Travel Reference
In-Depth Information
Economy
Nicaragua's solid grounding as an agricultural nation is a blessing and a curse. While the
average campesino (farmer) will generally have something to eat, the sector as a whole is
vulnerable to a range of threats. Plunging world commodity prices, natural disasters and
environmental factors like soil degradation and water shortages are all problems that Ni-
caraguan farmers face regularly. Coffee remains Nicaragua's main agricultural export, fol-
lowed by beef, shrimp, dairy products and tobacco.
Industrial production, encouraged under the last of the Somozas, was all but destroyed
by the war and is only now beginning to slowly pick up again. By far the biggest industry
is textile and apparel production, but the cigar industry is growing rapidly. Gold mining is
another important industry. Tourism plays an increasingly important role in the economy,
and it is here more than anywhere else that many see a bright future for Nicaragua.
By the end of the war, Nicaragua was a heavily indebted nation. In 1979 the departing
dictator Somoza emptied the country's coffers. The incoming Sandinista government en-
gaged in some shaky economic policies (including massive public spending financed by
foreign lending), while the economy was being slowly strangled by the US trade embargo.
In 2000 Nicaragua was included on the Highly Indebted Poor Countries list, meaning that a
large chunk of its massive foreign debt was canceled after it complied with a series of con-
ditions set down by the World Bank and International Monetary Fund (IMF). These meas-
ures - which included privatizing public assets and opening the economy to foreign mar-
kets - are highly controversial and it remains to be seen whether Nicaragua's participation
in the program will produce long-term gains for its ordinary residents.
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