Asociacin Educacin y Familia

Centro Escolar Aldebarn

Economy

Mr. Banegas

Nicaragua

Arnaldo Mungua

Jos Francisco Kuan

7/03/2013

Nicaragua: -Location: The country is situated between 11 and 14 degrees north of the Equator in the Northern Hemisphere, which places it entirely within the tropics. -Population: 6,100,000 people. -Currency: The first crdoba was introduced on March 20, 1912. It replaced the peso moneda corriente at a rate of 12 pesos m/c = 1 crdoba and the peso fuerte at par. It was initially nearly equal to the US dollar. It was named after the founder of Nicaragua, Francisco Hernndez de Crdoba. On February 15, 1988, the 2nd crdoba was introduced. It was equal to 1,000 1st crdobas. On April 30, 1991 the third crdoba, also called the crdoba oro, was introduced, worth 5,000,000 2nd crdobas. As of February 23rd, 2013, 24.305 cordobas are equal to one US dollar. -Religion: Religion is a significant part of the culture of Nicaragua and is referred to in the constitution. Religious freedom, which has been guaranteed since 1939, and religious tolerance are promoted by both the Nicaraguan government and the constitution.

-Politics: 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. The current president is Daniel Ortega. -Culture: Nicaraguan culture has strong folklore, music and religious traditions, deeply influenced by European culture but enriched with Amerindian sounds and flavors. Nicaraguan culture can further be defined in several distinct strands. The Pacific coast has strong folklore, music and religious traditions, deeply influenced by Europeans. It was colonized by Spain and has a similar culture to other Spanish-speaking Latin American countries. The indigenous groups that historically inhabited the Pacific coast have largely been assimilated into the mestizo culture. The Caribbean coast of the country, on the other hand, was once a British protectorate. English is still predominant in this region and spoken domestically along with Spanish and indigenous languages. Its culture is similar to that of Caribbean nations that were or are British possessions, such as Jamaica, Belize, the Cayman Islands, etc. Unlike on the west coast, the indigenous peoples of the Caribbean coast have maintained distinct identities, and some still speak their native languages as first languages. -Unemployment: According to the United Nations Development Programme, 48% of the population in Nicaragua live below the poverty line, 79.9% of the population live

with less than $2 per day, unemployment is 3.9%, and another 46.5% are underemployed (2008 est.).

Nicaragua: Inflation Inflation in Nicaragua and other countries is usually calculated as the percent change in the Consumer Price Index (CPI) from one year to the next. The CPI represents the prices paid by the average urban consumer in each respective country. Inflation can also be calculated with other price indexes such as the Produce Price Index or the socalled GDP deflator. You can read about the measures, causes, and consequences of inflation in the inflation articles of our global economy guide. Most countries try to keep inflation somewhere around 2-3 percent per year. That is too low to cause any problems for the businesses and households. At the same time, it is comfortably away from negative inflation, i.e. from deflation. Of course, this target is often missed.

Inflation: averages for the period from 2000 to 2010 The table shows the rate of inflation in Nicaragua and other countries. Averages serve better for comparison across countries. Data from one particular year could produce misleading comparisons as the numbers change over time. Bibliography: http://www.theglobaleconomy.com/Nicaragua/indicatorFP.CPI.TOTL.ZG/ Nicaragua: Minimum Wages for the second half of 2012 Minimum wage rate for the year 2013 are expected to be announced by March 2013. Till the next updation of minimum wages, the rates given below shall apply.

Sector of Activity Agricultural (Salary plus food) Fishing Mines and Quarries Manufacturing Industries subject to tax (Effective as of January 2012)

Percentage Monthly 6% 6% 6% 6% 0% C$2,273,80

Daily C$75,79

Hourly C$9,47 C$14,61 C$17,26

C$3,506,77 C$116,89 C$4,141,97 C$138,07 C$3,101,04

C$103,37 C$12,92 C$14,05

C$3,370,91 C$112,36

Micro and small cottage industry and national tourism (Effective Date: August 16, 2012) Electricity and water; Trade, Restaurants and Hotels, Transport, Storage and Communications Construction, financial institutions and insurance Com Services. Social and Personal Central Government and Municipal

5%

C$2,590,08 C$86,34

C$10,79

6% 6% 6% 6%

C$4,230,17 C$141,01 C$5,161,22 C$172,04 C$3,233,15 C$107,77 C$2,876,05 C$95,87

C$17,63 C$21,51 C$13,47 C$11,98

Bibliography: http://www.wageindicator.org/main/minimum-wages/nicaragua

Social indicators Household income or consumption by percentage share: lowest 10%: 1.4%; highest 10%: 41.8 (2005) Industrial production growth rate: 2.4% (2005) Electricity - production: 2.778 billion kWh (2006) Electricity - production by source: fossil fuel: 53.43%; hydro: 35.34%; nuclear: 0%; other: 11.23% (1998) Electricity - consumption: 2.929 billion kWh (2006) Electricity - exports: 69.34 million kWh (2006) Electricity - imports: 0 kWh (2006) Agriculture products: coffee, bananas, sugarcane, cotton, rice, corn, tobacco, sesame, soya, beans ; beef, veal, pork, poultry, dairy products; shrimp, lobsters Exports commodities: coffee, beef, shrimp and lobster, cotton, tobacco, beef, peanuts, sugar, bananas; gold Imports - commodities: consumer goods, machinery and equipment, raw materials, petroleum products

Currency: 1 gold Cordoba (C$) = 100 centavos Exchange rates: gold Crdoba (C$) per US$1 - 17.582 (2006), 16.733 (2005), 15.937 (2004), 15.105 (2003), 14.251 (2002) Price inflation: 2007: 16.88% 2008: 13.37%

Bibliography: http://en.wikipedia.org/wiki/Economy_of_Nicaragua

Principal market Agriculture and food production Food and agriculture Product Coffee, green Beans, Dry Groundnuts in Shell Indigenous horse meat Plantains Sesame Seed World rank1 4 17 30 30 32 32

Sugar Cane Pineapples Castor Beans Cocoa beans Cassava Oranges Soybeans
1

32 33 37 41 48 49 50

Source: FAO (2005) Major Food and Agricultural Commodities and Producers

Coffee became Nicaragua's principal crop in the 1870s, a position it still held in 1992 despite the growing importance of other crops. Cotton gained importance in the late 1940s, and in 1992 was the second biggest export earner. In the early 20th century, Nicaraguan governments were reluctant to give concessions to the large United States banana companies, and bananas never attained the level of prominence in Nicaragua that they reached in Nicaragua's Central American neighbors; bananas were grown in the country, however, and were generally the third largest export earner in the postWorld War II period. Beef and animal byproducts, the most important agricultural export for the three centuries before the coffee boom of the late 19th century, were still important commodities in 1992. From the end of World War II to the early 1960s, the growth and diversification of the agricultural sector drove the nation's economic expansion. From the early 1960s until the increased fighting in 1977 caused by the Sandinista revolution, agriculture remained a robust and significant part of the economy, although its growth slowed somewhat in comparison with the previous postwar decades. Statistics for the next fifteen years, however, show stagnation and then a drop in agricultural production. The agricultural sector declined precipitously in the 1980s. Until the late 1970s, Nicaragua's agricultural export system generated 40 percent of the country's GDP, 60 percent of national employment, and 80 percent of foreign exchange earnings. Throughout the 1980s, the Contras destroyed or disrupted coffee harvests as well as other key income-generating crops. Private industry stopped investing in agriculture

because of uncertain returns. Land was taken out of production of export crops to expand plantings of basic grain. Many coffee plants succumbed to disease. In 1989, the fifth successive year of decline, farm production declined by roughly 7 percent in comparison with the previous year. Production of basic grains fell as a result of Hurricane Joan in 1988 and a drought in 1989. By 1990 agricultural exports had declined to less than half the level of 1978. The only bright spot was the production of nontraditional export crops such as sesame, tobacco, and African palm oil.