• Freddy Espinoza

Nicaragua is a third world nation located in Central America. The capital of Nicaragua is Managua. It is the biggest country of the region with an extension of 129,442 km². Nevertheless its population is small in comparison with its size, only 6,071,042 habitants, although some cities like the capital, Managua, and León are overpopulated.

Nicaragua has had hard knocks in its economic history, but also has had good times. In the 60’s the economy of the country was good and increasing because of the industrialization but it started to decrease when people started to feel the oppression of the dictatorship. Also the economy was losing power because only the government and its allies had all the money; they were the largest owners of the industries while the rest of the population was poor. Then in 1972 the economy got worst because of the earthquake of that year which destroyed almost complete the downtown of the capital; many business and factories were destroyed so the production of the country decreased. In 1979 started the revolution (civil war) against the dictatorship Anastacio Somoza, causing a very low economic performance.

During the revolution people were fighting in the rural areas therefore most of the croplands were destroyed. This caused the production of food to decrease and due to the shortage between the demand and the supply the prices were forced to increase in order to contract the demand. Also the revolutionaries were recruiting men in order to have more power and fight against the National Guard, which was the president’s personal army. The reclusion caused a lack of labor for the production of goods because they had almost all their people working in their guard. With this low production the inflation rate reached a percentage of 70% in 1979. The communist government of Daniel Ortega overthrew Somoza but they didn’t do something good for the economy. They stayed in the power by imposing strength and controlling the imports and exports, so the other countries with different thinking couldn’t export to Nicaragua because the government would not let their products come into the country.

Due the political and economic crises in those times, Nicaragua’s external debt increased excessively, even more than its gross domestic product; being the debt impossible to pay. Since that time, government companies have been privatizing in order to reduce the external debt. Nowadays the economy has improved but there are still delimited works and unemployment creating a social-economic problem because many people have opted for informal jobs.

Informal jobs are a type of work that occurs mostly in developing countries, these are characterized by employments that don’t comply with legal formalities. They are divided in two: wage employment and self-employment. In Nicaragua informal jobs are considered as people’s works which are not in the formal sector of the economy. These jobs are not recognized by the INSS (Instituto Nicaraguense de Seguridad Social) which control the requirements and rights of workers, or are people who decides to work by themselves and they don’t inscribe their business in the corresponded institution.