THE ECONOMY IN NICARAGUA

Nicaraguas economy is mainly focused on the agricultural industry. However, as the

poorest country in Central America and the second poorest in the hemisphere, has
widespread underemployment and poverty. The US-Central America Free Trade Agreement
(CAFTA) has been in effect since April 2006 and has expanded export opportunities for
many agricultural and manufactured goods. Textiles and apparel account for nearly 60%
of Nicaragua sexports, but increases in the minimum wage during the Ortega
administration will likely erode its comparative advantage in this industry.
Ortegas promotion of mixed business initiatives, owned by the Nicaraguan and Venezuelan
state oil firms, together with the weak rule of law, could undermine the investment climate
for domestic and international private firms in the near-term.
Nicaragua relies on international economic assistance to meet internaland external-debt
financing obligations. Foreign donors have curtailed this funding, however, in response to
November 2008 electoral fraud. Managua has an IMF extended Credit Facility program,
which could help keep the governments fiscal deficit on target during the 2011 election
year and encourage transparency in the use of Venezuelan off-budget loans and assistance.
In early 2004, Nicaragua secured some $4.5 billion in foreign debt reduction under the
Heavily Indebted Poor Countries (HIPC) initiative. However, Managua still struggles with
a high public debt burden. Nicaragua is gradually recovering from the global economic
crisis as increased exports drove positive growth in 2010. The economy is expected to grow
at a rate of about 3% in 2011.
Labor force: 2.343 million (2010 est.)
Labor force by occupation: Agriculture: 28%
Industry: 19%
Services: 53% (2010 est.)
Exports:$3.182 billion (2010 est.)
Export commodities: Coffee, beef, shrimp and lobster, tobacco, sugar, gold, peanuts,
textiles, and apparel.
Imports: $4.7 billion (2010 est.)
Import commodities: Consumer goods, machinery and equipment, raw materials, and
petroleum products.

Nicaragua
Nicaragua, country of Central America. It is the largest of the Central American republics.
Nicaragua can be characterized by its agricultural economy, its history of autocratic
government, and its imbalance of regional developmentalmost all settlement and
economic activity are concentrated in the western half of the country. The countrys name is
derived from Nicarao, chief of the indigenous tribe that lived around present-day Lake
Nicaragua during the late 15th and early 16th centuries. Nicaragua has a unique history in
that it was the only country in Latin America to be colonized by both the Spanish and the
British. Nicaraguas population is made up mostly of mestizos (people of mixed European
and Indian ancestry). The national capital is Managua, which also is the countrys largest
city and home to about one-fifth of the population.
The family of Anastasio Somoza Garca dominated Nicaragua from 1936 to 1979, when it
was toppled by an insurrection led by the Sandinista National Liberation Front (Frente
Sandinista de Liberacin Nacional; FSLN). The land, economic, and educational reforms
initiated by the socialist-oriented Sandinista regime were negated when it became
embroiled in guerrilla warfare with a U.S.-backed insurgency beginning in the early 1980s.
The Sandinista-dominated government was finally defeated by the U.S.-funded National
Opposition Union, a coalition of parties, in the 1990 presidential elections. The election
results, which were deemed free and fair by the international community, signaled an end to
the armed conflict in Nicaragua. The Sandinistas returned to power after winning a national
election in 2006 but promised to uphold many of the economic reforms of their
predecessors.
Present-day Nicaragua is still recovering from its legacy of dictatorship and civil war. There
are ongoing disputes over land ownership, and Nicaragua continues to be dependent on
foreign aid, mainly from the United States. Moreover, the countrys infrastructure was
severely damaged in 1998 by Hurricane Mitch, which killed more than 1,800 Nicaraguans
and destroyed several villages. On the other hand, the country has been home to many
prominent artists, writers, and intellectuals, and it began to attract a significant income from
tourism in the early 21st century.
Land
Nicaragua is bounded by Honduras to the north, the Caribbean Sea to the east, Costa
Rica to the south, and the Pacific Ocean to the west.
Relief
The western half of Nicaragua is made up generally of valleys separated by low but rugged
mountains and many volcanoes. This intricately dissected region includes theCordillera

Entre Ros, on the Honduras border; the Cordilleras Isabelia and Dariense, in the northcentral area; and the Huap, Amerrique, and Yolaina mountains, in the southeast. The
mountains are highest in the north, and Mogotn Peak (6,900 feet [2,103 metres]), in the
Cordillera Entre Ros, is the highest point in the country.
To the west and south of the central mountain core is a string of 40 volcanoessome of
which are activethat stretches northwest-southeast along the Pacific coast. These
volcanoes are surrounded by low plains extending from the Gulf of Fonseca in the north to
the Bay of Salinas in the south and are separated from the mountains by the great basin that
contains Lakes Nicaragua, Managua, and Masaya. They are divided into two groups:
the Cordillera de los Marrabios in the north and the Pueblos Mesas in the south. The
highest volcanoes include San Cristbal (5,840 feet [1,780 metres]), Concepcin (5,282
feet [1,610 metres]), and Momotombo (4,199 feet [1,280 metres]).
The eastern half of Nicaragua has low, level plains. Among the widest Caribbean lowlands
in Central America, these plains average 60 miles (100 km) in width. The coastline is
broken by river mouths and deltas and large coastal lagoons as well as by the coral reefs,
islands, cays, and banks that dot Nicaraguas continental shelfthe widest in Central
America.
Drainage
The central mountains form the countrys main watershed. The rivers that flow to the west
empty into the Pacific Ocean or Lakes Managua and Nicaragua. They are short and carry a
small volume of water; the most important are the Negro and Estero Real rivers, which
empty into the Gulf of Fonseca, and the Tamarindo River, which flows into the Pacific.
The eastern rivers are of greater length. The 485-mile- (780-km-) long Coco Riverflows for
295 miles (475 km) along the Nicaragua-Honduras border and empties into the Caribbean
on the extreme northern coast. The Ro Grande de Matagalpa flows for 267 miles (430 km)
from the Cordillera Dariense eastward across the lowlands to empty into the Caribbean
north of Pearl Lagoon on the central coast. In the extreme south the San Juan River flows
for 124 miles (200 km) from Lake Nicaragua into the Caribbean in the northern corner of
Costa Rica. Other rivers of the Caribbean watershed include the 158-mile- (254-km-)
long Prinzapolka River, the 55-mile- (89-km-) long Escondido River, the 60-mile- (97-km-)
long Indio River, and the 37-mile- (60-km-) long Maz River.
The west is a region of lakes. Lake Nicaragua, with an area of 3,149 square miles (8,157
square km), is the largest lake in Central America. The lake is bisected by a chain of
volcanos which has led to the formation of numerous islands, the largest of which
is Ometepe Island. Located in the southern isthmus, the lake and its distributary, the San
Juan River, have long been discussed as a possible canal route between the Caribbean and
the Pacific.

There are six freshwater lakes near the city of Managua. They include Lake Managua,
which covers an area of 400 square miles (1,035 square km), Lake Asososca, which acts as
the citys reservoir of drinking water, and Lake Jilo, which is slightly alkaline and is a
favourite bathing resort. Lake Masaya is prized for its swimming and fishing facilities; the
sulfurous waters of Lake Nejapa have medicinal properties ascribed to them; and Lake
Tiscapa is located in the capital city.
Other lakes in the Pacific watershed include Lake Apoyo, near Lake Masaya;
LakeApoyeque, picturesquely located between two peaks on Chiltepe Point, which juts into
Lake Managua; and the artificial Lake Apans on the Tuma River, which generates much of
the electricity consumed in the Pacific zone.
Soils
Soils on the Caribbean coast are varied and include fertile alluvial types along waterways
and relatively infertile types in the pine-savanna and rainforest regions. On the Pacific coast
the soil is volcanic, and about four-fifths of its area is fertile.
Climate
The climate is slightly cooler and much wetter in the east than in the west. The Pacific side
is characterized by a rainy season from May to November and a dry season from December
to April. The annual average temperature there is in the low 80s F (about 27 C), and
annual precipitation averages 75 inches (1,905 mm). On the Caribbean side of the country,
the rainy season lasts for about nine months of the year, and a dry season extends from
March through May. The annual average temperature is about the same as on the Pacific
side, but annual precipitation averages almost 150 inches (3,810 mm). In the northern
mountains temperatures are cooler and average about 64 F (18 C). Prevailing winds are
from the northeast and are cool on the high plateau and warm and humid in the lowlands.

Cultural life Nicaragua

Cultural milieu
Nicaragua has rich cultural traditions that reflect long-standing ethnic cleavages. The
western part of the country is culturally similar to other Spanish-speaking countries in Latin
America. Its folk traditions are expressed in beautiful arts and crafts (ceramics, textiles, and
wood and leather handicrafts), religious ceremonies, and country music (corridos). The
eastern part of Nicaragua has a more Afro-Caribbean flavour, similar to other former
British colonies in the region.
Daily life and social customs
As is the case in much of Central America, Nicaraguan social life is centred on family and
fictional kinship. Most children are given godparents, who help organize the childs
baptism and serve as mentors throughout their childhood. Many social events are tied to the
Roman Catholic Church, and each Nicaraguan town or city holds an annual celebration to
honour its patron saint. The celebration of the Immaculate Conception of the Virgin Mary
(referred to locally as La Pursima) is the countrys most important holiday, and the nineday festival includes the building of altars to be placed at the doorways of private homes
and the creation of floats to be paraded through town.
Another tradition in Nicaragua is the annual performance of El Gegense, a satirical
drama that depicts resistance to colonial rule. The spectacular is performed in January
during the feast of San Sebastin, patron saint of the city of Diriamba, and combines folk
music, dance, and theatre. El Gegense, whose name derives from the Nahuatl
term gege (old one), was a powerful elder in pre-Columbian Nicaragua who was
compliant when in the presence of the colonists but ridiculed them behind their backs. The
drama was recognized by UNESCO as a Masterpiece of Oral and Intangible Heritage of
Humanity in 2005.
Nicaraguan cuisine is a mixture of indigenous and Creole traditions. The countrys national
dish is gallo pinto (fried rice mixed with black beans and other spices). Corn (maize) is the
staple of Nicaraguan gastronomy and is used in many foods, such asnacatamal (cornmeal
dough stuffed with meat and cooked in plantain leaves), indio viejo (corn tortilla with meat,
onions, garlic, sweet pepper, and tomato and cooked in orange juice and broth), and sopa
de albndiga (meatball soup). The traditional drink known as chicha is made with corn,
water, and sugar. Appetizers calledrosquillas are made with baked corn dough, cheese, and
butter. The Caribbean region has its own traditional dishes, such as rondn (turtle meat,
fish, or pork combined with various condiments). A drink found only in this region of the
country is gaubal (cooked green banana, milk, coconut water, and sugar).

The arts
The drama and emotions of the insurrectionary and revolutionary periods from the late
1970s through 1990 produced a flourishing of artistic expression. Masterly work was
exemplified in the paintings of Alejandro Canales, Armando Morales, and Leoncio Senz
and the theatre of Alan Bolt.
Nicaraguan folk music is popular both locally and throughout Central America and Mexico.
Much of this music was made popular by ethnomusicologist and composerSalvador
Cardenal Argello, who traveled throughout the country in the 1930s. Many contemporary
Nicaraguan folk artists work from Cardenals songbook, remaking songs that were popular
in the first half of the 20th century. In the 1970s the New Song movement, a form of
traditional Latin American folk music mixed with political and social commentary, was led
by Nicaraguan brothers Luis Enrque Meja Godoyand Carlos Meja Godoy, who continued
to perform into the 1990s, often with other artists, including Katia Cardenal and guitarist
Eduardo Araica. The English-speaking town of Bluefields, on the Caribbean coast, has
emerged as a centre of reggae music. Nicaraguan palo de mayo (maypole dance) music is
also popular in the region and is easily recognized by its incessant rhythm. Inspired by the
British, the annual monthlong Maypole festival in Bluefields is an amalgam of European
and Afro-Caribbean traditions centred on a decorated maypole; festivities include parades,
costumes, music, and dancing.
Nicaragua prides itself on a long and distinguished literary tradition, which until the late
20th century was familiar within the country only to the educated elite. Among the
countrys best-known writers are Rubn Daro, known as the prince of Spanish-American
poetry, Ernesto Cardenal, who established a literary and visual arts centre that has
attracted international writers and artists, the novelist Sergio Ramrez, the essayist Omar
Cabezas, and the poet Gioconda Belli.