How the Global Economic Crisis has Impacted Nicaragua
Feb 24th, 2009 |
Many Americans are extremely worried about the U.S. economy and the prospect of a worldwide economic crisis (and rightly so). But at times like this we forget how blessed we are — and how much overwhelming need continues to exist around the world. Here are some sobering statistics about the global recession’s tremendous impact on the Nicaraguan people:
- Poverty. Nicaragua is the second poorest country in the Western Hemisphere (behind Haiti). Nearly half (48 percent) of the population is below the poverty line, while one-third of children suffer from severe malnutrition and other chronic health problems. Nicaragua comes in below Indonesia and Vietnam in the “Human Development Index” rankings (which compares countries in areas such as economic development, standard of living, health care, and education).
- Unemployment. There is widespread unemployment and underemployment (reliable statistics are not available, but estimates range from 20 to 50 percent underemployment, compared to about 10 percent in the U.S.). Nicaragua also has one of the highest degrees of income inequality in the world. The top 10 percent of wage earners account for half of the country’s income. The poorest 10 percent earn 0.7 percent of Nicaragua’s income.
- Foreign aid. While Nicaragua has progressed toward macroeconomic stability in the past few years, annual GDP growth has been far too low to meet the country’s needs, forcing the country to rely on international economic assistance to meet fiscal and debt financing obligations. Aid as a percentage of GDP is 24 percent. In other words, a quarter of Nicaragua’s economy is foreign aid…which is now drying up during these troubling economic times.
- Infrastructure. Many Nicaraguan infrastructure projects — roads, bridges, water treatment plants, etc. — are paid for by foreign governments (including the U.S., Japan, Germany, and others). As stated above, foreign aid is beginning to dry up (especially in the case of the U.S. which is not on completely friendly terms with the Ortega administration in Managua). As the foreign aid evaporates, so do the infrastructure projects. Roads, bridges, and much needed facilities are left unfinished.
- Exports. The US-Central America Free Trade Agreement (CAFTA) has been in effect since April 2006 and has expanded export opportunities for many agricultural and manufactured goods. However, worldwide demand has plummeted, forcing prices down and drastically decreasing the economic benefits of exporting from Nicaragua.
These are just a few of the very real, very troubling effects of the global economic situation we find ourselves in. In America (or elsewhere in the world), as you tighten your purse strings and turn over the couch cushions for loose change, please remember your brothers and sisters in Nicaragua. The Nicaraguan people need your prayers and support now more than ever.
Chale Espinosa said:
Your facts are correct, and the need is real, and your need for is donations is a must to help some of Nicaragua neediest.
best of luck
Nathan said:
Thank you, Chale.