Republic of Nicaragua

NicaraguaArea: 129,494 sq. km
Population: 5.8 million (2008 est.)
Capital city: Managua
President, Chief of State and Head of Government: President Daniel ORTEGA Saavedra (since January 10, 2007)

History

Nicaragua – name derived from the chief of the area’s leading indigenous tribe at the time of the Spanish Conquest.

1522 – first settled by the Spanish, who were impressed with the indigenous civilization, gathered gold and began baptizing the locals.

Nicaragua was invaded by several Spanish forces. A series of battles known as “The War of the Captains” devastated the indigenous population and destroyed their civilization.

1529 – the conquest of Nicaragua was complete.

1610 – Momotombo Volcano erupted and destroyed the capital city of Leon. It was rebuilt northwest of its original site.

The history of Nicaragua remained relatively static for three hundred years following the conquest.

1821 – gained independence as part of the United Provinces of Central America, and then as an independent republic in its own right in 1838.

For the next century, Nicaragua’s politics were dominated by the competition for power between the Liberals, centered in the city of León, and the Conservatives, centered in Granada.

US marines occupied Nicaragua from 1912 to 1933.

1910 to 1926 – the Conservative Party ruled Nicaragua and evacuated the US marines in 1926.

1926 – Constitutionalist War: conflict between liberals and conservatives, resulting in a coalition government and the return of U.S. Marines.

1927 to 1933 – Augusto César Sandino led a sustained guerrilla war that resulted in the withdrawal of US marines and the establishment of a new Liberal government.

1933 – Anastasio Somoza was put in charge of the National Guard, and with US support outmaneuvered his political opponents and took over the presidency in 1936. The Somoza family ruled until 1979.

1972 – Managua earthquake – killed more than 10,000 people and left 500,000 homeless. Allegations were made that Somoza and the National Guard were embezzling relief money, leading to violent opposition to the government and the revival of a Sandinista movement (FSLN).

1978 – the country tipped into full scale civil war and the Sandinistas stepped up their rate of guerrilla activity.

Leon became the first city in Nicaragua to fall to the Sandinistas. Somoza responded with aerial bombardment.

1979 – the FSLN launched a major push to take control of the country. Nicaragua’s government collapsed and the National Guard commanders escaped with Somoza.

1979 (Jul 19) – a new government was proclaimed under a provisional junta headed by Daniel Ortega.

The Sandinista government worked against malnutrition, disease, and illiteracy.

1984 (Nov 4) – the Sandinistas were victorious in national elections, with Daniel Ortega elected as president.

American pressure against the government escalated.

1990 (Feb 25) – the FSLN lost to the National Opposition Union. This government achieved major progress toward consolidating democratic institutions, advancing national reconciliation, stabilizing the economy, privatizing state-owned enterprises, and reducing human rights violations.

1996 (Oct 20) – Presidential, legislative, and mayoral elections were judged free and fair by international observers. Former Managua Mayor Arnoldo Aleman, leader of the Constitutional Liberal Party (PLC) was elected president.

Aleman continued in liberalizing the economy by completing infrastructure projects such as highways, bridges and wells, assisted in large part by foreign assistance received after Hurricane Mitch hit Nicaragua in October 1998.

1998 – Hurricane Mitch killed more than 9,000 people, left 2 million people homeless and caused $10 billion in damages.

2000 (Nov) – Municipal elections were held with the FSLN winning a significant number of department capitals, including Managua.

2001 (Nov 4) – Presidential and legislative elections held – Enrique Bolanos of the PLC was elected President, defeating the FSLN candidate Daniel Ortega.

2002 – Aleman was arrested and sentenced to twenty years in jail for corruption.

2006 (Nov) – the presidential election was won by Daniel Ortega, bringing him back into power after 16 years of opposition. 

Nicaragua today is one of the fastest growing tourism and investment destinations in the region and offers attractive investment incentives.

Economy

Nicaragua began free market reforms in 1990, privatizing more than 350 state enterprises. Since then, inflation has been reduced from 33,603% to 8%, and the government’s foreign debt has been cut in half. The economy began expanding in 1991 and grew 2.5% in 2001. In 2001, the global recession, combined with a series of bank failures, low coffee prices, and a drought, caused the economy to retract.

One of the key engines of economic growth has been production for export. Exports for 2009 are estimated to be 2.344 billion (including free trade zones). Although traditional products such as coffee, meat, and sugar continue to lead the list of Nicaraguan exports, the fastest growth is now in nontraditional exports: apparel; gold; seafood; and new agricultural products such as peanuts, sesame, melons, and onions.

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.

In early 2004, Nicaragua secured some $4.5 billion in foreign debt reduction under the Heavily Indebted Poor Countries (HIPC) initiative, and in October 2007, the IMF approved a new poverty reduction and growth facility (PRGF) program that should create some fiscal space for social spending and investment.

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. In the last 12 years tourism has grown 394%, the rapid growth has led it to become Nicaragua’s second largest source of foreign capital. Less than three years ago, the nation’s tourism budget was U.S. $400,000; today, it is over $2 million. Nicaragua’s economy has also produced a construction boom, the majority of which is in and around Managua.

Mining History

Gold, a leading export commodity, has undergone a resurgence

1979 (Nov): The Sandinista government nullified all mining concessions issued by the previous administration and nationalized all mining companies operating in the country. Large-scale mining operations in the area were suspended until the mining industry was nationalized

1981: The mining industry was nationalized

1980: Gold exports reached $39.9 million in 1980

1982: Gold exports fell to $15 million

1982 to 1985: Gold exports were suspended

The Corporación Nicaragüense de Minas (INMINE), a subsidiary of the government holding company, controlled most of the country’s mineral exploration and production

Late 1990s: After a long period of low production, gold output almost tripled from 1,500 kg in 1996 to 4,450 in 1999

1997: A ban on new concessions was lifted

In 2001, the Congress passed a Mining Code despite opposition from small-scale miners and environmentalists, who argued the law would unduly benefit multinational companies and lead to environmental damage; Congress was investigating ways to protect the interests of small-scale miners, and the new law made submission of environmental impact statements mandatory

2001: output was 3,650 kg Gold and silver mines were in León, Chontales, and Zelaya departments. Mineral production for 2001 included silver, 1,590 kg, down from 4,000 in 1998; marine salt, 28,100 tons, up from 15,132 in 1998; and crude gypsum and anhydrite, 28,100 tons, up from 15,820 in 1997. Bentonite, lime, limestone, sand and gravel, and crushed stone were also produced. Deposits of iron, copper, lead, antimony, and zinc have been uncovered.

Infrastructure

The country’s infrastructure has improved since 1990. Nicaragua has 16,382 km of roadways, including 1,818 km of paved roads.

Nicaragua has no major rail lines. The country does have 2,220 km of navigable waterways and there is considerable traffic on some of these routes. The government has entered into a US$1.5 billion agreement with a private consortium to allow the construction of a 377 km railway system from the Atlantic coast to the Pacific region and the development of 2 ports. Air traffic has increased dramatically in Nicaragua. The nation has 163 airports (2007) of which 11 have paved runways. Managua International Airport in the capital is the largest airfield.