Republic of Nicaragua República de Nicaragua (Spanish)
Flag Coat of arms
Motto: En Dios Confiamos   (Spanish) "In God We Trust"[1]
Anthem: "Salve a ti, Nicaragua"  (Spanish) "Hail to Thee, Nicaragua"
Capital (and largest city)		Managua 12°9′N 86°16′W / 12.15°N 86.267°W / 12.15; -86.267
Official language(s)		Spanish
Recognised regional languages		Miskito, Rama, Sumo, Miskito Coastal Creole, Garifuna, Rama Cay Creole
Ethnic groups		69% Mestizo 17% White 5% Amerindian 9% Black[2]
Demonym		Nicaraguan, Nica (informal), Pinolero (informal)
Government		Unitary presidential constitutional republic
-	President	Daniel Ortega (FSLN)
-	Vice President	Moisés Omar Halleslevens Acevedo
Legislature		National Assembly
Independence		from Spain, Mexico, and the Federal Republic of Central America
-	Declared	15 September 1821
-	Recognized	25 July 1850
-	from the First Mexican Empire	1 July 1823
-	from the Federal Republic of Central America	31 May 1838
-	Revolution	19 July 1979
-	Current constitution	9 January 1987[3]
Area
-	Total	130,373 km2 (97th) 50,193 sq mi
-	Water (%)	7.14
Population
-	2010 Census estimate	5,891,199 (110th)
-	2005 census	5,666,301
-	Density	42/km2 (133rd) 114/sq mi
GDP (PPP)		2011 estimate
-	Total	$18.878 billion[4]
-	Per capita	$3,205[4]
GDP (nominal)		2011 estimate
-	Total	$7.297 billion[4]
-	Per capita	$1,239[4]
Gini (2007)		40.1 (medium)
HDI (2011)		0.589[5] (medium) (129th)
Currency		Córdoba (NIO)
Time zone		CST (UTC−6)
Drives on the		Right
ISO 3166 code		NI
Internet TLD		.ni
Calling code		505
1	English and indigenous languages on Caribbean coast are also spoken.
2	Significant proportion of information obtained from CIA World Fact Book

Nicaragua (ⁱ/ˌnɪkəˈrɑːɡwə/ nik-ə-RAH-gwə), officially the Republic of Nicaragua (Spanish: República de Nicaragua [reˈpuβlika ðe nikaˈɾaɣwa] ( listen)), is the largest country in the Central American isthmus, bordered by Honduras to the north and Costa Rica to the south. The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. The Pacific Ocean lies to the west, and the Caribbean Sea to the east. The country's physical geography divides it into three major zones: Pacific lowlands; wet, cooler central highlands; and the Caribbean lowlands. On the Pacific side of the country are the two largest fresh water lakes in Central America—Lake Managua and Lake Nicaragua. Surrounding these lakes and extending to their northwest along the rift valley of the Gulf of Fonseca are fertile lowland plains, with soil highly enriched by ash from nearby volcanoes of the central highlands. Nicaragua's abundance of biologically significant and unique ecosystems contribute to Mesoamerica's designation as a biodiversity hotspot.

The Spanish Empire conquered the region in the 16th century. Nicaragua achieved its independence from Spain in 1821. Since its independence, Nicaragua has undergone periods of political unrest, military intervention by the United States, dictatorship, and fiscal crisis—the most notable causes that led to the Nicaraguan Revolution of the 1960s and 1970s. Prior to the revolution, Nicaragua was one of Central America's wealthiest and most developed countries. The revolutionary conflict, paired with a 1972 earthquake, reversed the country's prior economic standing. Nicaragua is a representative democratic republic, and has experienced economic growth and political stability in recent years. In 1990, Nicaragua elected Violeta Chamorro as its president, making it the first country in Central American history and the second in the Western Hemisphere to democratically elect a female head of state.

The population of Nicaragua, approximately 6 million, is multiethnic. Roughly a quarter of the population lives in the capital city, Managua; it is the second-largest city in Central America. Segments of the population include indigenous native tribes from the Mosquito Coast, Europeans, Africans, Asians, and people of Middle Eastern origin. The main language is Spanish, although native tribes on the eastern coast speak their native languages, such as Miskito, Sumo, and Rama, as well as English Creole. The mixture of cultural traditions has generated substantial diversity in art and literature, particularly the latter given the various literary contributions of Nicaraguan writers, including Rubén Darío, Ernesto Cardenal, and Gioconda Belli.^[6] The biological diversity, warm tropical climate, and active volcanoes make Nicaragua an increasingly popular tourist destination.^[7][8]

Etymology[link]

The origin of the name "Nicaragua" is somewhat unclear; in one theory it is a portmanteau coined by Spanish colonists based on the name Nicarao, chief of the most populous indigenous tribe and agua, the Spanish word for water.^[9]

History[link]

Pre-Columbian history[link]

2,100-year-old human footprints preserved in volcanic mud near Lake Managua

In pre-Columbian times, in what is now known as Nicaragua, the indigenous people were part of the Intermediate Area, between the Mesoamerican and Andean cultural regions, and within the influence of the Isthmo-Colombian area. It was the point where the Mesoamerican and South American native cultures met. This is confirmed by the ancient footprints of Acahualinca, along with other archaeological evidence, mainly in the form of ceramics and statues made of volcanic stone, such as the ones found on the island of Zapatera in Lake Nicaragua and petroglyphs found on Ometepe island. The Pipil migrated to Nicaragua from central Mexico after 500 BC^[10]

By the end of the 15th century, western Nicaragua was inhabited by several indigenous peoples related by culture to the Mesoamerican civilizations of the Aztec and Maya, and by language to the Mesoamerican Linguistic Area.^[11] They were primarily farmers who lived in towns, organized into small kingdoms.

Meanwhile, the Caribbean coast of Nicaragua was inhabited by other peoples, mostly Chibcha language groups. They had coalesced in Central America and migrated also to present-day northern Colombia and nearby areas.^[12] They lived a life based primarily on hunting and gathering.^[13] Joined by waters, the people of eastern Nicaragua traded with, and were influenced by, other native peoples of the Caribbean. Round thatched huts and canoes, both typical of the Caribbean, were commonly crafted and used in eastern Nicaragua.

In the west and highland areas, occupying the territory between Lake Nicaragua and the Pacific Coast, the Niquirano were governed by chief Nicarao, or Nicaragua. The wealthy ruler lived in Nicaraocali, site of the present-day city of Rivas. The Chorotega lived in the central region of Nicaragua. Without women in their parties, the Spanish conquerors took Niquirano and Chorotega wives and partners, beginning the multi-ethnic mix of native and European stock now known as mestizo, which constitutes the great majority of population in western Nicaragua.^[11] Within three decades after European contact, what had been an estimated Indian population of one million plummeted. Scientists and historians estimate approximately half of the indigenous people in western Nicaragua died from the rapid spread of new infectious diseases carried by the Spaniards, such as smallpox and measles, to which the Indians had no immunity. The indigenous people of the Caribbean coast escaped the epidemics due to the remoteness of their area. Their societies continued more culturally intact as a result.^[11]

The Spanish conquest[link]

Farthest extent of Spanish colonization in America.
Red: Farthest extent of Spanish colonies under the House of Bourbon in the 1790s.
Pink: Disputed claims of Spanish colonial administration.
Purple: Portuguese colonies under dual Spanish colonial administration- conquest, settlement and political rule over much of the Western Hemisphere

Colonial expansion under the Spanish Empire was initiated by the Spanish conquistadores and developed by the Monarchy of Spain through its administrators and missionaries. The motivations for colonial expansion were trade and the spread of the Christian faith through indigenous conversions.

In 1502, Christopher Columbus was the first European known to have reached what is now Nicaragua as he sailed southeast toward the Isthmus of Panama. On his fourth voyage, Columbus explored the Misquito Coast on the Atlantic side of Nicaragua.^[14] The first attempt to conquer what is now known as Nicaragua was by Gil González Dávila,^[15] who arrived in Panama in January 1520.

González claimed to have converted some 30,000 indigenous peoples to Christianity and discovered a possible trans-isthmian water link. After exploring and gathering gold in the fertile western valleys, González was attacked by the indigenous people, some of whom were commanded by Nicarao and an estimated 3,000 led by the chief Diriangén.^[16] González later returned to Panama, where Governor Pedro Arias Dávila tried to arrest him and confiscate his treasure, some 90,000 pesos of gold. González escaped to Santo Domingo.

It was not until 1524 that the first Spanish permanent settlements were founded.^[15] Conquistador Francisco Hernández de Córdoba founded two of Nicaragua's principal towns in 1524: Granada on Lake Nicaragua was the first settlement, followed by León at a location west of Lake Managua. Córdoba soon built defenses for the cities and attacked against incursions by the other conquistadors. Córdoba was later publicly beheaded following a power struggle with Pedro Arias Dávila. His tomb and remains were discovered during 2000 in the ruins of León Viejo.^[17]

The clashes among Spanish forces did not impede their destruction of the indigenous people and their culture. The series of battles came to be known as The War of the Captains.^[18] By 1529, the conquest of Nicaragua was complete. Several conquistadors came out winners, while they executed or murdered others. Pedro Arias Dávila was a winner—although he had lost control of Panama, he moved to Nicaragua and successfully established his base in León. Through adroit diplomatic machinations, he became the first governor of the colony.^[17]

The land was parceled out to the conquistadors, who were most interested in the western portion. They enslaved many indigenous people as labor to develop and maintain estates there. Others were put to work in mines in northern Nicaragua, some were killed in warfare. The great majority were sold as slaves, and shipped to other Spanish colonies in the New World, at a significant profit to the newly landed aristocracy. Many indigenous people died as a result of new infectious diseases, compounded by neglect by the Spaniards, who controlled their subsistence.^[15]

Colonization to independence[link]

Corn Island off the Atlantic Coast was a British protectorate until it was ceded along with the rest Mosquito Coast to Nicaragua

The Fortress of the Immaculate Conception was constructed in the late 17th century to protect locals in neighboring Granada from pirate attacks. Today, it is one of the country's main tourist attractions.

In 1536, the Viceroyalty of New Spain was established. By 1570, the southern part of New Spain was designated the Captaincy General of Guatemala. The area of Nicaragua was divided into administrative "parties" with León as the capital. In 1610, the Momotombo volcano erupted, destroying the capital. It was rebuilt northwest of what is now known as the Ruins of Old León.

During the American Revolutionary War, Central America was subject to conflict between Britain and Spain, as Britain sought to expand its influence beyond coastal logging and fishing communities in present-day Belize, Honduras and Nicaragua. Horatio Nelson led expeditions against San Fernando de Omoa in 1779 and the San Juan in 1780, which had temporary success before being abandoned due to disease. In turn, the Spanish colonial leaders could not completely eliminate British influences along the Mosquito Coast.

The Captaincy General of Guatemala was dissolved in September 1821 with the Declaration of Independence of the Mexican Empire, and Nicaragua became part of the First Mexican Empire. After the monarchy of the First Mexican Empire was overthrown in 1823, Nicaragua joined the newly formed United Provinces of Central America, which was later renamed as the Federal Republic of Central America. Nicaragua finally became an independent republic in 1838.^[19]

Rivalry between the liberal elite of León and the conservative elite of Granada characterized the early years of independence and often degenerated into civil war, particularly during the 1840s and 1850s. Invited by the Liberals in 1855 to join their struggle against the Conservatives, a United States adventurer and filibuster named William Walker set himself up as president of Nicaragua, after conducting a farcical election in 1856. Costa Rica, Honduras and other Central American countries united to drive Walker out of Nicaragua in 1857,^[20][21][22] after which a period of three decades of Conservative rule ensued.

Great Britain, which had claimed the Mosquito Coast as a protectorate since 1655, delegated the area to Honduras in 1859 before transferring it to Nicaragua in 1860. The Mosquito Coast remained an autonomous area until 1894. José Santos Zelaya, president of Nicaragua from 1893–1909, negotiated the annexation of the Mosquito Coast to the rest of Nicaragua. In his honor, the region was named Zelaya Department.

In the 19th century, Nicaragua attracted many immigrants, primarily from Europe. In particular, families from Germany, Italy, Spain, France and Belgium emigrated to set up businesses with money they brought from Europe. They established many agricultural businesses, such as coffee and sugar-cane plantations, and also newspapers, hotels and banks.

Throughout the late 19th century, the United States (and several European powers) considered a scheme to build a canal across Nicaragua, linking the Pacific Ocean to the Atlantic.^[23] A bill was put before the U.S. Congress in 1899 to build the canal, which failed to pass; construction of the Panama Canal was begun instead.

United States intervention (1909–33)[link]

In 1909, the United States provided political support to conservative-led forces rebelling against President Zelaya. U.S. motives included differences over the proposed Nicaragua Canal, Nicaragua's potential as a destabilizing influence in the region, and Zelaya's attempts to regulate foreign access to Nicaraguan natural resources. On November 18, 1909, U.S. warships were sent to the area after 500 revolutionaries (including two Americans) were executed by order of Zelaya. The U.S. justified the intervention by claiming to protect U.S. lives and property. Zelaya resigned later that year.

In August 1912 the President of Nicaragua, Adolfo Díaz, requested that the Secretary of War, General Luis Mena, resign for fear that he was leading an insurrection. Mena fled Managua with his brother, the Chief of Police of Managua, to start an insurrection. When the U.S. Legation asked President Díaz to ensure the safety of American citizens and property during the insurrection he replied that he could not and that...

U.S. Marines occupied Nicaragua from 1912 to 1933,^[25] except for a nine month period beginning in 1925. From 1910 to 1926, the conservative party ruled Nicaragua. The Chamorro family, which had long dominated the party, effectively controlled the government during that period. In 1914, the Bryan-Chamorro Treaty was signed, giving the U.S. control over the proposed canal, as well as leases for potential canal defenses.^[26] Following the evacuation of U.S. Marines, another violent conflict between liberals and conservatives took place in 1926, known as the Constitutionalist War, which resulted in a coalition government and the return of U.S. Marines.^[27]

From 1927 until 1933, Gen. Augusto César Sandino led a sustained guerrilla war first against the Conservative regime and subsequently against the U.S. Marines, who withdrew upon the establishment of a new Liberal government. Sandino was the only Nicaraguan general to refuse to sign the el tratado del Espino Negro agreement and then headed up to the northern mountains of Las Segovias, where he fought the U.S. Marines for over five years.^[28] When the Americans left in 1933, they set up the Guardia Nacional (National Guard),^[29] a combined military and police force trained and equipped by the Americans and designed to be loyal to U.S. interests. Anastasio Somoza García, a close friend of the American government, was put in charge. He was one of the three rulers of the country, the others being Sandino and the President Juan Bautista Sacasa.

After the U.S. Marines withdrew from Nicaragua in January 1933, Sandino and the newly elected Sacasa government reached an agreement by which he would cease his guerrilla activities in return for amnesty, a grant of land for an agricultural colony, and retention of an armed band of 100 men for a year.^[30] But a growing hostility between Sandino and Somoza led Somoza to order the assassination of Sandino.^[29][31][32] Fearing future armed opposition from Sandino, Somoza invited him to a meeting in Managua, where Sandino was assassinated on February 21 of 1934 by soldiers of the National Guard. Hundreds of men, women, and children from Sandino's agricultural colony were executed later.^[33]

The Somoza dynasty (1936–79)[link]

Nicaragua has experienced several military dictatorships, the longest being the hereditary dictatorship of the Somoza family, who ruled for 43 years during 20th century.^[34] The Somoza family came to power as part of a US-engineered pact in 1927 that stipulated the formation of the Guardia Nacional, or the National Guard, to replace the US marines that had long reigned in the country.^[35] Somoza slowly eliminated officers in the National Guard who might have stood in his way, and then deposed Sacasa and became president on January 1, 1937 in a rigged election.^[29] Somoza was 35 at the time.

Nicaragua declared war on Germany on December 8, 1941, during World War II.^[36] Although war was formally declared, no soldiers were sent to the war, but Somoza did seize the occasion to confiscate attractive properties held by German-Nicaraguans, the best-known of which was the Montelimar estate which today operates as a privately owned luxury resort and casino.^[37] In 1945 Nicaragua was among the first countries to ratify the United Nations Charter.^[38]

Throughout his years as dictator, "Tacho" Somoza 'ruled Nicaragua with a strong arm'.^[33] He had three main sources for his power: control of Nicaraguan economy, military support, and support from the US. When Somoza used the National Guard to take power in 1937, he destroyed any potential armed resistance.^[39] Not only did he have military control, but he controlled the National Liberal Party (LPN), which in turn controlled the legislature and judicial systems, giving him complete political power.

Despite his complete control, on September 21, 1956, Somoza was shot by Rigoberto López Pérez, a 27-year-old liberal Nicaraguan poet. Somoza was attending a PLN party to celebrate his nomination for the Presidency. He died eight days later. After his father's death, Luis Somoza Debayle, the eldest son of the late dictator, was appointed President by the congress and officially took charge of the country.^[29] He is remembered by some for being moderate, but was in power only for a few years and then died of a heart attack. Then came president René Schick Gutiérrez whom most Nicaraguans viewed "as nothing more than a puppet of the Somozas".^[40] Somoza's brother, Anastasio Somoza Debayle, a West Point graduate, succeeded his father in charge of the National Guard, controlled the country, and officially took the presidency after Schick.

Nicaragua experienced economic growth during the 1960s and 1970s largely as a result of industrialization,^[41] and became one of Central America's most developed nations. Due to its stable and high growth economy, foreign investments grew, primarily from U.S. companies such as Citigroup, Sears, Westinghouse, Coca Cola, Bank of America, Chase Manhattan Bank, "Morgan Guaranty Trust and Wells Fargo Bank.^{[citation needed]} Other investors included London Bank and the Bank of Montreal.^{[citation needed]}

The capital city of Managua suffered a major earthquake in 1972 which destroyed nearly 90% of the city, creating major losses,^[42] and leveling a 600-square block area in the heart of Managua. Some Nicaraguan historians see the 1972 earthquake that devastated Managua as the final 'nail in the coffin' for Somoza. Instead of helping to rebuild Managua, Somoza siphoned off relief money to help pay for National Guard luxury homes, while the homeless poor had to make do with hastily constructed wooden shacks. The mishandling of relief money also prompted Pittsburgh Pirates star Roberto Clemente to personally fly to Managua on 31 December 1972, but he died enroute in an airplane accident.^[43] Even the economic elite were reluctant to support Somoza, as he had acquired monopolies in industries that were key to rebuilding the nation,^[44] and did not allow the businessmen to compete with the profits that would result.

In 1973, the year of reconstruction, many new buildings were built, but the level of corruption in the government prevented further growth. Strikes and demonstrations developed as citizens became increasingly angry and politically mobilized. The elite were angry that Somoza was asking them to pay new emergency taxes to further his own ends. As a result, more of the young elite joined the Sandinista Liberation Front (FSLN). The ever increasing tensions and anti-government uprisings slowed growth in the last two years of the Somoza dynasty.

Nicaraguan Revolution[link]

In 1961 Carlos Fonseca turned back to the historical figure of Sandino, and along with two others founded the Sandinista National Liberation Front (FSLN).^[29] Fonseca turned to the KGB and Cuba's DGI for arms and assistance. The FSLN was a small party throughout most of the 1960s, but Somoza's apparent hatred of it and his heavy-handed treatment of anyone he suspected to be a Sandinista sympathizer gave many ordinary Nicaraguans the idea that the Sandinistas were much stronger.^{[citation needed]}

After the 1972 earthquake and Somoza's apparent corruption, alleged mishandling of relief aid, and refusal to rebuild Managua, the ranks of the Sandinistas were flooded with young disaffected Nicaraguans who no longer had anything to lose.^[39] These economic problems propelled the Sandinistas in their struggle against Somoza by leading many middle- and upper-class Nicaraguans to see the Sandinistas as the main hope for removing the brutal Somoza regime.

In December 1974, a group of FSLN, in an attempt to kidnap U.S. Ambassador Tuner Shelton, held some Managuan partygoers hostage (after killing the host, former Agriculture Minister Jose Maria Castillo), until the Somozan government met their demands for a large ransom and free transport to Cuba. Somoza granted this, then subsequently sent his National Guard out into the countryside to look for the perpetrators of the kidnapping, described by opponents of the kidnapping as 'terrorists'. While searching, the National Guard allegedly pillaged villages and imprisoned, tortured, raped, and executed hundreds of villagers. This led to the Roman Catholic Church withdrawing support of the Somoza regime. Around this time, Chilean president Salvador Allende was removed from power in a military coup that prompted Allende to take his own life as the presidential palace came under fire. With right-wing Augusto Pinochet in power in Chile, several hundred committed Chilean revolutionaries joined the Sandinista army in Nicaragua.^[45]

On January 10, 1978, Pedro Joaquin Chamorro, the editor of the national newspaper La Prensa and ardent opponent of Somoza, was assassinated.^[46] This allegedly led to the extreme general disappointment with Somoza. It is alleged that the planners and perpetrators of the murder were at the highest echelons of the Somoza regime and included the dictator's son, "El Chiguin" ("The Kid"), the President of Housing, Cornelio Hueck, the Attorney General, and Pedro Ramos, a Cuban expatriate and close ally, who commercialized blood plasma.^[46]

Nicaraguan refugees, 1979

The Sandinistas, supported by some of the populace, elements of the Catholic Church, and regional governments (including Panama, Mexico, Costa Rica, and Venezuela), took power in July 1979. The Carter administration, refusing to act unilaterally, decided to work with the new government, while attaching a provision for aid forfeiture if it was found to be assisting insurgencies in neighboring countries.^[47] A group of prominent citizens known as Los Doce, "the Twelve", denounced the Somoza regime and said that "there can be no dialogue with Somoza ... because he is the principal obstacle to all rational understanding ... through the long dark history of Somocismo, dialogues with the dictatorship have only served to strengthen it", Somoza fled the country and eventually ended up in Paraguay, where he was assassinated in September 1980, allegedly by members of the Argentinian Revolutionary Workers Party.^[48]

To begin the task of establishing a new government, the Sandinistas created a Council (or junta) of National Reconstruction of five members: Sandinista militants Daniel Ortega, Moises Hassan, novelist Sergio Ramírez Mercado (a member of Los Doce), businessman Alfonso Robelo Callejas, and Violeta Barrios de Chamorro (the widow of Pedro Joaquín Chamorro). Sandinista supporters thus comprised three of the five members of the junta.

The non-Sandinistas Robelo and Chamorro later resigned because they had little actual power in the junta. Sandinista mass organizations were also powerful: including the Sandinista Workers' Federation (Central Sandinista de Trabajadores), the Luisa Amanda Espinoza Association of Nicaraguan Women (Asociación de Mujeres Nicaragüenses Luisa Amanda Espinoza), and the National Union of Farmers and Ranchers (Unión Nacional de Agricultores y Ganaderos).

On the Atlantic Coast a small uprising occurred in support of the Sandinistas. A group of Creoles led by a native of Bluefields, Dexter Hooker (known as Commander Abel), raided a Somoza-owned business to gain access to food, guns and money before heading off to join Sandinista fighters who had liberated the city of El Rama. The 'Black Sandinistas' returned to Bluefields on July 19, 1979 and took the city without a fight. The Black Sandinistas were challenged by a group of mestizo Sandinista fighters. The ensuing standoff between the two groups, with the Black Sandinistas occupying the National Guard barracks (the cuartel) and the mestizo group occupying the Town Hall (Palacio), gave the revolution on the Atlantic Coast a racial dimension absent from events in other parts of the country. The Black Sandinistas were assisted in their power struggle with the Palacio group by the arrival of the Simón Bolívar International Brigade from Costa Rica.

One of the brigade's members, an Afro-Costa-Rican called Marvin Wright (known as Kalalu) became known for his rousing speeches, which included elements of Black Power ideology, in his attempts to unite all black militias that had formed in Bluefields. The introduction of a racial element into the revolution was not welcomed by the Sandinista National Directorate, which expelled Kalalu and the rest of the brigade from Nicaragua and sent them to Panama.^[49]

Sandinistas and the Contras[link]

Robert Pastor, President Carter's National Security Advisor on Latin America explained why the administration had to back Nicaraguan dictator Anastasio Somoza until he could no longer be sustained to then move to bar the FSLN from power through the "preservation of existing institutions, especially the National Guard"^[50] even though it had been massacring the population "with a brutality a nation usually reserves for its enemy.":

"The United States did not want to control Nicaragua or the other nations in the region, but it also did not want to allow developments to get out of control. It wanted Nicaraguans to act independently, except when doing so would affect U.S. interests adversely."^[51]

Shortly after Somoza fled to Miami, National Security Adviser Zbigniew Brzezinski declared that "we have to demonstrate that we are still the decisive force in determining the political outcomes in Central America."^[52] As the Sandinista forces entered the capital, the Carter administration "began setting the stage for a counter revolution," Peter Kornbluh observes. On July 19, a U.S. plane disguised with Red Cross markings evacuated the remnants of the National Guard to Miami. The old Guardia was then built into the counter revolutionary force known as the 'Contras' by the CIA and Argentine trainers.^[53]

On assuming office in 1981, US President Ronald Reagan condemned the FSLN for joining with Cuba in supporting Marxist revolutionary movements in other Latin American countries such as El Salvador. Reagan said he was also concerned about the growing Soviet and Cuban presence in Nicaragua, and the Soviet hope to turn Nicaragua into a "second Cuba".

In contrast to the administration's warnings of a 'Soviet beachhead' in Nicaragua, the June 1984 Bureau of Intelligence and Research report, "Soviet Attitudes Towards, Aid to, and Contacts with Central American Revolutionaries," reported that "Soviet military aid to Nicaragua is unobtrusive and sometimes ephemeral." The author of the report, Dr. Carl Jacobsen found that "the limited amounts of truly modern equipment acquired by the Sandinistas. .. came from Western Europe not the Eastern bloc." The report concluded that "all too many US claims proved open to question" and that "the scope and nature of the Kremlin's intrusion are far short of justifying the President's exaggerated alarms."^[54]

Furthermore, the International Court of Justice determined that "the evidence is insufficient to satisfy the Court that, since the early months of 1981, assistance has continued to reach the Salvadorian armed opposition from the territory of Nicaragua on any significant scale, or that the Government of Nicaragua was responsible for any flow of arms at either period."^[55]

Under the Reagan Doctrine, his administration authorized the CIA to have paramilitary officers from their elite Special Activities Division begin financing, arming, training and advising rebels, some of whom were the remnants of Somoza's National Guard, as anti-Sandinista paramilitaries that were branded "counter-revolutionary" by leftists (contrarrevolucionarios in Spanish).^[56] This was shortened to Contras, a label the anti-socialist forces chose to embrace. Edén Pastora and many of the indigenous paramilitary forces unassociated with the "Somozistas" also resisted the Sandinistas. The Contras operated out of camps in the neighboring countries of Honduras to the north and Costa Rica to the south.^[56] As was typical in guerrilla warfare, they were engaged in a campaign of economic sabotage in an attempt to combat the Sandinista government and disrupted shipping by planting underwater mines in Nicaragua's Port of Corinto,^[57] an action condemned by the International Court of Justice as illegal.^[58] The US also sought to place economic pressure on the Sandinistas, and the Reagan administration imposed a full trade embargo.^[59]

US support for this Nicaraguan insurgency continued in spite of the fact that impartial observers from international groupings such as the European Economic Community, religious groups sent to monitor the election, and observers from democratic nations such as Canada and the Republic of Ireland concluded that the Nicaraguan general elections of 1984 were completely free and fair.^[60][61] The Reagan administration disputed these results, despite the fact that the government of the United States never had any observers in Nicaragua at the time.

The administration criticized the elections as a "sham" based on the charge that Arturo Cruz, the candidate nominated by the Coordinadora Democrática Nicaragüense, comprising three rightwing political parties, did not participate in the elections. However, the administration privately argued against Cruz's participation for fear his involvement would legitimize the elections. U.S. officials admitted to the New York Times that "The Administration never contemplated letting Cruz stay in the race because then the Sandinistas could justifiably claim that the elections were legitimate, making it much harder for the United States to oppose the Nicaraguan Government."^[62]

After the U.S. Congress prohibited federal funding of the Contras in 1983, the Reagan administration continued to back the Contras by covertly selling arms to Iran and channeling the proceeds to the Contras (the Iran–Contra affair).^[63] When this scheme was revealed, Reagan admitted that he knew about the Iranian "arms for hostages" dealings but professed ignorance about the proceeds funding the Contras; for this, National Security Council aide Lt. Col. Oliver North took much of the blame.

Senator John Kerry's 1988 U.S. Senate Committee on Foreign Relations report on Contra-drug links concluded that "senior U.S. policy makers were not immune to the idea that drug money was a perfect solution to the Contras' funding problems."^[64] According to the National Security Archive, Oliver North had been in contact with Manuel Noriega, a Panamanian general and the de facto military dictator of Panama from 1983 to 1989 when he was overthrown and captured by a U.S. invading force.^[65] He was taken to the United States, tried for drug trafficking, and imprisoned in 1992.^[66]

In August 1996, San Jose Mercury News reporter Gary Webb published a series titled Dark Alliance, linking the origins of crack cocaine in California to the Contras.^[67] Freedom of Information Act inquiries by the National Security Archive and other investigators unearthed a number of documents showing that White House officials, including Oliver North, knew about and supported using money raised via drug trafficking to fund the Contras.^[68] Sen. John Kerry's report in 1988 led to the same conclusions; major media outlets, the Justice Department, and Reagan denied the allegations.^[69]

The International Court of Justice, in regard to the case of Nicaragua v. United States in 1984, found; "the United States of America was under an obligation to make reparation to the Republic of Nicaragua for all injury caused to Nicaragua by certain breaches of obligations under customary international law and treaty-law committed by the United States of America".^[70] United States however rejected and did not comply with the judgement under the 'Connally Amendment' (part of the conditional participation of USA in the International court of Justice, which excludes from ICJ's jurisdiction "disputes with regard to matters that are essentially within the jurisdiction of the United States of America, as determined by the United States of America").^[71]

1990s and the post-Sandinista era[link]

Violeta Barrios de Chamorro in 1990 became the first female president democratically elected in the Americas.

The Nicaraguan general election, 1990 saw the defeat of the Sandinistas by a coalition of anti-Sandinista (from the left and right of the political spectrum) parties led by Violeta Chamorro, the widow of Pedro Joaquín Chamorro. The defeat shocked the Sandinistas, as numerous pre-election polls had indicated a sure Sandinista victory, and their pre-election rallies had attracted crowds of several hundred thousand people.^[72] The unexpected result was subject to extensive analysis and comment. Commentators such as Noam Chomsky and Brian Willson attributed the outcome to the U.S./Contra threats to continue the war if the Sandinistas retained power, the general war-weariness of the Nicaraguan population, and the abysmal Nicaraguan economic situation.^{[citation needed]}

The C.I.A. manual, "Psychological Operations in Guerrilla Warfare" under the subheading, "Implicit and Explicit Terror" instructs the Contras that "If the government police cannot put an end to the guerrilla activities, the population will lose confidence in the government, which has the inherent mission of guaranteeing the safety of citizens."^[73] "The United States wanted the contras kept intact in their Honduran bases to ensure Nicaraguan compliance with commitments to democratic and electoral change," the Washington Post reported.^[74] Boston Globe editor Randolph Ryan observed, Washington is sending "an implicit message..to the Nicaraguan electorate: If you want a secure peace, vote for the opposition."^[75]

The Canadian Observer Mission's four-week investigation of the electoral process in Nicaragua reported that the U.S. "is doing everything it can to disrupt the elections set for next year": "American intervention is the main obstacle to the attainment of free and fair elections in Nicaragua," the report stated. It added further that the Contras are "waging a campaign of intimidation with the clear message,`if you support the (Sandinista government), we will be back to kill you'." The observer mission estimates that the contras killed 42 people in "election violence" in October.^[76] In its review of 1989, Human Rights Watch condemned the Bush administration for trying to sabotage the elections by sustaining the death squads with aid and encouraging attacks on the electoral process.^[77]

On November 8, 1989, the White House announced that the embargo against Nicaragua would continue unless Violeta Chamorro won.^[78] The Bush administration also financed Chamorro's campaign with a $9 million election aid package through the National Endowment for Democracy. Edgar Chamorro, a former Contra leader who later became a critic of the CIA-Contra war, said 'For Nicaraguans, the choice was simple: continued war, poverty and inflation or opposition candidate Violeta Barrios de Chamorro'.."They were not electing a president, they were electing a way out." President elect Chamorro surmised that ensuing problems such as 16,000% inflation "eroded the credibility of the government" and led people to realize that "if the Sandinistas won, the pain would continue."^[79]

Time Magazine acknowledges that U.S. policy was to: "wreck the economy and prosecute a long and deadly proxy war until the exhausted natives overthrow the unwanted government themselves. Since 1985 Washington has strangled Nicaraguan trade with an embargo. It has cut off Nicaragua's credit at the World Bank and the International Monetary Fund. The contra war cost Managua tens of millions and left the country with wrecked bridges, sabotaged power stations and ruined farms. The impoverishment of the people of Nicaragua was a harrowing way to give the National Opposition Union (U.N.O.) a winning issue. Nicaragua had been devastated by a 40% drop in G.N.P., an inflation rate running at 1,700% a year and constant shortages of food and basic necessities. At least 30,000 people had been killed in the war, and 500,000 more had fled."^[80]

Thomas Walker, a specialist on Central America, writes: "The voters chose a candidate of Washington's choice with a 'gun held to their heads', as was clear to many impartial observers."^[81]

P. J. O'Rourke countered the US-centered criticism in his book Give War a Chance, saying "the unfair advantages of using state resources for party ends, about how Sandinista control of the transit system prevented UNO supporters from attending rallies, how Sandinista domination of the army forced soldiers to vote for Ortega and how Sandinista bureaucracy kept $3.3 million of U.S. campaign aid from getting to UNO while Daniel Ortega spent millions donated by overseas people and millions and millions more from the Nicaraguan treasury ..."^[82]

Exit polls of Nicaraguans reported Chamorro's victory over Ortega was achieved with 55% majority.^[83] Violeta Chamorro was the first female President of Nicaragua, and also the first woman to be popularly elected for this position in any American nation. Exit polling convinced Daniel Ortega that the election results were legitimate, and were instrumental in his decision to accept the vote of the people and step down rather than void the election. Ortega vowed that he would govern desde abajo (from below);^[84] in other words due to his widespread control of institutions and Sandinista individuals in all government agencies, he would still be able to maintain control and govern even without being president.

President of Nicaragua, Daniel Ortega, in 2008

Chamorro came to office with an economy in ruins. The per capita income of Nicaragua had been reduced by over 80% during the 1980s, and a huge government debt had ascended to US$12 billion, primarily due to the financial and social costs of the Contra war with the Sandinista-led government.^[85] Much to the surprise of the U.S. and the contra forces, Chamorro did not dismantle the Sandinista Popular Army, although the name was changed to the Nicaraguan Army. Chamorro's main contribution to Nicaragua was the disarmament of groups in the northern and central areas of the country. This provided the stability which the country had lacked for over ten years.

In the next election, the Nicaraguan general election, 1996, Daniel Ortega and the Sandinistas of the FSLN were again defeated, this time by Arnoldo Alemán of the Constitutional Liberal Party (PLC).

11 years after toppling the Sandinistas, Washington failed to deliver reparations for reconstruction after its prolonged terrorist war against the nation. The US-backed governments that succeeded the Sandinistas bled the country dry through widespread corruption. Nicaragua remained the second poorest country in the Western Hemisphere next to Haiti, its 5 million residents are beset by hunger, crime, and unemployment. For much of the campaign, Ortega had been leading in the polls, and many observers expected him to regain the presidency.

But no matter who won the election, few Nicaraguans expected either candidate to ease the country's economic misery. Ortega had since largely abandoned the revolution's principles of social justice. He alligned himself with the program of the US-backed oligarchy, steamrollered internal opposition, expelled his own allies by the dozens, and forged a power-sharing pact with his right-wing rivals that effectively excludes smaller parties from the electoral process.

In "The Lost Revolution", Mother Jones reports: "Ortega's political resurrection alarmed the Bush administration, which dispatched diplomat Lino Gutierrez to Managua in June to rail against the front-runner. "If the CIA had any brains," says one political analyst in Managua, "they'd have figured out by now that the Sandinistas not only don't represent a Marxist threat, but that long ago the party was taken over by opportunistic yuppies." Beneath the cynicism, few in Nicaragua see any way out of the current plight. Many prominent Sandinistas have left the party, saying a victory by Ortega holds no promise of meaningful change."^[86]

In the 2001 elections, the Bush administration attempted to link the Sandinistas with the "War on Terror" as a means of intimidating the population into voting for the U.S. backed candidate. A State Department press release stated that "we have grave reservations about the FSLN's history."

John F. Keane, Director of the Office of Central American Affairs at the State Department warned: "It would be dishonest of me not to acknowledge that the possibility of the election of a Sandinista government is disconcerting to the US government. We cannot forget that Nicaragua became a refuge for violent political extremists from the Middle East, from Europe and from Latin America. We are reminded of it daily by the continuing presence of some members of the FSLN leadership, including some very close to candidate Ortega, such as Tomás Borge, Lenín Cerna and Álvaro Baltodano, who perpetrated many of these abominations. Given their past record, why should we believe their statements that they have changed if they have done nothing concrete to demonstrate it…? We are confident that the Nicaraguan people will reflect on the nature and history of the candidates and choose wisely."

In response, Daniel Ortega maintained, "We have already expressed our readiness to support the fight against international terrorism. But any action must be based on the consensus of the international community, respect for international law, and not run counter to the system of the United Nations."^[87][88]

In the 2001 elections, the PLC again defeated the FSLN, with Enrique Bolaños winning the Presidency. The Washington Post explained the victory. The U. S. supported candidate "focused much of his campaign on reminding people of the economic and military difficulties of the Ortega era."^[89]

President Bolaños subsequently brought forward allegations of money laundering, theft and corruption against former President Alemán. The ex-president was convicted and sentenced to 20 years in prison for embezzlement, money laundering, and corruption.^[90] Liberal members who were loyal to Alemán and also members of congress reacted angrily, and along with Sandinista parliament members, stripped the presidential powers of President Bolaños and his ministers, calling for his resignation and threatening impeachment. The Sandinistas alleged that their support for Bolaños was lost when U.S. Secretary of State Colin Powell told Bolaños to keep his distance from the FSLN.^[91] This "slow motion coup d'état" was averted partially due to pressure from the Central American presidents, who vowed not to recognize any movement that removed Bolaños; the U.S., the OAS, and the European Union also opposed the "slow motion coup d'état".^[92] The proposed constitutional changes, to be introduced in 2005 against the Bolaños administration, were delayed until January 2007 after the entrance of the new government. One day before they were due to be enforced, the National Assembly postponed their enforcement until January 2008.

Before the general elections on 5 November 2006, the National Assembly passed a bill further restricting abortion in Nicaragua 52-0 (9 abstaining, 29 absent). President Enrique Bolaños supported this measure, and signed the bill into law on 17 November 2006.^[93] As a result, Nicaragua is one of five countries in the world where abortion is illegal with no exceptions, along with Chile, Malta, El Salvador,^[94] and the Vatican City.

In the 2006 elections, Paul Trivelli, the US ambassador to Nicaragua issued a vigorous warning to the electorate against supporting Daniel Ortega. The ambassador said that an Ortega administration talked of a mixed economy and renegotiating CAFTA, the trade agreement between the U.S. and Central America – would force Washington to "re-evaluate" relations. "He has made it pretty clear what kind of model he would put in place. And I think that under those conditions. .. [bilateral relations] would definitely be re-examined – and not only by the executive or the State Department or the White House but by the US Congress," he said.

The Financial Times emphasized: "It is no secret that the US is determined to prevent the spread of populist politics along the lines practised by Mr Chávez."^[95]

Roger Noriega, the Bush administration’s envoy to Latin America, in the Managua newspaper La Prensa warned the population that Nicaragua will "sink like a stone and reach depths such as those of Cuba" if the Sandinistas returned to office – Referring to the 50 year old United States embargo against Cuba.

Otto Reich, former head the illegal domestic propaganda operation in the Office of Public Diplomacy declared: "If he [Ortega] wins, there will be no foreign investment and no US aid."^[96]

Legislative and presidential elections took place on November 5, 2006. Daniel Ortega returned to the presidency with 37.99% of the vote. This percentage was enough to win the presidency outright, due to a change in electoral law which lowered the percentage requiring a runoff election from 45% to 35% (with a 5% margin of victory).^[97]

Nicaragua's 2011 general election resulted in re-election of Daniel Ortega.

Government[link]

Politics of Nicaragua takes place in a framework of a presidential representative democratic republic, whereby the President of Nicaragua is both head of state and head of government, and of a multi-party system. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. The Judiciary is independent of the executive and the legislature.

Between 2007–2009, Nicaragua's major political parties discussed the possibility of going from a presidential system to a parliamentary system. Their reason: there would be a clear differentiation between the head of government (Prime Minister) and the head of state (President). Nevertheless, it was later argued that the true reason behind this proposal was to find a legal way for current President Ortega to stay in power after January 2012 (this is when his second and last government period ends).

Presidential election[link]

Cid Gallup

Military[link]

C-47 is used in Nicaragua and Air Force equipment.

The armed forces of Nicaragua consists of various military contingencies. Nicaragua has an Army, Navy and Air Force. There are roughly 14,000 active duty personnel, which is much less compared to the numbers seen during the Nicaraguan Revolution. Although the army has had a rough military history, a portion of its forces, which were known as the National Guard became integrated with what is now the National Police of Nicaragua. In essence, the police became a gendarmerie. The National Police of Nicaragua are rarely, if ever, labeled as a gendarmerie. The other elements and manpower that were not devoted to the National Police were sent over to cultivate the new Army of Nicaragua.

The age to serve in the armed forces is 17 and conscription is not imminent. As of 2006, the military budget was roughly 0.7% of Nicaragua's expenditures.

Departments and municipalities[link]

Departments of Nicaragua

Nicaragua is a unitary republic. For administrative purposes it is divided into 15 departments (departamentos) and two self-governing regions (autonomous communities) based on the Spanish model. The departments are then subdivided into 153 municipios (municipalities). The two autonomous regions are 'Región Autónoma Atlántico Norte' and 'Región Autónoma Atlántico Sur', often referred to as RAAN and RAAS, respectively; until they were granted autonomy in 1985 they formed the single department of Zelaya.^[101]

Department Capital city 1  Boaco Boaco 2  Carazo Jinotepe 3  Chinandega Chinandega 4  Chontales Juigalpa 5  Estelí Estelí 6  Granada Granada 7  Jinotega Jinotega 8  Leon Leon 9  Madriz   Somoto

Department Capital city 10  Managua   Managua 11  Masaya Masaya 12  Matagalpa Matagalpa 13  Nueva Segovia Ocotal 14  Rivas Rivas 15  Río San Juan San Carlos 16  Región Autónoma del Atlántico Norte Bilwi 17  Región Autónoma del Atlántico Sur Bluefields

Geography and climate[link]

Mombacho Volcano Natural Reserve

Nicaragua occupies a landmass of 130,967 km² (50,567 sq mi), comparable to that of Greece or the state of Alabama. It lies between latitudes 10° and 15°N, and longitudes 82° and 88°W.

Nearly one fifth of the territory is designated as protected areas like national parks, nature reserves, and biological reserves. The country is bordered by Honduras to the north, the Caribbean to the east, Costa Rica to the south, and the Pacific Ocean to the west. Geophysically, Nicaragua is surrounded by the Caribbean Plate, an oceanic tectonic plate underlying Central America and the Cocos Plate. Since Central America is a major subduction zone, Nicaragua hosts most of the Central American Volcanic Arc.

Nicaragua has three distinct geographical regions: the Pacific lowlands, fertile valleys which the Spanish colonists settled, the Amerrisque Mountains (North-central highlands), and the Mosquito Coast (Atlantic lowlands). The low plains of the Atlantic Coast are 60 miles wide in areas. They have long been exploited for their natural resources.

Pacific lowlands[link]

Nicaragua is known as the land of lakes and volcanoes; pictured is Concepción volcano, as seen from Maderas volcano.

In the west of the country, these lowlands consist of a broad, hot, fertile plain. Punctuating this plain are several large volcanoes of the Cordillera Los Maribios mountain range, including Mombacho just outside Granada, and Momotombo near León. The lowland area runs from the Gulf of Fonseca to Nicaragua's Pacific border with Costa Rica south of Lake Nicaragua. Lake Nicaragua is the largest freshwater lake in Central America (20th largest in the world),^[102] and is home to some of the world's only freshwater sharks (Nicaraguan shark).^[103] The Pacific lowlands region is the most populous, with over half of the nation's population. The capital city of Managua is the most populous and is the only city with over 1.5 million inhabitants.

Scarlet Tanager passing through Nicaragua around April, and again around October.

The eruptions of western Nicaragua's 40 volcanoes, many of which are still active, have sometimes devastated settlements but also have enriched the land with layers of fertile ash. The geologic activity that produces vulcanism also breeds powerful earthquakes. Tremors occur regularly throughout the Pacific zone, and earthquakes have nearly destroyed the capital city, Managua, more than once.^[104]

Most of the Pacific zone is tierra caliente, the "hot land" of tropical Spanish America at elevations under 2,000 feet (610 m). Temperatures remain virtually constant throughout the year, with highs ranging between 85 and 90 °F (29.4 and 32.2 °C). After a dry season lasting from November to April, rains begin in May and continue to October, giving the Pacific lowlands 40 to 60 inches (1,016 to 1,524 mm) of precipitation. Good soils and a favorable climate combine to make western Nicaragua the country's economic and demographic center. The southwestern shore of Lake Nicaragua lies within 15 miles (24 km) of the Pacific Ocean. Thus the lake and the San Juan River were often proposed in the 19th century as the longest part of a canal route across the Central American isthmus. Canal proposals were periodically revived in the 20th and 21st centuries.^[104][105] Roughly a century after the opening of the Panama Canal, the prospect of a Nicaraguan ecocanal remains a topic of interest.^{[106][107][108][109]}

In addition to its beach and resort communities, the Pacific lowlands contains most of Nicaragua's Spanish colonial architecture and artifacts. Cities such as León and Granada abound in colonial architecture; founded in 1524, Granada is the oldest colonial city in the Americas.^[110]

North-central highlands[link]

The central highlands are a significantly less populated and economically developed area in the north, between Lake Nicaragua and the Caribbean. Forming the country's tierra templada, or "temperate land", at elevations between 2,000 and 5,000 feet (610 and 1,524 m), the highlands enjoy mild temperatures with daily highs of
75 to 80 °F (23.9 to 26.7 °C). This region has a longer, wetter rainy season than the Pacific lowlands, making erosion a problem on its steep slopes. Rugged terrain, poor soils, and low population density characterize the area as a whole, but the northwestern valleys are fertile and well settled.^[104]

The area has a cooler climate than the Pacific lowlands. About a quarter of the country's agriculture takes place in this region, with coffee grown on the higher slopes. Oaks, pines, moss, ferns and orchids are abundant in the cloud forests of the region.

Bird life in the forests of the central region includes Resplendent Quetzal, goldfinches, hummingbirds, jays and toucanets.

Toucans such as this Keel-billed Toucan are common in Nicaragua's rainforests

Caribbean lowlands[link]

This large rainforest region is irrigated by several large rivers and is sparsely populated. The area has 57% of the territory of the nation and most of its mineral resources. It has been heavily exploited, but much natural diversity remains. The Rio Coco is the largest river in Central America; it forms the border with Honduras. The Caribbean coastline is much more sinuous than its generally straight Pacific counterpart; lagoons and deltas make it very irregular.

Nicaragua's Bosawás Biosphere Reserve is in the Atlantic lowlands; it protects 1,800,000 acres (728,434 ha) of La Mosquitia forest – almost 7% of the country's area – making it the largest rainforest north of the Amazon in Brazil.^[111]

Nicaragua's tropical east coast is very different from the rest of the country. The climate is predominantly tropical, with high temperature and high humidity. Around the area's principal city of Bluefields, English is widely spoken along with the official Spanish. The population more closely resembles that found in many typical Caribbean ports than the rest of Nicaragua.

A great variety of birds can be observed including eagles, turkeys, toucans, parakeets and macaws. Animal life in the area includes different species of monkeys, anteaters, white-tailed deer and tapirs.

Economy[link]

Exports[link]

Graphical depiction of Nicaragua's product exports in 28 color coded categories.

The seaport in Corinto, Nicaragua is the country's only deep-water port capable of handling container ships and tankers

Nicaragua is primarily an agricultural country; agriculture constitutes 60% of its total exports which annually yield approximately US $2.0 billion.^[112] In addition, Nicaragua's Flor de Caña rum is renowned as among the best in Latin America, and its tobacco and beef are also well regarded. Nicaragua's agrarian economy has historically been based on the export of cash crops such as coffee, beef and tobacco. Light industry (maquila), tourism, banking, mining, fisheries, and general commerce are expanding. Nicaragua also depends heavily on remittances from Nicaraguans living abroad, which totaled $655.5 million in 2006.

Nicaragua has always been a predominantly agricultural country. On the Pacific side, coffee and cotton are by far the most important commercial crops. In 1992, more land was devoted to coffee than to any other crop, and it is the nation's leading export in terms of value. Nearly two-thirds of the coffee crop comes from the northern part of the central highlands, in the area north and east of the town of Estelí.^[104]

In the early 1980s, cotton became Nicaragua's second-largest export earner. Production is centered on large farms along the central Pacific coast. Unfortunately, the growth of the cotton industry has created serious problems. Soil erosion and pollution from the heavy use of pesticides have become serious concerns in the cotton district. Yields and exports have both been declining since 1985.^[104]

Plantation crops are significant in the Caribbean lowlands. After disease wiped out most of the region's banana plants in the years before 1945, attempts were made to diversify crops. Today most of Nicaragua's bananas are grown in the northwestern part of the country near the port of Corinto; sugarcane is also grown in the same district.^[104] Subsistence farms, where food is grown mainly for the consumption of the farm family instead of for sale, are found throughout Nicaragua. Favorite food crops grown on such farms include rice, beans, maize, citrus fruits, and cassava. Cassava, a root crop somewhat similar to the potato, is an important food in tropical regions. The plant's roots can be eaten boiled and sliced, or ground into flour. Cassava is also the main ingredient in tapioca pudding.^[104]

The Pacific lowlands and the middle and southern parts of the Central highlands are the principal cattle-grazing areas. An especially large number of cattle are found to the east of Lake Nicaragua.

Beginning in the 1960s, shrimp became big business on both the Pacific and Caribbean coasts. The main shrimping centers on the Pacific coast are Corinto and San Juan del Sur. Fishing boats on the Caribbean side bring shrimp as well as lobsters into processing plants at Puerto Cabezas, Bluefields, and Laguna de Perlas.^[104]

The lumber industry, concentrated mainly in the eastern third of the country, has been lethargic since 1980, with its activities limited by several problems. First, the best trees in the most accessible places have already been cut down. In addition, pure groves of trees are uncommon in tropical forests. Hundreds of species per acre are generally the rule, complicating the task of harvesting. Moreover, the most valuable dense hardwoods will not float. As a result, these trees must be trucked out of the forest rather than floated downriver to a sawmill. Finally, more restrictions are being placed on lumbering due to increased environmental concerns about destruction of the rain forests. But lumbering continues despite these obstacles; indeed, a single hardwood tree may be worth thousands of dollars.^[104]

Political turmoil has had a severe impact on the mining industry. Exports of gold are down, and little effort has been made to develop the large copper deposits of the northeast. Fighting during the revolution destroyed nearly one-third of Nicaragua's industry. As it rebuilds, the government is trying to change the industrial mix of the country and achieve decentralization. Before the revolution, more than 60% of the nation's industrial production, by value, was concentrated in Managua. The industrial-decentralization policy may help to slow the growth of the largest cities, while assisting in the redistribution of income and development of economies in impoverished areas. Major industries include food processing, cement production, metal fabrication, and oil refining. The Centroamérica power plant on the Tuma River in the Central highlands has been expanded, and other hydroelectric projects have been undertaken to help provide electricity to the nation's newer industries.^[104]

The economic core of Nicaragua is in the Pacific zone, and the railway and highway network reflects that concentration of activity. The government-owned rail system—an inefficient money loser—is gradually being replaced by truck transport. Transportation throughout the rest of the nation is often inadequate. For example, one cannot travel all the way by highway from Managua to the Caribbean coast. The road ends at the town of Rama. Travelers have to transfer and make the rest of the trip by riverboat down the Río Escondido—a five-hour journey.^[104]

Corinto is the only modern deepwater port in Nicaragua. It handles both agricultural exports and general-cargo imports. Petroleum is unloaded at Puerto Sandino, from which it travels by pipeline to a refinery in Managua. Trade with other nations in Central America has increased in recent years. Nicaragua has long been considered as a possible site for a new sea-level canal that could supplement the Panama Canal.^[104]

Components of the economy[link]

Gross Domestic Product (GDP) in purchasing power parity (PPP) in 2008 was estimated at $17.37 billion USD.^[3] The service sector is the largest component of GDP at 56.9%, followed by the industrial sector at 26.1% (2006 est.). Agriculture represents 17% of GDP, the highest percentage in Central America ^[113] (2008 est.). Remittances account for over 15% of the Nicaraguan GDP. Close to one billion dollars are sent to the country by Nicaraguans living abroad.^[114] Nicaraguan labor force is estimated at 2.322 million of which 29% is occupied in agriculture, 19% in the industrial sector and 52% in the service sector (est. 2008).

Agriculture[link]

A Nicaraguan farmer

After 1950 the scope of capital-intensive modern agriculture increased greatly. This growth was concentrated in export crops, while crops destined for domestic use continued to be produced by traditional labor-intensive methods. The shift to industrialized agriculture also significantly reduced the proportion of the population directly dependent on agriculture.

Commercial agriculture thrives in the Pacific lowlands, where cotton and sugarcane are the staple crops. Although coffee is grown in the Pacific zone at elevations over 1,000 feet (300 meters), the most important coffee zone is the northwestern part of the Central highlands, from Matagalpa to Jinotega. Cattle for the export of beef are raised in the southeastern part of the highlands. The overall expansion of export production by large landholders pushed the smallholders who produced the country's maize, beans, and other dietary staples onto marginal lands, with the result that food production could not keep up with population increase.

In the 1990s the government initiated efforts to diversify agriculture. Some of the new export-oriented crops were peanuts, sesame, melons, and onions.^[104]