NICARAGUA

Nicaragua
I INTRODUCTION

Nicaragua, largest country in Central America. Nicaragua is sometimes called “the land of lakes and volcanoes,” and the largest lakes in Central America and a chain of volcanic peaks dominate the western part of the country. Lakes also fill the craters of many of the volcanoes. Most of Nicaragua's people live in the country’s western lowlands, where most of the country’s economic activity also occurs. Managua, the country’s capital and largest city, lies along the shores of Lake Managua in western Nicaragua, on geologic fault lines. Severe earthquakes destroyed Managua twice in the 20th century. Nicaragua also has thick rain forests, rugged highlands, and fertile farming areas.

Nicaragua probably takes its name from Nicarao, chief of the indigenous people who lived around Lake Nicaragua at the time Spanish explorers and conquerors arrived in the early 1500s. Today, most of the people are of mixed European and Native American ancestry, but the country also has minorities of primarily Native American, African, or European descent. The total population is 5.8 million.

Nicaragua's economy is based largely on agriculture, especially on crops grown for export. Coffee is the most important agricultural export, while corn is the major crop grown for domestic consumption. Nicaragua ranks among the poorest nations in Central America, after years of corrupt dictatorship, natural disasters, revolution, and civil war.

Nicaragua has had a stormy history, marred by internal conflicts and intervention by other nations, especially the United States. Nicaragua remained a minor part of the Spanish colonial empire from the early 1500s until it gained independence in 1821. Ongoing conflict between liberal and conservative factions made political stability an impossibility during the country’s first century of independence. Armed U.S. forces intervened several times: in the 1850s, when an American mercenary took over Nicaragua, and between 1912 and 1933, when U.S. Marines were stationed there to impose order.

For more than 40 years, the Somoza family dictatorship controlled Nicaragua's government and economy, and enriched itself and its supporters at the nation's expense. The Somozas, who enjoyed strong U.S. support, were overthrown in 1979 by the Sandinistas, Marxist revolutionaries who promised social and economic reforms. The Sandinista government made some progress on social issues but fought a devastating civil war through the 1980s against rebels known as contras, who were supported by the United States and Nicaragua's neighbor Honduras. A peace settlement was reached in 1990, and since then democratically elected governments have succeeded one another. Nevertheless, the nation continues to struggle with severe economic problems, disagreements among political factions, and social inequalities.

II LAND AND RESOURCES

Nicaragua extends from the Caribbean Sea on the east to the Pacific Ocean on the west. It is bounded on the north by Honduras and on the south by Costa Rica. Located within the tropics, Nicaragua extends 490 km (300 mi) from east to west and 470 km (290 mi) north to south at its widest points. Rivers form large sections of its northern and southern borders, and its two coastlines together stretch 910 km (565 mi) in length. Its area of 129,494 sq km (49,998 sq mi) makes Nicaragua the largest of the region’s countries. Within its borders lie the two largest lakes in Central America, Lake Nicaragua and Lake Managua.

Nicaragua's landscape ranges from tropical rain forest and marshes to forested mountain slopes. Western Nicaragua is lined with active volcanoes, and volcanic ash from their frequent eruptions has produced soil that is among the most fertile in Central America. The country is also subject to severe earthquakes.

A Natural Regions

Nicaragua is divided into three major regions. Tropical lowlands near the Pacific and Caribbean coasts form two of the regions. At the center of the country is a cooler highland plateau crossed by several mountain ranges.

The western lowlands, near the Pacific, include Nicaragua’s two major lakes, Nicaragua and Managua. Three volcanic cones rise in Lake Nicaragua. From Lake Managua a chain of volcanoes extends northward. This fertile lowland area, which produces sugar and cotton, is the site of most of Nicaragua’s major cities, including Managua.

Farther inland the land rises to a highland plateau of more than 450 m (1,500 ft). Numerous peaks ascend above the plateau, and the country’s highest mountain range, the Cordillera Isabella, crosses the region. Some of its peaks reach heights of 2,100 m (6,890 ft). The lower elevations of this highland region have extensive cattle ranches, while coffee, the nation’s major export crop, grows at higher elevations. There are also small gold and silver mines in the highlands.

About half of Nicaragua’s territory consists of the eastern lowlands, which extend 70 km (40 mi) inland from the Caribbean. The eastern lowlands are also known as the Mosquito Coast after the original inhabitants, the Miskito Indians. This region once contained extensive stands of valuable tropical hardwoods, but most of these trees have been cut down. Tropical rain forest covers much of the area, threaded with rivers that begin in the highlands and empty into the Caribbean. The coast is indented with lagoons and river deltas, and islands and coral reefs are scattered offshore. Bananas are grown along river valleys, but elsewhere soils are often poor, and there are extensive salt marshes. Less than 5 percent of Nicaragua’s population, mostly Native Americans and people of African descent, lives in this isolated region. While not on the main storm track, Nicaragua’s Caribbean coast is occasionally struck by severe hurricanes.

B Rivers and Lakes

Lake Nicaragua, known as the Great Lake, is Central America’s largest, covering about 8,000 sq km (3,100 sq mi). More than 350 islands dot the lake, including the island of Ometepe, which has two volcanoes; the island of Zapatera, now a national park with pre-Columbian sites; and the Solentiname Archipelago, home of a well-known artists’ colony. Lake Nicaragua’s southeast corner lies only 19 km (12 mi) from the Pacific Ocean; the San Juan River connects the lake to the Caribbean Sea. Because of this water link, Nicaragua was once an important route for travel between the Pacific and Atlantic oceans and was considered a possible site for a canal across the Central American isthmus. The Tipitapa River links Lake Nicaragua to Lake Managua, which covers 1,050 sq km (405 sq mi).

All of Nicaragua’s major rivers run into the Caribbean. The Río Grande and its tributaries are the most extensive river system, while the Escondido provides a major transportation route between the Pacific and Caribbean coasts. The Coco runs along the border with Honduras, and the San Juan begins in Lake Nicaragua and forms part of the border with Costa Rica. There has been limited hydroelectric development on smaller rivers.

C Climate

Nicaragua’s climate is tropical, with temperatures determined largely by elevation. The coastal regions, including the city of Managua, have a hot climate, with a mean average temperature of 27°C (81°F). In the central highlands the temperature ranges between 16° and 27°C (60° and 80°F). The rainy season occurs from May until early November. Annual rainfall in the Pacific lowlands and central highlands generally ranges from 1,000 mm (40 in) to 1,800 mm (70 in), while the Caribbean coast receives more than 2,500 mm (100 in). Near the Costa Rican border to the south, rain can total as much as 6,350 mm (250 in). The Mosquito Coast becomes swampy during the rainy season.

D Plant and Animal Life

Vegetation in Nicaragua is largely tropical and subtropical. Broadleaf trees cover large areas, and major sections of the eastern lowlands are rain forest. Oak and cedar are common in the highlands, with stands of pine in the east. Most of the country’s mahogany and other valuable tropical hardwoods have been cut. Nicaragua has more than 50 varieties of fruit trees and a wide variety of orchids and other flowers.

Wild animals include pumas, small deer, several species of monkeys, sloths, and wild pigs. There are caimans and a wide variety of other reptiles, including venomous snakes. Many species of birds, including several varieties of parrots and hummingbirds, are native to Nicaragua, which is also the winter home for many North American birds. Freshwater sharks live in Lake Nicaragua. Along the Atlantic coast sea turtles are hunted for meat and eggs, a practice that has raised concerns about the species' survival.

E Natural Resources

Nicaragua's major resources are its excellent soil and its potential as a canal route. In addition to gold and silver, Nicaragua has mineral resources, including copper, as yet untapped. Hydroelectric potential is limited, but volcanoes provide a potential source for generating more geothermal energy. Timber reserves are extensive but are being depleted rapidly to provide lumber and more land for agriculture. Today, 15.9 percent of the land is farmed, and 40 percent is forested.

F Environmental Issues

Environmental issues received little attention in Nicaragua before the 1980s. Deforestation is the major concern, but soil erosion and water pollution also present serious problems. Pollution has destroyed the fishing industry in Lake Managua and elsewhere. Access to clean water is a notable problem in the Managua area, where many people lack sanitation facilities and sewage treatment is inadequate for the large population.

The Nicaraguan Institute for Natural Resources and Environment (IRENA) was created in the 1980s and established Bosawas, a nature preserve of about 14,000 sq km (about 5,400 sq mi) in northern Nicaragua. Species protected there include jaguars, tapirs, howler monkeys, and canopy orchids. In the 1990s another protected area was established in southeast Nicaragua. The Indio-Maíz biological reserve, between the San Juan and Punta Gorda rivers, covers about 4,500 sq km (about 1,700 sq mi) and is home to jaguars, ocelots, rare birds, and many types of frogs, butterflies, and orchids. Together, these areas give Nicaragua the largest forest reserves in Central America. Despite these efforts, Nicaraguan rain forests continued to be cut at an accelerating rate.

III PEOPLE

Nicaragua has a population of 5,780,586 (2008 estimate). It is among the poorest nations in Central America, a legacy of exploitation by dictators, of natural disasters, and of a devastating civil war. Most of its people are mestizos (of mixed European and Native American ancestry). Minority groups include people of African, Native American, and European descent. Traditionally, a small upper class has controlled most of the nation's land and its economic and political power.

Nicaragua has a young, rapidly growing population, with 30 percent (2008) of its people under the age of 15. The birth rate (24 per 1,000 people) greatly outpaces the death rate (4 per 1,000), contributing to a population growth rate of 1.8 percent. Population growth in Nicaragua slowed during the 1980s as hundreds of thousands of people fled the country to avoid the civil war, but it returned to higher levels in the 1990s as the conflicts ended and some refugees and exiles returned. An estimated 45 percent of the population survives on less than $1 a day, with poverty levels highest in rural areas.

Nicaragua has a population density of 48 persons per sq km (125 per sq mi), several times less than that of nearby El Salvador, the most densely settled nation on the mainland of the Americas. However, Nicaragua's Caribbean lowlands are very sparsely settled, while the population is quite dense in the Pacific coast region, where most of the cities are located.

An estimated 58 percent of Nicaragua's population lives in or around cities. Managua, the capital, had an estimated population of 1.1 million in 2003. It is by far the largest city and the center for government, communications, and industry. Managua is prone to earthquakes, which destroyed the city in 1931 and again in 1972.

Nicaragua's second-largest city is León, with a population of about 174,051 (2005). León is the home of the National University and the traditional center of the country’s Liberal Party, one of the major political forces. Granada, a commercial center on Lake Nicaragua and the nation's traditional Conservative Party stronghold, has a population of 105,171. Masaya, a market town south of Managua famous for its handicrafts, has a population of 139,582. Matagalpa, a coffee-producing center in the central highlands, has 133,416 inhabitants. Cities continue to grow as poor Nicaraguans pour in from rural areas, trying to escape violence and poverty in the countryside.

A Ethnic Groups

Nicaragua has a diverse ethnic mix. The majority, 69 percent, are mestizos; 17 percent are classified as white; 9 percent are of African descent; and 5 percent are Native American. The African and Native American populations are concentrated in the thinly settled eastern lowlands, where they are the dominant group.

The major Native American group in Nicaragua is the Miskito. Concentrated in the northeast, Miskito people live on both sides of the border with Honduras. Although many Miskito have some African ancestry, they have preserved their native language and much of their culture. Many Miskito speak English, because the Mosquito Coast was under British influence from the late 17th until the late 19th century. Most of the Miskito are Protestants, in part due to the activity of Moravian Church missionaries. There are much smaller Native American groups of Sumo and Rama, and a very small group of mixed African-indigenous ancestry known as Garifuna.

Nicaraguans of African descent, known as Creoles, dominate the towns along the Caribbean coast. Coming from the British West Indies, notably Jamaica and the Cayman Islands, they speak English and are largely Protestants. Although relations between Creoles and Miskito have been strained, they share a common dislike of the mestizo population of western Nicaragua, a population that is predominantly Spanish-speaking and Roman Catholic. In response to rising discontent among ethnic groups, Nicaragua's 1987 constitution established two autonomous zones on the east coast, giving greater powers and freedom to local governments. Reversing a history of exploitation and discrimination, Nicaragua's governments have begun efforts to recognize and strengthen indigenous cultures.

B Language

Almost all Nicaraguans speak Spanish, which is the official language. Many Nicaraguans on the country's east coast speak Miskito or English at home, but most also speak Spanish.

C Religion

Since the Spanish conquest in the early 1500s, the great majority of Nicaraguans have been Roman Catholics. Protestant denominations have grown very rapidly in recent decades, however, and 12 percent of the population identifies itself as Protestant. The majority of these are Pentecostal churches, but there are many other groups, including Moravians, Baptists, and Seventh-day Adventists. Nicaragua’s constitution guarantees religious freedom.

D Education

Before 1980 educational opportunities in Nicaragua were limited and, in rural areas, often unavailable. Adult literacy in 1971 was only 57 percent. In 1980 the Sandinista government launched a national literacy crusade, and spending on primary education more than doubled. Literacy rates climbed to 87 percent by 1985, and by 1990 the government claimed that virtually all children of primary age were enrolled in school. The 1987 constitution declared primary education free and obligatory, and schools were established in most rural areas.

However, education suffered during the warfare and economic problems of the late 1980s and early 1990s, and Nicaragua remains a poorly educated nation. Education budgets declined in the late 1980s and remain low. Literacy rates have fallen sharply, to 68 percent. Many children who are enrolled in primary school rarely attend. Some 61 percent are reported to attend secondary school.

University enrollments almost tripled in the 1980s, but most students attend part-time, and many never graduate. Slightly over half of those enrolled in higher education are women. Nicaragua has two major universities, the National University in León, founded in 1812, and the Central American University in Managua, founded by the Catholic Church in 1961. In addition, there are several state technical universities, and six private universities opened in the 1990s.

E Way of Life

A few elite families, descended primarily from Spanish settlers, dominate Nicaragua's economy and much of its political and cultural life. But nearly half of the country's people live in poverty.

Family relations are extremely important in Nicaraguan life, as they are in many other regions of Latin America. Extended family ties play a major role in determining status, political loyalties, jobs, and other opportunities. Nicaraguans feel a sense of responsibility toward family members. Many children grew up without fathers during the 1980s and 1990s as a result of the civil war that killed so many men. Many widows and their children lived with other family members. A system known as compadrazgo also creates important social and economic links between a child's family and his or her godparents. People call on their godparents for help finding jobs or getting through difficult times.

Women have made more progress in Nicaragua than they have in most of Central America, in part because of Sandinista efforts to organize them and in part because Violeta Barrios de Chamorro, elected in 1990, was the first woman to serve as president of a Central American nation. Women are active in politics, and women's groups are strong lobbying forces for various social issues.

Baseball is Nicaragua's national sport, reflecting U.S. influence. Cycling, basketball, volleyball, and soccer are also popular. The typical diet of the region is based on rice, beans, yucca, and tortillas. The nation is known for its variety of tropical fruits.

F Social Issues

Nicaragua suffers from serious social problems, worsened by warfare and economic crises in the 1980s. Some 47.90 percent of Nicaraguans live in poverty, with the percentage highest in rural areas. In the eastern lowlands poverty levels exceed 90 percent. Unemployment and underemployment are estimated as high as 50 percent, although official figures are lower.

Poverty and unemployment contribute to widespread housing shortages, malnutrition, and poor health care. Tropical diseases such as malaria and dengue fever, which were rare in the 1970s, became common during the civil war. Especially in Managua, the urban poor live in extensive slums, sometimes in houses made of cardboard with dirt floors. Many of the nation's households do not have access to clean drinking water or plumbing. Urban residents typically receive better services than do those in rural areas, yet even in the cities health and education facilities, water supplies, and sanitation are often inadequate. The Sandinista government made improved health care and education top priorities, and they made some progress, especially in poor and rural areas. But conditions declined as economic problems and the contra war diverted resources from social programs. Crime, including kidnapping, increased rapidly during the 1990s.

Nicaraguan society has deep class divisions, which contributed to the Sandinistas' takeover of power in 1979. At that time, about one-fifth of the population was upper class or middle class, and this small portion of the population received 60 percent of the nation's income and owned much of the best land. The Sandinista revolution tried to restructure society by taking wealth and land from the upper classes and distributing it to the poor or keeping it under government control. By emphasizing class divisions, the Sandinistas created the first effective, mass-based political forces in Nicaragua. Following the civil war of the 1980s and 1990s Sandinista support remained strong among the urban poor, while the middle class and much of the rural peasant population supported other political parties.

G Culture

Nicaraguan culture is largely a mixture of Hispanic and Native American elements, with regional variations. Many folk dances, for instance, are derived from both traditions. The most notable is a dance known as Las Inditas (literally meaning “little Indian girls”), in which figures representing Spanish conquistadors and Native Americans mock each other's cultures. There are many local festivals, and most towns and cities celebrate a patron saint in a festival known as Toro Guaco. The celebration of the feast of Santo Domingo in Managua takes place during the first ten days of August and combines popular festivities with a religious procession. Music is a vital part of Nicaraguan celebrations; the instruments played include marimbas, guitars, traditional flutes (zuls), and maracas. Along the Caribbean coast there is greater African influence on music and dance.

Nicaragua has produced many poets and novelists. Most famous is Rubén Darío, whose poetry of the late 1800s and early 1900s influenced an entire generation in Latin America. He was the first Latin American poet to be widely read outside of the hemisphere. Ernesto Cardenal, Pablo Antonio Cuadra, and Daisy Zamora are 20th-century poets whose works have been translated into English and other languages. Novelists include Sergio Ramirez, a Sandinista leader and former vice president (1984-1990).

Nicaraguan painters and sculptors, including painter Armando Morales, have achieved some prominence. Paintings of daily life done in a naive manner (see Naive Art) by artists in the Solentiname Islands off Nicaragua's coast have become popular since the 1970s. The National Museum in Managua has many pre-Columbian objects of gold, jadeite, and shell. Little colonial architecture survives in the cities because of the country's devastating earthquakes. The city of Granada in southwestern Nicaragua is the best place to see Spanish-style buildings.

IV ECONOMY

Since the colonial period, Nicaragua's economy has been based on the export of raw materials, largely agricultural products. Coffee has been a major crop since the 1840s, and cotton, sugar, bananas, forestry, mining, cattle, and shrimp have also contributed to the economy. A small elite class traditionally controlled the bulk of Nicaragua's land and therefore its economic life.

The economy grew rapidly from the 1950s until the 1970s, as agricultural exports and industry expanded. However, this growth benefited the middle and upper classes, especially the Somoza family and their associates, while poverty increased among the poorest Nicaraguans. A series of events then produced an economic crisis. Civil conflicts, especially the revolution that brought down the Somoza regime in 1979 and the contra war that followed it, slowed economic output and caused enormous destruction (see Nicaraguan Revolution). The Sandinista government, which came to power in 1979, tried to institute a new economic system, mixing socialist policies and private enterprise while redistributing income and land to the poor. Some of its policies succeeded, others failed, and all were hampered by U.S.-sponsored economic sanctions against Nicaragua, attacks by rebels backed by the United States, and unfavorable world economic trends. The result was a severe depression that lasted into the 1990s. Between 1981 and 1990 gross domestic product (GDP) per capita declined by 33.5 percent.

Nicaragua's economy gradually recovered after the mid-1990s, but was dealt a further blow when Hurricane Mitch destroyed crops and left thousands homeless in 1998. Ongoing political instability continues to leave businesspeople from Nicaragua and from abroad reluctant to invest in the country. Disputes over ownership of property that was confiscated under the Sandinistas remain unresolved. As many former owners sought to reclaim the property, legal battles ensued. Government compensation for some confiscated property caused the national debt to soar. Rising crime and rural violence, and a deteriorating infrastructure, have also hindered economic recovery.

In 2006 Nicaragua's GDP was $5.30 billion, equivalent to $958.10 per person, making Nicaragua one of the poorest countries in the Western Hemisphere. GDP is a measure of the value of all goods and services a country produces. Nicaragua had a high debt level—more than $6 billion in the early 2000s—and low worker productivity. Agriculture remained the dominant sector, although a growing percentage of the labor force worked in service jobs.

A Labor

In 2006 Nicaragua's workforce was 2.1 million people. Among women, 30 percent were economically active. Agricultural work employed 31 percent of Nicaragua's working population; the service sector employed 40 percent; and manufacturing, construction, and mining employed another 18 percent. Estimates for the unemployed and underemployed ranged as high as 50 percent of the potential workforce.

Labor unions grew rapidly in the 1980s, many tied to the Sandinistas. By the mid-1990s some estimates put union membership as high as 50 percent of Nicaragua's workforce. Unions have important political influence because of their political ties and their ability to paralyze vital areas of the economy, especially transportation.

B Agriculture

Agriculture provides 20 percent of Nicaragua's GDP, the highest percentage in Central America. Production fell during Sandinista rule, from 1979 to 1990, because of government policies and civil conflict. Efforts at land reform improved the life of some rural residents, but food production declined in the late 1980s, as did the output of cotton, sugar, and other export crops.

Recovery was slow after the Sandinistas lost power in 1990. Coffee remained a major cash crop and still provides a significant share of Nicaragua's export earnings. However, a drop in world coffee prices in the early 2000s hurt a number of coffee growers. Sugar cane, bananas, and beef cattle also are raised for export. Corn, rice, and beans are grown primarily for local use. Peanuts and dried beans have increased in importance as export crops since the 1990s.

C Forestry and Fishing

Forestry has occupied a minor place in Nicaragua's economy since the mid-1900s. Nicaragua has major stands of oak and pine and small areas of tropical hardwoods, But most logging today is for domestic use. Government efforts to encourage logging in a large area on the Honduran border encountered strong opposition from the indigenous Sumo people and international conservation groups.

Fishing plays an important role along the Caribbean coast; it is also significant in the Pacific and, to a small extent, on Lake Nicaragua. Commercial fishing operations landed 40,897 metric tons in 2005. Exports are largely limited to shrimp and spiny lobster, but the government is trying to expand the industry to include tuna and crabs and other shellfish.

D Manufacturing and Mining

Manufacturing contributes 19 percent of the nation's GDP. Major industries include cement, agricultural chemicals, petroleum products, metal processing, beer and soft drinks, food processing, and other consumer goods. The country has sugar refineries, small textile mills, and coffee-processing plants that produce instant coffee. The assembly of parts for export, especially clothing, footwear, and jewelry, has grown in importance since the 1990s.

Mining is a minor part of the economy. Gold and silver mines are located in the northeast and near León. Most production is exported. Nicaragua has reserves of copper, tungsten, lead, and antimony, but these are not currently being mined.

E Energy

Nicaragua has no petroleum reserves and depends in large part on imported sources of energy. In 2003 76 percent of the country's electricity was generated in conventional oil-fired facilities, 12 percent in hydroelectric installations, and 12.27 percent from renewable sources, primarily geothermal. The country has one small petroleum refinery, owned and operated by Exxon Corporation, which imports all the crude oil it refines. Power shortages and rationing occur in the cities, and wood remains an important fuel, especially in rural areas.

F Foreign Trade

Nicaragua's economy depends heavily on agricultural exports and imports of consumer goods and petroleum. Export revenues declined as a result of the civil war of the 1980s and an embargo imposed by the administration of U.S. president Ronald Reagan. Although trade began to recover in the 1990s after the embargo was lifted, Nicaragua continued to run a huge deficit. Revenues from foreign trade slumped again after Hurricane Mitch destroyed export crops in 1998. Earnings from tourism helped to offset the trade imbalance in the early 2000s, as did money sent back to the country by Nicaraguans living abroad.

Nicaragua's imports in 2004 totaled $2,251 million, far outpacing the $767 million in exports. The United States, El Salvador, Costa Rica, and Honduras are the major markets for exports. Imports come largely from the United States, Venezuela (petroleum), Costa Rica, Mexico, and Guatemala. The most important imports are consumer goods, machinery and equipment, and petroleum products.

Nicaragua is a founding member of the Central American Common Market (CACM), an organization founded in 1960 to promote economic integration and free trade. It is also a member of the World Trade Organization (WTO) and the Association of Caribbean States (ACS), a trade association of nations bordering on or within the Caribbean.

G Currency and Banking

The córdoba, consisting of 100 centavos, is Nicaragua's basic monetary unit (17.60 córdobas equal U.S.$1; 2006 average). The U.S. dollar is widely used and accepted.

Private banking was suspended under the Sandinistas but was restored in 1990. The state still controls a large part of the banking sector, but private banking is growing rapidly. Currency is issued by the government's Central Bank, which began operations in 1961. In addition to issuing currency, the bank handles government funds and conducts economic research.

H Transportation and Communications

Less than 13 percent of Nicaragua's roads are paved. The paved roadways include part of the Pan-American Highway, which runs the length of the country from Honduras to Costa Rica. The road system, like much of the nation's infrastructure, deteriorated during the conflicts and economic difficulties of the 1980s and 1990s, but reconstruction of the road system began in the late 1990s. The only international airport is in Managua. Three domestic airlines provide service within the country. Major ports are Corinto and Puerto Sandino on the Pacific and Bluefields and Puerto Cabezas on the Caribbean.

In 2005 Nicaragua had 43 telephone mainlines, 284 radio receivers, and 72 television sets for every 1,000 inhabitants. Most Nicaraguans rely primarily on radio or television for news. More than 100 radio stations broadcast, many of them from Managua, and several TV networks and cable TV stations operate in the country. In Managua the major daily newspapers are Nuevo Diario, La Prensa, and La Tribuna. Internet service was established in the mid-1990s.

I Tourism

Nicaragua had only a small tourist industry before the civil war halted most tourism. In the 1980s a number of foreigners who supported the revolution came to see the effects of the Sandinista victory. Since the fighting ended, the government has sought to develop tourism. In 2006 Nicaragua received 749,000 foreign visitors and took in $231 million from tourism.

Major tourist sites in Nicaragua include the Volcán Masaya National Park and the islands in Lake Nicaragua, including Las Isletas, a cluster of small, tropical islands off Granada. Ecotourism, a kind of tourism that seeks to conserve the environment, draws tourists to tropical forests where they can see monkeys, armadillos, birds, and other wildlife. Pristine beaches along the Pacific coast also attract visitors. In Managua, an important attraction is the Footprints of Acahualinca, the marks of humans and animals fleeing a volcanic eruption about 4000 bc that were preserved in the volcanic ash.

V GOVERNMENT

Since independence, Nicaragua has had a republican form of government, with an elected president, a congress, and a supreme court. However, the executive branch has usually been dominant. Constitutional rights could be suspended, congress and courts usually carried out presidential orders, and the military often played a decisive role. Intervention by the United States also distorted the political system, as the United States used its power and at times troops to keep favored rulers in power, prevent rebellions, and maintain order. From 1936 until 1979 the nation was dominated by the Somoza family, which ruled as a dictatorship. With the support of the U.S.-trained military, known as the National Guard, the Somozas rigged elections, violated human rights, and looted the economy. They were overthrown in 1979 by the revolutionary Sandinista regime, which led the government until 1990. Although the Sandinistas allowed opposition parties, they also restricted rights and manipulated the political process. With the election of Violeta Barrios de Chamorro as president in 1990, Nicaragua began an era of increasingly democratic political practices.

Nicaragua's current constitution was adopted in 1987 and amended in 1995 and 2000. Its provisions include guarantees of individual freedoms, rights to education and housing, and equality for women. Voter registration and elections are conducted by the Supreme Electoral Council, which was an independent branch of the government until an amendment in 2000 gave control over the appointments of council members to the ruling party and the largest opposition party. All Nicaraguan citizens over the age of 16 have the right to vote, and voting is by secret ballot.

A Executive

Nicaragua's president and vice president are elected by popular vote for a term of five years. Immediate reelection of the president or any close relative is prohibited. The president appoints and removes cabinet ministers and the heads of autonomous agencies such as the Central Bank. Presidential powers were reduced by the 1995 constitutional reforms but are still extensive. They include the right to initiate and veto legislation, prepare the budget, suspend constitutional rights (an act that must win the legislature's approval within 72 hours), conduct foreign relations, nominate judges, and act as commander in chief of the armed forces.

B Legislature

Nicaragua has a 90-member unicameral legislature known as the National Assembly. Deputies serve five years and are elected according to a complex formula, both by districts and on a national basis. The assembly's powers were greatly expanded by the 1995 constitutional reforms. The assembly enacts laws, approves the budget, elects Supreme Court judges, ratifies treaties, approves or rejects presidential declarations of a state of siege, and may override presidential vetoes with a simple majority.

C Judiciary

Nicaragua has a centralized judicial system with federal control over all courts. The system is headed by a 12-member Supreme Court, nominated by the president and approved by the assembly. The Supreme Court selects the judges for all lower courts. The Supreme Court's powers include the authority to determine the constitutionality of laws and to resolve disputes between government branches.

D Local Government

In 1990 Nicaraguans began to elect local government officials, who had previously been appointed by the central government. Nicaragua is divided into 15 departments plus two autonomous regions on the Caribbean coast. Within the departments there are 143 municipal governments authorized to elect their own officials. The autonomous regions have an elected Regional Council with limited powers, including the ability to control contracts for developing regional resources. Municipal governments, consisting of mayors and councilors, are directly elected, have limited taxing authority, and control most municipal activities and services.

E Political Parties

From the time of independence until the 1970s, Nicaraguan politics were dominated by the Liberal and Conservative parties. These parties represented rival factions within the elite class, while other groups had little political voice. Traditionally, the Conservatives supported the Catholic Church and were closely tied to rural, landowning interests, while Liberals emphasized free trade, were more open to influences from abroad, and sought to restrict church power. But by the 20th century their ideological differences had decreased, and both parties splintered into many smaller factions. From 1936 until the 1970s, the Somoza dictatorship dominated the political arena, controlling most of the Liberals and facing little effective opposition.

After the overthrow of the Somoza dictatorship in 1979, the number of political parties in Nicaragua grew. But many of them failed to survive for more than one election. For many years, the major political force was the Sandinista National Liberation Front (FSLN), the leftist guerrilla force that toppled Anastasio Somoza in 1979. The Sandinistas governed the country until 1990. A coalition of opposition parties defeated the Sandinistas in 1990 elections, but the coalition soon split, leaving the Sandinistas with considerable power.

Thirty-two national political parties plus several local civic associations participated in Nicaragua's 1996 elections. The Liberal Alliance, a coalition of factions of the traditional Liberal Party, won the presidency and the largest number of seats in the National Assembly. The alliance drew support from the business community and from areas of traditional Liberal strength such as León and Matagalpa. Its policies favored business interests, welcomed U.S. involvement, and sought to privatize government enterprises.

The Sandinistas finished second, drawing their strongest support from the urban poor and organized labor. As an opposition party, the Sandinistas sought to retain what they regarded as the political, social, and economic gains made under their revolution. They favored moving more slowly to privatize government-run businesses, protecting the interests of the poor, and following an independent foreign policy rather than being closely linked to the United States.

The Liberal Party and the Sandinistas together drafted an amendment to the constitution that limits seats in the National Assembly to candidates whose parties gain at least 4 percent of the vote. Critics said the amendment, added in 2000, would stifle opposition to the two largest parties. The two parties retained most of the seats in the legislature.

F Social Services

Nicaragua has an extensive network of government social programs, including a social security system that provides health care, retirement, and rural health benefits. Many programs were established under the Sandinistas to aid youth, women, and the poor, and most still exist. However, health and other social programs are badly underfunded, and available services are limited and often of poor quality. As a result of limited health services, 26 infants die for every 1,000 live births, one of the highest infant mortality rates in Central America.

G Defense

During the contra war of the 1980s Nicaragua's army reached a strength of 134,000. Chamorro won the 1990 presidential elections in part because she promised to end conscription and reduce the military, which was quickly accomplished. In 2004 military strength had declined to 14,000 members. Nicaragua's army includes small air and naval components. In 1994 a new military code strengthened civilian control over the army and limited the term of the military commander. Civil-military tensions have declined since then.

H International Organizations

Nicaragua is a founding member of both the United Nations (UN) and the Organization of American States, the most important regional diplomatic group. It is also a member of many specialized UN agencies.

VI HISTORY

At the end of the 15th century, western Nicaragua was inhabited by several indigenous peoples related by culture and language to those of central Mexico. They were primarily farmers who lived in towns, organized into small kingdoms. In eastern Nicaragua, a much smaller group of Native Americans that had migrated from Colombia and Panama lived a less sedentary life based on hunting and gathering.

A Colonial Period

Italian Spanish explorer Christopher Columbus sighted Nicaragua in 1502, but the first Spanish expedition, headed by Gil González Dávila, did not arrive until 20 years later. The conquest he began was completed from 1523 to 1524 by Francisco Fernández de Córdoba, who founded the cities of Granada and León. The conquest proved disastrous for the native population. Many died from diseases carried to the region by Europeans, such as measles, to which they had no immunity. Many of the survivors were enslaved; an estimated 200,000 were shipped off to labor in the mines of Peru and other parts of Spain's empire. Of an estimated 1 million indigenous people before the conquest, a 1548 census found only 11,137 Native Americans left in western Nicaragua.

For most of the colonial period Nicaragua was part of the Captaincy General, or Kingdom, of Guatemala. The kingdom was largely autonomous but was technically part of the Viceroyalty of New Spain, the huge Spanish territory based in Mexico. Far from the regional center in Guatemala, Nicaragua became a colonial backwater that exported small amounts of indigo and cacao. Its potential as a transit route between the Pacific and Atlantic brought some trade, but it also attracted the attention of English buccaneers such as Sir Richard Hawkins, who plundered Nicaragua and other Spanish colonies in the 1590s.

The British began to extend their influence over the inhabitants of Nicaragua's Caribbean coast as early as 1633. In 1655 a British expedition sacked Granada, and 30 years later another expedition looted Granada and León. The failure of a military expedition in 1780 ended British efforts to expand into western Nicaragua, but they retained control over the Miskito native peoples along the Caribbean coast, even creating a puppet Mosquitia Kingdom in 1687. British influence did not end until 1893.

In the mid-18th century Spain introduced commercial reforms into its American colonies. In an effort to expand trade, it allowed colonies to trade more freely with Spanish ports and with one another, and this expanding trade promoted production of export crops. These policies, combined with a growing desire among colonists to control their own affairs, divided upper-class Nicaraguans into two factions: Liberals favoring reforms, who included merchants centered around León, and Conservatives opposed to reforms, who were concentrated near Granada and included large landowners. This rivalry was a dominant element of Nicaraguan politics well into the 20th century.

B Independence and the 19th Century

Independence came slowly to Nicaragua, as movements to break away from Spanish rule arose in many colonies in the early 1800s. An 1811 uprising was crushed by colonial officials, and only when Spanish authority collapsed in Mexico in 1821 did Nicaragua, along with most of Central America, break with Spain. After the region declared independence, it was briefly part of the Mexican Empire of Agustín de Iturbide, but when he fell in 1823, Nicaragua and four other states formed a federation, the United Provinces of Central America.

This effort to unite the region was doomed by conflicts between Liberals and Conservatives and by rivalries among the member states. Liberals and Conservatives advocated different political, economic, and religious policies. Liberals promoted free-market capitalism, a strong central government, and limited power for the Catholic clergy, while Conservatives favored the traditional economic and social structure, dominated by large landowners and the church. Facing these divisions, the federation began to break apart in 1838, when Nicaragua and other members seceded and became independent states.

In the 1840s and 1850s Nicaragua was dominated by rivalries between León’s Liberals and Granada’s Conservatives and by a struggle between the United States and Britain for control over the transit route across Nicaragua. The discovery of gold in California motivated U.S. investors, led by wealthy industrialist Cornelius Vanderbilt, to create the Accessory Transit Company to transport U.S. citizens across Nicaragua. The company's network of carriages and boats took passengers from the Caribbean to the Pacific by way of the San Juan River and Lake Nicaragua. By 1852 a third of those traveling to California by sea used this route. To protect U.S. interests, the administration of President James Polk negotiated the Clayton-Bulwer Treaty with the United Kingdom. In the treaty, both nations agreed not to seek exclusive control over transit routes across Central America. The treaty proved unpopular in the United States and later administrations tried to have it revised.

Meanwhile, Conservative-Liberal rivalry in Nicaragua had broken out in open civil war. The Conservatives were winning, so the Liberals asked an American adventurer, William Walker, to recruit a private army to aid them. Known as filibusters, Walker’s troops began arriving in 1855 and soon took control of the country, shoving aside leaders of both parties and installing Walker as president (see Filibustering Expeditions). This move alarmed other Central American countries. They formed an army to drive Walker out, with support from the British and from Vanderbilt, whose business Walker had seized. Walker surrendered in 1857.

Walker’s fall brought the Conservatives back to power. Under their rule, which lasted until 1893, the capital was moved to Managua in an effort to dampen the rivalry between Granada and León. Coffee became the dominant export crop, and railroad construction was begun. United States interest in a possible canal across Nicaragua grew slowly, but an 1884 treaty that would have given the United States exclusive canal rights was never ratified by the U.S. Senate.

In 1893 a Liberal general, José Santos Zelaya, seized power. He continued as president until 1909, putting down Conservative revolts and making Nicaragua a major player in Central America's power struggles. He tried to improve public administration and develop the economy, promoting the beginning of banana exports. Railroads and ports were improved, schools were expanded, and the military was modernized. An agreement with the British led to their final withdrawal from the Caribbean coast. But hopes that the United States would build a canal were dashed when the administration of President Theodore Roosevelt selected a route through Panama instead (see Panama Canal). Relations between the countries deteriorated, and U.S. officials became convinced that Zelaya was an unstable element in the region who should be replaced.

C The Intervention Era, 1909-1933

In 1909 the United States encouraged a revolt against Zelaya, then used naval forces to prevent him from crushing the uprising. Zelaya resigned, but U.S. pressures continued until his successor turned over power to a coalition government. This coalition proved unstable, and in 1912 U.S. Marines landed and imposed order, defeating a Liberal force and ensuring that Conservative Adolfo Díaz remained president. A small Marine unit stayed in Nicaragua until 1925, making it clear that revolutions would not be tolerated. This enabled the Conservatives, a minority party, to rig elections without fear of being overthrown.

Allied with the Conservatives, the United States and its interests soon dominated Nicaragua. Conservative leader General Emiliano Chamorro signed the Bryan-Chamorro Treaty, which gave the United States exclusive rights to build a canal across Nicaragua in exchange for $3 million. Chamorro became president in 1916. The United States never planned to build a canal but wanted the treaty to ensure that no other nation would be able to do so. For Nicaraguan nationalists, this treaty became a symbol of U.S. exploitation of Nicaragua. United States officials and businesses also came to dominate much of Nicaragua's economy and banking system.

In the early 1920s the United States sought to promote political stability in the country so that the Marines would not be needed to prevent revolts. The United States tried to create a professional Nicaraguan military that could maintain order and tried to reform corrupt election practices. After elections brought a weak Liberal-Conservative coalition to power in 1925, the Marines left. Civil war immediately erupted as Chamorro, the defeated Conservative candidate, ousted the Liberals from government and took over the presidency himself.

Chamorro's takeover created a conflict for the United States government. It did not want the Liberals to win the war, especially when they seemed to be getting support from a revolutionary government in Mexico. At the same time, it wanted stable government in Nicaragua, and it also wanted to deter coups, such as Chamorro's. Therefore U.S. officials worked to force Chamorro from power, and former Conservative president Díaz again took office. The Liberals continued to win the civil conflict, however, and in 1926 and 1927 the United States again landed thousands of Marines in Nicaragua to support the Conservative government. Former U.S. secretary of war Henry Stimson then negotiated a peace agreement, under which Liberals were given some government posts; the United States agreed to supervise the 1928 elections; and troops of both sides were disarmed. They were to be replaced by a new, U.S.-created and U.S.-trained force that combined police and military, known as the National Guard.

One Liberal general, Augusto César Sandino, refused to accept this agreement. He formed a rebel army and carried on a guerrilla campaign against the U.S. presence until 1933. This made him a symbol of nationalism to many Nicaraguans and others who opposed U.S. intervention.

In 1928 U.S.-supervised elections brought Liberal general José María Moncada to power. The marines remained in Nicaragua until early 1933 because of U.S. concerns about Sandino and the time needed to train the National Guard. Plans to improve the economy fell victim to the worldwide depression of the 1930s and to a massive earthquake that destroyed Managua in 1931. The United States supervised the 1932 presidential elections, which were won by Liberal leader Juan Bautista Sacasa. The Marines then withdrew, giving command of the National Guard to a Liberal politician, Anastasio Somoza García, who was married to Sacasa's niece.

Sandino quickly negotiated a truce with the Sacasa government, ending his rebellion. Tensions between the National Guard and Sandino mounted steadily, however, and in 1934 Sandino was murdered by Guard officers. He became a hero to many Nicaraguans, and his name was adopted more than 40 years later by revolutionaries trying to overthrow the government and change Nicaraguan society, the Sandinistas.

D The Somoza Dynasty, 1936-1979

With Sandino out of the way, Somoza began his climb to power. In 1936 he forced Sacasa to resign, pressured the Liberal Party into making him their presidential nominee, and then used the National Guard to ensure his victory. Once in office he secured control over Guard officers and used political favors to keep the Liberal Party in line behind him. He took whatever steps he could to maintain the image of U.S. support, making an official visit to Washington, D.C., in 1939; naming Managua's main street after President Franklin D. Roosevelt; and declaring Roosevelt's birthday a national holiday. He also began to amass the largest private fortune in Nicaraguan history. With military support, wealth, and U.S. backing, he and his family members ruled Nicaragua for the next 43 years.

In the 1940s the United States began pressuring Somoza not to run for reelection. He reluctantly agreed, believing that as National Guard commander he could control any elected president. His forces ensured that his handpicked successor won the 1947 election, but once in office the new president tried to replace Somoza as Guard commander. He was promptly overthrown, and a series of puppet presidents completed his term.

Somoza then negotiated a deal with the Conservatives, still led by General Chamorro, which allowed him to win the presidency in 1950. Somoza continued to cultivate U.S. support, and to that end he backed a 1954 coup that toppled a reformist government in Guatemala. The coup had been supported by the U.S. Central Intelligence Agency (CIA). Somoza planned to run again in 1957 but was assassinated in 1956.

As president, Somoza gave Nicaragua peace and stability. The economy grew, new exports such as cotton were developed, and the foreign debt was paid. But all of this came at a high price. Corruption was institutionalized; force, fraud, and inside deals dominated politics; and the country was run as a giant estate for the benefit of the Somoza family. When members of elite families rebelled against Somoza's rule they were exiled; those without such influence were often imprisoned, tortured, or killed.

Somoza had groomed his sons, Luis Somoza Debayle and Anastasio Somoza Debayle, to succeed him. After their father's assassination, Luis became president and Anastasio, known as Tachito, took over command of the National Guard. They continued their father's system of control and corruption and maintained support for U.S. policies. In 1961 they allowed Nicaragua to be used as the launching pad for the unsuccessful Bay of Pigs invasion of Cuba, which had been led by Cuban exiles and backed by the CIA. Nicaragua's role in the invasion fueled hostility between revolutionary Cuban leader Fidel Castro and the Somozas.

In the early 1960s a small group of Nicaraguans organized an armed guerrilla force to try to overthrow the Somozas. Taking their name from General Sandino, they called themselves Sandinistas and their movement the Sandinista National Liberation Front (known by its Spanish abbreviation FSLN). The FSLN's founders—Carlos Fonseca Amador, Tomás Borge, and Silvio Mayorga—were Marxists who had met as university students involved in anti-Somoza activities. They were inspired by the Cuban Revolution and supported by Castro. Beginning with only about 20 members, the Sandinistas slowly won support during the 1960s among rural Nicaraguans, students, and poor urban youth.

The Somozas continued to hold power but allowed an associate they controlled to be elected president in 1963. However, Anastasio Somoza was determined to have his turn as president in 1967. When Luis died that year, the only effective limit on Anastasio's ambition was removed. As president, Anastasio Somoza Debayle proved to be more corrupt but less capable than his father. While the Somoza family and its close associates amassed even greater wealth, the poorest Nicaraguans grew poorer, especially in rural areas. By the 1970s the top 5 percent of the population received 30 percent of the nation's income, while the poorest 50 percent received only 15 percent. Malnutrition and disease were widespread among the poor.

Growing resentment over these conditions caused many young Nicaraguans, especially students, to join the Sandinistas. However, the guerrillas suffered repeated defeats in clashes with the National Guard. After a military campaign failed in 1967, many of the Sandinistas' leaders were killed, jailed, or exiled, but the group rebuilt during the early 1970s.

The Somoza dynasty began to unravel in the mid-1970s. In December 1972 Managua was again destroyed by an earthquake that killed as many as 10,000 people and left as many as 300,000 homeless. Millions of dollars in international aid poured into Nicaragua, but Somoza and the Guard took most of it for their own benefit. This corruption angered most Nicaraguans, including the middle class and businesspeople. Somoza's manipulation of politics became even more brazen when he was again elected president in 1974. Those who opposed Somoza were often imprisoned, tortured, exiled, or killed, and the Guard murdered and terrorized rural residents in areas of guerrilla activity. Constitutional rights were suspended and the press was censored. Yet opposition to the regime increased. The Sandinistas gained support among rural and urban residents for their guerrilla campaign. In addition, prominent Nicaraguans formed an anti-Somoza political movement, and Managua's archbishop, Miguel Obando y Bravo, became the spokesman for the Catholic Church's growing opposition to the Somozas.

The dictatorship also faced economic and international problems. The economy had grown rapidly in the 1950s and 1960s, but that growth ended in the mid-1970s as a result of the Somoza regime's increasing corruption and the rise in world prices for oil, on which Nicaragua depended for fuel. United States support declined after Jimmy Carter became president in 1977 and began to emphasize human rights and democracy in relations with Latin America. Somoza survived a 1977 heart attack, but the attack raised further doubts about the regime's ability to maintain control.

E The Sandinista Revolution, 1978-1990

The conflict between the Somoza regime and the Nicaraguan people reached a crisis point in January 1978. Pedro Joaquin Chamorro, a prominent newspaper editor and leader of the political opposition to Somoza, was murdered, probably by business associates of the president. This set off rioting and a nationwide general strike to demand that Somoza resign. In August 1978 a Sandinista commando force, headed by Edén Pastora (known as Comandante Zero), seized the National Palace and took the Nicaraguan congress hostage. A negotiated solution was reached, but the incident shattered the image of the Guard as invincible and raised the Sandinistas' prestige.

The Sandinista victory sparked a series of uprisings. The Guard responded with great brutality, killing many civilians. As a result, recruits flocked to the Sandinistas, and the business class supported another nationwide strike. The United States and other nations began seeking ways to force Somoza out of office, but an international mediation effort collapsed at the end of 1978. Costa Rica, Venezuela, and Panama now joined Cuba in supporting the Sandinistas, and many Nicaraguan business leaders and politicians decided that, despite the Marxist orientation of the Sandinistas, they were preferable to Somoza and the only alternative.

In May 1979 the Sandinistas launched an all-out offensive to overthrow Somoza, calling for a popular uprising. The Organization of American States (OAS) rejected a U.S. proposal to send an international armed force to Nicaragua to restore peace. Instead, the OAS called on Somoza to resign and turn over power to a Junta (Council) of National Reconstruction, selected by the Sandinistas. Somoza fled into exile, the National Guard dissolved, and on July 19, 1979, the Sandinistas took power in Nicaragua. It is estimated that up to 50,000 Nicaraguans died in the war to defeat Somoza.

The Sandinistas set up the junta and a broad-based cabinet, including non-Sandinistas, to govern and rebuild the war-damaged nation. Their goals included ambitious health-care, literacy, and land-reform programs to help the poor. A council of representatives from business, labor, and other segments of society was established to act as a legislature until elections could be held. But it soon became apparent that real power rested with the Sandinistas' nine-member National Directorate. By 1980 moderate leaders were leaving the government, and tensions between the government and Catholic Church officials were growing.

Relations with the United States deteriorated steadily, especially after Ronald Reagan became president in 1981. His administration was strongly anti-Communist and was convinced that the Sandinistas were supporting guerrilla forces in other Central American countries and were closely allied with Cuba and the Union of Soviet Socialist Republics (USSR). Reagan suspended aid to Nicaragua, imposed an economic boycott, and began supplying money, arms, and training for an armed opposition guerrilla force known as the contras (short for “counterrevolutionaries” in Spanish). These contra forces, based in neighboring countries, included former members of Somoza's National Guard and other Nicaraguans dissatisfied with the new government. Nicaragua, facing contra attacks, began receiving military aid from Cuba and the Soviet Union. The government censored the media, frequently jailed opposition politicians, and stepped up efforts to impose a socialist model on the economy. Privately owned businesses continued to operate, however, and opposition politics were never banned.

Elections were held in 1984, but most opposition parties refused to participate. The Sandinista candidate, Daniel Ortega Saavedra, won an easy victory, and the Sandinistas gained a huge majority in the new National Assembly. The United States and much of the opposition resorted to armed force to try to dislodge the Sandinistas. Casualties from the contra war mounted, and the threat of war between Nicaragua and Honduras increased. Honduran officials allowed the contras to attack Nicaragua from bases in their country, built up their own military forces, and permitted the United States to conduct military exercises and build airstrips from which to help the contras. Members of the U.S. Congress who opposed the contra policy tried to restrict funding for training contras, but they had only limited success until 1986. That year the scandal known as the Iran-Contra Affair revealed that Reagan administration officials had violated U.S. law to get support to the contras.

Other nations in the hemisphere tried to mediate the Central American crisis. The Contadora group of Mexico, Venezuela, Colombia, and Panama began its efforts in 1983 but had little success. In 1987 Costa Rica's president, Oscar Arias Sánchez, promoted a policy by which Central America’s leaders would resolve Central American problems. In 1988 the Sandinistas agreed to begin talks with the contras, but fighting continued for several months. Pressures for a negotiated settlement were building, however. Nicaragua's economy was devastated by the effects of the war and the U.S. embargo, low prices for exports, and a series of natural disasters. Many of the Sandinista government's economic policies, which involved state control of imports and exports, emphasis on agricultural cooperatives, and restrictions on private business, proved unsuccessful. At its worst point, in 1988, Nicaragua had the world's highest annual inflation rate, with estimates ranging from 2,000 percent to 36,000 percent. Aid from the Soviet bloc also declined in the late 1980s, as the Soviet economy deteriorated and Communist governments were overthrown in Eastern Europe. At the same time, U.S. efforts to find a negotiated solution in Central America increased after President George Bush succeeded Reagan in 1989.

In early 1989 Central America's presidents agreed on a plan for disarming the contras, dispatching a United Nations peacekeeping mission, and holding internationally monitored elections in Nicaragua in early 1990. Confident of victory, the Sandinistas relaxed restrictions on political opponents and allowed a relatively free campaign. Fourteen opposition parties formed the National Opposition Union (UNO) with Violeta Barrios de Chamorro, widow of assassinated editor Pedro Joaquin Chamorro, as their presidential candidate. Campaigning on a promise to end military conscription and promote national reconciliation, Chamorro won a stunning victory with 55 percent of the vote, defeating incumbent president Ortega, the Sandinista candidate, who received only 41 percent.

F Nicaragua in the 1990s

Chamorro was inaugurated in 1990 and immediately ended the draft. Restarting the economy proved more difficult. The Sandinistas held the largest bloc of seats in the National Assembly, controlled the military and police, and dominated most labor unions. Leading Sandinistas had used the period between Chamorro's election and her inauguration to appropriate homes and other property for themselves, actions that later provoked considerable controversy. The UNO coalition broke up, in part over a dispute about how to deal with the Sandinistas; the Chamorro administration tried to work with them, while Vice President Virgilio Godoy and the majority of the UNO deputies opposed making concessions to the Sandinistas to gain their cooperation.

The new government did manage to reform Nicaragua's currency, bringing inflation below 10 percent. But economic recovery was blocked by a number of problems: disputes over property rights, legislative paralysis caused by the breakup of the UNO coalition, Sandinista-backed strikes, and less international aid than expected. By the end of 1993 Nicaragua's GDP was slightly below the 1990 level. Most of the contras had put down their arms under UN supervision in 1990, but the lack of jobs, the government's failure to provide promised assistance, and easily available weapons led to rising crime in the cities and renewed violence in rural areas by former contras and soldiers.

With their country on the verge of disaster, Nicaraguans began to find ways to work together. The assembly passed a series of constitutional amendments that expanded the power of the legislature, reduced the power of the president, and made some provision for dealing with property disputes. A new military code was also adopted, strengthening civilian control over the military and limiting the terms of the commander. After some resistance, Sandinista general Humberto Ortega agreed to step down as military commander. Modest economic growth was achieved in 1994 and 1995.

Peaceful elections were held in 1996, with 23 presidential candidates and 32 parties participating. The campaign was often angry, with both major candidates, Managua mayor Arnoldo Alemán of the right-wing Liberal Alliance and former president Ortega of the FSLN, denouncing each other and attacking the Chamorro administration. The election was closely monitored by international observers, who pronounced the voting fair and honest, despite some technical problems. Alemán was elected, and although Ortega and the FSLN challenged the results, they were unable to reverse them. In January 1997 Alemán was inaugurated as president, marking the first time in Nicaraguan history that two consecutive elections had produced a peaceful transfer of power between rival parties.

In October 1998 Hurricane Mitch killed between 3,000 and 4,000 people in Nicaragua and caused extensive property damage. Heavy rains formed a lake in the crater of Casitas volcano, causing a landslide that covered 80 sq km (30 sq mi), wiping out several villages and killing more than 1,500 people. Repairs needed for roads and other infrastructure were estimated to cost billions of dollars. Some observers said that the country had been set back decades by the storm. The international community aided Nicaragua in recuperating from its losses. Many European nations cancelled Nicaragua's debts. The U.S. government offered two forms of help: It issued a moratorium on expelling Nicaraguan citizens who were in the United States without legal status, and it suspended the schedule of Nicaragua's payments of debts. In addition to economic struggles, the country faced steadily rising political tensions in the wake of Hurricane Mitch. Charges of government corruption were brought, and rioting students demanded an increase in university budgets.

G Recent Developments

In January 2000 the National Assembly approved a series of amendments to the constitution that appeared to concentrate power in the hands of the two largest political parties. Drafted by the Liberal Party and the Sandinistas, the amendments limit seats in the National Assembly to candidates whose parties gain at least 4 percent of the vote. The two largest parties also won the power to appoint members of the previously independent Supreme Electoral Council, which supervises voter registration and elections.

In the 2001 elections, Liberal Party candidate Enrique Bolaños Geyer was elected president, defeating Daniel Ortega, who ran as the Sandinista candidate. In the National Assembly, the Liberal Party won a majority of seats followed closely by the Sandinistas. Bolaños pledged to end corruption and ease the country's dire problems of unemployment and food shortages. Former president Alemán was charged with corruption and embezzlement during his term in office, found guilty, and in 2003 sentenced to 20 years in prison. The economy received a boost in 2004 when the World Bank (International Bank for Reconstruction and Development) agreed to wipe out 80 percent of Nicaragua's debt to the organization.

Ortega ran again in the 2006 presidential elections and this time he won. Ortega’s main rival was the conservative Eduardo Montealegre. Although Ortega won less than a majority of the vote, his vote total outdistanced that of Montealegre by a margin large enough to avoid a runoff election. Ortega campaigned as the candidate of the Sandinistas, but insisted that he had moderated his views from his days as a Marxist revolutionary. He decried “savage capitalism” but said that he would seek foreign investment to help bring jobs to Nicaragua while respecting the private sector.

The administration of U.S. president George W. Bush tried to influence the elections by hinting at possible economic sanctions and warning that Nicaragua might lose U.S. aid if Ortega was elected. U.S. officials also claimed that an Ortega victory would extend the influence of Venezuelan president Hugo Chávez, who is allied with the Sandinistas. But the U.S. effort appeared to backfire. Many Nicaraguans resented U.S. interference in the election process and voted for Ortega for nationalistic reasons. Following the elections, a Bush administration spokesman said the United States would be willing to work with the newly elected Nicaraguan leaders provided they remained committed to democracy.