Tuesday, June 09, 2009

Nicaragua; the poorest country in the Americas

During the global recession as many as 52,000 jobs could be lost in Nicaragua. Already the poorest country in the Americas, many are saying the country will fall well short of meeting Millennium Development Goal number 1, halving poverty by 2015.

From the IPS story, José Adán Silva examines how the country is reeling from the global recession.

In late 2008 the president of the Central Bank, Antenor Rosales, forecast three percent GDP growth for 2009. In January he revised the estimate downward, to between one and two percent.

The non-governmental Nicaraguan Foundation for Economic and Social Development (FUNIDES) predicted in March that GDP would shrink by between 0.4 and 1.7 percent. It also estimated that between 30,000 and 50,000 people would lose their jobs, and between 33,000 and 64,000 people would sink into poverty this year.

In this Central American country of 5.7 million, 47 percent of the populations live on less than two dollars a day, according to the United Nations.

This month the Central Bank confirmed a fall in exports in the first quarter of the year.

Rosales said exports from January to March were worth 355 million dollars, 11 percent below exports for the same period in 2008. "The hardest-hit product is coffee," he added.

The Nicaraguan economy is based on agriculture and livestock, and its main sources of revenue are exports of grains, meat and meat products, textile manufacturing, tourism, and remittances from workers living abroad.

According to the Nicaraguan Civil Society Network for Migrations, one million Nicaraguans are working outside the country, and they send home between 750 million and 850 million dollars a year.

Exports from duty free zones make up 37 percent of total exports in Nicaragua. In the first quarter of 2009 they brought in 243 million dollars, 15 percent less than in the same period last year.

Textile factories in the free zones are among those hit hardest by the crisis. Two companies closed down in May, bringing to 131 the number of firms that have gone under since 2007. A further four may close their doors in the coming months.

1 comment:

Vanessa said...

As per BBC news: Nicaragua has traditionally relied on agricultural exports to sustain its economy. But these benefited mainly a few elite families of Spanish descent, primarily the Somoza family, which ruled the country with US backing between 1937 and the Sandinista revolution in 1979.