Term Paper:
Sustainable Development
in Nicaragua
Professor Egil Glørud
Written by:
Valeria Juarez
Patrice Lüscher
1.Introduction:
1.1Economical Overview
1.2Key Figures:
2.Political History
3.Todays Situation
4.Bibliography
1.Introduction:
“It is generally accepted, particularly since the recent Earth Summit in Rio de Janeiro, that the goals of environmental sustainability, economic growth, and poverty alleviation--three desired outcomes--must be pursued at the same time.”
The simultaneous mining of natural and human resources in the attainment of economic growth can no longer be sustained, and achieving these three desired outcomes requires improvement in resource utilization technologies, in hard and soft infrastructure, and perhaps most importantly in the policy environment.
The figure below presents the critical triangle (three desired outcomes) referred to above (perhaps overly simplistically) as the three-way interrelationship among environmental sustainability, economic growth and poverty alleviation. Note that the relationships between each pair of points in the triangle is bidirectional. That is to say, the environment can affect poverty (e.g., vis-a-vis proliferation of tropical diseases like malaria), as well as vice-versa (e.g., very low levels of income precluding important investments in public health, sanitation or environmental conservation).
Likewise, the environment can affect the prospects for economic growth (e.g., differences in the natural resource base available for agriculture production clearly have an impact on yields), and vice-versa (inappropriate cultivation practices can lead to losses of soil integrity and erosion).
Finally, economic activities such as agriculture can have an impact on poverty (agricultural surplus induced by climatic shocks or technical change can dramatically improve the welfare of individuals and families), and vice-versa (e.g., extremely low levels of income can preclude important investments in agricultural productivity).
Although simplistic and well-known, the diagram highlights two important facts which will be the focus of the course: First, interrelationships among these ´three desired outcomesª must be understood if policymakers are to achieve these three goals simultaneously. Second, equally important, depending on the links that exist among the three desired outcomes and the factors that condition these links, different interventions (both in terms of policy and technology) may be called for.
From an interdisciplinary and integrated viewpoint, another objective of the course is also to build a bridge between the often practically distinguished realms of the social and natural science disciplines and the decision making environment that is shaped by the political and economic realities of decision makers.”[1]
What does it mean sustainable development in a country whose population is starving? With very depressing economic figures for the last ten years how they can achieve sustainable development when the main concert should be fighting poverty and corruption. There is high unemployment rates in Nicaragua that is also classified as the second poorest country in America. Also, this country is merely agricultural, the majority of the people trusting in the land resources to survive. Well, how they measure sustainability when there is not another way to acquire food? How can it be a primary concern to the people and not the government. The importance of sustainable development is not the matter to discuss here, but the relevant thing is that there are other problems that must be solved before people are ready to listen about these topic. We are talking about a country with not welfare system to rely on. You either work or do not eat. That I was taught since I was a little girl: “Those who don’t work, don’t eat!”
Should it be so important to stress this with the people? When we have the main focus is survival from starvation it is very difficult to determine in which degree or extend people from one’s country are willing to be part of a sustainable development program. Is there the possibility to make them understand the importance of protecting the environment? How to stress the importance of not throwing away the garbage on the streets or anywhere when we see children starving to death on the streets of the capital city. Is it realistic to say that Nicaragua can at this moment take part in this kind of matters. Spend money from its budget to try to attain levels of sustainable development as if a developed country. So, let’s try to review the information we have about the actual economic situation of the country, the last steps taken towards achieving sustainable development and the political history of the country. Why it is important sustainability in Nicaragua and the constraints that the country is facing based on the reality of the economy.
1.1Economical Overview
Nicaragua, one of the hemisphere's poorest countries, faces low per capita income, flagging socio-economic indicators, and huge external debt. While the country has made progress toward macro-economic stabilization over the past few years, a banking crisis and scandal has shaken the economy. Managua will continue to be dependent on international aid and debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. Donors have made aid conditional on improving govern ability, the openness of government financial operation, poverty alleviation, and human rights. Nicaragua met the conditions for additional debt service relief in December 2000. Growth should remain moderate to high in 2001.
1.2Key Figures:
Population: 4,918,393 (July 2001 est.)
GDP:purchasing power parity - $13.1 billion (2000 est.)
GDP - real growth rate: 5% (2000 est.)
GDP - per capita: purchasing power parity - $2,700 (2000 est.)
GDP - composition by sector: agriculture: 31.6%
industry: 22.8%
services: 45.6% (1999)
Population below poverty line: 50% (2000 est.)
Household income or consumption
by percentage share: lowest 10%: 1.6%
highest 10%: 39.8% (1993)
Inflation rate (cons. prices): 11% (2000 est.)
Labor force:1.7 million (1999)
Labor force - by occupation: services 43%
agriculture 42%
industry 15% (1999 est.)
Unemployment rate: 20% plus considerable underemployment
Budget: revenues: $734 million
expenditures: $836 million
Industries:food processing, chemicals, machinery and metal products, textiles,
clothing, petroleum refining and distribution, beverages, footwear, wood
Industrial production growth rate: 4.4% (2000 est.)
Agriculture - products: coffee, bananas, sugarcane, cotton, rice, corn, tobacco,
sesame, soya, beans; beef, veal, pork, poultry,
dairy products
Exports: $631 million (f.o.b., 2000 est.)
Exports - commodities: coffee, shrimp and lobster, cotton, tobacco, beef, sugar,
bananas; gold
Exports - partners: US 37.7%, El Salvador 12.5%, Germany 9.8%, Costa Rica
5.1%, Spain 2.5%, France 2.1% (1999)
Imports: $1.6 billion (f.o.b., 2000 est.)
Imports - commodities:machinery and equipment, raw materials, petroleum
products, consumer goods
Imports - partners: US 34.5%, Costa Rica 11.4%, Guatemala 7.3%,
Panama 6.9%, Venezuela 5.9%, El Salvador 5.5% (1999)
Debt - external: $6.4 billion (2000 est.)
2.Political History
After the departure of U.S. troops, National Guard Commander Anastasio Somoza Garcia outmaneuvered his political opponents, including Sandino, who was assassinated by National Guard officers, and took over the presidency in 1936. Somoza, and two sons who succeeded him, maintained close ties with the U.S. The Somoza dynasty ended in 1979 with a massive uprising led by the Sandinista National Liberation Front (FSLN), which since the early 1960’s had conducted a low-scale guerrilla war against the Somoza regime.
The FSLN established an authoritarian dictatorship soon after taking power. U.S.-Nicaraguan relations deteriorated rapidly as the regime nationalized many private industries, confiscated private property, supported Central American guerrilla movements, and maintained links to international terrorists. The United States suspended aid to Nicaragua in 1981. The Reagan Administration provided assistance to the Nicaraguan Resistance and in 1985 imposed an embargo on U.S.-Nicaraguan trade.
In response to both domestic and international pressure, the Sandinista regime entered into negotiations with the Nicaraguan Resistance and agreed to nationwide elections in February 1990. In these elections, which were proclaimed free and fair by international observers, Nicaraguan voters elected as their president the candidate of the National Opposition Union, Violeta Barrios de Chamorro.
During President Chamorro's nearly seven years in office, her government achieved major progress toward consolidating democratic institutions, advancing national reconciliation, stabilizing the economy, privatizing state-owned enterprises, and reducing human rights violations. In February 1995, Sandinista Popular Army Commander General Humberto Ortega was replaced, in accordance with a new Military Code enacted in 1994, by General Joaquin Cuadra, who has espoused a policy of greater professionalism in the renamed Army of Nicaragua. A new police organization law, passed by the National Assembly and signed into law in August 1996, further codified both civilian control of the police and the professionalization of that law enforcement agency.
3.Todays Situation
Nicaragua is one of the poorest countries in Latin America. Almost 48 percent of the population falls below the poverty line and 17 percent falls below the extreme poverty line. The poor are largely concentrated in rural areas (where about 70 percent are poor versus 30 percent in urban areas), and in the central region of the country (where 47 percent of the extreme poor reside). They mainly depend on agriculture for their incomes, and their consumption is concentrated on food and housing.
Social conditions in Nicaragua:
(i)Fertility rates are about twice the Latin American average and 50 percent of the population is under 17 years of age;
(ii)Nicaragua exhibits a high incidence of domestic violence, which raises broad concerns about women’s status and a lack of social cohesion;
(iii)Malnutrition is widespread (approximately 20 percent of children under five are chronically malnourished, or stunted, and this share rises to 36 percent among the extreme poor);
(iv)Nicaragua suffers from elevated levels of infant mortality and maternal mortality, and a high prevalence of infectious and parasitic diseases; and
(v)Nicaragua exhibits a high illiteracy rate, few years of schooling (the national average is 4.9 years) and great social disparities in education attainment levels (average schooling is only two years among the rural poor).
Some positive trends:
(i)The share of Nicaragua’s population living below the general and extreme poverty lines declined between 1993 and 1998, by 2.4 and 2.1 percentage points. Although modest, these declines are statistically significant;
(ii)Most of the gains in poverty reduction have occurred in rural areas as a result of a recovery in agriculture. Urban poverty has increased in the Pacific and Atlantic regions;
(iii)Social outcome indicators and coverage of basic social services have generally improved during the 1990s (immunizations, malnutrition, and infant mortality), with gains driven by improvements in rural areas;
(iv)Gains in preschool enrolment were almost exclusively rural, and predominantly benefited the poor; and
(v)The global fertility rate declined significantly, from 4.6 births per woman in 1993 to 3.9 births in 1998.
Perceptions of the poor:
In spite of the measured gains made in reducing poverty during 1993–98, qualitative analyses show that the poor associate the 1990s with a decline in their well-being. What can explain this finding?
First, the task of rebuilding Nicaraguan families and society, damaged during a decade of civil war, insecurity, and violence, is just beginning. Keeping in mind that per capita real GDP in Nicaragua fell by over 50 percent from 1978 to the early 1990s, a 7 percent income improvement (as happened in 1993–98) is likely to pass unperceived.
Second, the risks faced by Nicaragua’s poor may have increased during the 1990s. The replacement of a socialist state by a private market economy has opened greater prospects for growth and economic opportunity, but it has left the poorest with virtually no formal safety nets to protect them.
Third, the poor see improvements in infrastructure, but they do not perceive that their access to the services of that infrastructure has improved. The private costs of social services have risen, perhaps becoming prohibitive for the extreme poor, while rehabilitated facilities in many cases lack key inputs for operating, e.g., teachers, trained health staff, textbooks, or medicines.
Measuring poverty:
The Nicaragua Poverty Assessment measures poverty with reference to a poverty line based on consumption expenditures. The poverty line is defined as the level of total per capita annual expenditures at which an individual obtains the minimum daily caloric requirement (2,226 calories per adult) as part of an entire consumption basket that also includes nonfood items.
The extreme poverty line is defined as the total annual per capita cost of satisfying this minimum daily caloric requirement, ignoring other nonfood consumption. A person consuming less than this amount per annum cannot meet his/her minimum daily caloric requirement, even if the entire consumption budget is devoted to food. The poverty line for Nicaragua in 1998 was calculated at 4,259 córdobas and the extreme poverty line at 2,246 córdobas. (For reference purposes, GDP per capita in 1998 was 4,719 córdobas, or US$446.)
Brief Overview of Sustainable Development Context
After the Earth Summit held in Rio de Janeiro, Nicaragua has made modest but meaningful efforts in adopting sustainable development policies, such as the ratification of the Framework Convention on Climate Changes, the Convention on Biological Diversity, Desertification, Toxic Waste and Protection of the Ozone Layer, among others. One of the mechanisms of compliance and follow - up of this agreement, is the creation of the National Councils for Sustainable Development. As part of the efforts of this Government and in order to accomplish the core objective which relies on the need to reach a sustainable economic growth and to fight poverty, they have created entities through which it will be possible to improve inter-sectoral articulation in matters of public investment, and to attain social agreements in matters of economic and social policies.
Overview of NCSD Country Experience
* Executive or legal mandate
The NCSD known in Nicaragua as CONADES was created by presidential decree on June 5, 1997. This decree specifies its role as a forum for analysis, discussion, appraisal, broadcasting, agreement and monitoring of the Civil Society and the State's involvement in promoting the adoption of a sustainable development.
* Organizational structure including subdivision on geographical and topical bases
The Council consists of forty-two members and a Presidential Delegate that presides over the Council in accordance with the Decree. Nineteen members of governmental institutions are appointed, eleven members are elected from non-governmental and community based organizations, two parliamentarians, five members of business or industrial sector, three members of the academia, one member appointed by the Supreme Court of Justice and one by the Electoral Supreme Council. CONADES counts with an Executive Committee that consists of twelve representatives of the stakeholder groups mentioned before. The Executive Secretary is also the Director of CONADES, who is chosen by the Presidential Delegate is responsible of the administrative body for the implementation of the decisions taken within the Executive Committee. In the rest of the country the local councils of sustainable development are being created based on the initiative of the civil society and governmental institutions in each department.
* Extent of multi-stakeholder participation
The strengthening of CONADES is aimed towards the proactive role of its members within their institutional perspective and capacity. The long term strategic goal is to help market forces and democratic institutions to improve the availability and equal access to the individual opportunities of material and spiritual development, without depreciating the social and natural capital that future generations will require, as established by ALIDES' principles.
According to ALIDES, the success of sustainable development of the Central American Region is based on the setting up and strengthening of the municipal structures and governments. They should be responsible for the organization and participation of the community, as well as the social services under the national decentralization policies, with extensive participation of the beneficiaries. Regarding the above, CONADES has formulated an Action Plan (2000-2002) which places special emphasis on two priorities that are communication and education at the local level, simultaneously to high level dialogues on issues of national development policies.
* Critical issues and roadblocks in implementing sustainable development
Some roadblocks to implementing sustainable development in Nicaragua are:
1. Lack of constant financial resources or mechanisms that will allow financial sustainability of the National Council of Sustainable Development (CONADES).
2. A national legal frame out of juncture with the pace of actual development and of the real needs of society.
3. A disunited society without mechanisms of intersectoral coordination and cooperation which is vulnerable and incapable of tracing routes towards options of human sustainable development, even though there have been successful experiences in the local ambit that have not been shared, enriched and divulged as a social information priority.
* Best Practices and lessons learned
The NCSD counts with a wide stakeholder representation and political support. The Government has designated an annual amount from the National Budget. In coordination with the Economic and Social Planning Council (CONPES), the National Council of Sustainable Development has contributed on the document of the Strategy for Poverty Reduction of Nicaragua and the document that will be presented by the Government of Nicaragua in the Consultative Group in Washington on May this year.
* Present year activities (2000)
1. Strengthening of local capacity management at municipal level for sustainable human development.
2. Promotion of dialogues on public policies and strategies for sustainable development at regional, sectoral and national level.
3. To support the incorporation of sustainable human development principles, values and information to primary and secondary schools curricula and community service in areas of social and environmental care.
4. Carry out meetings and round tables with the stakeholders of the Council that are willing to work on the planning of the program of communication, information and education for the human sustainable development.
5. Contributes in capacity building activities related to Climate Change and Desertification.