Nicaraguan labor force is estimated at 2.961 million of which 28% is occupied in agriculture, 19% in the industry sector and 53% in the service sector (2012). ===Agriculture and food production=== Coffee became Nicaragua's principal crop in the 1870s, a position it still held in 1992 despite the growing importance of other crops.
Cotton gained importance in the late 1940s, and in 1992 was the second biggest export earner.
Beef and animal byproducts, the most important agricultural export for the three centuries before the coffee boom of the late 19th century, were still important commodities in 1992. From the end of World War II to the early 1960s, the growth and diversification of the agricultural sector drove the nation's economic expansion.
From the early 1960s until the increased fighting in 1977 caused by the Sandinista revolution, agriculture remained a robust and significant part of the economy, although its growth slowed somewhat in comparison with the previous postwar decades.
Until the late 1970s, Nicaragua's agricultural export system generated 40 percent of the country's GDP, 60 percent of national employment, and 80 percent of foreign exchange earnings.
From the early 1960s until the increased fighting in 1977 caused by the Sandinista revolution, agriculture remained a robust and significant part of the economy, although its growth slowed somewhat in comparison with the previous postwar decades.
By 1990 agricultural exports had declined to less than half the level of 1978.
Nicaragua relies on international economic assistance to meet internal- and external-debt financing obligations, although foreign donors curtailed this funding in response to widespread allegations of electoral fraud in Nicaragua's November 2008 elections. ==Economic history== Nicaragua's economy was devastated in the 1980s by the Contra War, which saw the destruction of much of the country's infrastructure.
Recently, in March 2007, Poland and Nicaragua signed an agreement to write off $30.6 million which was borrowed by the Nicaraguan government in the 1980s. The U.S.
Statistics for the next fifteen years, however, show stagnation and then a drop in agricultural production. The agricultural sector declined precipitously in the 1980s.
Throughout the 1980s, the Contras destroyed or disrupted coffee harvests as well as other key income-generating crops.
At the same time, the US staged an economic blockade from 1985 onward. Following the civil war, Nicaragua began free market reforms, privatizing more than 350 state companies and commencing a general trend of economic growth.
Production of basic grains fell as a result of Hurricane Joan in 1988 and a drought in 1989.
Many coffee plants succumbed to disease. In 1989, the fifth successive year of decline, farm production declined by roughly 7 percent in comparison with the previous year.
Production of basic grains fell as a result of Hurricane Joan in 1988 and a drought in 1989.
By 1990 agricultural exports had declined to less than half the level of 1978.
Nicaraguan labor force is estimated at 2.961 million of which 28% is occupied in agriculture, 19% in the industry sector and 53% in the service sector (2012). ===Agriculture and food production=== Coffee became Nicaragua's principal crop in the 1870s, a position it still held in 1992 despite the growing importance of other crops.
Cotton gained importance in the late 1940s, and in 1992 was the second biggest export earner.
Beef and animal byproducts, the most important agricultural export for the three centuries before the coffee boom of the late 19th century, were still important commodities in 1992. From the end of World War II to the early 1960s, the growth and diversification of the agricultural sector drove the nation's economic expansion.
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 process was boosted in late 2000 when Nicaragua reached the decision point under the Heavily Indebted Poor Countries (HIPC) debt relief initiative.
The country also has been grappling with a string of bank failures that began in August 2000.
But even with the recessions, growth has averaged 3.4% between 2001 and 2011 (again, based on World Bank figures). == Economy == Unemployment is 6.4%.
Nicaragua suffers from persistent trade and budget deficits and a high debt-service burden, leaving it highly dependent on foreign assistance—which represented almost 25% of GDP in 2001. One of the key engines of economic growth has been production for export.
Foreign private capital inflows topped $300 million in 1999 but, due to economic and political uncertainty, fell to less than $100 million in 2001.
Approximately one million Nicaraguans contribute to the remittance sector of the economy. In early 2004, Nicaragua secured some $4.5 billion in foreign debt reduction under the International Monetary Fund and World Bank Heavily Indebted Poor Countries initiative.
In 2005, finance ministers of the leading eight industrialized nations (G8) agreed to forgive some of Nicaragua's foreign debt, as part of the HIPC program.
In April 2006, the US-Central America Free Trade Agreement went into effect, expanding export opportunities for Nicaragua's agricultural and manufactured goods.
In October 2007, the IMF approved an additional poverty reduction and growth facility program in support of the government's economic plans.
In 2007, exports topped $1 billion US dollars for the first time in Nicaraguan history. Nicaragua is primarily an agricultural country, but construction, mining, fisheries, and general commerce also have been expanding during the last few years.
Recently, in March 2007, Poland and Nicaragua signed an agreement to write off $30.6 million which was borrowed by the Nicaraguan government in the 1980s. The U.S.
It is the second largest source of foreign exchange for the country and is predicted to become the first largest industry in 2007.
Consumer Price inflation have also curtailed since 2008, when Nicaragua's inflation rate hovered at 19.82%.
Nicaragua relies on international economic assistance to meet internal- and external-debt financing obligations, although foreign donors curtailed this funding in response to widespread allegations of electoral fraud in Nicaragua's November 2008 elections. ==Economic history== Nicaragua's economy was devastated in the 1980s by the Contra War, which saw the destruction of much of the country's infrastructure.
In recent years, under the administrations of Daniel Ortega, the Nicaraguan economy has expanded somewhat, following the global recession of 2009, when the country's economy actually contracted by 1.5%, due to decreased export demand in the US and Central American markets, lower commodity prices for key agricultural exports, and low remittance growth.
In 2009 and 2010, the country posted lower inflation rates, 3.68% and 5.45%, respectively. Remittances are a major source of income, equivalent to 15% of the country's GDP, which originate primarily from Costa Rica, the United States, and European Union member states.
The economy saw 4.5% growth in 2010 thanks to a recovery in export demand and growth in its tourism industry.
In 2009 and 2010, the country posted lower inflation rates, 3.68% and 5.45%, respectively. Remittances are a major source of income, equivalent to 15% of the country's GDP, which originate primarily from Costa Rica, the United States, and European Union member states.
Nicaragua's economy continues to post growth, with preliminary indicators showing the Nicaraguan economy growing an additional 5% in 2011.
But even with the recessions, growth has averaged 3.4% between 2001 and 2011 (again, based on World Bank figures). == Economy == Unemployment is 6.4%.
As evidence of continuous efforts in improving the business climate, Nicaragua has been ranked favorably in a variety of independent evaluations. The 2011 Doing Business Report, published by The World Bank Group, a report that benchmarks various indicators of the investment climate in 183 nations, ranked Nicaragua as the top location in Central America in starting a business, investor protection, and closing a business.
There also are copper mines in northeastern Nicaragua. Gross Domestic Product (GDP) in purchasing power parity (PPP) in 2012 was estimated at US$20.04 billion, and GDP per capita in PPP at US$3,300, making Nicaragua the second poorest country in the Western Hemisphere.
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