Nicaragua

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 27,177 metric tons in 2004. 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 18 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.

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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 (16.70 córdobas equal U.S.$1; 2005 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.

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