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Nicaragua: A Steady Battle Between Nature and Development

Updated: Oct 11, 2023

By Luciana Aguilar Laurencich

Edited by Melle de Ridder


The interplay between economy, geography, and politics unveils a compelling record of how natural phenomena serve as architects shaping the prospects of nations. Nicaragua is situated in the 'Ring of Fire' and is ranked as one of the regions with the highest climate change vulnerability. This country exemplifies the determinant role that natural disasters can play in developing countries' socioeconomic profiles and political stability.


©YURI CORTEZ/AFP/GETTY


Nicaragua's Ongoing Crises


In the past decades, socio-political convulsions have critically altered the state’s economic order. Despite Nicaragua’s rapid growth in the late nineteenth century, it is now the poorest country in the Western Hemisphere.


With an inflation rate of ten per cent and the prequels of the 2018 protests increasingly weakening the country’s economic performance, Nicaragua’s medium-term projections look worse than ever.


Furthermore, the current president Daniel Ortega is increasingly isolating Nicaragua from the international scene. This makes it even harder for international organisations to intervene against ongoing human rights crises throughout his dictatorship. Over time, Nicaragua has been economically strangled due to its turbulent socio-political environment.


However, the link between physical geography and political unrest is often underreported. Increasingly relevant, what is the relationship in determining society’s well-being as it lies at the mercy of climate change?


The Perils of Nicaragua's Geographical Features


Because of its hydro-meteorological and geological attributes, Central America is highly susceptible to natural adversities. This includes earthquakes, hurricanes, and volcanic eruptions. Guatemala, Honduras, and Nicaragua are among the ten most vulnerable countries facing climate-related hazards worldwide.

Nevertheless, Nicaragua’s case is unique. In the past thirty years, Nicaragua was among the countries that faced the worst impacts of hurricanes in Central America. The increasing frequency of natural disasters has been the primary obstacle to the country’s socioeconomic and political stability and a root cause of its spiralling inflation.


It began with the destruction of the capital city of Managua due to a 6.3 magnitude earthquake in 1972. This was followed by Hurricane Mitch and the avalanche of the volcano La Casita in 1998, which together resulted in the loss of 61 per cent of Nicaragua’s GDP.


By 1980 the country had already fallen 30 years behind 1977 growth levels, and in 1998 the destruction set back Nicaragua’s infrastructural and economic base by at least another 20 years.


Despite these examples being 25 to 50 years old, today’s Nicaraguan peaking vulnerability and structural economic policies are deeply rooted in the desperate response to relieve these disasters’ sizeable consequences.


Climate as a Driver of Economic Disparities


On the bigger picture, developing countries are found in a downward spiral when facing adversities that demand resilience. This is a consequence of high vulnerability to the risks of climate change.


With their low level of readiness and their extreme fragility it is then easy to fall into poverty traps, a vicious cycle of prolonged hardship and vulnerability.


Poverty traps: The vicious cycle of perpetuated poverty and vulnerability


A study done by the World Bank unveils the impact of natural disasters in Central America. Here, a connection between a country’s economic profile and the intensity of natural disasters was found.


This is visible when comparing Nicaragua’s low coping capacities and huge damaging effects to other Central American countries.


When analysing Central American economic performance patterns and the frequency of natural disasters over time, Nicaragua displays unfavourable social, economic, and geographical characteristics compared to its neighbouring countries. Predictably, it remains the least developed country in the region.


Besides the lower the income of a country, the higher the mortality rate and economic losses when facing natural disasters. For instance, Costa Rica’s and Panama’s GDP are almost three times that of Nicaragua’s.


Not surprisingly these Central American countries were the least affected by hurricanes in the last 30 years.


Nicaragua owed over nine billion euros to the Soviet Union and Western nations by the beginning of the 1990s. Naturally, a set of IMF and WorldBank prescriptions was embraced by the government at the time. Economic progress was primarily aimed at the country’s reactivation of its agricultural sector.


Reducing spending for social programs, attracting foreign investment, and encouraging exports triggered exponential land transformation, leading to deforestation and a lack of soil conservation.


These solutions lowered fiscal deficits and public expenditures in the short term while permanently exhausting Nicaragua’s natural resources in the long term. Nowadays Nicaragua’s environmental crisis costs its society around 6.7 per cent of its annual GDP.


In addition, workers and farmers were further impoverished and exposed to natural hazards. The model of development called for structural adjustment that decreased expenditures on social safety nets.


Consequently, this caused the displacement of the peasantry to cities in ecologically sensitive areas or places with higher vulnerability to disasters.


These examples reinforce how the poor are hit the hardest on the micro- and macro-economic levels when facing the impacts and responses of natural disasters.


Natural Disasters Leading to Political Turmoil


Geophysical catastrophes have a significant likelihood to provoke political unrest within states that already display characteristics of conflict-prone societies. Nicaragua is not an exception to this.


International aid aimed at the victims of Hurricane Irene-Olivia and the 1972’s 6.3 earthquake was pocketed by the dictatorship. This response fed already-existing anti-dictatorship sentiments in the country, culminating in the Nicaraguan Revolution (1978-1979). By the 1980s, the opposition (FSLN) had succeeded in overthrowing Somoza’s oligarchy.


The 1989 elections overthrowing FSNL were powered by Hurricane Joan Miriam 1989 on top of heavy floods. This enabled the U.S. to profit from Nicaragua’s declared state of emergency and strengthen the counterrevolutionary army.


Current unrestful protests concerning corruption and numerous crimes against humanity have followed the political-geographical pattern from the past decades.


Eight major hurricanes, five earthquakes with magnitudes above 5.4, and five volcanic eruptions in the past fifteen years opened the debate of nature’s influence in Nicaraguan politics and social environment.


Gazing Forward: Ortega’s Approach to Climate Resilience


Nicaragua’s poverty and human rights crises transcend the physical-geographical scope. Nevertheless, breaking down the relationship between history, politics, and economics can reveal causal relationships that help understand Nicaragua’s long-term consequences in development.


Nicaragua has suffered numerous policy distortions, market failures, and underinvestment in human resource development in the past. Despite research showing that these have been the root causes of the country’s degradation, Daniel Ortega neglects these by refusing to commit to the Paris Agreement.


In order to decrease the impacts of climate change, proper governmental planning will involve policy reforms and international support from financial lending institutions.


However, Nicaragua’s autocratic government and its increasingly tense relationships with the international panorama are opening space for isolation.



Sources: ECLAC, The United Nations Office of Disaster Risk Reduction, World Bank, Le Monde, PAHO Epidemiological Bulletin


Written by Luciana Aguilar Laurencich

October 2023









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