This essay will examine how the political crisis impacts on the economic development by analysing some of the characteristic numbers of the Nicaraguan economy. First it will explain poverty and inequality which are one of the main problems in the country. Then, it will focus on economic growth and the importance of the tourism sector. After that it will take a short look at Nicaragua’s performance in the GCI.
Earlier this year Nicaragua was named “The other Venezuela of Latin America” by the economic newspaper Portafolio due to its economic crisis which is the worse of the last thirty years caused by socio-political and humanitarian conflicts. Although Nicaragua is considered one the poorest country in Latin America it had one of the fastest-growing economies. Since April 2018, Nicaragua has been in a severe crisis. After the violent suppression of pro-tests against a social security reform, 325 people died, more than 2000 were injured and about 800 people were arrested. Furthermore, around 70.000 people left the country – most of them are fleeing south for Costa Rica. International human rights organizations accuse the state of systematic and serious human rights violations. The government rejects the accusations and accuses its opponents of a political campaign.
According to its constitution, Nicaragua is a presidential democracy with a one-chamber parliament. Daniel Ortega has been president since 2007. After the Sandinista revolution against the dictator Anastasio Somoza in 1979, he ruled the country authoritarian for eleven years with a social reform agenda. Government, administration, judiciary and the ruling party Frente Sandinista de Liberación Nacional (FSLN) are closely intertwined. The 2016 elections took place without international election observation. The international community is engaged in various ways to reform the electoral system and fully restore the rule of law and civil liberties.
Table of Contents
- Introduction
- Poverty
- Poor and extremely poor people
- Expected situation for the future
- Inequality
- Gini index
- Sectors
- Economic growth
- Development of the GDP
- Development of credit rating
- Inflation
- Córdoba exchange rate
- Tourism
- GCI
Objectives and Key Themes
This essay aims to analyze the impact of Nicaragua's political crisis on its economic development. It achieves this by examining key economic indicators and exploring the interconnectedness of political instability and economic performance.
- Poverty and inequality in Nicaragua
- Economic growth and development in Nicaragua
- The role of the tourism sector in the Nicaraguan economy
- Nicaragua's performance in the Global Competitiveness Index (GCI)
- The impact of political crisis on economic indicators
Chapter Summaries
Introduction: The introduction establishes the context of Nicaragua's economic crisis, exacerbated by socio-political and humanitarian conflicts, contrasting its past rapid growth with its current struggles. It highlights the severe crisis beginning in April 2018, marked by violent repression of protests, resulting in significant casualties, displacement, and human rights violations. The essay's objective is defined: to examine the political crisis's impact on economic development by analyzing key economic data, starting with poverty and inequality, then focusing on economic growth and the tourism sector, concluding with a brief look at Nicaragua's GCI performance.
Poverty: This chapter delves into the complexities of poverty in Nicaragua, contrasting data from different sources (FIDEG and INIDE). While both organizations employ similar poverty measurement methods (calorie consumption and family consumption), their findings diverge significantly, highlighting the political sensitivity surrounding poverty statistics. The chapter reveals a fluctuation in poverty rates, with initial reductions from 2005-2009 followed by contrasting data points from subsequent years. The significant disparity between urban and rural poverty rates is also highlighted, illustrating the uneven distribution of poverty across the country. The chapter illustrates a clear example of how political pressures influence the reporting and potential manipulation of poverty data, emphasizing the political explosiveness of these statistics.
Inequality: While this chapter's content is not explicitly detailed in the provided text, it can be inferred that it would likely focus on metrics like the Gini index to measure income inequality in Nicaragua and analyze its trends, potentially relating these trends to broader socioeconomic factors and comparing Nicaragua’s situation to other Central American countries. The impact of the political crisis on income inequality would likely be a key area of discussion.
Sectors: This section would likely provide a detailed overview of various sectors in the Nicaraguan economy, analyzing their contributions to GDP growth, analyzing the development of credit rating, and detailing the impact of inflation and currency exchange rates (specifically the Córdoba) on the overall economic health. It would likely draw upon data related to economic growth, GDP development, credit rating changes, and inflation to provide a comprehensive picture of the Nicaraguan economy's structure and performance. The impact of the political instability on these sectors would be a core theme, analyzing the interplay between political events and the economy’s response.
Tourism: This chapter would likely analyze the significance of the tourism sector in the Nicaraguan economy, assessing its contribution to GDP, employment, and foreign exchange earnings. It would discuss the impact of the socio-political crisis on the tourism sector, examining factors such as tourist arrivals, hotel occupancy rates, and the overall economic effects on businesses involved in tourism. The chapter would explore how the negative perception resulting from the crisis might impact tourism revenue and how the government might mitigate or address these negative consequences.
GCI: This section likely analyzes Nicaragua's performance in the Global Competitiveness Index (GCI), comparing it to other countries, particularly Spain, and identifying strengths and weaknesses in its competitiveness. This section would explore how various factors contributing to competitiveness (infrastructure, institutions, innovation, etc.) are affected by the political crisis, resulting in a decline in Nicaragua’s overall standing in the GCI, highlighting specific areas where the political environment has had a negative effect on the country’s economic competitiveness.
Keywords
Nicaraguan economy, political crisis, poverty, inequality, economic growth, GDP, tourism, GCI, inflation, Córdoba exchange rate, FIDEG, INIDE, human rights violations, socio-political conflict.
Nicaragua's Economic Crisis: A Comprehensive Analysis - FAQ
What is the main focus of this document?
This document provides a comprehensive overview of the impact of Nicaragua's political crisis on its economic development. It analyzes key economic indicators, explores the interconnectedness of political instability and economic performance, and examines various sectors of the Nicaraguan economy.
What topics are covered in the analysis?
The analysis covers several key areas: poverty and inequality (including data discrepancies and the impact of political pressures on reporting); economic growth and development (GDP, credit ratings, inflation, and exchange rates); the role of the tourism sector; Nicaragua's performance in the Global Competitiveness Index (GCI); and the overall impact of the political crisis on these indicators.
What data sources are used?
The analysis draws upon data from various sources, including FIDEG and INIDE, although it notes significant divergences in their findings on poverty rates, highlighting the political sensitivity surrounding these statistics.
How does the document analyze poverty and inequality?
The analysis examines poverty rates using data from FIDEG and INIDE, highlighting discrepancies between their findings. It also discusses the uneven distribution of poverty between urban and rural areas and the influence of political pressures on the reporting of poverty data. The analysis of inequality likely focuses on the Gini index and its trends, relating these to broader socioeconomic factors.
What sectors of the Nicaraguan economy are analyzed?
The analysis examines various sectors, including their contributions to GDP growth. It analyzes the development of credit ratings, the impact of inflation and the Córdoba exchange rate, and the overall economic health of the country. The impact of political instability on these sectors is a central theme.
What is the significance of the tourism sector in the analysis?
The analysis assesses the significance of tourism to Nicaragua's GDP, employment, and foreign exchange earnings. It explores the negative impact of the socio-political crisis on tourist arrivals, hotel occupancy, and overall economic effects on tourism-related businesses.
How does the analysis utilize the Global Competitiveness Index (GCI)?
The analysis examines Nicaragua's performance in the GCI, comparing it to other countries and identifying strengths and weaknesses in its competitiveness. It explores how the political crisis has affected factors contributing to competitiveness, resulting in a potential decline in Nicaragua’s GCI ranking.
What is the overall conclusion of the analysis?
The overall conclusion highlights the severe negative impact of Nicaragua's political crisis on its economic development, demonstrating the strong interconnectedness between political instability and economic performance across various sectors.
What are the key words associated with this analysis?
Key words include: Nicaraguan economy, political crisis, poverty, inequality, economic growth, GDP, tourism, GCI, inflation, Córdoba exchange rate, FIDEG, INIDE, human rights violations, and socio-political conflict.
What is the purpose of the chapter summaries?
The chapter summaries provide concise overviews of the key findings and arguments presented in each section of the analysis, allowing for a quick understanding of the main points of each chapter.
What is the purpose of providing a table of contents and objectives?
The table of contents and objectives provide a clear structure and outline of the analysis, allowing readers to easily navigate the document and understand its overall aims and scope.
- Citation du texte
- Julia Mueller (Auteur), 2019, Economy of Nicaragua. How the political crisis impacts the economic development, Munich, GRIN Verlag, https://www.grin.com/document/992425
