major trading partners
during
1980s. Trade conducted mainly with EC, United States,
Latin
America, and Japan since 1990. Balance of trade
characterized by
sizable deficits since 1980.
Balance of Payments: Total debt estimated at
US$10.6
billion in 1990. Experienced highest per capita debt in
Latin
America because of chronic fiscal and current account
deficits
during 1980s, resulting in approximately US$4 billion owed
to
former Soviet Union and approximately US$6 billion owed to
Western nations and multilateral lending institutions.
Granted
substantial debt relief beginning in 1990.
Foreign Aid: Most economic assistance provided
by
United States, EC, and multilateral agencies since 1990.
Major
recipient of aid from socialist countries during 1980s.
Currency and Exchange Rate: Gold córdoba
(córdoba oro);
US$1 = 6.55 gold córdobas in April 1994.
Fiscal Year: Calendar year.
Data as of December 1993
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