PROFILE
OFFICIAL NAME:
Republic of Nicaragua
Geography
Area: 129,494 sq. km. (59,998 sq. mi.); slightly
larger than New York State.
Cities: Capital--Managua (pop. 1
million). Other cities--Leon, Granada,
Jinotega, Matagalpa, Chinandega, Masaya.
Terrain: Extensive Atlantic coastal plains
rising to central interior mountains; narrow
Pacific coastal plain interrupted by volcanoes.
Climate: Tropical in lowlands; cooler in
highlands.
People
Nationality: Noun and adjective--Nicaraguan(s).
Population (2005 est.): 5.48 million.
Annual growth rate (2005 est.): 1.75%.
Density--42 per sq. km.
Ethnic groups: Mestizo (mixed European and
indigenous) 69%, white 17%, black (Jamaican
origin) 9%, indigenous 5%.
Religion: Predominantly Roman Catholic, with
rapidly growing percentage of Evangelical
Protestants.
Languages: Spanish (official), English and
indigenous languages on Caribbean coast.
Education: Years compulsory--none
enforced (28% of first graders eventually finish
sixth grade). Literacy—67.5%.
Health (2005): Life expectancy--70 yrs.
Infant mortality rate—35.50/1,000.
Work force (2004 est.): 1.9 million.
Unemployed--12%; underemployed--35%.
Government
Type: Republic.
Independence: 1821.
Constitution: The 1987 Sandinista-era
constitution was changed in 1995 to provide for
a more even distribution of power among the four
branches of government and again in 2000 to
increase the Supreme Court and the Controller
General's Office and to make changes to the
electoral laws.
Branches: Executive--president and vice
president. Legislative--National Assembly
(unicameral). Judicial--Supreme Court;
subordinate appeals, district, and local courts;
separate labor and administrative tribunals.
Electoral--Supreme Electoral Council,
responsible for organizing and holding
elections.
Administrative subdivisions: 15 departments and
two autonomous regions on the Atlantic coast;
145 municipalities.
Major political parties: Liberal
Constitutionalist Party (PLC); Sandinista
National Liberation Front (FSLN). Other
political parties: Conservative Party (PC);
National Resistance Party (PRN); Camino
Cristiano; Alliance for the Republic (APRE).
Regional parties in the Atlantic Coast include
YATAMA (Yapti Tasba Masraka Nanih Asla Takanka)
and PMUC (Partido Movimiento de Unidad Costeña).
Suffrage: Universal at 16.
Economy
GDP (2004 est.): PPP $12.3 billion
GDP real growth rate (2004 est.): 4%
Per capita GDP (2004 est.): PPP $2,300
Inflation rate (2004 est.): 9.3%.
Natural resources: Arable land, livestock,
fisheries, gold, timber.
Agriculture (22% of GDP): Products--corn,
coffee, sugar, meat, rice, beans, bananas.
Industry (21% of GDP): Types--processed
food, beverages, textiles, petroleum, and metal
products.
Services (58% of GDP): Types--commerce,
construction, government, banking,
transportation, and energy.
Trade (2004 est.): Exports--$755 million
(f.o.b.): coffee, seafood, beef, sugar,
industrial goods, gold, bananas, sesame.
Markets--U.S. 35%, European Union 14%,
Central American Common Market (CACM) 33%,
Mexico 5%. Imports--$2.02 billion
(f.o.b.): petroleum, agricultural supplies,
manufactured goods. Suppliers--U.S. 22%,
CACM 23%, Venezuela 14%, European Union 7%.
PEOPLE
Most Nicaraguans are of both European and
Indian ancestry, and the culture of the country
reflects the Ibero-European and Indian heritage
of its people. Only the Indians of the eastern
half of the country remain ethnically distinct
and retain tribal customs and languages. A large
black minority, of Jamaican origin, is
concentrated on the Caribbean coast. In the
mid-1980s, the central government divided the
eastern half of the country--the former
department of Zelaya--into two autonomous
regions and granted the people of the region
limited self-rule.
Roman Catholicism is the major religion, but
Evangelical Protestant groups have grown
recently, and there are strong Anglican and
Moravian communities on the Caribbean coast.
Most Nicaraguans live in the Pacific lowlands
and the adjacent interior highlands. The
population is 58% urban.
HISTORY
Nicaragua takes its name from Nicarao, chief
of the indigenous tribe that lived around
present-day Lake Nicaragua during the late 1400s
and early 1500s. In 1524, Hernandez de Cordoba
founded the first Spanish permanent settlements
in the region, including two of
Nicaragua's principal towns: Granada on Lake
Nicaragua, and Leon east of Lake Managua.
Nicaragua gained independence from Spain in
1821, briefly becoming a part of the Mexican
Empire and then a member of a federation of
independent Central American provinces. In 1838,
Nicaragua became an independent republic.
Much of Nicaragua's politics since
independence has been characterized by the
rivalry between the Liberal elite of Leon and
the Conservative elite of Granada, which often
led to civil war. Initially invited by the
Liberals in 1855 to join their struggle against
the Conservatives, an American named William
Walker and his "filibusters" seized the
presidency in 1856. The Liberals and
Conservatives united to drive him out of office
in 1857. Three decades of Conservative rule
followed. Taking advantage of divisions within
the Conservative ranks, Jose Santos Zelaya led a
Liberal revolt that brought him to power in
1893. Zelaya ended a longstanding dispute with
Britain over the Atlantic Coast in 1894, and
reincorporated that region into Nicaragua.
By 1909, differences had developed over an
isthmian canal and concessions to Americans in
Nicaragua; there also was concern about what was
perceived as Nicaragua's destabilizing influence
in the region. In 1909 the United States
provided political support to Conservative-led
forces rebelling against President Zelaya and
intervened militarily to protect American lives
and property. With the exception of a 9-month
period in 1925-26, the United States maintained
troops in Nicaragua from 1912 until 1933. From
1927 until 1933, U.S. Marines stationed in
Nicaragua engaged in a running battle with rebel
forces led by renegade Liberal Gen. Augusto
Sandino, who rejected a 1927 negotiated
agreement brokered by the United States to end
the latest round of fighting between Liberals
and Conservatives.
After the departure of U.S. troops, National
Guard Cmdr. Anastasio Somoza Garcia
outmaneuvered his political opponents--including
Sandino, who was assassinated by National Guard
officers--and took over the presidency in 1936.
Somoza and two sons who succeeded him,
maintained close ties with the United States.
The Somoza dynasty ended in 1979 with a massive
uprising led by the Sandinista National
Liberation Front (FSLN), which had conducted a
low scale guerrilla war against the Somoza
regime since the early 1960s.
The FSLN established an authoritarian
dictatorship soon after taking power.
U.S.-Nicaraguan relations deteriorated rapidly
as the regime nationalized many private
industries, confiscated private property,
supported Central American guerrilla movements,
and maintained links to international
terrorists. The United States suspended aid to
Nicaragua in 1981. The Reagan administration
provided assistance to the Nicaraguan resistance
and in 1985 imposed an embargo on
U.S.-Nicaraguan trade.
In response to both domestic and
international pressure, the Sandinista regime
entered into negotiations with the Nicaraguan
resistance and agreed to nationwide elections in
February 1990. In these elections, which were
proclaimed free and fair by international
observers, Nicaraguan voters elected as their
President the candidate of the National
Opposition Union, Violeta Barrios de Chamorro.
During President Chamorro's nearly 7 years in
office, her government achieved major progress
toward consolidating democratic institutions,
advancing national reconciliation, stabilizing
the economy, privatizing state-owned
enterprises, and reducing human rights
violations. Despite a number of
irregularities--which were due largely to
logistical difficulties and a baroquely
complicated electoral law--the October 20, 1996
presidential, legislative, and mayoral
elections were judged free and fair by
international observers and by the
groundbreaking national electoral observer group
Etica y Transparencia (Ethics and Transparency).
This time Nicaraguans elected former Managua
Mayor Arnoldo Alemán, leader of the center-right
Liberal Alliance. The first transfer of power in
recent Nicaraguan history from one
democratically elected president to another took
place on January 10, 1997, when the Alemán
government was inaugurated.
Presidential and legislative elections were
held in November 2001. Enrique Bolaños of the
Liberal Constitutional Party was elected to the
Nicaraguan presidency on November 4, 2001,
defeating FSLN candidate Daniel Ortega by 14
percentage points. The elections, characterized
by international observers as free, fair and
peaceful, reflected the maturing of Nicaragua's
democratic institutions. During his campaign,
President-elect Bolaños promised to reinvigorate
the economy, create jobs, fight corruption, and
support the war against terrorism. Bolaños was
inaugurated on January 10, 2002.
GOVERNMENT AND POLITICAL CONDITIONS
Nicaragua is a constitutional democracy with
executive, legislative, judicial, and electoral
branches of government. In 1995, the executive
and legislative branches negotiated a reform of
the 1987 Sandinista constitution, which gave
impressive new powers and independence to the
legislature--the National Assembly--including
permitting the Assembly to override a
presidential veto with a simple majority vote
and eliminating the president's ability to
pocket-veto a bill.
The president and the members of the
unicameral National Assembly are elected to
concurrent five-year terms. The National
Assembly consists of 90 deputies elected from
party lists drawn at the department and national
level, plus the defeated presidential candidates
who obtained a minimal quotient of votes.
The Supreme Court supervises the functioning
of the still largely ineffective, often
partisan, and overburdened judicial system. As
part of the 1995 constitutional reforms, the
independence of the Supreme Court was
strengthened by increasing the number of
magistrates from 9 to 12. In 2000, as part of
the PLC-FSLN pact, the number or Supreme Court
justices was increased to 16. Supreme Court
justices are elected to five-year terms by the
National Assembly. Led by a council of seven
magistrates, the Supreme Electoral Council (CSE)
is the co-equal branch of government responsible
for organizing and conducting elections,
plebiscites, and referendums. The magistrates
and their alternates are elected to 5-year terms
by the National Assembly. Constitutional changes
in 2000 expanded the number of CSE magistrates
from five to seven and gave the PLC and the FSLN
a freer hand to name party activists to the
Council, prompting allegations that both parties
were politicizing electoral institutions and
processes and excluding smaller political
parties.
Freedom of speech is a right guaranteed by
Nicaragua's constitution and vigorously
exercised by its people. Diverse viewpoints are
freely and openly discussed in the media and in
academia. There is no state censorship in
Nicaragua. Other constitutional freedoms include
peaceful assembly and association, freedom of
religion, and freedom of movement within the
country, as well as foreign travel, emigration,
and repatriation. The government also permits
domestic and international human rights monitors
to operate freely in Nicaragua. The constitution
prohibits discrimination based on birth,
nationality, political belief, race, gender,
language, religion, opinion, national origin,
and economic or social condition. All public and
private sector workers, except the military and
the police, are entitled to form and join unions
of their own choosing, and they exercise this
right extensively. Nearly half of Nicaragua's
work force, including agricultural workers, is
unionized. Workers have the right to strike.
Collective bargaining is becoming more common in
the private sector.
Political Parties
Though 35 political parties participated in the
1996 elections, under new, more restrictive
electoral laws passed in 2000, only three
parties participated in the 2001 national
elections--the PLC, the FSLN, and the PC. As a
result of those elections, of the 92 seats in
the National Assembly, 44 are held by the PLC,
38 by the FSLN, seven by the Azul y Blanco and
one by the Camino Cristiano.
Principal Government Officials
President--Enrique BOLANOS Geyer
Vice President--Alfredo GOMEZ Urcuyo
Foreign Affairs Minister--Norman CALDERA
Cardenal
Finance Minister--Mario ARANA Sevilla
Trade Minister--Alejandro José ARGÜELLO Choiseul
Defense Minister-- Avil Ramirez Valdivia
Ambassador to the United States--Salvador
STADTHAGEN Icazza
Ambassador to the United Nations—Eduardo Sevilla
Somoza
Ambassador to the Organization of American
States--José Luis VELAZQUEZ Pereira
Nicaragua maintains an embassy in the United
States at 1627 New Hampshire Avenue, NW,
Washington, DC 20009 (tel. 202-387-4371).
ECONOMY
Nicaragua began free market
reforms in 1991 after 12 years of economic
free-fall under the Sandinista regime. Despite
some setbacks, it has made dramatic progress:
privatizing more than 350 state enterprises,
reducing inflation from 13,500% to 5.3%, and
cutting the foreign debt in half. The economy
began expanding in 1994 and grew 2.5% in 2001,
with overall GDP reaching $2.44 billion in 2001.
In 2001, the global recession, combined with a
series of bank failures, low coffee prices, and
a drought, caused the economy to contract.
Nicaragua remains the second-poorest nation
in the hemisphere. Unemployment is officially
around 12.2%, and another 35.4% are
underemployed. Nicaragua suffers from persistent
trade and budget deficits and a high
debt-service burden; foreign assistance,
including donations and debt relief, totals 42%
of GDP in 2004.
One of the key engines of economic growth has
been production for export. Exports were $755
million in 2004. Although traditional products
such as coffee, meat, and sugar continued to
lead the list of Nicaraguan exports, the fastest
growth is now in nontraditional exports: maquila
goods (apparel); gold; seafood; and new
agricultural products such as peanuts, sesame,
melons, and onions. Nicaragua also depends
heavily on remittances from Nicaraguans living
abroad.
Nicaragua is primarily an agricultural
country, but construction, mining, fisheries,
and general commerce also have been expanding
during the last few years. Foreign private
capital inflows topped $300 million in 1999 but,
due to economic and political uncertainty fell
to less than $100 million in 2001. This trend
has been reversed to a degree during the
government of President Bolaños. Foreign direct
investment reached 250 million in 2004.
Rapid expansion of the tourist industry has
made it the nation's third-largest source of
foreign exchange. Some 60,000 Americans visit
Nicaragua yearly--primarily business people,
tourists, and those visiting relatives. An
estimated 5,300 U.S. citizens reside in the
country. The U.S. Embassy's consular section
provides a full range of consular services--from
passport replacement and veteran's assistance to
prison visitation and repatriation assistance.
Nicaragua faces a number of challenges in
stimulating rapid economic growth. Long-term
success at attracting investment, creating jobs,
and reducing poverty depend on its ability to
comply with an International Monetary Fund (IMF)
program, resolve the thousands of Sandinista-era
property confiscation cases, and open its
economy to foreign trade. This process was
boosted in late 2000 when Nicaragua reached the
decision point under the Heavily Indebted Poor
Countries (HIPC) debt relief initiative.
However, HIPC benefits will be delayed because
Nicaragua subsequently fell "off track" from its
IMF program. The country also has been grappling
with a string of bank failures that began in
August 2000. The macroeconomic policies
implemented by the Bolaños administration helped
the economy grow by 5.1% in 2004. Fiscal
deficits have been reduced through increased tax
collection and consolidated public sector
expenditures. International reserves have
increased from US$274 million in 2001 to US$ 670
million in 2004. The IMF’s Poverty Reduction and
Growth Facility (PRGF) was suspended because a
political stalemate between the executive and
legislative branches prevented Nicaragua from
meeting program preconditions.
The United States is the country's largest
trading partner by far--the source in 2004 of
roughly 25% of Nicaragua's imports and the
destination in 2004 of about 35% of its exports.
About 25 wholly or partly owned subsidiaries of
U.S. companies operate in Nicaragua. The largest
of those investments are in the energy,
communications, manufacturing, fisheries, and
shrimp farming sectors. Good opportunities exist
for further investments in those same sectors,
as well as in tourism, mining, franchising, and
the distribution of imported consumer,
manufacturing, and agricultural goods.
The U.S. Embassy's economic and commercial
section advances American economic and business
interests by briefing U.S. firms on
opportunities and stumbling blocks to trade and
investment in Nicaragua; encouraging key
Nicaraguan decision-makers to work with American
firms; helping to resolve problems that affect
U.S. commercial interests; and working to change
local economic and trade ground rules in order
to afford U.S. firms a level playing field on
which to compete. U.S. businesses may access key
Embassy economic reports via the mission's
Internet home page at
http://usembassy.state.gov/managua/wwwhemba.html.
On the San Juan River there have been
disagreements regarding navigational rights in
the Nicaragua-Costa Rica border area. Nicaragua
and Costa Rica signed a three-year agreement in
September of 2002 to defer presenting these
issues before the International Court of Justice
(ICJ) for resolution. The governments of
Nicaragua and Costa Rica agreed to work toward
an amicable solution and to jointly fund
community development projects in the border
area. At the 1994 Summit of the Americas,
Nicaragua joined six Central American neighbors
in signing the Alliance for Sustainable
Development, known as the Conjunta
Centroamerica-USA, or CONCAUSA, to promote
sustainable economic development in the region.
Nicaragua belongs to the United Nations and
several specialized and related agencies,
including the World Bank, the International
Monetary Fund (IMF), World Trade Organization
(WTO), UN Educational, Scientific, and Cultural
Organization (UNESCO), World Health Organization
(WHO), Food and Agriculture Organization (FAO),
International Labor Organization (ILO), and UN
Human Rights Commission (UNHRC). Nicaragua also
is a member of the Organization of American
States (OAS), the Non-aligned Movement (NAM),
the International Atomic Energy Commission
(IAEA), the Inter-American Development Bank
(IDB), and the Central American Bank for
Economic Integration (CABEI). In July 2004,
Nicaragua’s ambassador to the OAS assumed
chairmanship of the Permanent Council (the
Organization’s second-highest decision-making
body) for a 3-month period.
The resolution of U.S. citizen claims arising
from Sandinista-era confiscations and
expropriations still figures prominently in
bilateral policy concerns. Section 527 of the
Foreign Relations Authorization Act (1994)
prohibits certain U.S. assistance and support
for a government of a country that has
confiscated U.S. citizen property, unless the
government has taken certain remedial steps. In
July 2005, the Secretary of State issued a 12th
annual national interest waiver of the Section
527 prohibition because of Nicaragua's record in
resolving U.S. citizen claims as well as its
overall progress in implementing political and
economic reforms.
Other key U.S. policy goals for Nicaragua
are:
Since 1990, the United States has provided
$1.2 billion in assistance to Nicaragua. About
$260 million of that was for debt relief, and
another $450 million was for balance-of-payments
support. The U.S. also provided $93 million in
1999, 2000, and 2001 as part of its overall
response to Hurricane Mitch. Aside from funding
for Mitch reconstruction, the levels of
assistance have fallen incrementally to reflect
the improvements in Nicaragua. FY 2000
assistance was $25 million and FY 2001 amounted
to about the same. This assistance was focused
on promoting more citizen political
participation, compromise, and government
transparency; stimulating sustainable growth and
income; and fostering better-educated and
healthier families. The Millennium Challenge
Corporation, signed a five-year, $175 million
Compact with the Republic of Nicaragua on July
14, 2005. The Millennium Challenge Compact will
reduce poverty and spur economic growth by
funding projects in the regions of León and
Chinandega aimed at reducing transportation
costs and improving access to markets for rural
communities; increasing wages and profits from
farming and related enterprises in the region,
and increasing investment by strengthening
property rights.
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