Elliott Conely

1/31/2019

Nicaragua Development Blog

For the last century, Nicaragua has struggled with developing its economy and in 2020 it’s no different.

Nicaragua started the decade the second poorest country in the western hemisphere and despite high

annual growth rates, still is. I am going to investigate the indicators below to see why Nicaragua remains

undeveloped.

Real GDP Growth= -3.8% (2018)

A negative GDP growth rate is a very troubling sign for the continued success of the Nicaraguan

economy. It is a sharp downturn from 2017 when the growth rate was +4.6.

Gini Coefficient = .46

Nicaragua's Gini Coefficient indicates an unequal wealth distribution higher than some developed

countries but still within a comfortable range. For context, the US has a Gini Coefficient of .49.

Freedom House Score = 32

The Ortega regime’s recent actions are reflected in Nicaragua's troublingly low Freedom House score

which has dropped over 50% in the last decade. This low score and other related political concern has

destroyed Nicragua's tourism industry and foreign investment. I saw this change first hand when my

school was forced to abruptly cancel trips to Nicaragua after going on annual trips for many years.

When I visited in 2016 and 2017 I saw what a promising path the country was on and I was very

surprised by its low crime rate.

Unemployment Rate = 6.4%

Nicaragua's estimated unemployment rate in 2018 was 6.4%. The number was remarkably low and

with low unemployment often comes wage growth, a much needed change for Nicaraguan workers. It

is, however, worth mentioning that Nicragua's underemployement rate is much higher estimated

around 45%.

Percentage of Labor Force in Agriculture = 30.9%

With 30.9% percent of Nicaraguans working in Agriculture, their economy is particularly vulnerable to

climate change and other natural events. There are more Nicaraguans in non agricultural industries

than the global average which could help their economy industrialize more quickly.