Nicaragua profile - overview
- 27 May 2015
- From the section Latin America & Caribbean
Nicaragua is striving to overcome the after-effects of dictatorship, civil war and natural calamities, which have left it one of the poorest countries in the Western Hemisphere.
Nicaragua has traditionally relied on agricultural exports to sustain its economy, with pushes to diversiy into manufacturing in the 1950s and 1990s. But the country's meagre national wealth benefited mainly a few elite families of Spanish descent, in particular the Somoza family in the mid-20th century. This dynasty ruled the country with US backing between 1937 and the Sandinista revolution in 1979.
The Sandinistas began redistributing property and made huge progress in the spheres of health and education, but their pro-Cuban orientation alarmed the United States, which launched a sustained campaign of embargo and armed subversion.
The US in particular armed and financed thousands of Contra rebels to carry out attacks on Nicaragua from bases in Honduras and Costa Rica, and mined Nicaraguan harbours.
By 1990, when the Sandinistas were defeated in elections held as part of a peace agreement, Nicaragua's per capita income had plummeted, inflation was out of control and the infrastructure was in tatters.
Peace brought some economic growth, lower inflation and lower unemployment. But this was counter-balanced by the devastation caused by Hurricane Mitch in 1998, which killed thousands, left 20% of the population homeless and caused billions of dollars worth of damage.
Nicaragua's modest tourist industry - which had all but collapsed by the early 1990s - is seen as a possible source of revenue outside the vulnerable spheres of textiles, clothing and agricultural exports. The country's attractions include wildlife-rich rainforests, volcanoes, beaches and colonial-era architecture such as that to be found in the city of Leon.
In 2013 the government fast-tracked plans to build a 278 km canal across the country that would link the Atlantic and the Pacific and rival the Panama canal.
It says the $50bn Chinese-backed project will give a huge boost to the economy and have minimal impact on the environment.
Opponents say the project will be an environmental disaster and will displace tens of thousands of people living along the proposed route.