Wayzata World Factbook 1996/The World Factbook - 1996 Edition - Wayzata Technology (3079) (1996).iso/mac/TEXT/backgrd/NICARAGU.BKG

Text File | 1995-12-27 | 19KB | 390 lines

U.S. DEPARTMENT OF STATE
BACKGROUND NOTES: NICARAGUA
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
NOVEMBER 1994



Official Name:  Republic of Nicaragua

PROFILE

Geography
Area:  130,000 sq. km. (50,000 sq. mi.), slightly larger than New York
State.  Cities:  Capital--Managua (pop. 989,000).  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
Population:  4.3 million.
Annual growth rate:  3.1%.
Ethnic groups:  Mestizo (mixed European and Indian) 69%, Caucasian 17%,
black (Jamaican origin) 9%, indigenous 5%.
Religion:  Roman Catholic 85%.
Languages:  Spanish (official), English, indigenous languages.
Education:  Years compulsory--11 yrs. of school or 16 yrs. old.
Completion rate, primary school--20%.  Literacy--77%.
Health:  Life expectancy--63 yrs.  Infant mortality rate--55/1,000.
Work force (1.5 million):  Services--45%, agriculture--37%, industry--
18%.  Unemployment is 23%.

Government
Type:  Republic.
Independence:  1821.
Constitution:  Passed by the Sandinista-controlled National Assembly and
signed January 9, 1987.  The National Assembly is currently considering
constitutional reform proposals.
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; nine Regional
Electoral Councils; local Ballot Receiving Boards.
Political parties:  More than one dozen parties, forming various
coalitions.
Administrative subdivisions:  16 departments, 137 municipalities, and
one national capital district.  The military also has divided the
country into six regions and three special zones for its administrative
purposes.
Suffrage:  Universal at 16.

Economy
GDP (1993):  $1.8 billion.
Annual growth rate (1993):  -0.9%.
Per capita GDP (1993):  $414.
Natural resources:  Gold, silver, copper, tungsten, lead, zinc, timber,
fish.
Land use:  Pastures and meadows--43%, forest and woodland--5%, arable
land--9%.
Agriculture (22% of GDP):  Products--coffee, cotton, sugar cane,
bananas, maize, beans, rice, tobacco, peanuts, sorghum, sesame, meat,
and shellfish.
Industry (26% of GDP):  Types--processed food, beverages, textiles,
chemicals, petroleum, and metal products.
Services (50% of GDP):  Types--commerce, government, transportation,
banking, energy and water.
Trade (1993):  Exports--$267 million:  coffee, cotton, sugar, bananas,
beef, gold, shellfish.  Markets--U.S. 47%, Central American Common
Market (CACM) 22%, Germany 8%, Canada 11%.  Imports--$727 million:
petroleum, agricultural supplies, manufactured and consumer goods.
Suppliers--U.S. 21%, CACM 29%, Germany 1%, Canada 1%.
Exchange rate:  7.1 cordoba=U.S. $1.


PEOPLE

Most Nicaraguans have both European and Indian ancestry.  Only the
Indians of the Caribbean coast remain ethnically distinct and retain
tribal customs and dialects.  A large black minority (of Jamaican
origin) is concentrated on the Caribbean coast, although migration to
Managua is increasing.  Nicaraguan culture is based upon its Ibero-
European heritage.  Roman Catholicism is the major religion, but
evangelical Protestant sects have grown recently, and there are strong
Anglican and Moravian communities on the Caribbean coast.  Spanish is
the official language; English and indigenous languages are spoken on
the Caribbean coast.

Most Nicaraguans live in the Pacific lowlands and the adjacent interior
highlands region.  The population is 57% urban.  The principal cities of
Managua, Leon, and Granada are on the Pacific side.  The largest town on
the Caribbean coast is Bluefields.


HISTORY

Columbus sailed along the Nicaraguan coast on his last voyage in 1502.
The colonial period in Nicaragua began with the arrival of Spanish
conquerors 20 years later.  The country probably takes its name from
Nicarao, chief of the indigenous tribe then living around present-day
Lake Nicaragua.  Contact with Europeans decimated the indigenous
population.  Colonial Nicaragua's two principal towns were founded in
1524:  Granada on Lake Nicaragua and Leon near Lake Managua.  The region
was part of the Captaincy General of Guatemala.  After Nicaragua gained
independence from Spain in 1821, it briefly became part of the Mexican
Empire and then a member of a federation of independent Central American
provinces.  In 1838, Nicaragua became an independent republic.

For some time after this, politics were dominated by struggles between
the Liberals of Leon and the Conservatives of Granada.  This rivalry
allowed an American, William Walker, to seize the presidency in 1856,
but the Liberals and the Conservatives united to drive him out of office
in 1867, after which a period of about 30 years of Conservative rule
ensued.

Hostility between President Jose Santos Zelaya and the United States
over an isthmian canal led to American intervention in Nicaragua in
1909; U.S. troops stayed in Nicaragua until 1933.  U.S. intervention in
Nicaragua ended with Franklin Roosevelt's "Good Neighbor" policy.

Despite U.S. efforts to create an apolitical constabulary prior to
departing Nicaragua, National Guard Commander Anastasio Somoza Garcia
took over the presidency in 1936, initiating 43 years of Somoza family
rule, which ended in 1979 when the Sandinista National Liberation Front
(FSLN) overthrew the Somoza government following an armed insurgency and
popular insurrection.

The FSLN established an authoritarian dictatorship soon after taking
power in the 1980s.  U.S.-Nicaraguan relations were hostile in the 1980s
as a result of the repressive FSLN regime; Sandinista support for
Central American guerrilla movements and international terrorists; and
the involvement of the former Soviet bloc and Cuba in Nicaragua.  The
U.S. supported the Nicaraguan Resistance movement (the Contras) and
imposed a trade embargo.

The easing of Cold War tensions and successful diplomatic efforts led to
the first free and fair elections in Nicaraguan history in February
1990.  President Violeta Barrios de Chamorro won the presidency, and the
National Opposition Union (UNO) won a majority in the National Assembly.

GOVERNMENT AND POLITICAL CONDITIONS

Nicaragua is a constitutional democracy with executive, legislative,
judicial, and electoral branches of government.  The constitution was
adopted in 1987 by the Sandinista government and is under reform.  The
National Assembly is unicameral.  Elections for its 92 Deputies were
last held in 1990.  The next national elections for the presidency and
the National Assembly are scheduled to take place in 1996.  The Supreme
Court, which in practice functions by consensus, is no longer dominated
by a single political party.

The constitution provides for freedom of speech and the press, although
there are some constitutional provisions pertaining to the right to
accurate information.  Diverse viewpoints are freely and openly
discussed in the media and in academia.  There is no official 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, economic condition, 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.

The Chamorro government presides over a difficult transition from
dictatorship to democracy.  Progress has been made in consolidating the
democratic process, especially since the National Assembly is becoming
the principal forum for resolving national problems.  Nicaraguans have
begun to arrive at compromises affecting, for example, military reform
and legislation affecting Nicaraguan, American, and third-country
property claimants.  A key challenge is to ensure conditions for free
and fair general elections in November 1996.

Political Parties

The National Opposition Union is a coalition which comprised 14 parties
in 1990 but now has been reduced, through consolidation and expulsion,
to about six parties plus some independents.  This coalition includes
the Independent Liberal Party, the Constitutionalist Liberal Party, the
National Action Party, the National Conservative Party, the Neo-Liberal
Party, the Communist Party of Nicaragua, and independents.  Ex-UNO
parties which support constitutional reforms are the Nicaraguan
Democratic Movement, the Popular Conservative Alliance, the Social
Democratic Party, and the Union of Christian Democrats.  "Center
groups"--deputies who formerly belonged to UNO parties but split off
from the UNO coalition in 1992 to support executive branch positions--
are the Center Group and the Unity and Reconciliation Group.  Other
political parties are the Sandinista National Liberation Front and the
Nicaraguan Resistance Party.

National Security

The Chamorro government has reduced the Sandinista army from more than
80,000 upon entering office to about 15,000 and has ended the military
draft.  The National Assembly is considering a military reform law which
establishes the principle of civilian control over the military.  Term
limits for top military commanders (including the appointment of a new
army commander on February 21, 1995) and civilian trials for military
personnel accused of crimes against civilians are included in the
legislation.

Principal Government Officials
President and Minister of Defense--Violeta Barrios de Chamorro
Vice President--Virgilio Godoy de Reyes
Minister of Foreign Affairs--Ernesto Leal Sanchez
Ambassador to the U.S.--Roberto Mayorga
Ambassador to the OAS--Jose Antonio Tijerino
Ambassador to the UN--vacant

Nicaragua maintains an embassy in the United States at 1627 New
Hampshire Avenue NW, Washington, DC  20009
(tel. [phone]).


ECONOMY

Although the Chamorro administration has been successful in stabilizing
the economy, only Haiti is poorer than Nicaragua in the Western
Hemisphere.  Inflation has declined from 13,000% in 1990 to about 20% in
1993, and the freefall in GDP has been arrested--GDP per capita is
slightly more than $400.  However, production and investment are
stagnant, unemployment and underemployment exceed 50%, and the country
labors under a chronic balance-of-payments gap of about $350 million.
In 1993, Nicaragua's foreign debt was $11 billion, and multilateral and
bilateral assistance to the country is estimated at $590 million for
1994.

On June 24, 1994, the government concluded an agreement with the
International Monetary Fund (IMF) on an Enhanced Structural Adjustment
Facility (ESAF) for Nicaragua.  The IMF will lend $173 million to
Nicaragua for economic reform during 1994-96.  Other donor flows have
also been conditioned upon conclusion of the ESAF.  The IMF projects
real economic growth of 2% in 1994, 3% in 1995, and 4.5% in 1996.  It
estimates an inflation rate of 10% in 1994 and 9% in 1995.  By the end
of 1995, the IMF is hopeful that Nicaragua will increase gross
international reserves to 21/2 months' worth of imports.

During the June 1994 Consultative Group (CG) meeting of donors in Paris,
Nicaragua received high marks on the progress made on political issues
over the last year.  The 1993 CG had focused on the need for political
stability.  This year's CG emphasized the need to establish a secure
property rights regime in order to attract investment and promote
economic growth.

Business Conditions

The government has privatized most of the companies in the state holding
company, CORNAP.  The telecommunications monopoly, Telcor, is scheduled
to be privatized by the end of the year.  There are eight private banks.
Import/export licensing requirements have been greatly relaxed, and
Nicaragua, with the rest of Central America, has begun to reduce
tariffs.  Tariffs on the majority of products range from 5% to 30%.  The
Government of Nicaragua also levies a stamp tax and a selective
consumption tax on imports, resulting in high overall taxes on imported
products.  Foreign investors can repatriate profits generated since
1990.  Foreign exchange is readily available, partly because of the
existence of a parallel exchange market which offers rates only slightly
different from the official exchange rate.

Trade and Investment

Agriculture, livestock, fisheries, mining, and telecommunications are
the principal growth sectors for the short term.  The best prospects for
U.S. agricultural exports are sales of wheat, rice, tallow, vegetable
oil, poultry and livestock genetics, and planting seeds.  U.S.
commercial and industrial best-prospect exports are franchising,
agricultural machinery, food processing and packaging machinery,
construction equipment, automobiles and spare parts, and
telecommunications equipment.

Nicaragua's imports in 1993 were valued at $727 million and are expected
to decrease to $658 million in 1994.  The government continues to
require import licenses, although the licensing process is now little
more than a formality.  As noted, foreign exchange for goods and
services is freely available.  In 1994, the U.S. is expected to be the
source of nearly 25% of Nicaragua's total imports and to purchase 40% of
Nicaragua's exports.

Nicaragua is negotiating a free trade agreement with Mexico and has
joined its Central American neighbors in pursuing a collective free
trade pact with Colombia and Venezuela.  Imports from the Commonwealth
of Independent States--the republics of the former Soviet Union--have
fallen to a fraction of their 1990 level.

Nicaragua's export earnings are estimated to rise by 9% in 1994 to $291
million.  Non-traditional exports such as shrimp, tropical fruits, and
vegetables are becoming relatively more important.  Imports include
machinery, electrical appliances and transport vehicles, animal and
vegetable oil, fertilizers, prepared foods, and clothing and other
textile products.

U.S. investment in Nicaragua, estimated at less than $100 million, is
concentrated in the petroleum and agro-processing sectors.  Most of the
companies produce exclusively for the Nicaraguan market, although there
are shipments of goods to Central America and Puerto Rico.  For the most
part, these companies have been operating in Nicaragua for nearly four
decades.  Estimates are that U.S. investments represent between one-half
and two-thirds of all foreign investment, although investors from Spain,
the United Kingdom, and Taiwan are active.  Total foreign investment is
estimated to be under $200 million.

The best opportunities for investment appear to be in fishing, mining,
timber, processing of non-traditional agricultural exports, hotels, and
power generation.  The privatization of the telephone utility is also a
promising area for investors.

Nicaragua is a beneficiary of Caribbean Basin Initiative (CBI)
privileges.


FOREIGN RELATIONS

The 1990 election victory of President Violeta Chamorro placed Nicaragua
in the ranks of democratizing countries in Latin America and Eastern
Europe.  Nicaragua strongly backed efforts by the United States to
implement UN Security Council Resolution 940, designed to facilitate the
departure of Haiti's de facto authorities from power.  The Chamorro
government participates in the Central American Security Commission
(CASC), which promotes regional demilitarization, arms reduction, and
confidence-building.  A major objective of President Chamorro's
diplomacy has been to reach new terms with Nicaragua's international
creditors.

Nicaragua belongs to the UN and several of its specialized and related
agencies, including the World Bank, the International Monetary Fund, the
UN Educational, Scientific and Cultural Organization (UNESCO), the World
Health Organization (WHO), the Food and Agriculture Organization (FAO),
and the International Labor Organization (ILO); the General Agreement on
Tariffs and Trade; the Inter-American Development Bank; the Central
American Common Market (CACM); and the Central American Bank for
Economic Integration (CABEI).


U.S.-NICARAGUAN RELATIONS

The U.S. encourages Nicaraguans to resolve their problems among
themselves and recognizes as legitimate all political forces that follow
the democratic process and eschew violence.  It encourages continued
progress in the national reconciliation process.

The U.S. Administration and Congress remain concerned about the
following issues:

--  Possible activities of international terrorist and criminal
organizations--formerly ideologically-motivated paramilitary units have
degenerated to committing acts of criminal violence, although these have
not been directly targeted at foreigners or foreign business operations;

--  Resolving U.S. citizen expropriation claims arising from
confiscations which took place under the previous government--some 450
U.S. citizen claims remain unresolved;

--  Improving human rights;

--  Ensuring civilian control over the military and police; and

--  Reforming the judicial system.

The U.S. has provided about $760 million in direct aid and about $240
million in debt relief to Nicaragua since President Chamorro took office
in 1990.  About $450 million has been provided in balance-of-payments
support.  In FY 1994, the U.S. provided about $53 million in assistance.
U.S. aid is used to support democracy programs, human rights
organizations, free labor union activities, economic growth projects,
health programs, population activities, child survival programs, and
basic education and environmental programs.

Principal U.S. Officials
Ambassador--John F. Maisto
Deputy Chief of Mission--Heather M. Hodges
Economic/Commercial Counselor--Paul Trivelli
Political Counselor--Frederick Becker
Public Affairs Officer--Joseph McBride
Administrative Officer--Russell L. Keeton
Consul General--Kathleen Daly
Chief, USAID Mission--vacant

The U.S. embassy in Nicaragua is located at Kilometer 4.5, Carretera
Sur, Managua (tel. [phone]).

(###)